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

Shares in Kenmare Resources* (KMR) added 1p to 51.25p in heavy volume. after GE&CR published a note increasing its base case target price from 50.25p to 51.25p

I think somebody has got their numbers wrong there.

The April report stated:

We value the base case Moma mine (output 703,000 tones per annum) at 59.1p per share using a cautious DCF model and a 1 million tone mine would be worth 70.6p per share to Kenmare. We are working on new forecasts and a new valuation over the next few weeks, as we prepare a more detailed note but we see no reason why those forecasts and valuation will not be significantly higher than our current numbers.

FP agreed the note headlines state....

Kenmare Resources Results Note: Base Valuation increased from 59p to 71p. Buy at 49.875p.

And they do indicate a upgrade to the 71p SP target in the near future.

The TA picture is very clear and encouraging, not that TA always works on small and illiquid companies.KMR is relatively small but certeinly not illiquid as the spread is usually below 1%,the spread is normally a good guide as to liquidity.
The previous resistance level at about 48p has now become the support level.
The OBV has continued to climb steadily and there is good support from computer generated buying,probably institutional.

From GCI site....

Profits in sight at Kenmare
Companies: KMR
15/05/2007
Kenmare Resources hopes to turn 2.2 million losses into profit as its Mozambique titanium project reaches 800,000 tonnes in annual production.

Fully listed Kenmare, which raised 53 million at 16p in 2004 to develop the Moma titanium project and has 138 million project finance in place to take it forward, aims to increase its annual production of titanium-bearing ilmenite from 800,000 tonnes to 1.2 million tonnes by 2010.

By the same year, managing director Michael Carvill, the Northern Irish entrepreneur who has been developing Moma since 1987, hopes production of other Moma metals, zircon (more expensive and an ingredient for ceramics) and rutile will have reached 80,000 tonnes and 30,000 tonnes respectively.

Next year, Carvill sees the company, which needs to spend another 20 million to reach its 2010 targets, drawing 62.5 million revenues from Moma, with operating costs of only 19 million. That would make Kenmare among the lowest cost of potentially significant producers.

Titanium oxide is an ingredient in a wide range of products including jet engines, air frames, pigments, paints, medical implants, surgical instruments and colouring for cosmetics, toothpaste, ink, paper and clothes. With long-term shortages developing in the face of demand from China, India and other emerging giants, Carvill said Kenmare has off-take agreements covering 60 per cent of its projected revenues for the next five years at price adjustments pegged either to the metal market or inflation.

He said ilmenite deals done at 36 a tonne two years ago are now being agreed at 47. Kenmare shares, which stood at 3p in 1999, have now reached 51.5p, valuing the company at 345 million, should have further to go and could even at some stage attract corporate attention.

Good start to the week for this one.

Lets hope it goes on from here.

Moving nicely. 70p here we come.

Worth having a butchers at this....http://www.worldwidebb.com/news.php?id=latestnews&cast=363

Nice find GF. Hope you don't mind me relaying it to ADVFN. site. Cheers.

Nice find Goldfinger - warrants up nicely today again. I hold these instead of shares.

me to.

warrants are 36.5 exercisable on payment of 19p on ( or before ? ) 23/7/2009 share price is 54.75

Got both and doing nicely.

Positive again chaps.............NICE.

.

Going well again this week.

Yes...very good isn't...and lots more to go :-)

Sorry if this is old news, but I thought it was rather bullish read anyway. I am tempted to tuck in.
http://www.miningweekly.co.za/article.php?a_id=108343

Welcome aboard R88.

Moving up nicely.