Shares dived as news of losses and massive Placing wrecked sp. The placing was at more than 40% discount and not open to retail shareholders (as usual!).

The Co took this time to ann. severe operational Losses, which didn't help.

Placing abt 12p
17 March2010 abt 14.75p to buy.

Note that these shares are 0.06 Euro....which means I think they are about 5p at the current exchange-rate - DYOR -.
Not sure there's much of a Market in ultra-white as used in Paints, plastic, etc.

30th April 2010


Analyst: Thomas Jones
Email: thomas.jones@gecr.co.uk
Tel: 0208 099 0564



Kenmare Resources - Final Results. Major Expansion and Debt Reduction Plans. Target Price 20p - Buy.


Key Data

EPIC
KMR

Share Price
13.125p

Spread
13p - 13.25p

Total no of Shares
2,403,127,212

Market Cap
135.4 million

12 Month Range
13p - 28.75p

Net Debt
$346.0 million

Market
LSE Full Listing

Website
www.kenmareresouces.com

Sector
Mining

Contact
Michael Carvill, Managing Director

Tel: +353 1671 0411





The salient feature of Kenmare's annual report released on the 28th of April was the $270 million in capital raised to implement Moma's expansion plans and set the company up to reduce its net debt. Operations in the 12 months to 31st December 2009 saw steady improvement on a quarter on quarter basis as the company's performance improvement programme (PIP) reaped tangible rewards.



Ilmenite and total HMC (Heavy Mineral Concentrate) production increased from 93,801 tonnes and 142,131 tonnes respectively in the first quarter of 2009, to 143,203 tonnes and 280,185 tonnes respectively by the fourth quarter. The group's target production going forward is 800,000 tonnes per annum (tpa) of ilmenite, 50,000 tpa zircon and 14,000 tpa rutile. During the year there were 24 shipments totalling 418,000 tonnes of finished product, up from 17 shipments and 250,000 tonnes in 2008. Production figures for the first quarter of 2010 are already in with 150,956 tonnes of ilmenite and 8,001 tonnes of zircon produced, with Kenmare concentrating on these two revenue driving products at the expense of rutile.



The company's expansion study was completed in January 2010 and recommended an upgrade of the existing mine operation, the construction and commissioning of a second mining operation and the expansion of the Mineral Separation Plant (MSP). The initiatives suggested will increase design capacity by 50%, thus taking output to 1.2 million tpa ilmenite, 80,000 tpa zircon and 22,000 tpa rutile. Mining of the Namalope reserve would be accelerated by the addition of a second dredge pond, a third dredge and second wet concentrator plant (WCP). Namalope would remain the sole exploited reserve until 2019 when one of the WCP's would move on to the Nataka resource, before being joined by the second WCP in 2026. Total capital costs of the expansion study were estimated at $200 million with construction to commence in early 2011 after the completion of Aker Solutions E&C International's engineering study.



Kenmare is confident about the future prospects for titanium minerals as strong demand from Asia, Eastern Europe, the Middle East and South America offsets a slow recovery in North America and Western Europe. Future supply is expected to be constrained by mine closures in 2009 and the cancellation of development projects.



Financially Kenmare produced its first revenue in 2009 with $26.7 million reported. However, with an operating loss of $12.1 million (loss of $1.3 million in 2008), $15.5 million in finance costs (nil in 2008), and a foreign exchange loss of $2.9 million (gain of $0.3 million in 2008), Kenmare's pre-tax loss came in at $30.4 million compared to a profit of $0.3 million in calendar 2008. Consequently the loss per share was 3.59 cents versus earnings per share of 0.045 cents in 2008. Net debt at 31st December 2009 stood at $346.0 million up from $300.8 million at the corresponding time in 2008.



The issue of 1,497,030,066 shares is highly dilutive and will increase the number of Kenmare shares in issue by 165% to 2,403,127,212. However, the avoidance of new, and plans to reduce its existing, debt will relieve the burden to future cash flows and reduce the degree of financial risk within the company. GECR resumes coverage with a DCF derived target price of 20p and, with 51% upside, a recommendation of buy.


















Year to 31st Dec


Sales ($ million)


Pre-tax profit ($ million)


Earnings per share (c)


Price earnings ratio
Dividends per share (p)


Dividend yield (%)



2008A


0


0.35


0.045


467


0


0.0



2009A


26.7


(30.4)


(3.59)


NA


0


0.0



2010E


80.0


40.0


1.66


12.6


0


0.0



2011E


130.0


70.0


2.91


7.2


0


0.0











This research note cannot be regarded as impartial as GE&CR has been commissioned to produce it by Kenmare, it should be regarded as a marketing communication.

The information in this document has been obtained from sources believed to be reliable, but cannot be guaranteed. Growth Equity & Company Research is owned by T1ps.com Limited which is commissioned to produce research material under the GE&CR' label. However the estimates and content of the reports are, in all cases those of T1ps.com Limited and not of the companies concerned.

This research report is for general guidance only and T1ps.com Limited cannot assume legal liability for any errors or omissions it might contain. Readers of this report should also be aware that because this research is not independent that there is no prohibition on dealing ahead of the dissemination of it.

The value of investments can go down as well as up and you may not get back all of the money you invested; You should also be aware that the past is not necessarily a guide to the future performance. Finally, some of the shares that are written about are smaller company shares and often the market in these shares is not particularly liquid which may result in significant trading spreads and sometimes may lead to difficulties in opening and/or closing positions. Before investing, readers should seek professional advice from a Financial Services Authorised stockbroker or financial adviser.

T1ps.com Limited is authorised and regulated by the Financial Services Authority (FSA Registration no. 192801) and can be contacted at 44-46 New Inn Yard, London, EC2A 3EY.

email Philip.morrish@gecr.co.uk - fax 020 7628 3815 - tel 0208 099 0565

KMR now 11p-ish - might be linked to massive Market falls today as EuroZone looks a bit wobbly (my interpretation, only).....but I doubt it.

I wonder if the fundraising was OK...? The 2010-one at a sizeable Discount, but not for Retail Shareholders....who will be smiling since they can buy ( Whooah!) into this fantastic business for close-on 20% less than City-types who like to think they are so slick....

Still, the way I see it, there is no-one reading this -and- no-one appears to be Buying their Stock..... otherwise it would be rising gently.

DYOR:
RBC ann. recently Kenmare Res ( currently 0.38pence.! Wow.! ) "is facing refinancing" so they've downgraded....etc. ....what this means for retail shareholder ( ie those who invest their own money )...is anyone's guess.
This was a Web-chat "good stock" many years ago, but I've see the sp gradually drift down.
\Indeed I'm surprised I didn't invest as it followed the pattern of most of my other investments....down a little then Whoosh- =dead.
I suspect we shall see a CONsolidation and refinancing for the City, but little to warm those retail investors whose trust ( and Money!), has been frittered away. Presumably the Bosses are still earning ( Laugh!) a decent crust for steering the Ship towards the rocks . . . .
+I just hope Dulux has enough Illuminite when I need to paint my house again....