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

Lanfranco "Frankie" Dettori,


Thanks for the tip

Well thats a new one.. a 20000 bot instead of a 6250 bot..I like it ..come on botty buy more :-)

Is it a big seller selling in 20k lots?,cant be stop losses as they would have been triggered yesterday,any thoughts?

weird all this buying and selling, but the SP hasnt changed a bit???

Maybee a big buy order in the background?,interesting though.

Kinsella keen to see Kenmare sold
Ousted audit chairis still a director


Go By Tom McEnaney
Thursday July 12 2007


DONAL Kinsella, the ousted chairman of the Kenmare Resources audit committee, said he was keen to see the 636m company prepared for a takeover.


Mr Kinsella, who is still a director of the company and a member of the audit company, said it would be an obvious takeover target for one of the world's 'big four' mining companies.

These are Rio Tinto, BHP Billiton, Iluka Resources and Xtrada. Sources close to Kenmare deny Mr Kinsella agitated for a sale of the company.

Board meeting

The Kenmare board met yesterday to consider an incident at its Moma Mine in Mozambique last May during which Mr Kinsella repeatedly appeared naked at the door of Deirdre Corcoran, the company secretary, during the night.

Mr Kinsella said he was sleepwalking. He has formally apologised to Ms Corcoran over the incident.

He said: "One possibility was that somebody such as BHP might take over part of the company and leave the management in place. I wanted somebody to take over the full company."

According to Mr Kinsella, as well as pushing for the company to prepare itself for a sale, he suggested to its chairman, Charles Carville, who is in his eighties, that he should consider retiring.

Mr Carville's son, Michael, is managing director of the company.

The 10-member board met Mr Kinsella to consider his position as head of the audit committee at a meeting in the company's headquarters at 10.30 yesterday morning.

After Mr Kinsella was asked to retire, the remaining directors, some of whom were participating by conference call, voted unanimously to remove him from his position. According to Mr Kinsella, when asked why he was not being removed as a director, he was told that the company was acting on legal advice.

Before leaving the board meeting Mr Kinsella, who has been a director of Kenmare for almost exactly 20 years, told his fellow directors that he had been advised that he had legal remedies available to him.

"They are using this incident to diminish my standing within the company," he said. "I wasn't going to resign because that would have been admitting that I did something wrong."

Kenmare's Moma mine is close to production. It has a resource base capable of producing 800,000 tonnes of the mineral, from which Titanium is extracted, every year for the next 200 years.

The company has been a good performer for its mainly institutional share base. Those who subscribed for an equity issue in 2004 have seen their investment rise in value by more than 400pc since then.

Market sources said yesterday that were Kenmare interested in putting itself on the market, it would likely wait until it had brought its Moma mine into operation.

It is understood the company has not received an approach from a possible acquirer in the last 12 months.

- Tom McEnaney

Well worth a read......

http://www.mineweb.net/mineweb/view/mineweb/en/page39?oid=24259&sn=Detail

' ore exports will only begin in September. He says the delay is because the water at the mineral jetty built for exports is only seven metres deep, which is not deep enough for large bulk carriers. Meanwhile, it has hired a company in Singapore to construct smaller ships. '

Another option would have been to dredge or extend the jetty.

Why dont people read the info !, yes the water is too shallow for bulk carriers at the jetty and yes they have built a smaller ship, ie. a barge which operates in just under 3m of water, fully laden, I pity the poor wee workers inside it who are going to be busy shovling all that lovely ore back and forward to the bulk carriers 24 hours a day. It has always been planned that the barge would operate.

From article posted .....Mining operations at Moma commenced in April and it was expected the company would ship its first ore in July. But according to Hagarthy, ore exports will only begin in September. He says the delay is because the water at the mineral jetty built for exports is only seven metres deep, which is not deep enough for large bulk carriers. Meanwhile, it has hired a company in Singapore to construct smaller ships. Noticias reports that the company plans to export 80,000 tonnes of minerals a month in two ships each carrying 40,000 tonnes of ore.....

and from the company that has completed building the barge ...

...When the barge moors alongside the bulk carrier, two withdrawal conveyors will extract the product from the silos, deposit it on a cross conveyor to the elevator leading to the barges luffing and slewing discharge-boom and conveyor. The product will then be discharged at a rate of 1,200 t/h into the hold of the bulk carrier.

Cross-contamination of the titanium products, comprising ilmenite, rutile and zircon, loaded into the barge will be minimised by handling the products separately and providing the means to clean out the system between the batches. The product will be covered throughout and kept dry in all weather conditions with a dust-extraction system to minimise dust pollution.

