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

150,000 @ 22.75 ...what a steal!!!

This stock has to be one of the cheapest ever! Buy value = 3 times greater than sell value and price goes down. What a steal!!!

hope they dont sell for less than 60p.

Mega trade: 620,000 shares bought at 16.20pm

This share is my share of the month. Indeed I feel it has so much potential that I'm half tempted to say "share of the year". Things are a little quiet just now but when you have a company which deals in very much sought after goods and when demand very much outstrips supply -well, doesn't that seem like the perfect business model to you??

Up today. 3 times buy value to sell and twice as many buy trades. Like I said: A solid company with excellent forward expectations.

This share is on the rise. Hope you're all on board!!

On board and looking forward to an upward ride.
Di

Welcome aboard, Dynamite - always nice to have you with us.
SD

Stockdog...I've been abroad for over 18 months just waiting.
Thanks Stockdog
Di

Aboard or abroad - surely never a broad!
Apologies.

Aboard sorry...Nothing for you to apologise about :-)

Still on the rise chaps!

As a holder for well over a year, patience needed with this share, it will get where you want it to go but in its own time.

Looks like it is in a new trading range now instead of the 14p to 20p one of old, which is nice :-)

capa

4 times the value in buys against value of sells! Seems like people are getting the picture about this share!

I'm happy today with nearly all my holdings-0-:) etc. only NRG is letting me down. can't win em all I suppose.

pro, is there any news due soon on this share, I took the opportunity to get aboard yesterday in the dip, short lived though it was

Not that I'm aware of, but with a company that's got all the right credentials, like KMR has, any sudden uplift in price may just as easily be put down to share-buyer astuteness rather than news. You got in at a good time. Well done!!!

Very rewarding day with KMR.L!!!

News due re further offtakes, increasing capacity of production facility, progress report on mine. There is also the possibility of an offer for the company. Michael Carvill said last June that the company had recieved offer(s). However no timeframe for the news so could come at any time.