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

I cannot believe the share drop reaction on Friday. The herd instinct obviously took over before the impact of the financing deal was fully weighed up. Clearly investors short of information may have interpereted this as a sign of a company in trouble when in reality the deal gives huge scope to transform the fortunes of Kenmare by several times over. At 17 pence this is an absolute steal. I will try to add more if I can at this price.

Check out today's trades - lots of buys. On fundamentals all exploration companies with limited production resources can be said to be overpriced. The only real assets, outside production, they have which can have a hard-and-fast value assigned to them are their bank balances. In this case, the deal signed late on Friday has effectively trebled their net cash available at hand to fund accelerated exploration opps. People who invest in mining companies with an exploration bias because they believe that the team and financial resources have the potential to develop valuable deposits. The share price typically reflects the market's opinion about this potential. THe huge capital injection in KMR SHOULD be interperted positively. Let's see what happens.

This was released on Irish SE 21.6.2004;

Record Date for the Open Offer close of business on 16 June, 2004


Despatch of the Listing Particulars and
of the Open Offer Application Forms 21 June, 2004

Latest time and date for splitting
Application Forms (to satisfy bona fide
market claims only) 3.00 p.m. on 8 July, 2004

Latest time and date for receipt of Forms
of Proxy for the Extraordinary General
Meeting 11.00 a.m. on 12 July, 2004

Latest time and date for receipt of
completed application Forms and payment
in full under the Open Offer 3.00 p.m. on 12 July, 2004

Time and date of Extraordinary General
Meeting 11.00 a.m. on 14 July, 2004


Admission of the Placing Shares and
associated New Warrants to the Official
Lists and commencement of dealing therein on
the Irish Stock Exchange and the London
Stock Exchange(1) (2) (3) 15 July, 2004


CREST accounts expected to be credited
and definitive certificates expected to
be despatched in respect of the Placing
Shares and associated New Warrants no
later than (1) (2) (3) 15 July, 2004

Admission of the Open Offer Shares and
associated New Warrants to the Official
Lists and commencement of dealing therein
on the Irish Stock Exchange and the
London Stock Exchange(1) (2) (3) 23 July, 2004

CREST accounts expected to be credited
and definitive certificates expected to
be despatched in respect of the Open
Offer Shares and associated New Warrants
no later than (1) (2) (3) 23 July, 2004

Regards,
Sirtoven

Any views out there on whether to take up the offer?

This is what we've been waiting for...RNS at 10.29am today

KENMARE RESOURCES PLC ('Kenmare' or 'the Company')


Kenmare Announces Completion of Equity Financing Raising Stg53 Million


Further to the announcement made on 28 September, 2004, Kenmare is pleased to
announce that it has completed the arrangements for the equity financing of the
Moma Titanium Minerals Project. The final component of the Supplemental Placing
is now complete.


This placing brings the total funds raised by Kenmare under its Moma Project
Equity Financing to the targeted Stg53 million. A total of 40,380,576 Ordinary
Shares, with 10,095,144 Warrants attached on the same basis and terms as under
the original Placing and Open Offer, have been agreed to be issued at Stg16p per
share.


Of these Ordinary Shares and Warrants, an amount representing US$10 million
(34,340,659 Ordinary Shares and 8,585,164 Warrants) has been placed with
Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. ('FMO'),
which is also a Lender to Kenmare's Moma Project, and the balance have been
subscribed for by other institutional investors. The remaining underwriting
arrangements in respect of the Supplemental Placing referred to in the
announcement of 27 July, 2004 have therefore unwound as scheduled, without
recourse to the underwriters.


