New debt facilities

Kenmare Resources plc (“Kenmare” or “the Company”)11 December 2019New debt facilitiesKenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global producers of titanium minerals and zircon, which operates the Moma Titanium Minerals Mine in northern Mozambique, is pleased to announce the signing of debt facilities with Absa Bank Limited (acting through its Corporate and Investment Banking Division) (“Absa”), The Emerging Africa Infrastructure Fund (a PIDG Company) (“EAIF”), Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (“Nedbank”), Rand Merchant Bank and Standard Bank Group (“Standard Bank”). Rothschild & Co. acted as financial adviser to the Company on the transaction.The new debt facilities comprise a US$110 million Term Loan Facility and a US$40 million Revolving Credit Facility. They will be used in part to repay in full the existing Senior and Subordinated Project Loans, of which US$64 million is outstanding, and for working capital purposes. The new debt facilities also provide for a future Mine Closure Guarantee Facility of up to US$40 million, sharing in security.Statement from Tony McCluskey, Finance Director:“The new facilities will support the continued growth of our business as well as extending the maturity profile of our debt beyond the current short period of increased capital expenditure. It is also particularly pleasing to  replace the existing project loans with much more flexible corporate facilities, underlining the Company’s progress into a leading global mineral sands producer.Our planned increase in production volumes by more than 20% from 2021 will enable us to expand our product margins and position us in the first quartile of the industry revenue to cost curve, as well as to deliver increased cashflow stability. The original debt facilities were provided on terms that supported the building of the Moma Mine. However, given the strength of core cash flows being generated by the Moma Mine, the facilities provided by the new lender group, which includes both new and existing lenders, provide additional financial flexibility and are more suitable for Kenmare’s position as an established producer.”OverviewNew debt facilities provided by existing lenders (Absa and EAIF) and new lenders (Nedbank, Rand Merchant Bank and Standard Bank)Proceeds of the initial drawdown will be used to prepay in full the Company’s existing US$64 million Project Loans, and to pay fees and costs associated with the financingThe new facilities provide the Company with additional financial flexibility as a result of the extended maturity profile and increased liquidityKey financial covenants: interest cover ratio of >4.00 times; net debt to EBITDA of <2 times; Debt Service Cover Ratio of >1.2 times; and minimum liquidity of US$15 millionDistribution covenants: net debt to EBITDA of <1.5 times; and minimum liquidity of US$25 millionAvailability of the new debt facilities is subject to the satisfaction of customary conditions precedent, which will be completed as soon as practicalThe existing Project Loan facilities have an interest rate of 4.75% + LIBOR until 1 February 2020 and 5.5% + LIBOR thereafter until final maturity of 1 February 2022.The key terms of the new debt facilities are:
Term Loan FacilityFacility of up to US$110 millionAvailability for a period of 24 months after signingFinal maturity date 63 months after signingMargin of 5.40% + LIBOR per annumRepayment in seven equal semi-annual instalments beginning 27 months after signingRevolving Credit FacilityFacility of US$40 millionAvailability for a period of 35 months after signingFinal maturity date 36 months after signing, extendable by up to 24 months at lender discretionMargin of 5.00% + LIBOR per annumIn addition, the facilities accommodate the later inclusion of a Mine Closure Guarantee Facility of up to US$40 million (increasing from US$3 million to a maximum of US$40 million over five years), which will share the security package with the Term Loan Facility and Revolving Credit Facility on a pro rata and pari passu basis.  This press release contains inside information as defined in article 7(1) of the Market Abuse Regulation.
For further information, please contact:Kenmare Resources plc
Jeremy Dibb / Katharine Sutton
Investor Relations
Tel: +353 1 671 0411
Mob: + 353 87 943 0367 / + 353 87 663 0875Murray (PR advisor)
Joe Heron
Tel: +353 1 498 0300
Mob: +353 87 690 9735About Kenmare ResourcesKenmare Resources plc is one of the world’s largest producers of mineral sands products. Listed on the London Stock Exchange and the Euronext Dublin, Kenmare operates the Moma Titanium Minerals Mine in Mozambique. Moma’s production accounts for approximately 7% of global titanium feedstocks and the Company supplies to customers operating in more than 15 countries. Kenmare produces raw materials that are ultimately consumed in everyday “quality-of life” items such as paints, plastics and ceramic tiles.