Kenmare Resources plans to raise $270 million for titanium mine
08 March 2010
Irish miner Kenmare Resources Plc (Kenmare) intends to raise approximately £180 million ($270 million) through share issue for the expansion of its existing titanium mining operation in Moma in Mozambique, anticipating increased demand for the mineral in the developing markets in the coming years.
The fundraising is planned through the issue of approximately 1.5 billion new shares of the company at 12 pence (18 cents) a share, half of which will be through firm placing and the other half through open offer.
Dublin-based Kenmare is engaged in exploration and development of natural resources and its main asset is the Moma titanium minerals mine in Mozambique. The company's shares are listed on the Irish and London stock exchanges.
The issue price of 12 pence per share represents about 42 per cent discount to the closing price of 20.75 pence per share on the London Stock Exchange on 4 March, the day before the announcement. Further to the news, the shares dived almost 27 per cent to end at 15.25 pence on Friday on funding concerns.
Through the proposed expansion, Kenmare plans to increase the capacity of its Moma mine by 50 per cent to 1.2 million tonnes annually.
About $200 million of the net proceeds will be used to fund the engineering, procurement and construction costs of the expansion including upgrade of the existing production facilities and addition of a new dredge, concentrator and mineral separation plant.