Capital Raising

 

TIDMKMR 
 
RNS Number : 1426I 
Kenmare Resources PLC 
05 March 2010 
 

 NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR 
INDIRECTLY, IN OR INTO OR FROM THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG, 
                              JAPAN OR SWITZERLAND 
 
 
5 March 2010 
 
                              Kenmare Resources plc 
 
      Firm Placing of 748,515,033 New Ordinary Shares at 12p (EUR0.132) each 
                                      and 
 Placing and Open Offer of 748,515,033 New Ordinary Shares at 12p (EUR0.132) each 
                        to raise in aggregate GBP179.6m 
 
The Board of Kenmare Resources plc ("Kenmare" or the "Company") today announces 
a fully underwritten share issue by way of a Firm Placing and Placing and Open 
Offer to raise gross proceeds of approximately GBP179.6 million through the 
issue of 1,497 million New Ordinary Shares at 12 pence per New Ordinary Share. 
·      GBP89,821,804 million will be raised, gross of expenses, through a Firm 
Placing of 748,515,033 million New Ordinary Shares; and 
·      GBP89,821,804 million will be raised, gross of expenses, through a 19 for 
23 Placing and Open Offer resulting in the issue of 748,515,033 million New 
Ordinary Shares 
The Issue Price of 12 pence per New Ordinary Share represents a 41.8% discount 
to the closing mid-market price of 20.625 pence per Ordinary Share on the London 
Stock Exchange on 4 March 2010 and a 45.7% discount to the closing mid-market 
price of 24.3 cents per Ordinary Share on the Irish Stock Exchange on 4 March 
2010. 
Summary 
·      Funding with gross proceeds of GBP179.6 million (approximately GBP170.8 
million net of expenses) by way of a Firm Placing and Placing and Open Offer 
(the "Capital Raising"). 
 
·      Principal purpose of the Capital Raising is to enable Kenmare to 
implement an expansion of its existing mining operation at Moma in Mozambique 
(the "Expansion") in order to significantly increase production, at a relatively 
low cost per incremental tonne of annual production, take advantage of projected 
favourable market conditions, and generate a substantially expanded revenue base 
with which to pay down debt, thereby significantly improving the financial 
performance and value of the Group. 
 
·      Expansion study completed in January 2010: 
o  Provides for an expected 50% increase in design capacity of the Moma mine, 
taking design capacity of ilmenite production to 1.2 million tonnes; 
o  Expected to be completed in 2012 and full production at the expanded design 
capacity to be achieved by the end of 2012; 
o  Estimated cost of US$200 million, which includes a contingency of 
approximately US$18 million.  This estimated cost, excluding the contingency, is 
stated to an accuracy limit of +/- 25%; and 
o  Allows the Company to optimise the productivity of the Mine and exploit the 
potential market opportunity presented by the projected shortage of  titanium 
dioxide feedstock resulting primarily from increased demand - expected supply 
deficit by 2012. 
 
·      GBP133.1 million (US$200 million) of the net proceeds from the Capital 
Raising is intended to be used to fund the engineering, procurement and 
construction costs of the Expansion. The Expansion entails the upgrade of the 
existing dredges and wet concentrator plant, a new third dredge and a second wet 
concentrator plant and the upgrade of the mineral separation plant. 
 
·      The balance of the net proceeds of approximately GBP37.7m (US$56.7 
million) from the Capital Raising will be available to the extent necessary for 
any increase in costs of the Expansion and general corporate purposes, including 
potentially meeting any debt service payments which cannot be met from operating 
cash flows; 
 
·      Kenmare has also agreed certain amendments to the Group's Financing 
Facilities, which will take effect upon completion of the Capital Raising and 
the deposit of US$200 million into the Contingency Reserve Account.  These funds 
may then immediately be contributed by Kenmare to the Project Accounts 
controlled by the Project Companies, from where they may be spent on, amongst 
other things, the Expansion. 
 
Kenmare has also today released its preliminary results for the full year ending 
31 December 2009, details of which are set out in a separate announcement. 
 
A prospectus, also comprising a shareholder circular, containing details of the 
Capital Raising and associated proposed shareholder resolutions is expected to 
be posted to shareholders later today and will be available on the Company's 
website, www.kenmareresources.com. An Extraordinary General Meeting to approve 
the Capital Raising is expected to be held at 11.00am on 29 March 2010 at the 
Westbury Hotel, Grafton Street, Dublin 2, Ireland. 
 
Michael Carvill, Managing Director of Kenmare, said: 
 
"During a challenging period in the markets in which we operate, we ramped up 
production of heavy mineral concentrates in 2009, with production of ilmenite 
and zircon at full design capacity expected to be achieved by the end of H1 
2010. 
 
"End markets in the titanium minerals industry are now anticipated to be 
favourable in the upcoming years. Demand growth at rates above the average 
historic trend growth rate driven by cyclical recovery and increased demand from 
China and other developing countries, coupled with constrained supply are 
expected to result in a shortage of titanium minerals production developing 
during 2012. 
 
"The expansion of our Moma mine, due to be completed in 2012 under our Expansion 
Plan, will allow Kenmare to capitalise on these favourable conditions.  We have 
a world class asset in Moma, boasting a large, long life resource in a 
favourable location. 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. 
 
"We are excited about the opportunity to expand our capacity at Moma and to take 
advantage of the market supply deficit expected to develop by 2012, seize first 
mover advantage and deliver increased financial returns while maximising the 
utilisation of existing facilities, infrastructure and technology." 
 
J.P. Morgan Cazenove is acting as Global Co-ordinator, Bookrunner and Joint 
Broker. Davy is acting as Sponsor, Co-Bookrunner and Joint Broker. Canaccord 
Adams and Mirabaud are acting as Co-Bookrunners and Joint Brokers. 
 
Rothschild is acting as financial adviser to Kenmare. 
 
For further information, please contact: 
 
Kenmare Resources plc 
+------------------------------+------------------------------+ 
| Michael Carvill, Managing    | Tony McCluskey, Financial    | 
| Director                     | Director                     | 
| Tel: [phone]          | Tel: [phone]          | 
| Mob: + 353 87 674 0110       | Mob: + 353 87 674 0346       | 
+------------------------------+------------------------------+ 
 
+------------------------------+------------------------------+ 
| J.P. Morgan Cazenove         | Davy                         | 
| Laurence Hollingworth        | Hugh McCutcheon              | 
| Neil Passmore                | Eugenee Mulhern              | 
| Tel: [phone]        | Tel: [phone]         | 
+------------------------------+------------------------------+ 
 
+------------------------------+------------------------------+ 
| Murray Consultants           | Conduit PR Ltd               | 
| Joe Heron                    | Leesa Peters/Charlie Geller  | 
| Tel: [phone]         | Tel: [phone]        | 
| Mob: + 353 87 690 9735       | Mob: [phone]        | 
+------------------------------+------------------------------+ 
 
 
                                IMPORTANT NOTICE 
 
This announcement does not constitute an offer to sell, or the solicitation of 
an offer to buy or subscribe for, securities of the Company in the United States 
or in any other jurisdiction. 
 
This announcement has not been approved by the Irish Financial Regulator, the 
Financial Services Authority or by any other regulatory authority. This 
announcement is an advertisement and not a prospectus and investors should not 
subscribe for or purchase any securities referred to in this announcement except 
on the basis of information provided in the prospectus to be published by the 
Company in due course. Copies of the prospectus will, following publication, be 
available from the Company's registered office at Chatham House, Chatham Street, 
Dublin 2, Ireland and at the Company's website at www.kenmareresources.com. 
 
The securities of the Company (the "Securities") have not been and will not be 
registered under the US Securities Act of 1933, as amended (the "Securities 
Act"), and may not be offered or sold in the United States unless registered 
under the Securities Act or an exemption from such registration is available. 
No public offering of Securities is being made in the United States. Any 
representation to the contrary is a criminal offence in the United States. 
 
The securities mentioned herein and in the Prospectus may not be offered, sold, 
resold, transferred or delivered, directly or indirectly, in any Excluded 
Jurisdiction absent registration or an applicable exemption from the 
registration requirements of the relevant laws of any Excluded Jurisdiction. 
There will be no public offer of such securities in any Excluded Jurisdiction. 
This announcement does not constitute an offer to sell, or a solicitation of an 
offer to subscribe for, the securities being issued in any jurisdiction in which 
such offer or solicitation is unlawful. 
 
No communication or information relating to the offer of Securities (the 
"Offering") may be disseminated to the public in jurisdictions other than the 
United Kingdom and the Republic of Ireland where prior registration or approval 
is required for that purpose.  No action has been taken that would permit an 
offer of the Securities in any jurisdiction where action for that purpose is 
required, other than in the United Kingdom and the Republic of Ireland. 
 
J.P. Morgan Cazenove is a marketing name used by J.P. Morgan Securities Ltd. 
J.P. Morgan Securities Ltd. is acting as Global Co-ordinator, Bookrunner and 
Joint Broker to Kenmare in respect of the Capital Raising. J&E Davy ("Davy") is 
acting as Sponsor, Co-Bookrunner and Joint Broker to Kenmare in respect of the 
Capital Raising.  Canaccord Adams Limited ("Canaccord Adams") and Mirabaud 
Securities LLP ("Mirabaud") are acting as Co-Bookrunners and Joint Brokers to 
Kenmare in respect of the Capital Raising.  N.M. Rothschild & Sons Limited 
("Rothschild") is acting as Financial Adviser to Kenmare in respect of the 
Capital Raising. 
 
This announcement has been issued by and is the sole responsibility of Kenmare. 
No representation or warranty, express or implied, is or will be made as to, or 
in relation to, and no responsibility or liability is or will be accepted by the 
Banks or Rothschild, or by any of their respective affiliates or agents as to, 
or in relation to, the accuracy or completeness of this announcement or any 
other written or oral information made available to or publicly available to any 
interested party or its advisers, and any responsibility or liability therefore 
whether arising in tort, contract or otherwise is expressly disclaimed. 
J.P. Morgan Cazenove., Canaccord Adams, Mirabaud and Rothschild, each of which 
is authorised and regulated in the United Kingdom by the FSA, are acting 
exclusively for the Company and no one else in connection with the Capital 
Raising and will not regard any other person as their client in relation to the 
Capital Raising and will not be responsible to anyone other than the Company for 
providing the protections afforded to their clients or for providing advice in 
connection with the Capital Raising or any other matter referred to in this 
announcement. 
Davy, which is authorised and regulated in Ireland by the Financial Regulator, 
is acting exclusively for the Company and no one else in connection with the 
Capital Raising and will not regard any other person as its client in relation 
to the Capital Raising and will not be responsible to anyone other than the 
Company for providing the protections afforded to its clients or for providing 
advice in connection with the Capital Raising or any other matter referred to in 
this announcement. 
This announcement includes statements that are, or may be deemed to be, 
forward-looking statements. These forward looking statements can be identified 
by the use of forward looking terminology, including the terms "anticipates", 
"believes", "estimates", "expects", "intends", "may", "plans", "projects", 
"should" or "will", or, in each case, their negative or other variations or 
comparable terminology, or by discussions of strategy, plans, objectives, goals, 
future events or intentions. These forward-looking statements include all 
matters that are not historical facts. They appear in a number of places 
throughout this announcement and include, but are not limited to, statements 
regarding Kenmare's intentions, beliefs or current expectations concerning, 
amongst other things, Kenmare's results of operations, financial position, 
liquidity, prospects, growth, strategies and expectations for its Mine and the 
titanium mining industry. 
By their nature, forward looking statements involve risk and uncertainty because 
they relate to future events and circumstances. Forward-looking statements are 
not guarantees of future performance and the actual results of Kenmare's 
operations, financial position and liquidity, and the development of the markets 
and the industry in which Kenmare operates may differ materially from those 
described in, or suggested by, the forward-looking statements contained in this 
announcement. Forward-looking statements may, and often do, differ materially 
from actual results. Any forward-looking statements in this announcement reflect 
Kenmare's current view with respect to future events and are subject to risks 
relating to future events and other risks, uncertainties and assumptions 
relating to Kenmare's operations, results of operations, financial position and 
growth strategy. 
1.         Introduction 
 
Today, the Company announced a Capital Raising to raise gross proceeds of 
GBP179.6 million (US$269.9 million) (GBP170.8 million (US$256.7 million) net of 
expenses) through the issue of in aggregate 1,497,030,066 New Ordinary Shares at 
an issue price of 12 pence per New Ordinary Share. 748,515,033 New Ordinary 
Shares will be issued through the Placing and Open Offer and 748,515,033 New 
Ordinary Shares will be issued through the Firm Placing. The issue price of 12 
pence (EUR0.13) per New Ordinary Share represents a discount of 8.6 pence (41.8 
per cent.) to the closing mid-market price of 20.6 pence per Ordinary Share on 
the London Stock Exchange on 4 March 2010 and a discount of 11.1 cents (45.7 per 
cent.) to the closing mid-market price of EUR0.24 per Ordinary Share on the Irish 
Stock Exchange on 4 March 2010 (being the last trading day prior to the 
announcement of the Capital Raising). 
 
