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

boxerdog,

Many thanks.

agree with andy but you just never know, so stopping in just in case. ajc doesnt post often on TIM but when she does its worth listening to, very clever at all aspects of trading and investing.

Kivver,

I'm not selling, I just think the main price push will be in the summer.

Ticking up again

Intention to add to one of my two core holdings today.
KMR v RTD.After viewing KMR 1m buys v 37k sells no
contest,guess the rest.

topped up a long time ago

A nice move up again, don't you just love this share?
I wish all the shares in my portfolio behaved like this one.

they sat you should never fall in love with a share but i must admit i like it a lot. First batch bought at 14p.

Me too...

Photo's updated on KMR website!.

I would like to buy more but holding on to chp.

bought at 14, 27 and 38, well chuffed.

23, 27, 39 equally chuffed - a fine chart is a thing of beauty to behold.

good weekend everyone

sd

Bought 14, 19 and 25 and happy to hold. Hiya sd ....glad you are doing well on this one...shame you didn't buy GFM too...have a good weekend

Always ahead of the game Di, this year's great so far for me up over 20% across the board so far with a lot of interesting stocks moving very nicely (and one or two that aren't!)

sd

SD .....KMR and GFM are my top performers but I am not doing more than watching and waiting...my main activity is day trading the miners these days. Still it makes sense then that my top shares are miners too.
I am glad you are doing well sd. Do you still have hyr and vti? I only kept hyr and it is doing well now.
Di

No I got out of them a long while back - see VTI hit a bad patch - actually a good entry point I thought, but all funds committed. Haven't looked at HYR for ages. How is day trading? I'm very tempted by spreadbetting, but, inspite of following a "system" have lost all bets so far (only small beer, but irritating) - like 90% of punters do, I'm told.

Cleared out some dogs early in the year, concentrating on good performers already held and reduced the number of shares in my portfolio - almost overnight imorovement and feeling of better control. Still a couple to go (apart from our friend NML!!!) - are you in GME or ARX - wonder if they'll ever come good?

sd

I'm very tempted by spreadbetting too but have not yet tried it as I hate to lose aand you can lose quite a bit it seems to me. I buy and hold or take profits if they're reasonable--still holding GME in fact I've topped up as they have lots of orders all in the right areas and there's a shortage of companies supplying their expertise-we just need the revenues to start rolling in!! I'm into CGT now which makes me reluctant to sell now so I'm watching some profits slip away again--hope they come back next tax year! this seems stupid as well so I guess I must have a go at spreadbetting sometime. If sorry when- DGT comes good I might retire!!
cheers MP

MP
I always have automatic stop losses in place to control risk on each trade to no more than 5% of my total (micro) fund.
I'm also in GME - has to work some day, doesn't it? Also heavily into DGT.
With AIM your CGT falls to 10% of profits after holding for 2 years. At that level it should not affect your judgement when to sell (you could lose a lot more dillying about!).

sd

thanks sd.