Dublin, Ireland — MININGREVIEW.COM — 09 March 2010 – Ireland-based Kenmare Resources “’ quoted on the Irish and London Stock Exchanges “’ plans to raise £179.6-million (R2 billion) through a share placement to fund the expansion of its US$410 million (R3 billion) Moma titanium mine, in Mozambique.
Kenmare had undertaken an expansion study, which was completed in January, providing it with options to increase the mine’s production by about 50% to about 1.2 million tonnes a year of ilmenite and associated products.
Kenmare managing director Michael Carvill noted in a statement to shareholders that demand growth at rates above the average historic trend “’ which was being driven by a cyclical recovery and increased demand from China and other developing economies, coupled with constrained supply “’ would result in a titanium-minerals deficit by 2012.
Years of underinvestment in these minerals, had left the supply industry unable to respond sufficiently to increasing demand. The company expected a significant supply deficit to remain, despite the expansion of Moma.
“The expansion of our Moma mine, due to be completed in 2012, will allow Kenmare to capitalise on these favourable conditions. Kenmare is already producing high-quality ilmenite, and we expect to produce significant quantities of valuable co-products. In addition, the Moma mine’s existing infrastructure means we can readily expand in a capital-efficient manner,” he added.
Kenmare would require an estimated US$200 million (R1.5 billion) to expand the mine’s output by the end of 2012.
The company would use the raised funds to finance the engineering, procurement and construction costs of the expansion. This would entail the upgrading of the existing dredges and wet concentrator plant, a new third dredge and a second wet concentrator plant, and the upgrade of the minerals separation plant, Kenmare explained in a statement to shareholders. The balance of the proceeds would be used to the extent necessary for any increase in the costs of the expansion and for general corporate purposes.