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

Excellent news release - ahead of schedule, on budget and higher prices for the latest offtake contract. A good start to the week !

any special news about KMR today...well up and
brokers quoting in 25k lots for it

I believe there is a broker note out today but no details...anyone?

A couple of serious roll-overs at lunchtime today - 5m and 1.1m with 0.01p turn on the price - both showing as sells which they weren't. Price ticked up 0.25p.

I saw those - even without them there was a very large turnover in KMR shares yesterday. Any ideas why ?

I thought the large turnover was the two rollovers. Otherwise no real idea, except we seem to be ticking up nicely on a pretty strong chart.

Total turnover yesterday was 12.5 million of which the rollovers accounted for less than half. Much bigger than the usual day's trading. Chart looks very good and difficult at the moment to see what downside there is given the upbeat comments coming from KMR

roll on spring 2006 when production starts.

I think you may be a little ahead of things - according to the release on 25 july. completion of the project (which I take to mean start of production) is slated for late september 2006. I wouldn't be surprised if before then we hear further news on more customers and a possible expansion of resources.

thanks for correcting my over-enthusiasm, jw - still roll on fall 2006! Yes, I am sure there will be increasingly regular updates as the plant is built and put into commission between now and then.

sd

Hi all,

Not a holder of these but I had an interesting conversation with a broker at Redmayne Bentley last night that thinks these are destined for 80p. This was the same man that tipped me firestone diamonds at 40p.... He has held these since 16p

don't know anything whatsoever about the co... chart looks as though it isgoin in the right direction anyway!!

Good luck all.

Nice run up, but beware, price extended on very thin volumes and some indicators showing a little toppy - may fall back before going further over the next 12 months. Quite a way to go until production still.

Anyone know when we are due the interims?

sd

Wouldn't be surprised if some announcement due out soon as very large number of buys going through - at Noon buy/sell ratio over 22:1.

Although there is still a year to go, other than political unrest, it is difficult to see much downside to the SP, especially given the bullish noises made by KMR. IMHO we are more likely to see a drip of good news over the next few months including an increase in quantity at the mine and more contracts. I'm holding.

I'm holding too - regular news would be good.

I see KMR is having another stonking day...must be some news out soon I think. I cannot see why KMR would not be over 2 in a couple of years. Having bought from 14p-24p I am sitting pretty on this share and intend on keeping it for a few years.
Di

Thought today's action might winkle you out of your shell. How are you, Di?

Memo to self re post 451: don't talk rubbish!

sd

Fine SD...now trying full time trading...this is my third day. Not made any money yet though :-(
I wish NML would do as well as KMR...your diamond collar is looking a distance dream at the mo.!!! Still hanging on and intend keeping and waiting.
Di

Would agree that these are good boys. Not a holder. Looks as though i might miss the party!!

I know of a certain private client stockbroker buying these today. He was the one pestering me to buy fdi at 45p!!!

Good luck. Perhaps it was in ic this am??? has anyone checked??

This is one of my buy and hold stocks, been holding for two years now and it is great to see the price rise over the last 12 months.

As production gets ever nearer the uncertainty evaporates, concentrate on the margins, demand, doubled up production and future dividends.

I will still be amazed if they are allowed to go through with production without a big boy taking them out, the higher the price now the more they will have to pay.

all the best

capa

Capa...snap I also have had KMR for two years...it was one of my first stocks and I am holding on tight...should be an interesting ride
Di