The Capital Raising is conditional on, amongst other things, the passing by 
Shareholders of all of the Resolutions proposed for consideration at the 
Extraordinary General Meeting on 29 March 2010, upon the Placing and Open Offer 
Agreement becoming unconditional in all respects and upon Admission. The 
Resolutions proposed seek an increase in share capital and the grant to the 
Directors of share issue authorities necessary for the implementation of the 
Capital Raising, and, in accordance with the Listing Rules, seek the approval of 
the Issue Price and the approval, as a related party and class 1 transaction 
under the Listing Rules, of the potential participation by M&G, a substantial 
shareholder in the Company, in the Firm Placing and the Placing. 
 
The purpose of this announcement is to set out the background to, and the 
reasons for, the Capital Raising and to explain why the Directors believe it is 
in the best interests of the Company and the Shareholders as a whole and why the 
Directors are recommending that Shareholders vote in favour of the Resolutions 
necessary for the implementation of the Capital Raising. The Prospectus will set 
out the actions to be taken by Qualifying Shareholders in respect of the Open 
Offer. The notice convening the Extraordinary General Meeting, to be held at 
11.00 a.m. on 29 March 2010 at The Westbury Hotel, Grafton Street, Dublin 2, 
Ireland, will be set out in the Prospectus. 
 
 
2..                                Background to and Reasons for the Capital 
Raising 
 
Background 
The principal activity of Kenmare is the operation of the Mine. The Mine 
contains substantial reserves of heavy minerals including the titanium minerals 
ilmenite and rutile, and the relatively high value zirconium silicate mineral, 
zircon. As at 31 December 2008 the Mine had total reserves of 634 million tonnes 
of ore and resources of 5,900 million tonnes of ore as will be set out in the 
Prospectus. The Namalope Reserve, currently being mined by Kenmare, and the 
Nataka Resource, a second deposit located at the Mine which is currently not 
being mined, would together maintain production at the Mine at design capacity 
levels of 800,000 tpa of ilmenite plus co-products for more than 150 years of 
mining (assuming the mineral resources at Nataka are converted to mineral 
reserves). 
 
The Directors believe that the Kenmare Group has a number of significant 
advantages, including the location of the Mine in a favourable location beside 
the ocean with an export terminal, the size of the resource, the ability to 
implement a relatively low cost dredge mining method, the high quality of the 
ilmenite products, the Group's low cost power supply arrangements and the 
integrated and efficient nature of the Mine's facilities. Further, in addition 
to ilmenite which is the Group's main revenue component, the Mine has valuable 
co-products in zircon, which the Company has sold during 2008 and 2009, and 
rutile which the Directors expect to be produced in commercially significant 
quantities during 2010. 
 
The Directors believe that the characteristics of the Mine and the significant 
progress recently made in implementing the Ramp Up (as detailed below) now 
position Kenmare to implement an expansion of the existing mining operation (the 
"Expansion") in order to significantly increase production, at a relatively low 
cost per incremental tonne of annual production, take advantage of projected 
favourable market conditions, and generate a substantially expanded revenue base 
with which to pay down debt, thereby significantly improving the financial 
performance and value of the Group. This Expansion is the main purpose of the 
Capital Raising. The Capital Raising will also enable the Group to make the 
Deposit which enables the Agreed Financing Amendments to become effective. 
 
Existing Operations 
Mining at Moma is carried out by means of dredging in an artificial dredge pond, 
with concentration of the heavy minerals in a wet concentrator plant ("WCP"), 
which floats behind the dredges. This produces a heavy mineral concentrate 
("HMC") which is pumped to a mineral separation plant ("MSP") for further 
processing. The MSP separates and upgrades the HMC into the final products: 
ilmenite, rutile and zircon. These products are exported directly from the Mine 
using a dedicated shipping terminal and a trans-shipment vessel owned by the 
Group which loads ocean-going ships typically chartered by customers of the 
Group. 
 
Kenmare has held mining tenements in the general Moma area since 1987. Following 
completion of a definitive feasibility study in 2001, financing arrangements (a 
combination of long term project loans and equity) for the development of the 
Mine were finalised in 2004, following a period of negotiation with prospective 
lenders, lender due diligence, the procurement by the Company of off-take 
contracts for planned production from Moma and the completion of a definition 
phase in 2003 (involving the designing of items such as the jetty, concrete 
works and conveyor systems) in order to facilitate bidding from sub-contractors. 
In April 2004, Kenmare entered into an EPC Contract with the EPC Contractor for 
the engineering, procurement, building and commissioning of the facilities at 
the Mine. However, during the course of construction in late 2006, it became 
apparent to the Directors that the EPC Contractor would not achieve the original 
contractual handover date for the plant in November 2006. A Deed of Amendment 
and Settlement was therefore entered into in December 2006 to provide for, among 
other things, a phased handover of completed sections of the Mine to Kenmare for 
its operation and management. The Group entered into a Deed of Final Settlement 
and Release with the EPC Contractor in December 2009. 
 
Following assumption of control of the assets but prior to the Deed of Final 
Settlement and Release, Kenmare became aware of deficiencies in the plant and 
equipment, which resulted in the failure of certain performance tests set out in 
the EPC Contract. From this point in 2008, until the cessation of the 
relationship with the EPC Contractor in December 2009, Kenmare was engaged with 
the EPC Contractor in implementing a Performance Improvement Programme ("PIP"), 
the costs of which were substantially met by the EPC Contractor. The PIP was 
designed to address these deficiencies and to achieve production levels at 
design capacity. The deficiencies in the equipment and the consequent 
requirement to implement the PIP has led to a delay in achieving the planned 
Ramp Up and achieving production levels at design capacity levels across all 
three of the Mine's mineral products. 
 
The implementation of the PIP has materially increased production levels in the 
fourth quarter of 2009: 
·      HMC production was 280,000 tonnes. This reflects a 22 per cent. increase 
compared to the third quarter of 2009 and represents 100 per cent. of design 
capacity for the period; 
·      Ilmenite production was 143,000 tonnes. This reflects a 10 per cent. 
increase compared to the third quarter of 2009 and 72 per cent. of design 
capacity for the period; 
·      Zircon production was 5,400 tonnes in total, comprising two different 
zircon products, standard zircon (3,900 tonnes) and special zircon (1,500 
tonnes). This reflects a similar level of production as the third quarter of 
2009 (and was adversely affected by disruptions to zircon production associated 
with the implementation of the metallurgical optimisation projects) and 43 per 
cent. of design capacity for the period; 
·      Rutile production was negligible in 2009; and 
·      Finished product sales in the fourth quarter of 2009 were 139,000 tonnes, 
comprised primarily of ilmenite, but also including zircon. This reflects a 6 
per cent. increase on the previous quarter and resulted in shipments in the 
second half of 2009 being 83 per cent. higher than in the first half of 2009. In 
2009, there were 24 shipments totalling 418,000 tonnes of finished products 
(2008: 17 shipments totalling 250,000 tonnes of finished products). 
 
Although the PIP has been completed, the Company has not yet reached design 
capacity for production of the Group's final products on a quarterly or monthly 
basis. Additional upgrading is in progress to address the production 
deficiencies. This includes the installation of additional reheaters in the 
zircon and rutile circuits, along with a new ilmenite scavenging circuit, which 
are designed to significantly enhance the zircon and rutile production. 
 
In addition, revenue generated by the Group was hampered significantly by the 
market deterioration resulting from the global recession in 2009, as decreased 
demand led customers to defer delivery of shipments and by the reduction of 
prices realised for non fixed price contracted products. As a result of the 
production-related issues experienced during 2008 and the first half of 2009 and 
the market deterioration, cashflow generation from the Mine during 2009 was 
below budget. 
 
The construction of the Mine was funded by a combination of equity and senior 
and subordinated loan facilities under the Financing Agreements. The Financing 
Agreements contained schedules for repayment and certain operational tests, 
including with respect to Technical Completion. The Lender Group, which includes 
a number of development finance institutions, has historically been 
accommodating to the evolving situation at the Mine (including in relation to 
construction delays and operational challenges) and it has previously agreed a 
number of amendments to the Financing Agreements, including deferral of the 
principal repayments of Senior Loans that would have fallen due in 2009. 
 
In the context of the Capital Raising, the Lender Group has agreed to the Agreed 
Financing Amendments. These include modifications to the Technical Completion 
tests and deferral of the date for achieving Technical Completion from 31 
December 2010 to 31 December 2011, as well as changing the consequence of 
failing to achieve Technical Completion at the required date from an event of 
default to an interest margin increase of, in the case of the Senior Loans, 1 
per cent., and in case of Subordinated Loans 2 per cent. until Technical 
Completion is achieved. Under the current terms of the Financing Agreements, 
failure to achieve Completion by the Final Completion Date is an event of 
default. Pursuant to the Agreed Financing Amendments, the Lender Group has 
agreed to eliminate this event of default, so that Completion can be achieved at 
any time. The Agreed Financing Amendments also introduce the concept of 
Non-Technical Completion and defer the Final Completion Date from 31 December 
2012 to 31 December 2013. Failure to achieve Non-Technical Completion by the 
Final Completion Date will result in an event of default. The Agreed Financing 
Amendments are conditional on the Deposit. As part of the Agreed Financing 
Amendments, funds deposited into the Contingency Reserve Account can be 
transferred to the Project Accounts and spent on, amongst other things, the 
Expansion. 
 
Absent the Capital Raising and subsequent completion of the Deposit (which is 
the sole remaining condition to the effectiveness of the Expansion Funding Deed 
of Waiver and Amendment, as further described below in this section), the Agreed 
Financing Amendments will not take effect and the Company's ability to comply 
with the existing terms of the Financing Agreements may be compromised. In such 
circumstances, further negotiations with the Lender Group may be required. 
Further information on the financial position of the Company absent the Capital 
Raising will be set out in the Prospectus. 
 
During 2009, the Group made a number of key appointments to its operational 
management team which have helped with the effective implementation of the PIP, 
the continued implementation of improvements to increase production since the 
cessation of the relationship with the EPC Contractor and the conclusion of the 
PIP in December 2009. The Group is currently producing HMC at design capacity 
levels and expects to approach design capacity levels for ilmenite and zircon by 
the end of the first half of 2010. The Group has not produced any commercially 
significant amounts of rutile to date but the Directors anticipate such 
production will commence during 2010. Information on projected market 
conditions, including on the recovery in demand, is detailed in the section 
below entitled "Opportunity for Expansion". 
 
