Kenmare in £8m funding
Article Date: Apr 09 2002Irish minerals explorer Kenmare Resources has arranged a placing at 14p a share, alongside a one-for-eight open offer to existing shareholders at the same price, to raise £8 million to help fund development of the company's 63 million tonne Moma titanium project in Mozambique. Robert Tyerman reports.
Canadian-owned broker Canaccord is arranging the placing, which, like the open offer, is not being underwritten. Tony McClusky, fully-listed Kenmare's (KMR) finance director, says enough firm commitments have been received from the company's institutional shareholders, with 40 per cent of the equity, to ensure the success of the fundraising.
With this new equity funding under his belt, Kenmare's managing director Michael Carvill can go back to the banking groups which have so far agreed to put up $130 million (£93 million) to develop Moma, which is wholly owned by Kenmare, and ask for the $90 million still needed to bring it to fruition. A definitive feasibility study has identified reserves of 14 million tonnes at Moma, but the company reckons that there is potentially five times as much in the prospect and has been negotiating marketing contracts for future output.
Kenmare shares have fallen from more than 20p early last year to 14.25p today. Analysts suggest they could bounce back if the extra finance is now forthcoming.
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