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Mining Sector

Mining Roundup

20 June 2016 16:16

Kenmare Resources (LON:KMR) intends to raise a minimum of US$275 million of new equity through a cornerstone placing with State General Reserve Fund of the Sultanate of Oman and a firm placing.

SGRF has, through its subsidiary African Acquisition Sarl, signed a cornerstone subscription Agreement for a US$100 million equity investment.

Kenmare says of the $275m, US$200m will used to repay and discharge US$269m in debt and accrued interest under the terms of the amendment, repayment and equitisation agreement, leaving no more than US$100m of residual group debt and provide the Kenmare Group with additional liquidity by retaining US$75m for working capital and to cover expenses.

Certain lenders will underwrite up to a maximum of US$40.8m of the capital raise by agreeing to equitise a matching amount of debt, in the event that cash proceeds are less than US$275m. All funds raised in excess of US$275m (including under the open offer) will be applied to reduce or eliminate any debt equitisation and reduce or eliminate debt on the basis that every US$3 of cash will discharge US$4 in debt.

The maximum funds raised, including through a proposed open offer, would be approximately US$368 million, a level which would fully extinguish all group debt of US$392 million (assuming a closing date in early August) and provide US$75 million for working capital and to cover expenses.

Managing director Michael Carvill said: "We are pleased that we have signed an agreement for the investment of US$100 million by SGRF and are encouraged by the level of interest shown by a broad range of investors in the Capital Raise. Early indications of investment from three of the main shareholders of Kenmare, in combination with lender underwriting position the Company well to achieve the minimum target of US$275 million.

"With the finalisation of key transaction agreements as announced today, we look forward to further engagement with investors and the completion of the Capital Restructuring in the next few weeks.

"Production and cost guidance for 2016 remains unchanged and the product market is already showing a long awaited improvement in prices, reversing four years of significant downward pressure. With increased power stability at the Mine, a recapitalised balance sheet, a new strategic investor and a higher free float than would have existed with two strategic investors, we believe that the completion of the Capital Restructuring will leave Kenmare in a strong position in an industry with expectations of a growing supply deficiency."

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Gemfields (LON:GEM) reports new record auction revenues of US$44.3 million for rough ruby extracted from the Montepuez ruby deposit in Mozambique.

The company said 1,516,459 carats were sold (95% by weight or 98% by market value) out of the total of 1,601,145 carats offered at an average price of US$ 29.21 per carat.

Gemfields' sixth auction of rough rubies and corundum from Montepuez saw 44 companies placing bids.

The stones were extracted by Montepuez Ruby Mining Limitada (which is 75% owned by Gemfields and 25% by local partner Mwiriti Limitada). The auction was held in Singapore from 13-19 June and was the last auction the company has planned for this financial year.

The quality and quantity of the goods placed on offer was developed in response to market feedback. Growing demand for rough rubies suited to the production of high quality jewellery through to larger volume pieces. The improved reliability of supply and the consistency of the grading system introduced and applied by Gemfields continues to be well received by the company's clients as it allows for reduced risks, improved manufacturing efficiencies and increased ability to meet consumer demand.

Chief executive Ian Harebottle said: "We are pleased with the results of Gemfields' sixth Montepuez ruby auction. The prices achieved and the high percentage of goods sold fully support our analysis of the market conditions, the quality of Mozambique's rubies and the increasing levels of demand across various markets and categories.

"Our commitment to further building the coloured gemstone sector continues with the launch of a new global marketing campaign focussing on Mozambican rubies. The auction attendees were given a brief preview of the campaign, to be launched in London on the 22nd June. The overwhelmingly positive response underpinned the clients' confidence in Gemfields marketing efforts and is further supported in the Company's ongoing success in growing demand for Zambian emeralds.

"The five ruby and emerald auctions Gemfields has hosted so far this financial year have yielded aggregate revenues of US$174.4 million. A superb performance by the Company with credit due to every member of its devoted and hard-working global team as well as its respective business partners in each of its host operating nations."

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Greatland Gold (LON:GGP) has started field operations at the Bromus project in southern Western Australia and are preparing drill locations ready for commencement of drilling.

The planned programme comprises four specifically selected targets for approximately 1,000m of drilling in total.

Four holes will target well defined bedrock conductors to be tested by several diamond drillholes.

The key object of the drilling programme is to determine the nature of the bedrock conductors and their nickel content and downhole geophysics will also be undertaken during the drill programme to determine the size and orientation of buried targets.

Executive director Callum Baxter said: "We are very pleased to have commenced field operations at our 100% owned Bromus project which marks the commencement of an increasingly proactive phase for the Company.

"The nickel sulphide targets identified by last year's geophysical work will be tested by diamond drilling and provision has been made for downhole EM surveys to determine size and orientation of the buried targets.

"We will continue to announce Bromus developments as the drill programme continues alongside further updates in respect of other Company projects and prospective acquisitions."

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Amur Minerals Corporation (LON:AMC) has raised £2.5m through the issue 64,102,565 shares at 3.9p apiece under the £12.5m subscription with attach warrants agreement entered into with Crede CG III Ltd on 14 December.

Amur also issued warrants over 48,076,924 ordinary shares to the investor exercisable at 5.07p for a period of 5 years.

The proceeds will be used by the company for general corporate purposes.

At 4:16pm:

(LON:AMC) Amur Minerals Corporation share price was -0.62p at 3.43p

(LON:BEM) Beowulf Mining PLC share price was 0p at 3.83p

(LON:BKY) Berkeley Energia Ltd share price was -1.25p at 33.75p

(LON:CEY) Centamin PLC share price was -1.3p at 109.9p

(LON:CHL) Churchill Mining PLC share price was 0p at 23.63p

(LON:CZA) Coal of Africa Ltd share price was +0.03p at 4.05p

(LON:FDI) Firestone Diamonds PLC share price was 0p at 30.5p

(LON:FRES) Fresnillo PLC share price was -3.5p at 1223.5p

(LON:GEM) Gemfields PLC share price was +0.13p at 38.25p

(LON:GEMD) Gem Diamonds Ltd share price was -1.62p at 132.38p

(LON:GGP) Greatland Gold PLC share price was 0p at 0.28p

(LON:HOC) Hochschild Mining PLC share price was +1.38p at 156.88p

(LON:KMR) Kenmare Resources PLC share price was +0.18p at 0.88p

(LON:VED) Vedanta Resources PLC share price was +6.2p at 417.8p

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Related Company: KMR

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