Opportunity for Expansion 
Based on Kenmare's own supply and demand analysis, the Directors anticipate that 
the titanium dioxide feedstock industry will experience demand growth over the 
next five years which will be above average historic industry trend growth 
rates. This view is shared by that of independent industry analysts, including 
TZMI as referred to below. Demand for pigment (the principal end use market for 
titanium feedstocks) has averaged a compound annual growth rate of approximately 
3 per cent. over the past 30 years and has moved closely in line with the growth 
in the global economy over this period. The compound annual growth rate of 
Chinese pigment consumption has averaged approximately 15 per cent. over the 
last 20 years, reflecting the growing importance of China in pigment demand. 
While demand was adversely affected by the global recession in late 2008 and 
2009, industry experts have predicted a strong rebound in pigment demand of 8 
per cent. to 10 per cent. for 2011. DuPont, for example, has stated that its 
expectations are for above trend line growth for the period 2009 to 2015 in the 
range of 5 per cent. to 10 per cent. as demand catches up with the long term 
growth rate. This demand growth is expected to be driven principally by 
increased demand from China and other developing countries driven by strong 
economic growth and a shift towards urbanisation in those countries, as there is 
typically a strong correlation between GDP growth per capita and demand for 
titanium dioxide feedstock products. The anticipated growth in GDP per capita in 
developing countries and the relatively low consumption of pigment per capita in 
such developing countries underpins the favourable global outlook for the 
titanium dioxide feedstock industry. 
 
The ongoing recovery in the pigment market is expected to result in significant 
re-stocking by pigment producers of TiO2 feedstocks during 2010 and 2011. A 
small surplus of feedstocks until 2012 has been forecasted by TZMI in a 
statement to Kenmare, followed by a significant growing deficit in supply to 
2015 of over approximately 1 million TiO2 units or 20 per cent. of the total 
projected market size in 2015, if no new projects, incremental to those already 
approved, come on stream. 
 
Increase in supply necessary to address this anticipated deficit is subject to a 
number of constraints: certain existing operations are reaching full capacity 
and have limited expansion potential and a number of the major titanium 
feedstock producers are expected to decrease their future production. Reasons 
for reducing (or not increasing) future production include suspension or 
cancellation of development projects; resource depletion in some major titanium 
mines; considerable capital expenditure required to facilitate meaningful 
expansion (often unjustified by the size of the resource) and significantly 
increasing power prices in competitors' jurisdictions, particularly in South 
Africa. As a result of such factors, a number of Kenmare's global competitors 
have curtailed or cancelled production or are expected to decrease future 
production. In addition there are a limited number of known new sources of 
significant supply which could come on stream in the short term and there are 
uncertainties with respect to the development of certain of these projects, for 
example BHP has recently relinquished its Corridor Sands deposit in Mozambique, 
Tiomin Resource's Kwale project in Kenya has recently been written off in their 
accounts and Tata Steel's Titanium Project in India and Mineral Commodities' 
Xolobeni deposit in South Africa have both been delayed. 
 
The Directors believe that Kenmare is favourably positioned to expand its 
existing operation and take advantage of the market opportunity presented by 
this combination of demand growth and supply constraints. Kenmare's key 
strengths are: 
 
·      A large resource - the Moma titanium mineral deposit is large. The size 
of the resource provides significant potential to expand production well beyond 
current design capacity; 
 
·      A long life resource - at design capacity levels of 800,000 tpa of 
ilmenite plus co-products the Namalope Reserve, currently being mined by 
Kenmare, and the Nataka Resource, a second deposit located at the Mine which is 
currently not being mined, could be operational for more than 150 years of 
mining (assuming the Nataka Resource can be converted into an equivalently sized 
mineral reserve). The Namalope Reserve and the Nataka Resource could maintain 
production at post-Expansion design capacity levels of 1.2 million tpa of 
ilmenite plus co-products for more than 110 years of mining (assuming the Nataka 
Resource can be converted into an equivalently sized mineral reserve); 
 
·      Low-cost production - Moma contains a large dredgeable resource with an 
abundance of fresh water for dredge mining (dredge mining being the lowest cost 
method of mining such a resource) with low cost power supply arrangements and 
integrated and efficient materials handling equipment and infrastructure, in 
addition to a favourable fiscal regime in Mozambique; 
 
·      High quality ilmenite products - the Mine produces a number of high 
quality ilmenite products, with differing TiO2 content for different market 
applications, which can be used by a broad range of end users. The quality of 
ilmenite product is sufficiently high to allow the sale of ilmenite product 
directly to pigment consumers without the need to upgrade through slagging or 
other processes; 
 
·      Valuable co-products - while ilmenite is expected to be 64 per cent. of 
the Group's revenue at design capacity levels, Kenmare also expects to produce 
significant quantities of high value co-products zircon and, to a lesser extent, 
rutile; 
 
·      A well positioned and integrated site in a favourable location with 
export terminal - the Group's operations are efficient and streamlined due to 
the close proximity between existing mining operation, processing plant and 
port, with no significant on-site product transport requirements, located on the 
coast with a dedicated marine terminal to export final products to customer 
markets in Asia, Europe and North America; 
 
·      Capital efficient expansion options - the large Moma resource and 
existing operations and infrastructure at the Mine (installed at a total capital 
cost since 2004 of approximately US$500 million) allow Kenmare to implement the 
Expansion with a relatively low cost per incremental tonne of annual production; 
 
·      Experience - the Group's management and other employees gained experience 
through the development of the Mine to date and through the expertise of the key 
management personnel recently appointed, notably the appointment of Jacob Deysel 
as Chief Operations Officer in February 2009. An EPCM Contract will be concluded 
in order that Kenmare retains control over the Expansion process to ensure 
rigorous commitment to meeting key dates and deliverables; and 
 
·      Ease of expansion - the Mine's modular design (consisting of distinct and 
separate components) and the modular structure of the proposed Expansion 
(including a new dredge and WCP operating in a separate dredge pond from the 
existing dredges and WCP and a WHIMS plant housed in its own structure) means 
that interference caused by the Expansion to current operations will be 
minimised. The Expansion will also utilise proven, existing technology. 
 
Planned Expansion 
Kenmare completed an Expansion Study in January 2010 that considered the options 
available to the Group to improve the productivity of the Mine and exploit the 
potential market opportunity presented by the projected shortage of and 
increased demand for titanium dioxide feedstock. A number of mining options and 
mineral separation options were analysed with a view to maximising returns 
consistent with integrating the Expansion into the existing operation and 
minimising disruption to production. From a range of mining and production 
options, the Expansion Study concluded that the upgrade of the existing Mine 
operation, the construction and commissioning of a second mining operation at 
the Mine and the expansion of the MSP, was the best way to deliver increased 
financial growth while maximising the utilisation of existing facilities, 
infrastructure and technology. More specifically, the Expansion Study contains 
the following recommendations: 
·      an upgrade of the capacity of the existing two dredges and WCP 
concentrator to increase spiral feed capacity from 3,000 tph to 3,500 tph; 
·      the installation of a second WCP with a spiral feed capacity of 2,000 tph 
in a separate dredge pond, utilising a new third dredge on the Namalope Reserve 
approximately 5km away from the existing mining operation; and 
·      the addition of a Wet High Intensity Magnetic Separation (WHIMS) circuit 
at the front of the ilmenite circuit of the MSP, as well as other modifications 
to the MSP, including an auxiliary ilmenite 80tph circuit, to increase 
throughput capacity from 135 tph to 220 tph. 
 
The Directors expect that the Expansion will increase design capacity by 
approximately 50 per cent. from the Mine's current design capacity, resulting in 
the existing design capacity increasing from 800,000 tpa to 1.2 million tpa of 
ilmenite, from 50,000 tpa to 80,000 tpa of zircon and from 14,000 tpa to 22,000 
tpa of rutile. Assuming Kenmare's production levels reach full post-Expansion 
design capacity, Kenmare would supply approximately 10 per cent. of the world's 
titanium dioxide feedstock supply and approximately 6 per cent. of the world's 
zircon supply, based on the total global supply in 2008 estimated by TZMI in 
their Mineral Sands Annual Review 2009. 
 
The Expansion Study estimates the cost of the Expansion as approximately US$200 
million, which includes a contingency of approximately US$18 million. This 
estimated cost, excluding the contingency, is stated to an accuracy limit of +/- 
25 per cent. 
 
As the next step in implementing the Expansion, in November 2009 Kenmare 
appointed Aker Solutions to commence an Engineering Study. This Engineering 
Study is expected to be completed by mid 2010. Pending results of the 
Engineering Study, detailed design is expected to commence in the third quarter 
of 2010, with construction expected to be completed by the end of 2011. The 
Directors expect that the Expansion will be completed, and production expanded 
to the post-Expansion design capacity levels, by the end of 2012. 
 
The Directors expect that the Expansion will benefit the Group and deliver value 
to Shareholders by allowing Kenmare to: 
·      take advantage of the market supply deficit of ilmenite expected to 
develop by 2012 by achieving post-Expansion design capacity levels at that time; 
·      deliver increased financial growth by maximising the utilisation of 
existing facilities, infrastructure and technology, thereby delivering a capital 
efficient expansion; 
·      capture market share and continue to provide high quality products at 
relatively low operating costs; 
·      seize first mover advantage in capturing upside in an evolving market 
supply deficit by announcing the Expansion plans ahead of other competitors, 
thereby discouraging further investment in the sector; and 
·      increase revenues in order to pay down debt. 
 
The Lender Group has conditionally agreed that the Expansion may proceed and has 
agreed to the Agreed Financing Amendments which, if effective, will amend the 
terms of the Financing Agreements to modify the terms of the Technical 
Completion tests and certain other matters, including deferral of the dates by 
which the tests for Technical Completion and Completion have to be satisfied, in 
order to facilitate the Capital Raising and the Expansion. The effectiveness of 
the Agreed Financing Amendments is conditional on Kenmare depositing at least 
US$200 million into the CRA on or before 30 June 2010. Funds in the CRA may be 
contributed to the Project Accounts at the sole discretion of Kenmare, without 
restriction or condition. 
 
In connection with the Lenders Group's agreement to the Agreed Financing 
Amendments, the independent engineer appointed by the Lenders, SRK, has reported 
to the Lender Group its reasonable satisfaction with the Expansion Study and has 
confirmed to the Lender Group its view that the Expansion will not materially 
and adversely affect existing operations at the Mine. 
 
A summary of the principal terms of the Expansion Funding Deed of Waiver and 
Amendment will be contained in the Prospectus. 
 
It is proposed that implementation of the Expansion would commence in the second 
half of 2010 on completion of the Deposit, the Engineering Study and the 
execution of an EPCM Contract with an appropriate contractor capable of managing 
the Expansion project. Assuming completion of these steps, the Directors believe 
that completion of the Expansion along with the anticipated increase in demand 
and the market opportunity presented by the projected supply deficit in titanium 
dioxide feedstocks compared to demand would leave Kenmare well placed to achieve 
significantly enhanced financial performance. 
 
 
3.         Use of Proceeds 
 
In accordance with the capital cost estimates under the Expansion Study, 
GBP133.1 million (approximately US$200 million in Q3 2009 US$ terms and 
including a contingency of approximately US$18 million) of the net proceeds from 
the Capital Raising is intended to be used to fund the engineering, procurement 
and construction costs of the Expansion. This estimated cost, excluding the 
contingency, is to a stated accuracy limit of +/- 25 per cent. It is expected 
that US$2.3 million will be spent on upgrading the existing WCP A, US$74.3 
million will be spent on a new WCP B (including the dredge), US$57.5 million 
will be spent on the upgrade of the MSP including the WHIMS and approximately 
US$65.9 million will be spent on, inter alia, electricity supply upgrade, other 
mobile equipment, product storage, construction and spares. 
 
The balance of the net proceeds of approximately GBP37.7 million (US$56.7 
million) from the Capital Raising will be available to the extent necessary for 
any increase in costs of the Expansion and general corporate purposes, including 
meeting any debt service payments (inclusive of the August Payment) which are 
not met from operating cash flows. Any unspent proceeds which have not been 
deposited to the CRA may be used at the Group's option to prepay Additional 
Subordinated Lender Margin without penalty. 
 
In order to make the Deposit and thereby satisfy the condition in the Expansion 
Funding Deed of Waiver and Amendment, US$200 million of the proceeds of the 
Capital Raising will initially be deposited into the Contingency Reserve 
Account. Under the Expansion Funding Deed of Waiver and Amendment, funds in the 
CRA may be contributed to the Project Accounts and spent on, amongst other 
things, the Expansion. 
 
