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'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.

that million share sell-off as you call it was in fact a rollover

You mean like a lottery rollover?!!!
Oh and by the way. It was NOT a rollover. 500,000 were sold for 23p and 500,000 were then sold for 23.1p
Be helpful if you stated facts in future instead of making a soggy attempt to ramp a share that is slipping into the other side of nowhere!!

No not like a lottery which is a game of pure chance with very poor odds, it's to do with a strategic manouver as part of investing in a real company which will shortly be producing real goods of real and increasing worth.

Pro by name, amateur by nature, boring by result.

SD

We've heard this (ramping) spiel about "hearing news shortly" but as the share price and the mega sell-offs show, the only news we are having about Kenmare is ALL BAD! It gives me NO pleasure to have to say that -it's just the truth.

What news - your assertions are not news - show, don't tell as they say in my industry.

SD

FWIW - Pro is a South African note the use of the term "spiel"

pro - 30 Mar'05 - 16:20 - 286 of 287
We've heard this (ramping) spiel about

There was a lot of selling off today and it is my opinion that the selling will continue unabated tomorrow. The plain and simple fact is that the true share price of Kenmare should be no more than 18 pence. I've nothing against the share (apart from the fact that there's a whole lot of selling off at the moment amidst rumours of bad news to follow shortly) but the present share price simply doesn't reflect fair value. When it gets down to 18 pence, which I feel will be sometime over the next week, then I may consider buying in but certainly not above 18 pence.

Ha as I thought Pro, who is anything but, is just trying to push the price down to buy low. As SD said where's the bad news? Only in your imagination.
Go away Pro.

Hi all,

As an ex holder of KMR, I've checked in now and again to read the thread although I haven't posted on it until now. To be honest, I've only kept a small eye on how the sp has performed so congrats to these who have held on until now.

Just read Pro's comments of the 1m sell off which he claims was "definitely a sell". Sorry Pro but it looks like a rollover to me, probably a holder who took the shares originally on a T+ basis, probably over 25 days. They either have the choice of keeping and paying for them at the end of the 25 days, or rolling them over again for another 25 days. Looks to me as if he sold 500k at 23.00p and bought the 500k back again immediately for 23.10p. My understanding of a rollover is that the shares must be sold and then bought back again within 3 minutes. Both the trades will show up in the sell column as they were both conducted under the mid price at the time.

Hope some of that helps.

Cheers

Gav (no position in KMR)

Definitely NOT a rollover. Sold at different prices and as an ORDINARY trade. I wish I could side with you but have a real bad feeling about this one over the next week. All the bad rumours and the slide in the share price along with the heavy selling off (don't forget the 11 million sell-off a few days back) tell me to keep avoiding this one until times get better. Too many good shares to profit on without getting involved in a lottery. Who needs that?!!

Of course they were done at different prices. The holder of the 500k sold them at 23.00 and then bought them back within a few seconds for 23.10p. You can't roll over at the same price as the MM won't make any money on the deal. As far as the trades showing as ordinary trades, of course that is the case. The holder of the 500k simply sold them for 23.00 and bought them back again for 23.10. Both trades will show up as O trades.