As a result of FMO's equity investment, some of its commitments as a
subordinated lender to the Moma Project have been taken up by Emerging Africa
Infrastructure Fund Limited ('EAIF') by way of subparticipation. Furthermore,
the FMO subordinated debt facility (originally 15 million facility) has been
amended to a two-tranche loan facility comprising a fixed-rate Euro tranche of
7.1 million and a floating-rate US Dollar tranche of US$10 million, which
Dollar tranche will be funded by way of EAIF's subparticipation arrangements
with FMO. In addition, EAIF has agreed to provide senior debt to the Project
under a floating-rate US$5 million facility, for which purposes KfW Bankengruppe
('KfW') has agreed to reduce its commitments in the senior debt package by the
same amount. The costs/fees associated with these arrangements are within the
headroom afforded by the Company's cash resources under its Financing Plan.


Charles Carvill, Kenmare's Chairman said:

'We are delighted to have successfully raised 100% of the targeted equity funds.
With the equity financing now successfully behind us, we can focus on building
the mine and developing further marketing contracts. The market for titanium
minerals is strengthening all the time and we want to start deliveries as soon
as possible.'

Kenmare is tipped as a buy today in Red Hot Penny Shares

Consider for a moment that the equity financing in Moma is now complete (per RNS posted above) removing the only potential barrier to the exploitation of titanium the field and that...

"The construction phase of the mine will last two years after which the facility will produce more than 650,000 tonnes of Titanium Minerals annually. Sales contracts for more than 50% of the planned output have already been signed" (KMR 28 Sept)

Putting this in a global context....

Titanium is currently going through the roof in terms esp in the US where aerospace and industrial applications have recovered apace of demand and prices are following in line - could reach $8.50/kg by 2008. Similarly, scrap shortages and strengthening demand resulted in rapidly rising prices for ferrotitanium in the first half of 2004, from around $4/kg in August 2003 to over $11/kg (Roskill Minerals and Metals report - October 2004)

There is now a global shortage vs demand and KMR will become a scale industrial level supplier with the moma project....

Let's do a little maths lesson here 650 tonnes (Moma capacity)= 650 million kilograms at even (let's be conservative) $5 per Kilogram = $3.25 Billion annual revenue on titanium from Moma by 2006. If it hits $10 which is feasible then the number doubles...even after the Mozambique and finance sharing this equates into an absolutely HUGE revenue stream for such a small company today. The financial risk after last week's RNS is now almost neglible.

Net, no surprise the share was tipped in red hot penny shares today and I will be amazed if we don't see it really take off in the weeks ahead.

up 1p to 17p in early trading...

Now very heavy trading and up 1.25p. The significance of the Moma financing and buy signals are finally getting through. This will easily reach 20p without pausing for breath.

now up to 17.75 and steady progress set to continue this week

This stock is no good. When it reaches 19.5/20 it will react the same way again as it did in the past. If it gets over the 20p I will get in here.

LDettori... KMR has been a great stock for buying at 15-16p and selling at 20p but that was before the financing was sorted out. Now everything is in place this share will rocket, maybe not this week, maybe not until next year even, but rocket it will. Question is will you be able to catch it?

KMR new COO appointment RNS includes: "his appointment strengthens the Kenmare team in developing new opportunities for the company". Interesting... Maybe it won't be a one trick pony after all. I'd hope that any further projects took less long in gestation, though (Moma will have been over a decade?). There are other TiO2 plays in Africa, but none with as good economics as Moma, I believe. But that's not to say they are not actually economic. And I suppose there'a also Aricom (TIO) (spun out of POG), which seems to be in play, and which would save KMR some of the groundwork. Still, I hope nothing drastic will happen in terms of "developing new opportunities" until some revenues are coming in, in late 2006.

Point taken Dynamite, but, as I see it there were hundreds of millions of shares issued in the last few months and the holders of these shares will be very keen to lessen their KMR exposure so it will take a lot of buying to absorb all the selling - because of that I cannot see the 20p mark being breached in the next 6 months.

