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

How come they have stopped putting photos
on the website?

I have my finger hovering over the buy botton but can't decide if it has reached bottom. It could go either way so i'm treading water for a few days.
GF i see you've been pulling a few tails elsewhere re ASG. For what it's worth I think you're bang on.

LOL
MS

Its just nudged up again.

Poldark, no idea about the photos, must admit I should look at companys web sites more.

Mickey, looks like a bottom as been formed, might be right to watch for a few days.
ASG, yup its looking ok now but in the medium term?. You know Im a patient chap (probably all the stella I consume that puts me to sleep)and I thinks things are going to take a turn for the worse at some time for the pushers on advfn. We shall see.

I think this short term debating on MMs/seller in the market is going a little far.

The broader picture is that the demand for Kenmares products is growing ie, India , China and developing nations (7% to 10% growth for Imenite and Zircon per year, more than double historic growth rate) and the supply into the market is getting dangerously low, the worlds two largest mines are close to the end of their lives and production is in decline,

Levels of inventory throughout the supply chain are very low indeed.

KMR is in the right position at the right time, in my opinion.


http://www.kenmareresources.com/pdf/canaccordkmr0806.pdf

I go out for 20 minutes and look whats happened. That just about sums my luck up.

MS

Buys coming in thick and fast now.

Nice to see - pity got no spare cash.

Not sure yet. Many other stocks are slightly down today, so it may just be a case of traders trying to find bargains elsewhere. KMR attractive price, but there should be a bounce for those who have missed the boat, imo.

very well put GF, makes the recent fall even more suprising!!!

Just to add to that,there are only a few buyers of ilmenite, headed by Dupont and KMR has already sold 57% of the first 5 years production. Near 20% is under fixed price contracts, which ensures that KMR can more than adequatley cover its operating charges and bank interest. The remainder will be sold at the prevailing market rate and we can assume anticipated rising prices given the World shortage of the mineral.

Any talk of further fund raising is really silly. Lets put that to bed now, once and for all.

From RHPS tip sheet this weekend..........

KENMARE RESOURCES (KMR)

The Moma Titanium Minerals Project is OVER 90% complete, and Kenmare expects to be mining before the end of the year. BUY.

Buy up to 40p, Target Price 60p.

Speculation over the road that the IC will be running a positive piece on this one friday. Dont know how they get there info.

Good end to the day.

i am also led to believe the first selling contracts have long been signed, in other words the deal is already done for a certain amount time. This is good but also a slight negative because if the price/value of the commodity goes up KMR will not be able to take advanrtage of this until the deal has run out. Perhaps others with more time might want to confirm this or confirm ive been lead up the garden path.

"Through forward contracts, Kenmare has sold more than half of the first five years production", taken from RHPS tip sheet mail shot.

But you have to remember Kivver this money is in the bag at a substantial premium to its mining cost and production and also props the company up on its way to serving the market, in other words no more funds will be raised and the company will be in full swing very early 2006.

"The rest will be sold at prevailing market rate and Kenmare anticipates rising prices."

China and India cant get enough of these minerals.

67% of the titanium feedstock market is controlled by 3 producers, Anglo, Rio Tinto and Iluka Resources. Historically demand as grown by 2% to 3% per annum, but the raging bull market in commodities has seen an acceleration driven by China and India. Prices have been held down by sales from inventory , but this cannot last especially as the big three producers above are all facing declining production.

KMRs Moma project will add 7% to the global supply of titanium feedstock, and according to independant consultant IBMA, WHO ADVISEDTHE PROJECTS LENDERS, Moma will be the second lowest cost producer in the industry.

Looks very good to me.

Titanium supply remains tight

By Tom Stundza

October 11, 2006

Titanium demand from all end markets, but especially commercial aerospace, remains healthy and robust, says Ronal Epstein, analyst at Merrill Lynch in New York, who recently attended the International Titanium Associations annual conference.

Although numerous capital expansion programs are in place, the suppliers continue to play catch-up with demand, he says, adding there was no consensus whether there would be enough supply to meet the significant demand in the coming years.

Reason: Demand may double by 2015. In a report to clients this week, Epstein says that Boeing expects to be the largest customer of titanium, at 30% of consumption by the end of the decade. He notes that Boeings internal forecasts, even with the planned capacity expansions, show there wont be enough supply to meet the onslaught of demand and encourages further capital expansions. Capacity of 95-100% is not feasible and ideal capacity is in the 80-85% in order for any unexpected demand to be met, writes Epstein. Hence, the company is aggressively addressing issues it sees with the supply chain. Reason: Between 15%-20% of the 787-model jetliner will be comprised of titanium as compared to less than 9% on the 777 model. Also, while commercial aerospace is expected to be the main driver of demand, Epstein says, the industrial and defense segments are also expected to be strong, mostly driven by global economic expansion in the Middle East and China and the oil and gas industries.

Titanium Corporation Announces On-Site Commissioning of Pilot Mineral Concentrator Plant

October 04, 2006

Titanium Corporation Inc. is pleased to announce that its pilot mineral concentrator plant has been successfully commissioned on-site in Fort McMurray, Alberta.

The operation of this heavy mineral concentrator on-site is an important step in Titanium Corporation's 2006 Pilot Program to finalize the Company's process flow sheet to optimize the recovery and separation of heavy minerals from mined oil sands tailings. As a result of technical work conducted in 2005, the Company's engineering team redesigned the process flow sheet. The Company's strategic plan was modified to focus the first phase of development on the production of zircon, followed by an expansion phase to produce titanium products. Zircon continues to remain in high demand world wide and has experienced significant price increases .

The pilot mineral concentrator was constructed in Australia in modules, a strategy which is proving highly efficient with project timing and costs tracking within the original budget of C$3 million. Following decommissioning of the pilot mineral concentrator in late October 2006, the mineral concentrate that is produced will be shipped to Titanium Corporation's Regina facility for separation processing and analysis during the fourth calendar quarter of 2006.

I wonder what the sp will be in a years time when everything is up and running ?