Kenmare Resources plc : Debt Financing Update

Kenmare Resources plc ("Kenmare" or "the Company")

1 August 2014

Debt Financing Update

Kenmare Resources (LSE: KMR, ISE: KMR), one of the leading producers of titanium minerals, is pleased to announce that it has agreed an amendment to the project financing terms for the Moma Mine in Mozambique, as well as an extension to the corporate loan provided by Absa Bank Limited ("Absa"), a member of Barclays.

The project financing amendment removes the requirement to make scheduled principal payments of Senior Debt and payments of interest and principal of Subordinated Debt falling due in August 2014, February 2015 and August 2015. Instead, project lenders will receive payments under a cash sweep dependent on the level of cash generation at the mine. Simultaneously, Kenmare has agreed with Absa an extension to Absa's US$20 million corporate loan, which will now mature on 31 March 2016.

Managing Director Michael Carvill commented: "We are pleased to have concluded this agreement with the project lenders and Absa which will enable us to conserve cash and provide greater flexibility during the current period of low product prices."

The principal amendments to the project financing are as follows:

• Principal repayments of Senior Debt and principal repayments and interest due in respect of Subordinated Debt that in each case fall due on the 1 August, 2014, 1 February, 2015 and 1 August, 2015 payment dates will now be paid only to the extent the Kenmare group cash balance exceeds US$80 million in accordance with a cash sweep mechanism.
   
• To the extent scheduled amounts are not paid on the due dates under this cash sweep mechanism, the balances would then be payable on the earlier of the next payment date (to the extent payable under the cash sweep) and the Deferral Amount Payment Date.
   
• The Deferral Amount Payment Date is the earlier of 31 December 2015 and 30 days after a change of control of Kenmare.

In addition, Absa has agreed that the repayment date for the US$20 million loan provided to Kenmare will be extended from the current date of 31 March 2015 to 31 March 2016. The terms of the extension provide that the loan is repayable upon a change of control of Kenmare.

In return for this increased flexibility, Kenmare and the Project Companies have agreed, amongst other things, to provide information to project lenders in greater detail and on a more frequent basis, and to meet the costs of providing the lenders with legal and other professional advisers.  In addition, the Project Companies are required to deliver a budget for 2015 to the lenders by 31 January 2015. This budget must show the Project Companies meeting their debts as they fall due and be approved by the lenders, acting reasonably, failing which an Event of Default would ensue.

The Kenmare group has also agreed to the payment of fees as follows:

• In addition to fees payable to providers of political and commercial risk insurance, guarantees to certain of the project lenders and payment of reimbursable expenses, work fees of US$300,000 will be payable to the project lenders, half of which will be payable to Senior Lenders and half to Subordinated Lenders.
   
• An extension fee equivalent to 4% (US$800,000) of the principal amount will be payable to Absa in relation to the Absa Facility. It is expected that this fee will be settled through the issuance of warrants for Kenmare shares, unless these cannot be issued for regulatory reasons. The warrants will not be issued before 1 September, 2014 and will have an exercise price equal to the market price at the time of issue. The warrants will be exercisable for a period of seven years and will otherwise be on substantially the same terms as the warrants issued on 16 October 2013 in connection with Kenmare's placing at that time.

Kenmare group cash balances amounted to $37.3 million and the aggregate group debt was $349.6 million at the 30 June 2014.

Kenmare's Half-Yearly Report is scheduled for release on 27 August 2014.

For further information, please contact:

Kenmare Resources plc
Michael Carvill, Managing Director                                     
Tel: [phone]                                                           
Mob: + 353 87 674 0110                                                   

Tony McCluskey, Financial Director
Tel: [phone]  
Mob: + 353 87 674 0346

Jeremy Dibb, Corporate Development & Investor Relations Manager
Tel: [phone]
Mob: [phone]

Murray Consultants                                                           
Joe Heron / Jim Milton                                                          
Tel: [phone]                                                        

Buchanan
Bobby Morse / Louise Mason / Gordon Poole
Tel: [phone]

Note: Kenmare Moma Mining (Mauritius) Limited and Kenmare Moma Processing (Mauritius) Limited are wholly owned subsidiaries of Kenmare Resources plc and collectively referred to herein as "the Project Companies".  The "Kenmare group" includes Kenmare Resources plc and its subsidiaries.

The Directors of Kenmare accept responsibility for the information contained in this announcement. To the best of their knowledge and belief (having taken all reasonable care to ensure that such is the case), the information contained in this announcement is in accordance with the facts and does not omit anything likely to affect the import of such information.
This announcement is not intended to, and does not, constitute or form part of any offer, invitation or the solicitation of an offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of, any securities whether pursuant to this announcement or otherwise. The distribution of this announcement in jurisdictions outside Ireland or the United Kingdom may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves about, and observe, such restrictions. Any failure to comply with the restrictions may constitute a violation of the securities law of any such jurisdiction.

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The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Kenmare Resources via Globenewswire

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