From the FT on the 19th June

http://search.ft.com/search/article.html?id=040619001094&query=kenmare&vsc_appId=totalSearch&state=Form

COMPANIES UK & IRELAND: Kenmare negotiates $269m loan
By John Murray Brown
Financial Times; Jun 19, 2004



One of the largest debt financings for an independent mining company was announced yesterday when Kenmare Resources agreed a $269m (146.5m) facility to develop the Moma titanium mine in Mozambique.

Drawdown of the debt is contingent on the Irish company raising equity of $79m, lifting the value of the project to $345m.

The company already has commitments of $55m from a number of large investment funds.

Documents will be posted to shareholders on Monday for an open offer to raise up to $42m.

A banker at NM Rothschild, lead advisers on the financing, said the debt package represented three times Kenmare's market capitalisation of $90m.

"I do not think there have been any listed mining companies who have done that," he said.

Among the lenders, the African Development Bank is lending $40m and the European Investment Bank $15m in senior debt and a $40m subordinated loan, reflecting the vital economic benefits to what is the poorest region of one of Africa's poorest countries.

Martin Curwen, of the EIB, said this was the first deal signed under the 2000 Cotonou agreement between the EU and African, Caribbean and Pacific countries.

He said EIB's presence would "provide comfort" to other lenders. "It is part of our mandate to support projects where the funding would not have been available from the financial markets," he said at yesterday's signing ceremony, attended by Castigo Langa, Mozambique's minister of mineral resources and energy.

KFW, the German development finance institution, is providing $50m, partly tied to the supply of electrical equipment by Siemens.

The Dutch development agency FMO is lending $15m. The only commercial bank involved is ABSA, the South African bank, which is lending $80m to support the purchase of South African goods and services by the mine.

The mine is expected to be in production in the second half of 2006, with annual output of 600,000 tonnes of ilmenite and other titanium minerals that supplies white pigment used in paint and toothpaste.

The company has already raised 4m to purchase a mineral separation plant in Western Australia, which is being dismantled and shipped to the site.

At full production, the mine will account for about 5 per cent of world supply. About two-thirds of world production is controlled by RTZ and Iluka, an Australian company spun out of the old Rennison Goldfields.

FT Comment

* There have been similar financings in the minerals sector but never where the borrowing is three times the borrower's market valuation. The Lihir gold project in Papua New Guinea raised $300m in 1995 but lenders had the comfort that Rio Tinto Zinc owned about 40 per cent of the company. Kenmare's project is 100 per cent-owned by Kenmare, a company that has no cash flow and would have reported a small loss of $40,000 last year but for interest on its bank deposits. This project clearly could transform its fortunes. There are offtake agreements in place for more than half the first five years' production with Dupont and Mitsui. Prices for mineral sands tend to be more stable than base metals, which behave more like a commodity dependent on capital goods demand. The current market cap is little more than the value of a year's production from the mine. An upgrade seems inevitable. Canaccord, the company's broker, has a current price target of 35p. This compares with a close of 17p, down 2p yesterday.


Copyright The Financial Times Ltd

The best share is always one with sound economics. Kenmare has so much going for it and will really motor over the nextyear!!!

Kenmare is a good share and a cheap one. Definitely one for the very near future. It has been likenened to Asia Energy which has risen ten-fold since last summer.

Kenmare is doing very well thank you!! Up again yesterday. It is now trading at a newly established level. Forget the 20p of old. 25p is now the new low. Anything around this level and it's a BIG buy!!!

Kenmare roaring again today!! FTSE down 20 points. Kenmare up 2%!!!

I may be old and I may also be no more than a little wise but this share is one of the best I have ever purchased. It has made me a tidy profit already and really I can only see it doing even better yet.

This share is well worth taking up. It gets stronger by the day with more buying value than selling over the past few weeks. As time draws ever closer to Kenmare going into overtime production on a commodity which is in short global supply, there is a clear possibility of bid approaches. Here's a recent article from the Sunday Times.


ShareWatch: Stronger Kenmare in bid rumours. February 06, 2005
EDITED BY FRANK FITZGIBBON


SHARES in Kenmare Resources, a natural resources explorer with a full listing on the Dublin and London exchanges, have been remarkably strong since the beginning of the year. At Fridays close of 24.75p (36.1c) in London, they are boasting a 48% increase since the turn of the year, valuing the business at 160m. The run-up in the price has led to all sorts of market rumours, inevitably focusing on the possibility of a takeover bid.

One of the names mentioned as a possible suitor for Kenmare is 250m AIM-listed Asia Energy, whose primary activity is the development of an open cast coal mine at Phulbari in northwest Bangladesh.

The future of Kenmare is tied into the success or otherwise of its Moma titanium minerals project. Equity financing for this Mozambique-based venture was completed last November. As previously noted in this column, Moma is is expected to bring in annual revenues of $85m (66m) over 20 years with operating costs at $23m a year over the same period.

The next time any news is released this share will see its price rise dramatically and I wouldn't be at all suprised to see it hit a pound by years end!!!

Mr Pro, I think a may be a bit optimtic but, but 30-45p does sound nice - certainly stable & realistic, although i may be completely wrong & you may be completely right.

wa157te, nice article. But i still debate that the increase in the share price has more to do with the increase in the commodity prices which as fact have increased by more than 45% since the end of Nov04. But if you & I are both correct then there will be further increases over & above the commodity price influence.

Further more I have come to realise there are some very long term holders here and I feel their time is coming. It is a no brainer that consumable commodities of this type will surge in value as demand is already starting to take over supply in a big way.

The fact that we see this share being auctioned to me means, fair & just treatment of ordinary long term share dealers, a good sign.

What I have just posted may indeed be nonsense but as a beginner I am prepared to take some abuse, other wise sleep easy Kenmarian-knights' :)

The buyers are in town!!! Todays deals: Buys = 11 Sells = 1 ...and it's only 8.05!!! Are you on yet?!!

Pro been in for 20 months, sat waiting for the move up and this is only the beginning. Going uuuuuuuuuuuuuuuuuuuuup!
Di

Has anyone any news as to why the share price is moving north today?
Thank you.

bella, the commodity prices increased again last week this could have had an influence.

The Gull. thanks for the information. I was thinking of buying in.

Anyone know which stock thisd is:-

Turn Magic African Sand into a potential 185% gain by
Christmas!

Could this be the most profitable mining penny share you
ever invest in?

The global market for titanium dioxide is growing at 5%
per annum.

And one plucky mining company has just been granted
permission to process 615,000 tonnes of product annually
adding a whopping 7% to the global supply of titanium
feedstock!

For a full report on this intriguing natural resources
play, click here now:

http://www.fsponline-recommends.co.uk/aprhpsmt01?ia280205

Don't feel like paying to find out.

SD

stockdog
As you probably suspected, its KMR.
This has already been confirmed on the other side.
FP

FP - Good! I hoped so, but had no time to DMOR - so thanks for answering. It's from an interesting enough source to re-confirm my existing holding as being well placed.

Why the droopy SP the last four days?

SD

Not sure, but added another 10K this morning just after
the large X trade. Missed the bottom by seconds, bugger!

Will be up and down for the next 15 months or so, but sooner or later it will have to fly, you need to be in before that happens or you could miss the boat, alternatively you could have your money tied up doing nothing for a long while. My thinking is you have to be in it to win it!! I agree with FP, this is topping up opportunity. By the way fp when the mine is finished will you change your name to filthy rich?

Could be that we have now reached a new trading range. Lets hope so !

capa

it certainly looks that way