 
4.         Principal Terms of the Capital Raising 
 
Kenmare is proposing to raise gross proceeds of approximately GBP179.6 million 
(US$ 269.9 million) (approximately GBP170.8 million net of expenses (US$256.7 
million)) by way of the Capital Raising. 748,515,033 New Ordinary Shares will be 
issued through the Placing and Open Offer and 748,515,033 New Ordinary Shares 
will be issued through the Firm Placing. 
 
Placing and Open Offer 
The Issue Price represents a discount of 8.6 pence (41.8 per cent.) to the 
closing mid-market price of 20.6 pence per Ordinary Share on the London Stock 
Exchange on 4 March 2010 and a discount of 11.1 cent (45.7 per cent.) to the 
closing mid-market price of EUR0.24 per Ordinary Share on the Irish Stock Exchange 
on 4 March 2010 (being the last trading day prior to the announcement of the 
Capital Raising). 
 
Qualifying Shareholders, on and subject to the terms and conditions of the Open 
Offer, are being given the opportunity to apply for the Open Offer Shares at the 
Issue Price, pro rata to their holdings of Existing Ordinary Shares on the 
Record Date on the following basis: 
 
           19 Open Offer Shares for every 23 Existing Ordinary Shares 
 
Fractions of Open Offer Shares will not be allotted to Qualifying Shareholders 
in the Open Offer and fractional entitlements under the Open Offer will be 
rounded down to the nearest whole number of Open Offer Shares. Accordingly, 
Qualifying Shareholder holding fewer than 23 Existing Ordinary Shares on the 
Record Date will not be eligible to participate in the Open Offer. 
 
Qualifying Shareholders may apply for any whole number of Open Offer Shares up 
to their maximum entitlement which, in the case of Qualifying Non-CREST 
Shareholders, is equal to the number of Open Offer Entitlements as shown in Box 
2 on their Application Form, or, in the case of Qualifying CREST Shareholders, 
is equal to the number of Open Offer Entitlements standing to the credit of 
their stock account in CREST. Qualifying CREST Shareholders will receive a 
credit to their appropriate stock accounts in CREST in respect of their Open 
Offer Entitlements at 8.00 a.m. on 8 March 2010. Qualifying Shareholders with 
holdings of Existing Ordinary Shares in both certificated and uncertificated 
form will be treated as having separate holdings for the purpose of calculating 
their entitlements under the Open Offer. 
 
The Placing and Open Offer is fully underwritten by the Underwriters pursuant 
to, and subject to the terms of, the Placing and Open Offer Agreement, the 
principal terms and conditions of which will be summarised in the Prospectus. 
 
The Placing and Open Offer is conditional, inter alia, upon: 
(i)   the passing of all of the Resolutions; 
(ii)   Admission taking place by no later than 8.00 a.m. on 1 April 2010 (or 
such later time and date as the Company, J.P. Morgan Cazenove and Davy may agree 
not being later than 8.00 a.m. on 15 April 2010); and 
(iii)  the Placing and Open Offer Agreement having become unconditional in all 
respects and not having been terminated in accordance with its terms. 
 
Application has been made for the Open Offer Entitlements to be admitted to 
CREST. It is expected that the Open Offer Entitlements will be admitted to CREST 
at 8.00 a.m. on 8 March 2010. The Open Offer Entitlements will also be enabled 
for settlement in CREST at 8.00 a.m. on 8 March 2010. Applications through the 
CREST system may only be made by the Qualifying Shareholder originally entitled 
or by a person entitled by virtue of a bona fide market claim. 
 
Qualifying CREST Shareholders should note that, although the Open Offer 
Entitlements will be admitted to CREST and be enabled for settlement, 
applications in respect of entitlements under the Open Offer may only be made by 
the Qualifying Shareholder originally entitled or by a person entitled by virtue 
of a bona fide market claim raised by Euroclear's Claims Processing Unit. 
Qualifying Non-CREST Shareholders should note that their Application Form is not 
a negotiable document and cannot be traded. 
 
Further information on the Placing and Open Offer and terms and conditions on 
which it is made, including the procedure for application and payment, will be 
set out in the Prospectus and, where relevant, on the applicable Application 
Form. 
 
If Admission does not take place on or before 8.00 a.m. on 1 April 2010 (or such 
later time and/or date as the Company, J.P. Morgan Cazenove and Davy may 
determine, not being later than 8.00 a.m. on 15 April 2010), the Open Offer will 
lapse, any Open Offer Entitlements admitted to CREST will thereafter be disabled 
and application monies under the Open Offer will be refunded to the applicants, 
by cheque (at the applicant's risk) in the case of Qualifying Non-CREST 
Shareholders and by way of a CREST payment in the case of Qualifying CREST 
Shareholders, without interest as soon as practicable thereafter. In these 
circumstances, the Placing to the Conditional Placees will not proceed. 
 
Application has been made to the ISE and the UKLA for the New Ordinary Shares, 
the subject of the Placing and the Open Offer, to be admitted to the Official 
Lists and to the Irish Stock Exchange and the London Stock Exchange for the New 
Ordinary Shares, the subject of the Placing and the Open Offer, to be admitted 
to trading on the Irish Stock Exchange's and the London Stock Exchange's 
respective regulated markets for listed securities. It is expected that 
Admission will become effective on 1 April 2010 and that dealings for normal 
settlement in the New Ordinary Shares, the subject of the Placing and the Open 
Offer, will commence at 8.00 a.m. on the same day. 
 
Any Qualifying Shareholder who has sold or transferred all or part of his/her 
registered holding(s) of Ordinary Shares prior to 6.00 p.m. on 3 March 2010 is 
advised to consult his or her stockbroker, bank or other agent through or to 
whom the sale or transfer was effected as soon as possible since the invitation 
to apply for Open Offer Shares under the Open Offer may be a benefit which may 
be claimed from him/her by the purchasers under the rules of the Irish Stock 
Exchange and the London Stock Exchange. 
 
The Open Offer Shares, when issued and fully paid, will be identical to and rank 
in full for all dividends or other distributions declared, made or paid after 
Admission and in all other respects will rank pari passu with the Existing 
Ordinary Shares. No temporary documents of title will be issued. The New 
Ordinary Shares can be held in certificated form or in uncertificated form in 
CREST. 
 
The commitments of the Conditional Placees are subject to clawback in respect of 
valid applications for Open Offer Shares by Qualifying Shareholders pursuant to 
the Open Offer. 
 
Firm Placing 
Kenmare is proposing to issue 748,515,033 Firm Placed Shares at the Issue Price 
pursuant to the Firm Placing. 
 
The Firm Placed Shares are not subject to clawback and do not form part of the 
Open Offer. The Firm Placing is expected to raise approximately GBP89.8 million 
(US$135.0 million). 
 
The Firm Placing is fully underwritten by the Underwriters pursuant to, and 
subject to the terms of, the Placing and Open Offer Agreement. 
 
The Firm Placing is subject to the same conditions and termination rights which 
apply to the Placing and Open Offer. 
 
Application has been made to the ISE and UKLA for the New Ordinary Shares, the 
subject of the Firm Placing, to be admitted to the Official List and to the 
Irish Stock Exchange and London Stock Exchange for the New Ordinary Shares, the 
subject of the Firm Placing, to be admitted to trading on the Irish Stock 
Exchange's and London Stock Exchange's respective regulated markets for listed 
securities. It is expected that Admission will become effective on 1 April 2010 
and that dealings for normal settlement in the New Ordinary Shares, the subject 
of the Firm Placing, will commence at 8.00 a.m. on the same day. 
 
The Firm Placed Shares, when issued and fully paid, will be identical to, and 
rank in full with, the Ordinary Shares for all dividends or other distributions 
declared, made or paid after Admission, and will rank pari passu in all other 
respects with the Existing Ordinary Shares as at the date of issue. The New 
Ordinary Shares can be held in certificated form or in uncertificated form in 
CREST. 
 
Related Party Transaction 
M&G is a related party for the purposes of the Listing Rules because it is a 
substantial shareholder in the Company (being a party which holds in excess of 
10 per cent. of the currently issued ordinary share capital of the Company). 
M&G, as at 3 March 2010 is interested in approximately 165,694,896 Ordinary 
Shares, representing approximately 18.3 per cent. of the existing issued 
ordinary share capital of the Company. As M&G is participating, or may 
participate, in the Firm Placing and the Placing in respect of up to a maximum 
of 432,600,000 New Ordinary Shares (GBP51.9) million), it will be entitled to a 
commission of 1.75 per cent. of the value of the New Ordinary Shares for which 
it has agreed, or shall agree, to subscribe for under the Placing. Final 
participation of placees in the Firm Placing and the Placing is expected to 
occur on 5 March 2010 and has not therefore been confirmed as of the issue of 
this Announcement. In the event that M&G participates in the Firm Placing and 
the Placing in respect of this maximum, and is allocated all such New Ordinary 
Shares subscribed for under the Placing (but does not otherwise participate in 
the Open Offer), the shareholding of M&G in the Enlarged Issued Share Capital 
would be 598,294,896 Ordinary Shares or 24.9 per cent. 
 
The participation of M&G in the Firm Placing and the Placing in respect of up to 
a maximum of 432,600,000 New Ordinary Shares is classified under the Listing 
Rules as a related party transaction and a class 1 transaction and, as such, 
requires the approval of Independent Shareholders by way of a simple majority in 
general meeting. This approval is sought in a Resolution to be tabled at the 
Extraordinary General Meeting. M&G will not vote at the Extraordinary General 
Meeting on the relevant Resolution. M&G has undertaken to take all reasonable 
steps to ensure that its associates (as defined in the Listing Rules) do not 
vote on the relevant Resolution at the Extraordinary General Meeting. As will be 
referred to in the Prospectus, the Board believes that the participation by M&G 
in the Firm Placing and the Placing in respect of up to a maximum of 432,600,000 
 New Ordinary Shares, which would be on the same terms and, other than the 
approval of the relevant Resolution, subject to the same conditions as the 
participation of all other participants, is fair and reasonable and in the best 
interests of Shareholders as a whole and the Board has been so advised by Davy, 
an independent financial adviser. 
 
 
5.         Current Trading and Prospects 
 
Today, Kenmare published its unaudited preliminary results in respect of the 
year ended 31 December 2009. In these Preliminary Results, which will be 
reproduced in the Prospectus, the Group has reported revenue and related costs 
in the income statement from July 2009 (until the end of June 2009, because of 
the delayed ramp-up, Kenmare continued to operate an accounting policy where 
costs net of revenues were capitalised into the overall development expenditure 
for the project). 
 
The reported loss after tax for the year ended 31 December 2009 was US$30.4 
million. During the first six months of the year costs of US$13.8 million, net 
of revenue earned of US$15.6 million and net of delay damages of US$1.2 million, 
were capitalised in development expenditure in property, plant and equipment. 
Loan interest of US$13.4 million and finance fees of US$5.6 million were also 
capitalised resulting in an increase in development expenditure of US$32.8 
million to 30 June 2009. 
 
Revenue for the six months from July to December 2009 amounted to US$26.7 
million and cost of sales for the corresponding period was US$35.2 million 
resulting in a gross loss of US$8.5 million. Distribution and administration 
costs for the six month period to December 2009 were US$1.8 million and US$1.9 
million respectively. There was loan interest and finance fees of US$15.5 
million during the second half of the year and deposit interest earned of US$0.2 
million. In addition there was a foreign exchange loss for the year of US$2.9 
million, mainly as a result of the retranslation of the euro denominated loans, 
resulting in a loss for the year of US$30.4 million. 
 
For the year, additions to property, plant and equipment amounted to US$47.7 
million made up of assets of US$14.1 million and development expenditure of 
US$33.6 million. At 31 December 2009 net property, plant and equipment amounted 
to US$540.9 million. Depreciation and amortisation for the six month period was 
US$12.9 million. 
 
