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

Large volumes have been followed by spikes in the sp in the past - this will go to 35p / 37p in the next 2 weeks IMO.

67 per cent more shares to be issued.::::liquidity problems? takeover? any rumours out there?

Warrants MUST be exercised BEFORE end of year.These are underwritten at 19p.{that means the shares can be bought at 19p.} hopefully we should see some upward movement after 1st jan. as this is what has been holding KMR down.

Settlement and release with contractor who has paid and waivered 40 million (yes 40 million!!!) project complete. excellent result.

Is that not 50m? dollars that is. I'm a confirmed critic of this board of directors but I hope they have learned from their many mistakes over the last 2 1/2 years. After holding for 4+ years i whittled my stake down to 40k and added a further 40k yesterday on this news. Whats ironic here is I've paid the same yesterday as i did on my first purchase practically before ground had been broken in Moz.

Yes boxerdog you are right. Paid 10million. Retention 12million. Waived payment 8.5million and 20millionheld = 50 million+. Great news. After many many delays the mine is running at full capacity and has a lot less financial worries. I have been in this a long time and just exercised warrants at 19p. This has been a very very disappointing share due to many years delay and finance issues. Lets hope it is all behind us all and it is "up up and away" (although I have said this many times before). Good luck to all holders and keep the faith.

On the move.

Brokers are recommending KMR very strongly - price forecasts ranging from 50p to 80p short term. What odds a takeover for 150p within the year?

Kenmare Resources update 26 january was very good.Price now 23p. Fallen a little in general with most stocks today. The last big funding which was at 32p. would be the next ceiling to look to,maybe after prelimary results and statement due 17 april. Takeovers can happen to any company but not worth factoring in to price until substantiated.

180m cash call at heavy discount to current sp:
"The Issue Price of 12 pence per New Ordinary Share represents a 41.8% discount to the closing mid-market price of 20.625 pence per Ordinary Share on the London Stock Exchange on 4 March 2010 and a 45.7% discount to the closing mid-market price of 24.3 cents per Ordinary Share on the Irish Stock Exchange on 4 March 2010."
"If the Capital Raising is not completed, the Deposit is not made and the Group is unable to meet its obligations under the Financing Agreements (whether in relation to scheduled payments of Senior Loan principal and interest repayments or Technical Completion or otherwise), and if in addition the Group is unable to agree requisite amendments to the Financing Agreements prior to the agreed schedule in the Financing Agreements, there would be an event of default under the Financing Agreements. In the case of an event of default under the Financing Agreements, the Lenders may in certain circumstances be permitted to apply post-default interest margins, accelerate the payment of all sums outstanding under the facilities (including any accrued interest), enforce the security interests in the assets of the Project Companies, the CRA and the shares of the Project Companies and guarantees granted by Kenmare and Congolone, place the Project Companies into administration and initiate insolvency or other similar proceedings against the Project Companies."
Extreme caution advised by brokers as cash call is a make or break situation.

Bad results and fund raising at 12p. This might go sub 12p. I am out taking a35% loss on the chin. Good luck to all who hold,it will eventualy come good.

possibly but lets hope under new management and not new ownership.

I think that any shareholder on register before 6pm. 3 march will be able to apply for shares under the fundraising at 19 openoffer shares for every 23 existing ordinary shares at the price of 12p. If you sold shares anytime after this time you could buy under the offer at 12p. Is this correct?

do you want to buy shares at even 12p, so far this project has been disastrous lenders will be looking to salvage whatever they can.

Selling your existing shares anywhere near 15p. and buying the new shares at 12p. On the 23 to 19 offer, this would be profitable.

I'm not in these (thankfully) but before investing more into what seems to be a money gulper, I would look to see what those responsible for running this co. were prepared to invest. Good luck to holders.
2517

Midas verdict: Some Kenmare shareholders were disgruntled by the company's 180million financing. They buy into the logic of expanding, but they were irritated because the new shares were priced so low and the stock is now trading at just 13.75p. For new investors however, the current price offers an exciting opportunity to pick up shares on the cheap.

This company has learned plenty of lessons from the past two years and the money it has raised will help turn it into a leading player in the market at just the right time. Buy.

http://www.dailymail.co.uk/money/article-1257781/MIDAS-SHARE-TIPS-Cash-adds-lustre-miner.html

It will be interesting to learn if KMR can succeed in raising a further 180m. for a project in Mocambique whose performance so far has been very disappointing.

Is Mocambique in Mozambique ?

If they can't raise the funds then likely existing lenders will foreclose and shareholders would receive zilch.