Fully laden, the self-propelled 1,400 t barge has a draught of 2.9 m to permit it to navigate the shallow sea shelf at Moma....A crew of 10, with full on-board accommodation, will operate the barge around the clock

I sold KMR because the delays in reaching production and generating cash from exports have only added to the cost of servicing their massive debts. This latest news about not being able to load bulk carriers does not instill investors with confidence in the management. The water depth at the loading jetty must have been known all along.

Perhaps the " naked "director is right and the only way out is for the company to be taken over, but at what price?

Well good for you!. Its only a few of weeks ago these were trading all time high, nothing but blue skies etc, nothing fundamentally changed as i know of in KMR's aspirations or expecations.
I'd wager it they were to drop back another few pence you'd be back in like a shot, give it a rest pal.

Boxerdog,

Don't you wish you had sold at there all time high, and had the chance to buy back in at a lower price. Its called trading.

No!, i'm happy to have bought a shed load at a average of 25p. I dare say i could have traded them along the way might have lost or won but did'nt. But you stick to trading if its good for you, i'll stick to making dosh its called investing.

Even for a long term invester, there is nothing wrong with trading when you see an opportunity.

Boxer you are right I will buy KMR when they have a positive cashflow. At the moment they are "bleeding" cash.

You just haven't read the info Halifax, they are on a fixed contract with the builders who have penalties built in for the delay. As for the depth of the water, it has never changed , it was always known that is why the barge was commissioned at the start of 2006 as part of the plans, it was completed some time ago and after its sea trials was sailing to the project which again if you read would take 40 days. Again all this information is available in the public domain...either KMR website or bateman engineering...as for the delay, well its not that great really in the scheme of things...BHP pulled out of the JV in 99, kenmare were purchasing the equipment in 2000, it is still planned for shipment of the first ore in September, the work is still going on, they are still stock piling ore for seperation...a short delay in the grand scheme of things. I'm sure you will be able to make money elsewhere and I'm quite happy to buy more shares...so keep sellin m8.

I was invested in KMR untill quite recently. My concern is that as long as the project is not generating cash the debt mountain becomes greater and greater. Do not forget either that we are talking about a play on commodity prices.

I think this a slighlty bettter description of the barge taken from the KMR Moma project newsletter:

In order to transport the product from the jetty head to the waiting
offshore bulk carriers Kenmare has constructed a purpose built
barge. Called the Bronagh J, she is a self unloading, self propelled
barge with a pay load of 4000 tons. The barge is flat bottomed, 75m
long with a beam of 28m. Propulsion is supplied by 4 Caterpillar
3412 C diesel engines driving through Rudder, propeller Azimuth
thrusters. The product is transported in 2x 2000 ton silos which bottom
discharge onto individual conveyors, these conveyors feed via a
cross conveyor into a bucket elevator which transports the product
vertically out of the barge feeding via a chute into the Bulk carrier.
From there the products are shipped to their respective purchases
who are predominantly in Europe and the United States.

Seems a small discrpeancies from grot's post. Anyone know how far it is from the jetty to the offshore holding area?

pth

Answered my own question - 10km.

Incidentally 80,000t per month is only 20 barge loads at 4000t per trip, less than one a day, hardly working round the clock?

pth

Announcements - 7th August 2007
Handover of Mineral Separation Plant at Kenmare's Moma Mine.
Three new sales contracts signed.
Kenmare Resources announced today that it has issued a Taking-Over-Certificate for Phase 2 of the Moma Titanium Minerals Mine in northern Mozambique to the contractor building the project. Phase 2 includes the Mineral Separation Plant, product warehouse, mineral export facilities, and all related infrastructure. The Mineral Separation Plant is now under the control of Kenmare, operational, and producing final products which are being stored for shipment.



Mining and concentration operations commenced at Moma in late April. Since then a heavy mineral concentrate stockpile has been built up, ready for conversion into final products in the Minerals Separation Plant. Kenmares customers are keenly awaiting delivery of product from Moma. The market for titanium minerals has become increasingly tight throughout the year. Three additional sales contracts have been signed in recent months.



The Bronagh J, a 4,000 tonne self-propelled transfer barge, is making final preparations to sail from Singapore to Moma. This barge will transfer products from Kenmares jetty and self-discharge these mineral products into customer vessels moored offshore. The Taking-Over of the Bronagh J will complete handover of the core elements of the project.



Kenmares Chairman, Charles Carvill said, Now that we have control of the plant, we are phasing the second mining dredge into production earlier than anticipated to accelerate ramp up and to meet increasing customer demand.



Moving along even if a bit slow
Sheba