In June 2009, the Group completed a share placing resulting in US$16.1 million 
being received in August 2009. At the 31 December 2009 Group loans totalled 
US$356.1 million and cash balances amounted to US$17.4 million. In January 2010 
US$7.7 million was received pursuant to the exercise of warrants. 
 
The loss which occurred in the last six months of 2009 is a result of both the 
slower than planned ramp-up and the depressed feedstock market situation. 
 
Since 31 December 2009, both production and market conditions, current and 
projected, are now healthier providing encouraging indications of a significant 
improvement in operational and financial performance for the year ahead. While 
the production improvements delivered by the PIP fell short of expectations 
during 2009, HMC production is currently at design capacity levels, with 
processing improvements on track. The significantly improving trend in zircon 
production since the commissioning of additional equipment in the zircon 
circuit, referred to in the announcement of 26 January 2010, has continued and 
is expected to be followed by improvements in rutile production. Production at 
levels approaching design capacity for ilmenite and zircon is expected by the 
end of the first half of 2010, with work to increase rutile production ongoing 
throughout 2010. 
 
From 1 January 2010 to the end of February 2010, eight shipments from the Mine 
have been completed totalling 154,000 tonnes of ilmenite and zircon, as compared 
to one shipment in the first two months of 2009 for 7,050 tonnes of ilmenite, 
and twenty four shipments in 2009 totalling 418,000 tonnes of ilmenite and 
zircon. 
 
 
6. Importance of the Vote 
 
The Board is recommending the raising of approximately GBP179.6 million 
(US$269.9 million) (approximately GBP170.8 net of expenses (US$256.7 million)) 
through the Capital Raising. This Capital Raising will enable the Group to 
proceed with the proposed Expansion on the basis of the Expansion Study and make 
the Deposit, thereby satisfying the condition of the Expansion Funding Deed of 
Waiver and Amendment, and will provide the Group with additional liquidity to 
the extent that the capital raised is not used for the Expansion. According to 
the Expansion Study, the estimated cost of the Expansion is approximately US$200 
million, which includes a contingency of approximately US$18 million. This 
estimated cost, excluding the contingency, is stated to an accuracy limit of +/- 
25 per cent. The Lender Group has agreed to a number of revisions to the 
existing Financing Agreements, in connection with the proposed Expansion, which 
are conditional on the Deposit which is proposed to be raised through the 
Capital Raising. These waivers and amendments, details of which will be set out 
in the Prospectus, include the modification of the Completion tests, the 
deferral of the deadline for Technical Completion (currently set for 31 December 
2010) elimination of the deadline for Completion (currently set for 31 December 
2012) and the introduction of Non-Technical Completion as a concept and 
establishing its deadline as 31 December 2013. These Agreed Financing Amendments 
are conditional on, and will become effective immediately upon, making the 
Deposit. 
 
The Capital Raising is conditional, inter alia, on the passing of the 
Resolutions at the EGM. If the Resolutions are not passed, the Capital Raising 
will not complete, the proposed Expansion will not proceed at this time (thereby 
preventing the Group from significantly increasing its production in order to 
take advantage of the projected improvement in market conditions for titanium 
mineral products) and the Agreed Financing Amendments to the Financing 
Agreements will not become effective. In this situation, the existing provisions 
of the Financing Agreements would, absent further renegotiation, continue. These 
include, inter alia, requirements that Technical Completion and Completion occur 
by 31 December 2010 and 31 December 2012 respectively. In addition, a number of 
scheduled Senior Loan principal and interest repayments fall due under the 
Financing Agreements over the forthcoming period including the August Payment. 
 
Cashflow generation from the Mine for 2009 was significantly below budget. This 
was due in part to market deterioration as a result of the global recession in 
2009, decreased demand leading to customers deferring delivery of shipments and 
reduced prices being realised for some spot market ilmenite sales. The Group has 
also experienced delays in achieving targeted production for the period as a 
result of difficulties with the equipment, the consequent necessity for the 
implementation of the PIP, and the delay in completing all material aspects of 
the PIP to achieve the planned Ramp Up in production to design levels across all 
three of the Group's final products. While the PIP has been completed and some 
additional upgrading is in progress to address the production deficiencies, 
including the installation of additional reheaters in the zircon and rutile 
circuits, along with a new ilmenite scavenging circuit, which are designed to 
significantly enhance the zircon and rutile production the Company has not yet 
completed the Ramp Up and reached targeted production. There is also a risk that 
pricing and/or shipment levels may not be achieved and that insufficient cash 
may therefore be generated from the Mine to meet the next scheduled payment 
under the Financing Agreements in August 2010. Accordingly, should circumstances 
require it, some of the proceeds of the Capital Raising may be used so as to 
ensure that the Company can meet any shortfall in cashflow in order to service 
Senior Loan obligations as they fall due. 
 
If the Resolutions are not passed, the Capital Raising and the Deposit will not 
complete, the Agreed Financing Amendments will not become effective and the 
Company will not proceed with the Expansion at this time. In such circumstances, 
the Company would, to the extent it becomes necessary, take a number of actions 
designed to maximise cashflow/increase its cash balances in order to meet 
scheduled Senior Loan interest and principal payment obligations as they fall 
due, including the August Payment. These steps could include disposing of stocks 
of titanium minerals product built up at the Mine earlier than planned under the 
Company's shipping schedule, curtailing discretionary expenditure, seeking to 
obtain additional debt or equity finance and/or seeking to agree with the Lender 
Group amendments to the loan repayment schedules. While the Directors believe 
they would be able to implement the necessary courses of action in order to 
satisfy the payment obligations under the Financing Agreements, the consequences 
of such actions may be inconsistent with the long term strategy of the Group. 
For example, the accelerated sale of inventory may affect the pricing the Group 
achieves for its products more generally, curtailment of expenditure may delay 
or prevent the delivery of benefits from the capital expenditure programme, 
alternative capital may be expensive, and the cost of any amendments agreed with 
the Lender Group may be punitive and may result in more onerous obligations than 
those currently prevailing. Discussions between Kenmare and the Lender Group to 
date have been based on the assumption that the Capital Raising and the 
Expansion will proceed. 
 
The current terms of the Financing Agreements require the Group to achieve 
Technical Completion tests by 31 December 2010. Should the Capital Raising and 
Deposit not be completed and, as a result, the Agreed Financing Amendments do 
not become effective, Kenmare would seek to agree with the Lender Group a number 
of amendments to the Technical Completion tests in order to accommodate some 
operational aspects of the Mine which are different than those originally 
envisaged. Furthermore, in the event that production rates and other operational 
aspects from the Mine were not expected to be sufficient to satisfy the 
Technical Completion tests as at 31 December 2010, the Company would also seek 
to re-negotiate the tests for Technical Completion and/or implement a number of 
operational measures (certain of which may be uneconomical and may be 
inconsistent with the Group's long term strategy) in order to satisfy the 
Technical Completion test or to limit the scope of any necessary modifications 
to the Technical Completion tests. While the production levels and operational 
measures required under Technical Completion have not yet been achieved and 
there can be no guarantee that the Technical Completion requirements will be 
satisfied, the Directors believe that they would be able to implement the 
required operational measures and/or successfully re-negotiate a deferral or 
relaxation of loan terms with Lenders. 
 
If the Capital Raising is not completed, the Deposit is not made and the Group 
is unable to meet its obligations under the Financing Agreements (whether in 
relation to scheduled payments of Senior Loan principal and interest repayments 
or Technical Completion or otherwise), and if in addition the Group is unable to 
agree requisite amendments to the Financing Agreements prior to the agreed 
schedule in the Financing Agreements, there would be an event of default under 
the Financing Agreements. In the case of an event of default under the Financing 
Agreements, the Lenders may in certain circumstances be permitted to apply 
post-default interest margins, accelerate the payment of all sums outstanding 
under the facilities (including any accrued interest), enforce the security 
interests in the assets of the Project Companies, the CRA and the shares of the 
Project Companies and guarantees granted by Kenmare and Congolone, place the 
Project Companies into administration and initiate insolvency or other similar 
proceedings against the Project Companies. 
 
Accordingly, the Board believes that it is in the best interests of the Company 
and Shareholders as a whole that all Shareholders vote in favour of the 
Resolutions in order that the Capital Raising and, consequently the Deposit, can 
proceed and the Agreed Financing Amendments to the Financing Agreements become 
effective. 
 
 
7. Extraordinary General Meeting 
 
A notice convening the Extraordinary General Meeting will be set out in the 
Prospectus. The Extraordinary General Meeting will be held on 29 March 2010 at 
11.00 a.m. at The Westbury Hotel, Grafton Street, Dublin 2, Ireland. A Form of 
Proxy will be enclosed with the Prospectus. 
 
The Extraordinary General Meeting is being held for the purpose of considering 
and, if thought fit, passing the resolutions that will be set out in the 
Prospectus. 
 
 
 
 
 
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 
 
+------------------------------------------+------------------+ 
| Event                                    | Time and/or Date | 
+------------------------------------------+------------------+ 
| Record Date for entitlement under the    |   6.00 p.m. on 3 | 
| Open Offer                               |      March, 2010 | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Announcement and publication of          |   5 March,  2010 | 
| Prospectus and Application Form          |                  | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Ex-entitlement date for the Open Offer   |   8 March, 2010  | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Open Offer Entitlements credited to      | by 8 March, 2010 | 
| stock accounts of Qualifying CREST       |                  | 
| Shareholders in CREST                    |                  | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Recommended latest time for requesting   |  4.30 p.m. on 19 | 
| withdrawal of Open Offer Entitlements    |     March,  2010 | 
| from CREST                               |                  | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Latest time and date for depositing Open | 3.00 p.m.  on 23 | 
| Offer Entitlements into CREST            |      March, 2010 | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Latest time and date for splitting       | 3.00 p.m.  on 24 | 
| Application Forms (to satisfy bona fide  |      March, 2010 | 
| market claims only)                      |                  | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Latest time and date for receipt of      | 11.00a.m.  on 26 | 
| completed Application Forms and payment  |      March, 2010 | 
| in full under the Open Offer and         |                  | 
| settlement of relevant CREST             |                  | 
| instructions (as appropriate)            |                  | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Latest time and date for receipt of      | 11.00a.m.  on 27 | 
| Forms of Proxy and receipt of electronic |      March, 2010 | 
| proxy appointments by registered         |                  | 
| Shareholders for the Extraordinary       |                  | 
| General Meeting                          |                  | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| Extraordinary General Meeting            | 11.00a.m.  on 29 | 
|                                          |      March, 2010 | 
+------------------------------------------+------------------+ 
| Admission and commencement of dealings   |  8.00 a.m.  on 1 | 
| in the New Ordinary Shares               |      April, 2010 | 
|                                          |                  | 
+------------------------------------------+------------------+ 
| New Ordinary Shares, in uncertificated   |  8.00 a.m.  on 1 | 
| form, expected to be credited to CREST   |      April, 2010 | 
| accounts                                 |                  | 
+------------------------------------------+------------------+ 
|                                          | by 8 April, 2010 | 
| Despatch of definitive share             |                  | 
| certificates for New Ordinary Shares in  |                  | 
| certificated form                        |                  | 
+------------------------------------------+------------------+ 
Notes: 
(1)        The times and dates set out in the expected timetable of principal 
events above and mentioned throughout this announcement may be adjusted by the 
Company, in which event details of the new times and dates will be notified to 
the Irish Stock Exchange, the UKLA, the London Stock Exchange, and, where 
appropriate, Qualifying Shareholders by means of an announcement through a 
Regulatory Information Service. 
 (2)       References to times in the timetable are to Dublin times unless 
otherwise stated. 
 
