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

A quote from Chip Goodyear chief exc.at BHP Bilton.After reporting profits up to 2.5b (half time).I expect a strong and continued demand for all mining commodities for the foreseeable future.Is this not what KMR. are all about?.I noticed that although KMR.failed to register a gain today on the LSE.Their counterpart trading on the Dublin exchange registered a handsome gain of 3.3%.Lets hope we follow suit tomorrow.

boxerdog, im pretty well sure its a 'when' not an 'if'. We've seen a big rise and the mine isnt finished yet, should be around sept/oct. Just bought my 3rd batch the first bought at 14p and not sold one share. The next big step up will come but learning a little bit more about the market it will probably be closer to that date but you have to be in to catch it!!!

Kivver not sure if my post read as intended!The remark starting (i expect)was infact the quote from Chip Goodyear of BHP.I only came aboard last feburary thanks to the postings of AJC.Of another "BB".(Many thanks Amanda) at 22p and added since several times and intend to add still further circumstances permitting.

On the move again!.The SP.has in fact risen 10% alone in the last month.

boxerdog,

This sudden rise may be down to rumours of a bid for Lonmin, the whole mining sector seemed to jump at the same time.

boxerdog - me too!!!! re - amanda as i call her on the bb we're talking about 'the shares goddess' up today on little trading prefer it to be lots of trading

for those of you that dont know (im sure there are not many) kenmare are building a mine in mozambigue called The Moma Project to produce titanium minerals, Rutile, Ilmenite and Zircon. The mine should be finished towards the end of this year. Some analyst say the lowest value should be just over 60p and some say much more with an increase in activity at the mine. Already had a big rise and im sure the push towards that 60p will come but when?? who knows, but as they say you have to be in it to win it!!

kivver,

Out of interest, wihch BB and poster are you guys referring to please?

I agree re kMR, but think the real push for the price will come in Q3, when the mine approaches production, rather then now.

We have tax year end coming, and whilst the gains here have not been too substantial compared to some oil, gold, or zinc stocks, the market normally suffers a downturn during the spring and summer.

Andy, the BB. board in question is (thisismoney.co.uk.)

boxerdog,

Many thanks.

agree with andy but you just never know, so stopping in just in case. ajc doesnt post often on TIM but when she does its worth listening to, very clever at all aspects of trading and investing.

Kivver,

I'm not selling, I just think the main price push will be in the summer.

Ticking up again

Intention to add to one of my two core holdings today.
KMR v RTD.After viewing KMR 1m buys v 37k sells no
contest,guess the rest.

topped up a long time ago

A nice move up again, don't you just love this share?
I wish all the shares in my portfolio behaved like this one.

they sat you should never fall in love with a share but i must admit i like it a lot. First batch bought at 14p.

Me too...

Photo's updated on KMR website!.

I would like to buy more but holding on to chp.