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

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.

stockdog,

Don't mention NML, otherwise we will have the demented one here telling us all off!

After holding KMR shares for around a year now i'm still confident of their prospects and indeed added even this week.If forcasts are to be beleived the SP.is only halfway there.
Could anyone be kind enough to fill me in on trading warrents ie.pros.cons if any, as i'd like to add to my interests in KMR this way .

Regards BD.

Boxer,

Warrants have a time limit, in Kenmare's case, 23rd July, 2009, and unlike the shares, cannot be put in an ISA.

The risk is that if the warrants aren't "in the money" by 23/7/09, they will expire worthless.

The warrants give you the right to obtain a full share for 19p, and with the current price of the ordinary share at 46p, the warrants have a slight "premium" at 27.5p. (19p + 27.5p = 46.5p) In otherwords the warrant has a half pence premium against the value of the ordinary share.

They offer leverage, but some people prefer to own the shares.

Cousin boxer
You need to become a personal expert to be safe probably. Highly geared - big gains on small outlay - also big losses, bigger than outlay, possible. A few tips on a BB would be a very dangerous way to start IMHO. PS. let me know when you've found out and tell us all how to do it. lol!

sd

Sorry to be off topic...Sd...It has taken me over 2 years to find a method that works for me with sb. In the past 23 weeks of my 'working' method of day trading with sb I have made a profit 19 of them. Only one of my 4 losing weeks was anything much and I lost the previous weeks gains. Currently up 350% since september. However, for the first two years or so I was one of those 90% of losers. I didn't lose much as I bet only 1pp until I could consistently gain. I now go up 1pp everytime I gain another 500.. Obviously it took me a long time at 1pp to get that first 500. The last 500 took 10 days the current one I am nearly there after 6 days. Hopefully it will continue but I do spend 4.5 hours a day glued to my screens and charts.
If you don't have that time companies like KMR are a good long term investment IMHO.

Have a good one.
Di

Andy thank you.Please elaborate ""in the money"" by 23/7/09.i'm a bit thick.
Do only certain plc's trade in warrents.Like standard shares can i sell at any time?.

regards BD.

boxerdog,

By "in the money" I mean that the value of the warrant and any premium will be equal to or more than the prevailing ordinary share price, otherwise you would lose money.

The warrant has a conversion price of 19p so if the ordinary share was, say, 10p, then you would not convert from the warrant, as you would be paying 9p per warrant more than the share is worth, and you could buy cheaper in the open market.

In this case, you would not convert, and your warrant would time expire, on the 23rd July 2009, and would be worthless, which is where the risk is.

And the warrants don't have the same tax advantages.

Not many companies issue warrants, although they are sometimes given as incentives in placings.

CURRENTLY this does look VERY unlikely in Kenmare's case, but you never know what's around the corner!

For example, there was an earthquake in Mozambique last week, no serious damage ,and thankfully only a few deaths, to the best of my knowledge, thank goodness, but I was surprised to hear they had even had one to be honest.

To see the earthquake news, click HERE

Cheers Andy,Are they your posts over on ADVFN ?, "guessing they are" i've just read.
regards BD.

boxer,

Yes I post as Andy on both sites, plus a few others.

SD

Hope this helps and doesn't get me into trouble

http://www.financial-spread-betting.com/Spread-betting.html

http://www.advfn.com/cmn/fbb/thread.php3?id=10613301

http://www.advfn.com/column8/stop-stop-losses.html

Thanks, zscrooge - looks interesting.

sd

OT
Dynamite
Re post no 534: you've evidently worked up your s/b positions from modest beginnings. I'd like to try the same, but don't know where to start. Which s/b company lets you start at 1pp? Do you 'phone through for quotes or is it an online service?

All help gratefully received.

Trelleck...cmc is who I use but having a lot of problems with them at the moment. You need an online service to get anywhere or else it will cost you dear. Good luck
Di

Dynamite

Thanks and good luck. It's nice to know it can be done without losing the capital whilst struggling up the learning curve.

Trelleck - also try Cantor. Good on-line service, plus once you've placed orders on-line very happy to move them closer to the action by phone even though below minimum phone roder size. Incredibly nice people even when only dealing 1 a point.

Tried to use CMC as first choice, but no good for Mac users like me (silly losing 10-15% of your market 'cos too lazy to X-platform the software!).

Someone should start a spreadbet thread!

sd

Nice to see a Mac user stockdog.
There really is no excuse for web pages not to be friendly to all users.
I would not change back to a PC for any price.
Cheers.