DEFINITIONS 
 
In this Announcement, the following expressions have the following meaning 
unless the context otherwise requires: 
 
+--------------------+---------------------------------------------+ 
| "1990 Act"         | the Companies Act 1990;                     | 
+--------------------+---------------------------------------------+ 
| "1963 Act"         | the Companies Act 1963;                     | 
+--------------------+---------------------------------------------+ 
| "1983 Act"         | the Companies (Amendment) Act 1983;         | 
+--------------------+---------------------------------------------+ 
| "2005 Act"         | the Investment Funds, Companies and         | 
|                    | Miscellaneous Provisions Act 2005;          | 
+--------------------+---------------------------------------------+ 
| "Absa"             | Absa Bank Limited, a South African bank;    | 
+--------------------+---------------------------------------------+ 
| "AfDB"             | African Development Bank, an international  | 
|                    | organisation established and existing under | 
|                    | the agreement establishing the African      | 
|                    | Development Bank and having its             | 
|                    | headquarters in Abidjan, Republic of the    | 
|                    | Cote D'Ivoire;                              | 
+--------------------+---------------------------------------------+ 
| "Additional        | additional Subordinated Loans in an         | 
| Standby            | aggregate principal amount of US$22 million | 
| Subordinated       | made to the Project Companies by FMO and,   | 
| Loans"             | by way of sub-participation, EAIF, pursuant | 
|                    | to an amendment to the Subordinated Loan    | 
|                    | Agreement dated 28 August 2007;             | 
+--------------------+---------------------------------------------+ 
| "Additional        | additional interest accruing on the         | 
| Subordinated       | Subordinated Loans at the rate of 3 per     | 
| Lender Margin"     | cent. per annum from 31 March 2009 until    | 
|                    | the date of Technical Completion, and at    | 
|                    | the rate of 1 per cent. per annum from the  | 
|                    | date of Technical Completion until the date | 
|                    | of Completion, and thereafter, nil;         | 
+--------------------+---------------------------------------------+ 
| "Admission"        | the admission of the New Ordinary Shares to | 
|                    | the Official Lists                          | 
|                    | becoming effective in accordance with the   | 
|                    | Listing Rules and the admission of such     | 
|                    | shares to trading on the respective         | 
|                    | regulated markets for listed securities of  | 
|                    | the Irish Stock Exchange and the London     | 
|                    | Stock Exchange becoming effective in        | 
|                    | accordance with the Admission and           | 
|                    | Disclosure Standards;                       | 
+--------------------+---------------------------------------------+ 
| "Admission and     | the "Admission and Disclosure Standards" of | 
| Disclosure         | the London Stock Exchange and the Admission | 
| Standards"         | to Trading Rules of the Irish Stock         | 
|                    | Exchange containing, among other things,    | 
|                    | the admission requirements to be observed   | 
|                    | by companies seeking admission to trading   | 
|                    | on the Irish Stock Exchange's and London    | 
|                    | Stock Exchange's respective regulated       | 
|                    | markets for listed securities;              | 
+--------------------+---------------------------------------------+ 
| "Agreed Financing  | the agreed amendments to the Financing      | 
| Amendments"        | Agreements set forth in theExpansion        | 
|                    | Funding Deed of Waiver and Amendment;       | 
+--------------------+---------------------------------------------+ 
| "Aker Solutions"   | Aker Solutions E&C International Ltd;       | 
| or "AS"            |                                             | 
+--------------------+---------------------------------------------+ 
| "Application Form" | the personalised application form on which  | 
|                    | Qualifying Non-                             | 
|                    | CREST Shareholders who are registered on    | 
|                    | the register of Kenmare at the Record Date  | 
|                    | may apply for Open Offer Shares under the   | 
|                    | Open Offer;                                 | 
+--------------------+---------------------------------------------+ 
| "August Payment"   | a payment of US$17.8 million in respect of  | 
|                    | repayment of principal and payment of       | 
|                    | interest under the Senior Loans due on 3    | 
|                    | August 2010;                                | 
+--------------------+---------------------------------------------+ 
| "Banks"            | J.P. Morgan Cazenove, Davy, Canaccord Adams | 
|                    | and Mirabaud Securities;                    | 
+--------------------+---------------------------------------------+ 
| "BHP"              | BHP Billiton Limited of BHP Billiton Centre | 
|                    | 180 Lonsdale Street, Melbourne Victoria     | 
|                    | 3000, Australia;                            | 
+--------------------+---------------------------------------------+ 
| "Board"            | the board of directors of Kenmare Resources | 
|                    | plc;                                        | 
+--------------------+---------------------------------------------+ 
| "Capital Raising"  | the Placing and Open Offer and the Firm     | 
|                    | Placing;                                    | 
+--------------------+---------------------------------------------+ 
| "Canaccord Adams"  | Canaccord Capital Inc, trading as Canaccord | 
|                    | Adams of 7th Floor, Cardinal Place, 80      | 
|                    | Victoria Street, London SW1, United         | 
|                    | Kingdom;                                    | 
+--------------------+---------------------------------------------+ 
| "Cash Collateral   | the cash collateral and shareholder funding | 
| and Shareholder    | deed dated 18 June 2004, as amended,        | 
| Funding Deed"      | varied, novated from time to time to time,  | 
|                    | entered into among Kenmare, Congolone, the  | 
|                    | Lender Group, and Absa as administrative    | 
|                    | agent, Absa Bank Limited, London branch, as | 
|                    | account bank and security trustee;          | 
+--------------------+---------------------------------------------+ 
| "CCSS"             | the CREST Courier and Sorting Service       | 
|                    | established by Euroclear to facilitate,     | 
|                    | amongst other things, the deposit and       | 
|                    | withdrawal of securities;                   | 
+--------------------+---------------------------------------------+ 
| "Closing Price"    | the closing, mid-market quotation of an     | 
|                    | Existing Ordinary Share, as published in    | 
|                    | the daily official list of the London Stock | 
|                    | Exchange, or as the case may be, the        | 
|                    | closing, middle market quotation of an      | 
|                    | Existing Ordinary Share, as published in    | 
|                    | the daily official list of the Irish Stock  | 
|                    | Exchange;                                   | 
+--------------------+---------------------------------------------+ 
| "Common Terms      | the agreement dated June 18 2004, as        | 
| Agreement"         | amended, varied and novated from time to    | 
|                    | time, entered into among the Project        | 
|                    | Companies, the Lender Group and Absa as     | 
|                    | administrative agent, Absa Bank Limited,    | 
|                    | London branch, as account bank and security | 
|                    | trustee setting forth common terms for the  | 
|                    | provision of the Senior Loans and           | 
|                    | Subordinated Loans to the Project           | 
|                    | Companies;                                  | 
+--------------------+---------------------------------------------+ 
| "Companies Acts"   | the Companies Acts 1963 to 2009;            | 
+--------------------+---------------------------------------------+ 
| "Completion"       | in summary the achievement of Technical     | 
|                    | Completion and the satisfaction of certain  | 
|                    | other legal, financial and marketing        | 
|                    | conditions, as evidenced by the delivery of | 
|                    | the completion certificates specified in    | 
|                    | the Completion Agreement in the manner so   | 
|                    | specified;                                  | 
+--------------------+---------------------------------------------+ 
| "Completion        | the agreement dated 18 June 2004 and as     | 
| Agreement"         | amended, varied and novated from time to    | 
|                    | time among Kenmare, Congolone, the Lender   | 
|                    | Group and Absa as administrative agent,     | 
|                    | Absa Bank Limited, London branch, as        | 
|                    | account bank and security trustee;          | 
+--------------------+---------------------------------------------+ 
| "Completion        | the guarantee in the Completion Agreement   | 
| Guarantee"         | by Kenmare and Congolone of all amounts of  | 
|                    | Senior Loans;                               | 
+--------------------+---------------------------------------------+ 
| "Completion Tests" | the conditions to be satisfied by the Mine  | 
|                    | and the Project Companies for purposes of   | 
|                    | achieving Completion, being the conditions  | 
|                    | set forth in the completion certifcates     | 
|                    | specified in the Completion Agreement and   | 
|                    | the delivery of such certifcates in the     | 
|                    | manner so specified;                        | 
+--------------------+---------------------------------------------+ 
| "Computershare"    | Computershare Investor Services (Ireland)   | 
|                    | Limited, the Registrar and receiving agent  | 
|                    | of the Company;                             | 
+--------------------+---------------------------------------------+ 
| "Conditional       | any persons who have agreed or shall agree  | 
| Placees"           | to subscribe for Open Offer Shares pursuant | 
|                    | to the Placing subject to clawback to       | 
|                    | satisfy valid applications by Qualifying    | 
|                    | Shareholders pursuant to the Open Offer;    | 
+--------------------+---------------------------------------------+ 
| "Congolone"        | Congolone Heavy Minerals Limited, a wholly  | 
|                    | owned indirect subsidiary of Kenmare;       | 
+--------------------+---------------------------------------------+ 
| "Contingency       | the account established, maintained and     | 
| Reserve Account"   | secured in favour of the Lender Group in    | 
| or "CRA"           | accordance with the Cash Collateral and     | 
|                    | Shareholder Funding Deed into which certain | 
|                    | cash collateral is deposited as collateral  | 
|                    | security for Kenmare's and Congolone's      | 
|                    | obligation under the Completion Agreement;  | 
+--------------------+---------------------------------------------+ 
| "CREST"            | the relevant system (as defined in the 1990 | 
|                    | Act (Uncertificated Securities) Regulations | 
|                    | 1996 of Ireland), as amended enabling title | 
|                    | to securities to be evidenced and           | 
|                    | transferred in dematerialised form operated | 
|                    | by Euroclear UK & Ireland Limited;          | 
+--------------------+---------------------------------------------+ 
| "CREST Manual"     | the rules governing the operation of CREST, | 
|                    | consisting of the CREST Reference Manual,   | 
|                    | CREST International Manual, CREST Central   | 
|                    | Counterparty Service Manual, CREST Rules,   | 
|                    | Registrars Service Standards, Settlement    | 
|                    | Discipline Rules, CCSS Operations Manual,   | 
|                    | Daily Timetable, CREST Application          | 
|                    | Procedure and CREST Glossary of Terms (all  | 
|                    | as defined in the CREST Glossary of Terms   | 
|                    | promulgated by Euroclear on 15 July 1996    | 
|                    | and as amended since);                      | 
+--------------------+---------------------------------------------+ 
| "CREST             | the Companies Act 1990 (Uncertificated      | 
| Regulations"       | Securities) Regulations 1996, including (i) | 
|                    | any enactment or subordinate legislation    | 
|                    | which amend or supersedes those             | 
|                    | regulations; and (ii) any applicable rules  | 
|                    | made under those regulations or any such    | 
|                    | enactment or subordinate legislation for    | 
|                    | the time being in force;                    | 
+--------------------+---------------------------------------------+ 
| "Davy"             | J&E Davy (trading as Davy) of Davy House,   | 
|                    | 49 Dawson Street, Dublin 2, Ireland,        | 
|                    | trading as Davy;                            | 
+--------------------+---------------------------------------------+ 
| "Deed of Amendment | the deed entered into on 18 December 2006   | 
| and Settlement"    | between the Project Companies and the EPC   | 
|                    | Contractor to amend the EPC Contract;       | 
+--------------------+---------------------------------------------+ 
| "Deed of Final     | the deed entered into on 18 December 2009   | 
| Settlement and     | between the Project Companies and the EPC   | 
| Release"           | Contractor to settle and release all        | 
|                    | outstanding rights under the EPC Contract;  | 
+--------------------+---------------------------------------------+ 
| "Deferred Shares"  | deferred shares of EUR0.25 each in the        | 
|                    | capital of the Company which are            | 
|                    | non-voting, carry no dividend rights and    | 
|                    | may be repurchased by the Company at a      | 
|                    | price not exceeding 1c for all such         | 
|                    | Deferred Shares so purchased;               | 
+--------------------+---------------------------------------------+ 
| "Deposit"          | the deposit of US$200 million into the      | 
|                    | Contingency Reserve Account by no later     | 
|                    | than 30 June 2010, as required under the    | 
|                    | Expansion Funding Deed of Waiver and        | 
