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

And so will the crime rate go up in the blackouts, all this will hit the tourist industry

fourth shipment out,and the share price goes down. whats up doc?

Sometime in the future, soon, this will be rising and everybody will be thinking : " I wish I bought in then", in the meantime this drop like this is a pain in the neck, I'm going to sit through this, and hope that in a few weeks time all the problems will have been resolved, which I think will have been (42p crazy..., unthinkable a few months ago..).

I've traded this a couple of times on the way up, and with the current depressed share price was looking to buy back in, However, I am concerned that forecast revenues for 2009 are still only approx 90M against a market cap of 322M. In my mind this limits the upside without significant upgrades to production ouput. I'll wait and watch for the moment...............

Well canary9, it depends whether you look on the short term or the next decade or so, from what I gather this mine should last 100 years, (that is a long time, enormous earnings). If I were a major mining company, this would be the time to pounce on little KMR, the RIO's or Xtratas's could snap this up just like that, there will be a rebound there's no doubt, just a matter of when ?, the sooner the better for the likes of me !

I can certainly relate to the last 2 posts, canary additional revenues are expected to come from a ramp up to 2mt. Whilst feasible i share your concerns i also think 42p crazy. After saying that if kmr. were and still are such a great potential with enormous earning potential, I'd have thought any predator would show their hand now with a subdued SP. and pi's running for the exit signs!. A hefty 50% premium on top of 42p only values the company at may 2007 prices. A great deal has been achieved since then, i for one thought we'd be 70p+ now what a bummer.

Basically it has to do with the price and demand for the products. Currently firm in both counts and likely to remain so.
They have experienced problems not of their own making and the management is sound and on track.
Looking at the chart it looks like a buying opportunity.

looks like chart is in feefall to me. anyone know why kenmare is planning to draw down from standby credit facility when it raised over 9 million from take up of warrants last month ? . patience is starting to wear thin.

Whats Tom W have to say about these, it was one of his top tips ?

Tom W is a joke, acc & fmj were 2 of his top tips 3 years ago. He's like Andy Cole; have 10 shots at goal, you'll get one in eventually!!

The problem TW has is he rarely gives sell recommendations as most of the companies he tips are his clients.

or you could just sell his buy tips, i would of made on fortune on acc and fmj if id have done that!!

BACK TO KMR A GREAT BUYING OP IMHO!!

Nice climb...about time too..should be above 60p at least...

The KMR share price is very much linked to the price and demand for Titanium and other products that KMR produce. Despite various world wide recession/inflation concerns the Chinese and other consumers/manufacturers have not gone away and are unlikely to close their factories any time soon.
Ironically the power shortages in Africa that affect virtually all miners there, and KMR have already acknowledged their concerns, will keep prices firm as there should now be shortages of the basic commodities mined there.
For example look at Aquarius Platinum -- their production problems and power shortages have sent their share price rocketing.

How has this fallen so much on such little volume being sold????

Not only little volume, but also no news, good or bad. This is purely market maker manipulation. You will also notice that the spread varies quite a lot, again for the same reason Kivver.

z, does that mean the MM's try to get them at a lower price now to sell later at a much higher price?? Looks like very little fell for it and held onto their shares.

Yes K I think you are right, but their main source of increasing their profits is simply jerking the price around and also varying the spread. All this usually at low volume when the normal market forces do not come into play, so then this is quite obvious.

ok. I've got a warrent certificate I would like to exercise, however my online dealers won't accept them. Can anyone give advice. Reading the instructions on the back I believe I should complete the form & send it with a cheque to

Registrar
Computershare Investor Services (Ireland) Limited
Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland.

Advice from anyone who has exercised their warrents appreciated
Regards qklink

I recently took advantage of the discount exercise price of 17p per warrant to buy full shares. this was an easy transaction completed by my broker at no other charge, but took about a month. the price per warrant to exercise is now 19p up to 23/7/2009, and your online broker should be able to do this for you. check again with your broker, [by telephone] as this is usually part of their service.