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

Mr Pitt,you are a bore.

Squelch him :-)

What do I have to do to squelch?

Click on his name on this thread and press Squelch
Di

Thanks Di,got him!!!I hate to see this type of idiot trying to spoil well researched information.

Hey man what's with this so called "well researched info..." man??? Aint so well researched man cos the price of this share is falling and the selling is continuing ...so what does that say about your research man?? You gotta get real man and I'm only trying to help you save money man so you shouldn't have a pop at me man. If you'd listen to me last week you'd have saved a bundle AND made lots more on African Diamonds!!!

Hi Di and Ehtel - just puttiing the kettle on. How do you like your coffee? I like mine FILTERED he-he! lol :D

Very good SD...I don't like hot drinks at all...but if I did I would like mine filtered :-)

Hey man, todays trade are real bad!

Buys.... = 347,031
Sells... = 1,576,877
!!!!!!

Man I reckon this is one bad share and I sure as hell hope you guys are getting wise to it too!

What a "Knob-Head" Pit-Bull lookalike is.
Man, he is not!
Can,t stand any more of the bullshit it spouts.
FILTERED!

Hey man, no wonder you are "filthy poor" man. You should stop being nasty man and listen to good advice man. I told you to sell last week and you didn't ...is that my fault man? Only trying to help you man -okay? It's a real bad share man and that's why people are selling. Don't need to be a genius to see that man! Stop slagging people off man who are only trying to help you.

If Kenmare resources knew what was going on on this thread,they would be mortified.
This has taken us into another realm.
It's amazing how BPLA has latched onto this particular thread.I've squelched him,but I see that he's still at it.Poor sod.A sort of stocks serial stalker/killer.NASTY.

Ethel, ahm real sorry you feel this way. Only trying to put money in your pocket is what ahm doin'. Don't know who has ramped this share up so's you went for it but man it aint how they tell it. The share price is downward and there's a very simple and clear-cut reason for that Ethel. Think about it. It's been ramped up for some time now and gullible folk have taken the bait so the price has gone up ...temporarily. But the truth will always show itself and that's what's happening now with the price drop. It's a bad share price and should, in my opinion, be around 20p.

A perfectly respectable thread being spoiled by a couple of prats. I am disappointed to find it necessary to use the squelch facility. Please Mr Moderator don't let this go the way of the worthless BB's over the road. Reasoned debate please. Chuck the persistent hecklers out.

Here here Compound. If people don't have anything constructive to say and are rude throw them out.. please Ian? Obviously it is continuing as other people are having to Squelch too.

I sold my holding in KMR this morning - not because I think this is not a worthwhile holding but I felt it was high enough for now and that it was better to trade out with a view to trading back in when the holiday effect has passed and when the market direction becomes clear again.

IMHO some resource stocks are a relatively safe haven when a low-volume shakeout is occurring in the market. Again IMHO, KMR is a bit inflated by recent trading and talk of being taken out by a big player, especially for the fact that it hasn't yet sold any physical product off Moma.

The discounted cash flow view suggests to me that in the long term there is plenty of upward room in the share price but it may not be seen for a while.

Agreed. Ian, do you have a policy with regards to serial offenders?

Compound I can only see a long term up and so have decided to just sit on KMR. After all I had it ages at 14p before it had a big move up which came suddenly. In a few years KMR will be a big player and pay dividends too so I am using a chunk of money I haven't been trading with and added to my position.
Di

I have no problem with that Di. My overall strategy is long term but this market weakness has caused me to want to take some cash off the table. It has been a terrific 6 months on the long tack. I do not want to give anything back to the market.

Overall risk management counts more for me than waiting for a value share to be recognised. Total hypocrisy of course. I have a holding in CC. on value analysis that has more dust on it than Pompeii.

If I miss the next rise in KMR shares...que sera.

I looked at doing the same Compound but all my shares have gone down in the past two days and I didn't fancy selling the lot especially as I hold the shares in my company and it is our year end next week. If I sell them all now I will have to pay tax on all my profits. One of the reasons I decided to keep KMR and gain future dividend income.
Di