|                    | Amendment to give effect to the Agreed      | 
|                    | Financing Amendments;                       | 
+--------------------+---------------------------------------------+ 
| "Directors"        | the directors of the Company;               | 
+--------------------+---------------------------------------------+ 
| "EAIF"             | Emerging Africa Infrastructure Fund         | 
|                    | Limited, a limited liability company        | 
|                    | organised and existing under the laws of    | 
|                    | Mauritius;                                  | 
+--------------------+---------------------------------------------+ 
| "EIB"              | European Investment Bank, a European Union  | 
|                    | institution established by the Treaty of    | 
|                    | Rome;                                       | 
+--------------------+---------------------------------------------+ 
| "enabled for       | in relation to Open Offer Entitlements,     | 
| settlement"        | enabled for the limited purpose of          | 
|                    | settlement of claim transactions and        | 
|                    | unmatched stock event transactions (each as | 
|                    | described in the CREST Manual issued by     | 
|                    | Euroclear);                                 | 
+--------------------+---------------------------------------------+ 
| "EGM" or           | the extraordinary general meeting of the    | 
| "Extraordinary     | Company, to be held at 11.00 a.m. on 29     | 
| General Meeting"   | March 2010 at The Westbury Hotel, Grafton   | 
|                    | Street, Dublin 2, Ireland or any            | 
|                    | adjournment thereof, notice of which will   | 
|                    | be set out in the Prospectus;               | 
+--------------------+---------------------------------------------+ 
| "Engineering       | the engineering study being performed by    | 
| Study"             | Aker Solutions in relation to the           | 
|                    | Expansion;                                  | 
+--------------------+---------------------------------------------+ 
| "Enlarged Issued   | the Existing Ordinary Shares as enlarged by | 
| Share Capital"     | the allotment and issue of the New Ordinary | 
|                    | Shares;                                     | 
+--------------------+---------------------------------------------+ 
| "EPC"              | Engineering, Procurement and Construction;  | 
+--------------------+---------------------------------------------+ 
| "EPC Contract"     | the contract for the building, and transfer | 
|                    | of facilities at the Mine;                  | 
+--------------------+---------------------------------------------+ 
| "EPC Contractor"   | the joint venture formed between            | 
|                    | subsidiaries of Multiplex Limited and       | 
|                    | Bateman B.V.;                               | 
+--------------------+---------------------------------------------+ 
| "EPCM"             | Engineering, Procurement Construction and   | 
|                    | Management;                                 | 
+--------------------+---------------------------------------------+ 
| "EPCM Contract"    | the contract for the engineering,           | 
|                    | procurement, construction and management of | 
|                    | the Expansion;                              | 
+--------------------+---------------------------------------------+ 
| "EPCM Contractor"  | the contractor responsible for delivering   | 
|                    | the EPCM Contract;                          | 
+--------------------+---------------------------------------------+ 
| "EU"               | the European Union;                         | 
+--------------------+---------------------------------------------+ 
| "EUR" or "EUR" or    | euro, the lawful currency of Ireland;       | 
| "Euro"             |                                             | 
+--------------------+---------------------------------------------+ 
| "Euroclear"        | Euroclear UK & Ireland Limited, the         | 
|                    | operator of CREST;                          | 
+--------------------+---------------------------------------------+ 
| "Excluded          | Australia, Canada, Hong Kong, Japan and     | 
| Territories"       | Switzerland and any other jurisdictions     | 
|                    | where the extension of availability of the  | 
|                    | Placing and Open Offer would breach any     | 
|                    | applicable law or any one of them as the    | 
|                    | context requires;                           | 
+--------------------+---------------------------------------------+ 
| "Excluded          | subject to certain exceptions, a Qualifying | 
| Territory          | Shareholder who has a registered address in | 
| Shareholder"       | or are otherwise located in the United      | 
|                    | States or any Excluded Territory;           | 
+--------------------+---------------------------------------------+ 
| "Executive         | Michael Carvill, Jacob Deysel, Terence      | 
| Directors"         | Fitzpatrick and Tony McCluskey;             | 
+--------------------+---------------------------------------------+ 
| "Existing Ordinary | the Ordinary Shares in issue at the Record  | 
| Shares"            | Date;                                       | 
+--------------------+---------------------------------------------+ 
| "Expansion"        | the upgrade of the existing Moma mining     | 
|                    | operation, the construction and             | 
|                    | commissioning of a new mining operation and | 
|                    | the expansion of the MSP to achieve a circa | 
|                    | 50 per cent. increase in ilmenite           | 
|                    | production capacity to circa 1,200,000      | 
|                    | tonnes per year plus associated co-products | 
|                    | of zircon and rutile;                       | 
+--------------------+---------------------------------------------+ 
| "Expansion Funding | The deed of waiver and amendment dated 4    | 
| Deed of Waiver and | March 2010, relating to the Common Terms    | 
| Amendment"         | Agreement, Cash Collateral and Shareholders | 
|                    | Funding Deed, Senior Loan Agreements and    | 
|                    | Subordinated Loan Agreements entered into   | 
|                    | by the Project Companies, the Lender Group  | 
|                    | and the Lenders' Agents;                    | 
+--------------------+---------------------------------------------+ 
| "Expansion Plan"   | the expansion study completed by Kenmare    | 
| or "Expansion      | into the expansion of production capacity   | 
| Study"             | of the Mine;                                | 
+--------------------+---------------------------------------------+ 
| "Final Completion  | currently under the Financing Agreements,   | 
| Date"              | 31 December 2012 and, upon the              | 
|                    | effectiveness of the Agreed Financing       | 
|                    | Agreements, 31 December 2013;               | 
+--------------------+---------------------------------------------+ 
| "Financial         | the Irish Financial Services Regulatory     | 
| Regulator"         | Authority, as a constituent part of the     | 
|                    | Central Bank and Financial Services         | 
|                    | Authority of Ireland;                       | 
+--------------------+---------------------------------------------+ 
| "Financing         | the loan documentation for the financing of | 
| Agreements"        | the Mine entered into with the Lender Group | 
|                    | including the Common Terms Agreement, the   | 
|                    | Completion Agreement, the Cash Collateral   | 
|                    | and Shareholders Funding Deed, Senior Loan  | 
|                    | Agreements, Subordinated Loan Agreements,   | 
|                    | Subordinated Lenders' Option Agreement and  | 
|                    | amendments thereto;                         | 
+--------------------+---------------------------------------------+ 
| "Firm Placed       | the 748,515,033 New Ordinary Shares which   | 
| Shares"            | are the subject of the Firm Placing;        | 
+--------------------+---------------------------------------------+ 
| "Firm Placing"     | the placing of the Firm Placed Shares with  | 
|                    | the Firm Placees;                           | 
+--------------------+---------------------------------------------+ 
| "Form of Proxy"    | the form of proxy to be used at the         | 
|                    | Extraordinary General Meeting;              | 
+--------------------+---------------------------------------------+ 
| "FMO"              | Financierings Maatschappij Voor             | 
|                    | Ontwikkslingslanden N.V., a limited         | 
|                    | liability company organised and existing    | 
|                    | under the laws of the Netherlands;          | 
+--------------------+---------------------------------------------+ 
| "FSA"              | the Financial Services Authority of the     | 
|                    | United Kingdom;                             | 
+--------------------+---------------------------------------------+ 
| "FSA Handbook"     | the handbook of rules and guidance issued   | 
|                    | by the FSA, as amended from time to time;   | 
+--------------------+---------------------------------------------+ 
| "FSMA"             | Financial Services and Markets Act 2000 of  | 
|                    | the United Kingdom, as amended from time to | 
|                    | time;                                       | 
+--------------------+---------------------------------------------+ 
| "Global            | J.P. Morgan Cazenove;                       | 
| Co-ordinator"      |                                             | 
+--------------------+---------------------------------------------+ 
| "IBMA"             | International Business Management           | 
|                    | Associates Inc.;                            | 
+--------------------+---------------------------------------------+ 
| "Independent       | the shareholders other than M&G, being      | 
| Shareholders"      | those Shareholders who are eligible to vote | 
|                    | on Resolution (5);                          | 
+--------------------+---------------------------------------------+ 
| "Ireland"          | Ireland other than Northern Ireland, and    | 
|                    | the word "Irish" shall be construed         | 
|                    | accordingly;                                | 
+--------------------+---------------------------------------------+ 
| "Irish Stock       | The Irish Stock Exchange Limited;           | 
| Exchange" or "ISE" |                                             | 
+--------------------+---------------------------------------------+ 
| "ISIN"             | International Securities Identification     | 
|                    | Number;                                     | 
+--------------------+---------------------------------------------+ 
| "Issue Price"      | GBP12p (EUR0.132) per New Ordinary Share;     | 
+--------------------+---------------------------------------------+ 
| "Issued Share      | the 906,097,146 Ordinary Shares which were  | 
| Capital" or        | in issue on 3 March 2010 (being the latest  | 
| "Issued Shares"    | practicable date prior to the publication   | 
|                    | of the Prospectus);                         | 
+--------------------+---------------------------------------------+ 
| "J.P. Morgan       | J.P. Morgan Securities Ltd. (which conducts | 
| Cazenove"          | its UK investment banking activities as     | 
|                    | J.P. Morgan Cazenove) of 125 London Wall,   | 
|                    | London EC2Y 5AJ;                            | 
+--------------------+---------------------------------------------+ 
| "KfW"              | KfW, a public law institution organised     | 
|                    | under the laws of the Federal Republic of   | 
|                    | Germany;                                    | 
+--------------------+---------------------------------------------+ 
| "Kenmare" or "the  | Kenmare Resources public limited company, a | 
| Company"           | company registered in Ireland with          | 
|                    | registered number 37550 and having its      | 
|                    | registered office at Chatham House, Chatham | 
|                    | Street, Dublin 2;                           | 
+--------------------+---------------------------------------------+ 
| "Kenmare Group" or | Kenmare and its subsidiaries, subsidiary    | 
| "the Group"        | undertakings, branches and associate        | 
|                    | undertakings;                               | 
+--------------------+---------------------------------------------+ 
| "KMML"             | Kenmare Moma Mining (Mauritius) Limited, a  | 
|                    | wholly-owned indirect subsidiary of Kenmare | 
|                    | which is incorporated in Mauritius;         | 
+--------------------+---------------------------------------------+ 
| "KMPL"             | Kenmare Moma Processing (Mauritius)         | 
|                    | Limited, a wholly-owned indirect subsidiary | 
|                    | of Kenmare, which is incorporated in        | 
|                    | Mauritius;                                  | 
+--------------------+---------------------------------------------+ 
| "Lender Group" or  | the group of lenders which have provided    | 
| "Lenders"          | Senior Loans and Subordinated Loans to the  | 
|                    | Group for the Mine being the EIB, AfDB,     | 
|                    | FMO, KfW, EAIF and Absa;                    | 
+--------------------+---------------------------------------------+ 
| "Lenders' Agents"  | the administrative agent, the security      | 
|                    | trustee and the account bank appointed      | 
|                    | pursuant to the terms of the Common Terms   | 
|                    | Agreement;                                  | 
+--------------------+---------------------------------------------+ 
| "Listing Rules"    | the listing rules issued by the FSA in its  | 
|                    | capacity as the competent authority for the | 
|                    | purposes of Part VI of the FSMA and as set  | 
|                    | out in the FSA Handbook, as amended from    | 
|                    | time to time and/or the listing rules       | 
|                    | issued by the Irish Stock Exchange;         | 
+--------------------+---------------------------------------------+ 
| "London Stock      | the London Stock Exchange plc;              | 
| Exchange"          |                                             | 
+--------------------+---------------------------------------------+ 
| "Market Abuse      | Directive 2003/6/EC;                        | 
| Directive"         |                                             | 
+--------------------+---------------------------------------------+ 
| "M&G"              | M&G Investment Management Limited and its   | 
|                    | associates (as defined in the Listing       | 
|                    | Rules);                                     | 
+--------------------+---------------------------------------------+ 
| "Mine"             | the Moma titanium minerals mine consisting  | 
|                    | of a heavy mineral sands mine, processing   | 
|                    | facilities and associated infrastructure    | 
