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

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

Can ah just wish all those people who took ma advice to sell Kenmare and buy African Diamonds a most hearty "Well Done!!"
Kenmare hasn't been a bad share, a bit slow to move but promises in the distant future of a bit of a return for the patient investor. However it rose a few pence recently and without any just cause. No significant finds and results. Yet some people chose, in ma humble opinion, to promote it (some would say ramp) to gullible investors. That's when ah gave the advice a few days ago to switch to AFD. Ah bought mostly at 60p and it's now 73.5p. Best wishes!!!

Something sounds familar here!! When I read 'only trying to put money in your pocket'alarm bells sounded. A poster on another board was ousted as a ramper of AFD & deramper of KMR.

Hey man, ...squirrel you're nuts man!! Ah did put money in your pocket man.. Told you to git the hell outta Kenmare and into African Diamonds when it was as low as 60p. It's 73p now man. Didn't you make a bundle on it then? Did you doubt ol BPL?? Guess you aint as smart as some of the squirrels ah know!!
By the way man, todays transactions on Kenmare are:
Sells: = 156,323
Buys: = 000000
Get wise man!!!

Even Jarvis (JRVS) is a better share than this one man!!!

There is so much selling off of this share today .....it makes me wonder if there is some very bad news on the way very soon?? ...like when we come back after Easter???

..it's just that the 11 million share sell-off some days ago is still in my mind??
Anyone heard anything???

No, but Brad soundalike is wrong and this share will be 1 this time next year, if not more. I have always had faith in it and the way they have managed offtake agreements etc prior to producing,give me great confidence in whole KMR team. They have strategised their whole operation slowly and surely from commencement and, I believe I`m right when I state that facility has life span of approx 25 - 30 years and can quite easily be free of debt and producing nett profits within the next 5 years with the nett profits expected to be somewhere in the order of $20m or so. ??? You can`t believe all you read but I am taken on this lot !!!

Snakey is 100% right. If you want to trade in and out then stay away from Kenmare, it's not for you. It is not necessarily a share to make a quick buck on if you are prepared to make a sound investment and tuck it away for 12-18 months or so then it will reward you very very handsomely. They are fully financed for Moma, sitting on proven reserves and well on track to deliver with 60%+ offtake deals already in place and much more to come. Financial and political risk is very low esp by African standards. Meantime the titanium market continues to move apace in terms of demand esp Asia and prices are following. Given the drop this week it's a great opportunity to add more - shares like KMR never move in straight lines but take the long term view and imho you'll not find one better share with the nailed on growth potential of this one. Strong, stable and highly driven management team too, in it for the long term!

am in my experience has also been a site where one can get pretty well informed views and opinions (positive and negative) but the recent bullsh*t I've read from certain new posters (financially illiterate, inarticulate and brazenly unintelligent)is a real concern. De-rampers always used to have a bit more panache and were able to use a semblance of facts to support their arguments - the current individual(s) seem lacking in the most basic understanding of the market and deserve to be swatted like an annoying bluebottle with a rolled up copy of Shares magazine. Ian, please?

I'm more than a little concerned at the mention of bad rumours regarding Kenmare. Okay, we all know that often it's the case that rumours are not up to much ...only I too am concerned at recent events. Remember the 11 million share sell-off last week?? There were some hefty share sell-offs this week too. Maybe there is something in the air that isn't all good news???
Anyone any news on this?

No news at all so there is no point fuelling the rumour mill. Its been a poor few weeks for all markets and its no wonder that stocks like KMR which has had good gains should see some sell off, especially when we have plonkers like BPLA around. Keep calm - MOMA is a world class, low cost mine which is going to supply minerals which are in short supply. Hang in there.

KMR was down only on the back of a general dip in the mining sector. Investors spreading risk away from mining as the sector fell out of favour, esp profit taking a stock that has had such signinficant upward movement.

Ta for your comment but saying "hang on in there" doesn't do too much for me and certainly doesn't assuage my concerns. It has to be realised that there have been large sell-offs of Kenmare over the past ten days and we are talking about 11 million share batches here -not a couple of hundred. It isn't the guy in the street who's selling these. This is what concerns me -even more so when I read on more than one board over the past couple of days of rumours of possible bad news coming through over the next week.

I agree it's not the guy in the street - it's the institutions rebalancing their portfolio and mining was out of favour, driven lower by concerns on Xstrata and profit taking in general on a sector that significantly outperformed the market in the last 6 months. The only "rumours" I've picked up on KMR specifically are from the woeful Brad Pitt brain-a-like and his side-kick the serial mis-informer. I like making money so I'll draw my own conclusions and leave it to others to decide whether they want to take on board the advice of these investment geniuses. Pro - if you have seen any other more serious postings then it'd be good to paste these and provide the source - there are some de-rampers on KMR around currently so we need to tread carefully. Thanks, Joe

Time to sell up and get out of this one ASAP chaps!!! Lots of chatter of immenent bad news is sending sellers running for cover and the way it is being sold off, I'm expecting the worst!!! Only a fool would stick around when all the signposts are pointing to the exit!!!!

Pro...all the shares are having a sell off as it is the end of the financial year. There has been no proof of any bad news it is just derampers like yourself trying to push the price down to buy back at a lower price. Are you going to sell all your shares cos' virtually all are going down at the moment? Long term this is a brilliant share and if you get out there is no guarantee you will be able to buy lower!

I think you should check out that million share sell-off that went through a couple of minutes ago. Then review your feelings. This is not a good share to be in!

Rubbish Pro...this is one of the safer long term shares on the AIM. Go and deramp somewhere else.