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

aldwickk,

let's hope so!

I feel we must be due some sort of construxction announcement son, and then we should be back over 40p.

Andy,

Off topic, am still holding BEM at a loss , whats your view on them now ?

Its gone 406 mad !

trading sideways, will it be up or down??? up i hope, quite a lot of deals today but going nowhere at the mo?? lots of single smaller buy trades but one bigger sell. for the life of me i cant see why anyone would sell now!!!!!!!

Can anybody explain what a wt trade is all about ?

if the wt trade isat about 19 or 20p it will be a trade in the underlying warrants which are exercisable 1 for 1at 19p on 23/7/2009

Nice to see this one moving up slowly but surely.

Why would people sell now, when the big rise is just around the corner. Or have i got it wrong in asuming the SP should go up when the mine is up and running in a matter of a couple of months time!! Lots of smaller buy trades today but even bigger sell trades.

RNS out its good and bad news ? which way will the sp go thursday ?

KIVVER //HI-AS I understand it I BELIEVE that you are wrong????the mine will not be making money still aprox six months after the machine and pond go into action ie start exporting etc / so i think the S.P.will go all over the place for some time yet// just my take on these at the monent.

Still a buy as far as I am concerned. A short delay doesnt dent the long term prospects here.

AGREED///IN TOTAL//

Anyone that got a few more at 32/33 are smiling now .

Will be doing more than smiling come March next year.... :)

Lets hope so .

Glad I kept faith in this one.

Goldfinger why? Have i missed some-thing seriously!

6 week delay for mineral separation plant,which was due early 2007.charman has said signifigance small,project has gone extremely well.titanium output forcast from 700,000 tonnes to 800,000 tonnes per year.whole project now 94.5% complete. dated15/10/06. about time these started moving and dont forget the warrants.

What about the power line connection ?

connected ...... bzzzzzz