|                    | which is located in the north east coast of | 
|                    | Mozambique under licence to KMML and KMPL;  | 
+--------------------+---------------------------------------------+ 
| "Minerals          | the minerals concentrator plant which was   | 
| Concentrator       | purchased from BHP Titanium Minerals Pty    | 
| Plant"             | Limited, a subsidiary of BHP in January     | 
|                    | 2000;                                       | 
+--------------------+---------------------------------------------+ 
| "Mining            | mining concession 735C issued by the        | 
| Concession"        | Government of Mozambique to KMML relating   | 
|                    | to the Namalope Reserve which is valid      | 
|                    | until 28 August 2029;                       | 
+--------------------+---------------------------------------------+ 
| "Mirabaud          | Mirabaud Securities LLP of 21 St. James's   | 
| Securities"        | Square, London, SW1Y 4JP, United Kingdom;   | 
+--------------------+---------------------------------------------+ 
| "Moma"             | a series of heavy mineral sands deposits on | 
|                    | the north east coast of Mozambique that     | 
|                    | have been incorporated into an integrated   | 
|                    | operation with each individual deposit      | 
|                    | individually named;                         | 
+--------------------+---------------------------------------------+ 
| "Mozambique"       | the Republic of Mozambique;                 | 
+--------------------+---------------------------------------------+ 
| "Namalope Reserve" | the deposit of heavy mineral sands          | 
|                    | contained within the Mining Concession;     | 
+--------------------+---------------------------------------------+ 
| "Nampula"          | capital city of the province in which the   | 
|                    | Mine is situated;                           | 
+--------------------+---------------------------------------------+ 
| "Nataka Resource"  | the deposit of heavy mineral sands          | 
|                    | contained within the Nataka exploration     | 
|                    | licenses;                                   | 
+--------------------+---------------------------------------------+ 
| "New Ordinary      | the new Ordinary Shares to be issued by the | 
| Shares"            | Company pursuant to the Capital Raising and | 
|                    | "New Ordinary Share" means any one of them; | 
+--------------------+---------------------------------------------+ 
| "Non-Technical     | satisfaction of the non-technical           | 
| Completion"        | requirements for Completion;                | 
+--------------------+---------------------------------------------+ 
| "Notice"           | the notice of EGM set out at the end of the | 
|                    | Prospectus;                                 | 
+--------------------+---------------------------------------------+ 
| "Non-executive     | the Directors other than the Executive      | 
| Directors"         | Directors;                                  | 
+--------------------+---------------------------------------------+ 
| "Official Lists"   | the official lists of the UKLA and the      | 
|                    | Irish Stock Exchange;                       | 
+--------------------+---------------------------------------------+ 
| "Open Offer"       | the offer to Qualifying Shareholders,       | 
|                    | constituting an invitation to apply for the | 
|                    | Open Offer Shares on the terms and subject  | 
|                    | to the conditions set out in the Prospectus | 
|                    | and, in the case of Qualifying Non-CREST    | 
|                    | Shareholders, in the Application Form;      | 
+--------------------+---------------------------------------------+ 
| "Open Offer        | an entitlement of a Qualifying Shareholder  | 
| Entitlements"      | to apply for 19 Open Offer Shares for every | 
|                    | 23 Existing Ordinary Share(s) held by him   | 
|                    | or her on the Record Date pursuant to the   | 
|                    | Open Offer;                                 | 
+--------------------+---------------------------------------------+ 
| "Open Offer        | the 748,515,033 New Ordinary Shares to be   | 
| Shares"            | offered to Qualifying Shareholders under    | 
|                    | the Open Offer;                             | 
+--------------------+---------------------------------------------+ 
| "Ordinary Shares"  | the ordinary shares with a nominal value of | 
|                    | EUR0.06 each in the share capital of the      | 
|                    | Company including, if the context requires, | 
|                    | the New Ordinary Shares;                    | 
+--------------------+---------------------------------------------+ 
| "PIP"              | performance improvement programme entered   | 
|                    | into by the Project Companies and the EPC   | 
|                    | Contractor in 2008 and 2009 to address the  | 
|                    | deficiencies in the plant and equipment;    | 
+--------------------+---------------------------------------------+ 
| "Placing"          | the conditional placing of the Open Offer   | 
|                    | Shares with Conditional Placees in          | 
|                    | accordance with the Placing and Open Offer  | 
|                    | Agreement;                                  | 
+--------------------+---------------------------------------------+ 
| "Placing and Open  | the Placing and the Open Offer;             | 
| Offer"             |                                             | 
+--------------------+---------------------------------------------+ 
| "Placing and Open  | the conditional agreement dated 5 March     | 
| Offer Agreement"   | 2010 between the Company and J.P. Morgan    | 
|                    | Cazenove, Davy, Canaccord Adams and         | 
|                    | Mirabaud Securities, further details of     | 
|                    | which will be set out in the Prospectus;    | 
+--------------------+---------------------------------------------+ 
| "Preliminary       | the announcement by the Company of the      | 
| Results" or        | unaudited preliminary results in respect of | 
| "Preliminary       | the twelve months ended 31 December 2009 as | 
| Results            | published on 5 March 2010 and reproduced in | 
| Announcement"      | the Prospectus;                             | 
+--------------------+---------------------------------------------+ 
| "Project Accounts" | the accounts established by the account     | 
|                    | bank for the benefit of the Project         | 
|                    | Companies pursuant to the Common Terms      | 
|                    | Agreement, which are secured in favour of   | 
|                    | the Lender Group and the Lenders' Agents;   | 
+--------------------+---------------------------------------------+ 
| "Project           | KMML and KMPL;                              | 
| Companies"         |                                             | 
+--------------------+---------------------------------------------+ 
| "Prospectus"       | the document expected to be issued by       | 
|                    | Kenmare dated 5 March 2010;                 | 
+--------------------+---------------------------------------------+ 
| "Qualifying CREST  | Qualifying Shareholders holding Ordinary    | 
| Shareholders"      | Shares in uncertificated form in CREST;     | 
+--------------------+---------------------------------------------+ 
| "Qualifying        | Qualifying Shareholders holding Ordinary    | 
| Non-CREST          | Shares in certificated form;                | 
| Shareholders"      |                                             | 
+--------------------+---------------------------------------------+ 
| "Qualifying        | Shareholders on the register of members of  | 
| Shareholders"      | the Company on the Record Date, with the    | 
|                    | exclusion (subject to exceptions) of        | 
|                    | persons with a registered address or        | 
|                    | located in the United States or any         | 
|                    | Excluded Territory;                         | 
+--------------------+---------------------------------------------+ 
| "Ramp Up"          | the ramp up of the Mine to achieve design   | 
|                    | capacity levels of 800,000 tpa of ilmenite, | 
|                    | 50,000 tpa of zircon and 14,000 of rutile;  | 
+--------------------+---------------------------------------------+ 
| "Record Date"      | 6.00 p.m. on 3 March 2010;                  | 
+--------------------+---------------------------------------------+ 
| "Registrar" or     | Computershare Investor Services (Ireland)   | 
| "Receiving Agent"  | Limited;                                    | 
| or "Computershare" |                                             | 
+--------------------+---------------------------------------------+ 
| "Regulatory        | one of the regulatory information services  | 
| Information        | authorised by the Irish Stock Exchange      | 
| Service" or "RIS"  | and/or the FSA to receive, process and      | 
|                    | disseminate regulated information from      | 
|                    | listed companies;                           | 
+--------------------+---------------------------------------------+ 
| "Resolutions"      | the resolutions to be proposed at the       | 
|                    | Extraordinary General Meeting in connection | 
|                    | with the Capital Raising, contained in the  | 
|                    | Notice which will be set out in the         | 
|                    | Prospectus;                                 | 
+--------------------+---------------------------------------------+ 
| "Rothschild"       | N.M. Rothschild & Sons Limited, of New      | 
|                    | Court, St. Swithin's Lane, London EC4P 4DU, | 
|                    | United Kingdom;                             | 
+--------------------+---------------------------------------------+ 
| "Senior Lenders"   | the group of lenders that have provided     | 
|                    | Senior Loans to the Project Companies being | 
|                    | EIB, AfDB, FMO, KfW, EAIF and Absa;         | 
+--------------------+---------------------------------------------+ 
| "Senior Loans"     | the loans with Senior Lenders;              | 
+--------------------+---------------------------------------------+ 
| "Senior Loan       | each of the agreement entered into between  | 
| Agreement"         | the Project Companies and a Senior Lender;  | 
+--------------------+---------------------------------------------+ 
| "Shareholders"     | holders of Ordinary Shares;                 | 
+--------------------+---------------------------------------------+ 
| "SRK"              | SRK (UK) Limited;                           | 
+--------------------+---------------------------------------------+ 
| "Sponsor"          | Davy, in its capacity as sponsor to Kenmare | 
|                    | in respect of the Capital Raising under the | 
|                    | Listing Rules;                              | 
+--------------------+---------------------------------------------+ 
| "Standby           | additional Subordinated Loans in an         | 
| Subordinated       | aggregate principal amount of EUR2.8 million  | 
| Loans"             | and US$4 million made to the Project        | 
|                    | Companies by EIB and FMO, and by way of     | 
|                    | sub-participation in FMO's Standby          | 
|                    | Subordinated Loans, EAIF, pursuant to       | 
|                    | agreements entered into on 30 June 2005;    | 
+--------------------+---------------------------------------------+ 
| "Subordinated      | the group of lenders that have provided the | 
| Lender"            | Subordinated Loans to the Mine being the    | 
|                    | EIB, FMO and as a sub-participant in FMO's  | 
|                    | Subordinated Loans EAIF;                    | 
+--------------------+---------------------------------------------+ 
| "Subordinated      | the loans from Subordinated Lenders to the  | 
| Loan(s)"           | Project Companies, including the Additional | 
|                    | Standby Subordinated Loans and the Standby  | 
|                    | Subordinated Loans;                         | 
+--------------------+---------------------------------------------+ 
| "Subordinated Loan | the agreements entered into between the     | 
| Agreements"        | Project Companies and EIB and FMO, pursuant | 
|                    | to which the Subordinated Loans have been   | 
|                    | made available to the Project Companies;    | 
+--------------------+---------------------------------------------+ 
| "subsidiary"       | shall be construed in accordance with the   | 
|                    | 1963 Act;                                   | 
+--------------------+---------------------------------------------+ 
| "subsidiary        | shall have the meaning given by the         | 
| undertakings"      | European Communities (Companies: Group      | 
|                    | Accounts) Regulations 1992;                 | 
+--------------------+---------------------------------------------+ 
| "Technical         | the completion of the construction of the   | 
| Completion"        | Mine to the point where it is operational   | 
|                    | in a defined manner as evidenced by the     | 
|                    | delivery of certain completion tests        | 
|                    | specified in the Completion Agreement by    | 
|                    | the Project Companies;                      | 
+--------------------+---------------------------------------------+ 
| "TZMI"             | TZ Minerals International Pty Limited,      | 
|                    | independent consultant in the mineral sands | 
|                    | and TiO2 pigment industries;                | 
+--------------------+---------------------------------------------+ 
| "UK Listing        | the UK Listing Authority, being the FSA     | 
| Authority" or      | acting as the competent authority for the   | 
| "UKLA"             | purposes of Part VI of the FSMA;            | 
+--------------------+---------------------------------------------+ 
| "United Kingdom"   | the United Kingdom of Great Britain and     | 
|                    | Northern Ireland;                           | 
+--------------------+---------------------------------------------+ 
| "Underwriters"     | J.P. Morgan Cazenove, Davy and Canaccord    | 
|                    | Adams;                                      | 
+--------------------+---------------------------------------------+ 
| "US", "USA" or     | the United States of America, its           | 
| "United States"    | territories and possessions, any state of   | 
|                    | the United States of America, the District  | 
|                    | of Columbia and all other areas subject to  | 
|                    | the jurisdiction of the United States of    | 
|                    | America; and                                | 
+--------------------+---------------------------------------------+ 
| "US Securities     | the US Securities Act of 1933, as amended.  | 
| Act"               |                                             | 
+--------------------+---------------------------------------------+ 
 
 
This information is provided by RNS 
            The company news service from the London Stock Exchange 
   END 
 
 IOEKKPDDQBKKKNK