Kenmareto raise $97m for titanium project

THE exploration company Kenmare Resources are planning to raise $97 million to fund its titanium extraction project in Mozambique.

Kenmare yesterday said that it has arranged an equity issue to raise $55 million through the placing of shares with institutions and an open offer of a further $42m.

The company will place 187.5 million new shares at 16p a share, with existing shareholders getting 13 new shares for every 27 they hold.

The completion of the equity funding is the last major step in the financing of project implementation at the Moma titanium mineral sands project in Mozambique.

Kenmare and the lenders to the project yesterday signed loan agreements which will cover $269 million of debt.

The lenders were the African Development Bank, ABSA, a South African commercial bank, the European Investment Bank, FMO, a Dutch development finance institution, and KfW Bankengruppe, a German development finance institution.

Company chairman Charles Carvill said that with the financing for the project in place it hoped that the mine would be operational during the second half of 2006.

Despite the positive news out of Kenmare, its shares dropped by 7% yesterday to 28 cents on the Dublin stock market.

Kenmare has been working on the Moma deal for some time and has had a good build up to the project with contracts already in place for construction of the infrastructure needed to extract the titanium.

Kenmare has also agreed sales contracts covering more than 50% of the annual revenues for the first five years of production are in place.

According to Kenmare, the Moma titanium minerals project has a proven deposit of titanium minerals located on the coast of north-eastern Mozambique.

The company plans to build up the infrastructure in the area for local workers including provision of a jetty, airstrip and other amenities for employees on the project.