That's the downside of having an open issue alongside a placing - the retail investors looking to take early profits (the placees may have lock-ins). Still, overall, I guess I'm grateful for being given the chance to buy at 16p and get some free warrants -- at least, I'm a little more grateful now the price has finally clawed above 16p :)

But, the volume and number of trades has picked up nicely - highest for over a year, and OBV chart stepped up nicely on the last few day's move up in price - good support for the move. Much more of the higher number of trades and the average spread might actually start to narrow, which would only help trading as well.

From Business Day:



New titanium project excites

--------------------------------------------------------------------------------

The finalisation of a US$400 million debt and equity arrangement for the Moma titanium minerals project in the Nampula Province on the north eastern coast of Mozambique will provide a major boost to the South African government's commitment to the sustainable development of the African region.

According to Ian Benning, head of the project finance resources division of Absa Corporate and Merchant Bank (ACMB)(ASA), the lead arranger for the South African component of the deal, the titanium mine is expected to be fully operational by 2006 with revenues of some US$85 million a year being generated over the project's 20-year life.

As part of the debt package, ACMB have signed a US $80 million export credit financing agreement with Irish and London-stock exchange listed company Kenmare Resources to develop the Moma titanium minerals deposit.

Total debt comprises of a combination of senior and subordinated debt amounting to US$269 million and represents one of the largest ever debt raising in London for a non-FTSE 100 mining company.

This represents a turning point in the mining industry, whereby traditionally large resource projects were only financed through the support of major mining partners and mostly excluded traditional mid-tier mining
companies.
The lender group also comprises the European Investment Bank (EIB), the African Development Bank (AfDB), FMO (a Dutch-based development institution) and KfW Bankengrpe. Absa's lending is insured by the ECIC, South Africa's Export Credit Insurance Agency.

Using globally proven technology, Kenmare aims to develop a world-class titanium minerals deposit at Moma.

The mine is expected to be fully operational by 2006 and will in steady state produce 620,000 tons of ilmenite, 15,000 tons of rutile and up to 60,000 tons of zircon per annum.

Operating at an estimated cost of US$23 million a year, Moma will yield huge benefits for Mozambique. The proximity of the mine near major shipping routes will assist in opening the northern parts of Mozambique to the rest of the world.

The completed project will consist of dredges, a dredge pond and concentrator plant, a minerals separation plant, tailings dam, access road, export jetty with product storage and loading facility, electrical transmission and generation facilities, accommodation, airstrip and other related infrastructure

The project is expected to employ approximately 425 permanent staff at the mine and associated processing operations. When in steady state production, only 40 of these will be expatriate staff, while the rest of the complement will comprise Mozambican citizens.

Approximately 94% of titanium minerals are used in the manufacture of titanium dioxide (TiO2) pigment, providing whiteness and opacity to products such as paints and coatings but also plastics, paper, inks, food and cosmetics, including most toothpastes.

The balance of titanium is largely consumed in titanium alloys which are characterized by their strength, light weight, extraordinary corrosion resistance, and ability to withstand extreme temperatures, and are principally used in aircraft, although applications in consumer products such as golf clubs, bicycles, wedding bands and laptop computers are becoming more common.

I-Net Bridge

http://66.102.9.104/search?q=cache:Hf61SXPwRKsJ:www.bday.co.za/bday/content/direct/1,3523,1654420-6078-0,00.html+%22kenmare+resources%22+november+2004&hl=en

Nice to see the price holding up after a large bout of selling. There were also a few nice buys this afternoon which may be an indication of some press comment coming up. If so, we may see another rise before the next round of big sells. It would be nice to test the 20p mark again. If I could ask one question to Michael Carvill it would be - Are you currently in talks with another company regarding a takeover? I believe that the election will result in an easy win for the ruling party - Frelimo, everything seems to be going well, the only thing that causes me any slight concern is the weather - this year we have had so many hurricanes I hope one doesn't arrive in the Mozambique channel even though there should be plenty of shelter from Madagascar which would limit any damage, and there's not much to damage at this stage.

Stirrings from darkest Mozambique

capa