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UPDATE 1-Irish-based miner Kenmare eyes $106 mln cash injection
October 10, 2013 / 5:25 PM / 4 years ago

UPDATE 1-Irish-based miner Kenmare eyes $106 mln cash injection

LONDON, Oct 10 (Reuters) - Irish-based miner Kenmare Resources said it would sell new shares to raise 66.33 million pounds ($105.82 million) in short term liquidity after weak pricing for minerals and lower production caused a funding squeeze.

Kenmare, which mines ilmenite and zircon from its Moma mine in Mozambique, said on Thursday it would place 250.3 million new ordinary shares, representing 9.89 percent of its existing share capital, at a price of 26.5 pence per share.

The placing is being conducted through an accelerated book build process which would be launched immediately, and is fully underwritten by RBC Europe and J&E Davy, it said.

Kenmare said it decided it needed a capital injection following a 40 percent fall in shipments over the July 10-Oct. 1 period, which had been hit by lower-than-expected sales to China, and a weak pricing outlook.

It said it intended to use the cash raised to pay near-term obligations of about $20 million that were related to the expansion of its Moma mine, and to apply against a $40 million loan with Absa Bank that it was also hoping to extend.

Shares in Kenmare closed at 29.09 pence on Thursday, valuing it at 667.45 million pounds.

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