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

FP - Good! I hoped so, but had no time to DMOR - so thanks for answering. It's from an interesting enough source to re-confirm my existing holding as being well placed.

Why the droopy SP the last four days?

SD

Not sure, but added another 10K this morning just after
the large X trade. Missed the bottom by seconds, bugger!

Will be up and down for the next 15 months or so, but sooner or later it will have to fly, you need to be in before that happens or you could miss the boat, alternatively you could have your money tied up doing nothing for a long while. My thinking is you have to be in it to win it!! I agree with FP, this is topping up opportunity. By the way fp when the mine is finished will you change your name to filthy rich?

Could be that we have now reached a new trading range. Lets hope so !

capa

it certainly looks that way

on the move again - it is possible that the involvement by big institutions since the fund raising exercise will limit any sell offs. After all, if you put your money (and your reputation) into a project as big as this, you want to see success. I would imagine that it won't be too long before we start getting some sort of newsflow from KMR about progress and hopefully new lifting contracts.

Honourable mention on this site by Zak Mir for iii.t confirms what we all know

http://personalfinance.iii.co.uk/articles/articledisplay.jsp?article_id=2287422&bread_id=Share%20

SD

This will be at least 35p by next friday - for certain.

Any evidence that you can share Ldettori? Sounds exciting.

SD

Over 300,000 shares have been dumped in the last hour. Someone needs to do some homework because this share is going nowhere!!!

hahahahaha, sorry, its already come miles in short time, what do you want,? blood!! will slow down now and be some profit taking, still 18 monthes before the mine opens so patience is needed!

Informer - I don't call that "dumped" not to mention the 200k buy at midday - seems a fair days trade with sells slightly outweighing buys in relatively thin trade overall. Marking time with a couple of policy decisions made to get in or out of the stock.

I'm with Kivver for real and with LDettori in my dreams (lucky old LDet!)

SD

Okay now, whilst I fully respect your opinion along with your right to express it, I have to come back on this one with a few cold hard facts in the form of the last 6 trading days (MoneyAM only gives data for that period but I assure you the following trend goes back much further). Please bear this in mind: I am trying to help you! Bury your head in the sand and it will cost you a lot of money which you wont get back as easily as you lose it!

11 March Buys: 406,648 Sells: 697,494
10 March Buys: 103,132 Sells: 11,330,640
09 March Buys: 314,300 Sells: 1,583,654
09 March Buys: 129,956 Sells: 890,485
09 March Buys: 852,731 Sells: 1,840,684
09 March Buys: 967,502 Sells: 1,874,593

Totals = Buys: 2,774,269 Sells: 18,217,552

That's a 15.5 million discrepancy. Who do you think dumped them then??
Whichever way you cut the cake you have to admit that the chances of you getting the piece with the sixpence in is a shade on the slim side. Me? I'd get out now -before the MM's take your money away.

Yes, informer, but for each of those sells there was a buyer on the other side, not just any buyer, a professional market buyer who knows what they are doing more than most investors. If they were not happy to take on stock at those prices they would have changed the price by now - lower. Constant selling by investors to the market makers whilst the price stays still usually means there will shortly be a significant increase in price when the market makers will sell to the more gullible investors at a rapidly rising price whilst fear of being out of the market convinces people to pile in a little bit too late.

Also, don't forget the stock market is not a zero sum gamble - where one person loses the exact equal and opposite amount that someone else gains. The difference is the company produces goods of real worth - slowly, in the future, unrelated in time to the market worth, but none the less, in time the real future worth of those goods comes to equal the net present value of the stock.

Whether I'm right or wrong inmy own analysis of whether to buuy, hold or sell, I am certain that your argument doesn't stack up.

SD

Okay now, whilst I fully respect your opinion along with your right to express it, I have to come back on this one with a few cold hard facts in the form of the last 6 trading days (MoneyAM only gives data for that period but I assure you the following trend goes back much further). Please bear this in mind: I am trying to help you! Bury your head in the sand and it will cost you a lot of money which you wont get back as easily as you lose it!

11 March Buys: 406,648 Sells: 697,494
10 March Buys: 103,132 Sells: 11,330,640
09 March Buys: 314,300 Sells: 1,583,654
09 March Buys: 129,956 Sells: 890,485
09 March Buys: 852,731 Sells: 1,840,684
09 March Buys: 967,502 Sells: 1,874,593

Totals = Buys: 2,774,269 Sells: 18,217,552

That's a 15.5 million discrepancy. Who do you think dumped them then??
Whichever way you cut the cake you have to admit that the chances of you getting the piece with the sixpence in is a shade on the slim side. Me? I'd get out now -before the MM's take your money away.

very original, pro - congratulations.

Yes, pro, but for each of those sells there was a buyer on the other side, not just any buyer, a professional market buyer who knows what they are doing more than most investors. If they were not happy to take on stock at those prices they would have changed the price by now - lower. Constant selling by investors to the market makers whilst the price stays still usually means there will shortly be a significant increase in price when the market makers will sell to the more gullible investors at a rapidly rising price whilst fear of being out of the market convinces people to pile in a little bit too late.

Also, don't forget the stock market is not a zero sum gamble - where one person loses the exact equal and opposite amount that someone else gains. The difference is the company produces goods of real worth - slowly, in the future, unrelated in time to the market worth, but none the less, in time the real future worth of those goods comes to equal the net present value of the stock.

Whether I'm right or wrong inmy own analysis of whether to buuy, hold or sell, I am certain that your argument doesn't stack up.

kiv

very original, kivver - congratulations. rofl :))

SD

Well I'm just in agreeance okay?? Also feel very strongly that there'll be a rush for the doors this coming week as people catch on and look to bail out quickly from this one! One person dumped 11,185,384 shares on Thursday. You have to presume that this someone knows a bit more than we do about Kenmare -and it isn't good news or why dump that many shares in one go???