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

Hi Predateur,
Thanks for the reply..lol. I'd just thought I'd ask the question as sometimes posters can provide more info on these matters. The sale hasn't affected the sp which is the main thing. In the meantime if anyone sees a small bloke with size 10 feet and 4 million quid in his pocket.......
LL

KMR looking oversold at this price IMO.

The processing plant is nearly constructed, electric line almost connected, cost of work is already fully funded, most production pre sold at agreed prices, and the US$ has not fallen suffuciently to cause undue concern IMO.

Maybe an entry point?

Can whats occured regarding the SP. of KMR be at all justified.We were slowly working towards a fair valuation price of 59p.in the space of 5 days the SP has receeded some 20%.Why?.

HI BOXERDOG/////ALWAYS MY CHOICE OF DOG//////why the fall in price?? FEAR//////////

bristlelad mine too,(the dogs)i have 2.Fear! elaborate please.

Sheep is sheep if one jumps over the cliff they follow. MM's take full advantage of this situation and add to the panic. Me and other holders are remainling cool (i hope) know that a fair and very conservative value of the company is 59p. Because the deals have already been done. The price of what they are going to sell is already set. I am hoping it will go a bit lower then fill my boots. Just wish i could sell some of my other stock, but thats all fallen too!!! all IMHO of course, you must make your own judgments. Good luck too those who have remained cool and stayed in.

Kivver never one to lose my bottle,i remain commited.It helps that another one of my holdings is travelling in the opposite direction RTD.From memory wern't you once/still a holder.

BD, once a holder of RTD and a fan but been out for quite a while now. suppose others have taken my interest.

bd fear/ falling markets/pro/moneymanagers/etc trying to make you or i trade more so that they make more money//etc I will be getting a new boxer dog by the end of this year

Bristle i have mother and son .i bred her 2 years ago.Be careful when buying.

Well It seems that KMR stopped falling yesterday and what a great buying opportunity. I rate KMR as my top share in potential...it was GFM but after 75% of my portfolio became GFM because of profits...I downscaled my GFM holding.KMR I have now bought more at 33p yesterday so I now hold from 14p through to 33p and my biggest holding in my portfolio is now KMR.

There is a world shortage of Titanium and this mine is due to be in production in September. This makes KMR a great investment IMHO. DYOR etc.
Di :-)

di,

Good to see you still around!

I am still in GFM, and KMR, this looks like a tidy growth story, provided we don't have too many shocks like the last week or so!

I prefer producers/near producers rather than raw explorers (Except PAF) in the current market, and IMO GAL is worth looking at, we are visiting the minesite on Friday, and they are about to commence production!

The jewellery gives them an additional edge, as they multiply the profits of the gold they use for the jewellery many times! and they are the only miner doing this to my knowledge.

Did you work out your trading problem with the SB company?

Hi Andy,

Glad to see you still have GFM and KMR.. having mostly sold out of GFM at the highs I bought back more GFM as well as KMR yesterday now I have no spare cash at all.

CMC...nope haven't got anywhere with them...still have hanging tickets and currently trading with Cap Spreads whilst I get the hang of a bit longer term trades and commission. I was actually making progress but traded like an idiot yesterday and lost alot of it :-( Once I get the hang of commission and trading I shall move over to Global or 2 way Futures....with my old trading method of quick scalps they didn't want me as a customer either:-(

However, if I keep trying I will get there again.
Di

Looks like 33 was a good buy . on the move again .

fliper its a cracking buy,good luck.

Have been in from 23p and added along the way .

I bought in 22p,23,27 etc what a ride.Nearly threw in the towel this week CFD's were looking perilous hope the worsts behind us.

My two tips at the start of the year were kmr and pci ,both going well .

New research report out from cannacord adams Report click here

Well buying more KMR at the end of May at the lows was definitely a good decision. KMR is my biggest holding of any share and showing a great profit and certainly worth the 3 years I have held... the best is yet to come. I think once the mine opens in Sept KMR will also issue news of more resources of Titanium and maybe other metals...don't forget the broker note a little while back saying 80p by the year end...I suspect it will be more DYOR etc. Shares mag last week says 1 in 10 readers hold KMR which is interesting.
Di