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

Yes, pro, but for each of those sells there was a buyer on the other side, not just any buyer, a professional market buyer who knows what they are doing more than most investors. If they were not happy to take on stock at those prices they would have changed the price by now - lower. Constant selling by investors to the market makers whilst the price stays still usually means there will shortly be a significant increase in price when the market makers will sell to the more gullible investors at a rapidly rising price whilst fear of being out of the market convinces people to pile in a little bit too late.

Also, don't forget the stock market is not a zero sum gamble - where one person loses the exact equal and opposite amount that someone else gains. The difference is the company produces goods of real worth - slowly, in the future, unrelated in time to the market worth, but none the less, in time the real future worth of those goods comes to equal the net present value of the stock.

Whether I'm right or wrong inmy own analysis of whether to buuy, hold or sell, I am certain that your argument doesn't stack up.

kiv

very original, kivver - congratulations. rofl :))

SD

Well I'm just in agreeance okay?? Also feel very strongly that there'll be a rush for the doors this coming week as people catch on and look to bail out quickly from this one! One person dumped 11,185,384 shares on Thursday. You have to presume that this someone knows a bit more than we do about Kenmare -and it isn't good news or why dump that many shares in one go???

Well Guys, can I just say, that the thing that probably most people who trade in shares do is panick when the price starts to fall and then sell out, and guess what happens good news hits and hey presto the shares rocket. I owned shares in dana petroleum about 5 years ago, and the same thing as KMR happened, and I sold out. Have a look at Dana today over 5 and growing. I bailed out of DOO because trendwath gave them a miss, and look at them rocket. I also sold 4000 Da. at 240, cos they went down, they are now 5. Lukily I bought 1000 back.

When people sell there shares its because they are usually impatient, and I guess none of us can predict what the future holds, and we will lose some a long the way, but hopefully we will win more. I guess the message is with some shares you can make a fast buck, and others you will need patience. We will all do it differently, so let he who wishes to bail out do so, and he who has patience stay in. There is no such thing as a certainty in this game, but if you don't take risks you have not lived.
good luck to all.

The Company is aware that on 21st June 2004, the following held in excess of 3% of the issued ordinary shares of the Company.

No. of Ordinary Shares
% of Issued Share Capital

Clydesdale Bank
28,750,000
9.98%

State Street Nominees Limited
22,800,000
7.90%

Morstan Nominees Limited
10,990,000
3.81%

HSBC Global Custody Nominee (UK) Limited
10,886,775
3.78%

BNY (OCS) Nominees Limited
10,521,625
3.65%

Add
Prudential 92,754,629 = 14.35% as of 11th November
Artemis 41,000,000 = 6.35% as of 17th December
Zurich Financial Services Group 580,000 shares + 3,443,750 warrants as of 4th February

Funny - can't find any notifable disposals of these holdings. If they have sold some millions of them into the general market after a rise from about 17p in June 2004 to 27.5p currently who can blame them, that's what they are meant to do - a gain is not a profit till it's banked and all that. As I tried to explain above, the MMs have been happy to absorb them at this price and the original holders continue to hold substantial volume of shares between them.

The company's Moma titanium project is about to start mining operations with real revenues flowing over a 20 year life of some 2bn tonnes of ore in total.

There are no adverse reports and various tipsheets continue to support them for what that's worth.

I would be interested to know why you have spent so much effort in dissing these shares - are you shorting them, or wanting to buy in at a lower price or just earnest guardians of other people's fortunes. My own effort is spent in debating your position because I hold and will continue to hold shares which I do not want to see devalued by what I consider to be erroneous arguments. Although, perversely, I should welcome a dip on the price to top up my holding.

SD

Good Post SD. I have held KMR shares for almost 2 years now (bought at 14p)But I am not selling, instead I bought some more a while ago. I hold these shares through my company; as an aim share if I hold them over two years I do not have to pay CGT so I am definitely holding. Even if this were not the case I cannot see any reason for selling as this share has massive potential as it even has the customers when the mine is built. KMR can only go up and even short term profit taking is only going to be extremely short term dips. KMR seems to settled at this new level; any newsof progress is going to shoot it up to another level again so buy whilst you can and climb on boardDYOR IMHO ;-)
Di

I see there's another hectic rush for the doors today! Everyone and his grannie is selling Kenmare lately and can't seem to get rid quick enough. So much rubbish is hyped on this share but the person who dumped that whopping 11 million shares last Thursday told the real story about Kenmare Resources!!!

Informer...I have one word to say to your post 'CRAP'

The day is young and Kenmare is falling like a stone!!!

Here's a genuine tip for you. Sell Kenmare and buy African Diamonds (AFD). 114 buys and only 9 sales today (kenmare has 3 buys and 15 sells). It's a share with a future and, best of all, it's going to fly over the next couple of days!!!

Informer...AFD has made me lots of money with it's up and downs but I've given up on it now. If you really want to make money on a diamond mine and you have the bottle to take the risk buy NML not AFD

Hi Dynamite

Have you been away, or just busy?

I detect some shorters' trades (several 6,250 AT sells going through) today. Let them create a buying opportunity for all of us, not just themselves, say I.

There is no point in shorting a dog (I should know!); you just follow it down to the bottom where it stays. Maximum leverage consists of expecting good news to hike the SP after you've shaken the tree - so any stock worthy of shorting perversely must have some fundamental and market values which will take it up again the other side.

Di's 50% gain over two years with still the best to come will in the end make more profits than the traders. It's on my top up list, funds willing.

SD

Sorry Dynamite -but it looks like you checked out of the (African Diamonds) hotel a little early. The move is really on now and there's lot's of money to be made here over the next few days. Check back in is my advice.

SD....KMR is not a dog and not going to the bottom. I have been busy spending money instead of making it so now I have to make some more :-)

AFD chart looks good and the Sunday Telegraph mention of De Beers' take over of the 49% they don't already own has clearly stimulated the price this morning.

However, in cases of take over excitement, it is often better to bank profits whilst you can, in case the rumour proves unfounded or gets caught up in regulatory approval mechanisms.

AFD and KMR both suffer the potential weakness of being single product companies, but KMR has the enormous strength of being in the much more limited Ti02 market with established demand growth (China etc) with a vast new site to mine all to itself, without big brother holding is hand (half way up its back, knowing De Beers).

If AFD is taken over the premium may be as high as 50% to today's price - very nice too. If KMR fulfils its potential it should at least double or more in price over the next several months. But no reason why AFD should not have its day in the sun too. Good luck with it.

SD

Informer....
....the day is young and the shares are falling like a stone....
alot of small shares are being pulled back on little volume including kmr. Infact it touched a 38% retracement which could herald another buying opportunity... yep, a whopping 11 million shares on thursday and the stock ended up!!!!!!!

Jules...KMR screen is all blue now...it was nothing more than a buying opportunity.
Di

"A fool and his money are easily parted" Especially this is the case where fools put their money on such a weak share as Kenmare.

informer... think you may be the fool