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31 May 2007

Discovery to Delivery. Moma Titanium Minerals Project Gareth Clifton Mozambique Manager. 31 May 2007. Kenmare Moma Titanium Minerals Mine. THE EARLY DAYS. 1987 - Start exploration at Congolone 1988 - 4.2 Million Tonnes Ilmenite Reserve Proven

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31 May 2007

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  1. Discovery to Delivery Moma Titanium Minerals Project Gareth Clifton Mozambique Manager 31 May 2007

  2. Kenmare Moma Titanium Minerals Mine THE EARLY DAYS • 1987 - Start exploration at Congolone • 1988 - 4.2 Million Tonnes Ilmenite Reserve Proven • 1993 - 1996 - Joint venture with BHP. During this period the Moma deposit was discovered. • 1999 – BHP strategic decision to withdraw from Titanium Minerals Industry. Kenmare negotiated purchase of Concentrator and Separator Plants from BHP’s Beenup plant. • 1999 – Pre-feasibility study completed • 2000 - Kenmare Completes Moma DFS • 2001 – NM Rothchild appointed as Financial Advisor

  3. Kenmare Moma Titanium Minerals Mine Concentrator Plant in Australia

  4. Kenmare Moma Titanium Minerals Mine Separator Plant in Australia

  5. Kenmare Moma Titanium Minerals Mine The Mining Process

  6. Competitive Advantages • Location on Coast (No Overland Transport) • Surface Mineralisation (No Overburden) • Low Cost Dredge Mining • Limited Infrastructure Requirements • Low Cost Hydro Power • Significant Co-product Revenue • Ilmenite Products Suitable for Sulphate & Chloride Markets Without Further Beneficiation • Substantial Additional Resources for Expansion

  7. Kenmare Moma Titanium Minerals Mine Next Steps to be Taken • Identify potential lenders and present Project details • Bring interested parties together to discuss possible financing packages • Identify concerns of potential lenders • Address those concerns • Finalise debt financing package

  8. Kenmare Moma Titanium Minerals Mine Lender Concerns • Mozambique economic and political environment • The small size of Kenmare relative to financing required • Marketing commitments • Potential cost overruns • Supply of Power

  9. Kenmare Moma Titanium Minerals Mine Solutions: Mozambique Economic and Political Situation • Mineral Licensing Contract and Implementation Agreement signed 21 January 2002 with the Government of Mozambique defining: • Fiscal and Legal stability for the duration of the Project • Rights and Obligations of the Project Companies • Clear dispute resolution mechanisms • Clear rights of assignment

  10. Kenmare Moma Titanium Minerals Mine Solutions: Kenmare’s Size • Loan disbursements to be conditional upon: • Signing of an acceptable contract for construction of the mine – key elements fixed price. • Signing of marketing contracts. • Kenmare raising $83m equity, including $30m Contingency Reserve

  11. Kenmare Moma Titanium Minerals Mine Solutions: Marketing Commitments • Completion support provided by blue chip customers • Long Term Contracts (5 years) as no terminal market • Guaranteed offtake volumes • Agree prices or pricing mechanisms • Direct agreements with lenders

  12. Kenmare Moma Titanium Minerals Mine Joint Venture Between MULTIPLEX Solutions: Potential Cost Overruns • Contract signed April 2004 • Base price $220m • Provision for cost overrun up to $20m • Contractor to share increasing portion of cost overrun • Significant delay and performance damages

  13. Kenmare Moma Titanium Minerals Mine Solutions: Supply of Power • Power Supply Agreement signed with Electricidade de Moçambique December 2002: supply and price formula guaranteed • Power Line Concession Contract signed with Government of Mozambique June 2004 authorizing the construction of privately owned line

  14. Kenmare Moma Titanium Minerals Mine Initial Capital Structure Sources Equity US$m Previously Contributed 90 Project Equity Contribution 53 Senior Debt 200 Subordinated Debt 66 Subordinated Stand-by Facility 7 Overrun Contingency 30 446

  15. Kenmare Moma Titanium Minerals Mine Lender & ECA Group Senior-Debt Sub-Debt Total US$m & € m US$m & € m US$m & € m AfDB - $ 40 $ 40 ABSA : ECIC - $ 80 $ 80 € 15 € 40 € 55 EIB - $ 26 KfW : Hermes $ 26 - $ 15 KfW : MIGA $ 15 € 7 $ 19 FMO $ 19 + € 7 $ 10 $ 5 EAIF $ 15 Total $10 + € 47 $185 + € 15 $195 + € 62 $4 + €2.7 Subordinated Lender Stand-by Facility

  16. Kenmare Project Advisors • Stockbrokers: Canaccord Capital & Davy Corporate • Financial: N M Rothschild • Legal: Sullivan & Cromwell • Client Engineer: Aker Kvaerner • Insurance: AON Lender Advisors • Legal: Milbank Tweed Hadley & McCloy • Independent Engineer: SRK Consulting • Industry Expert: IBMA Inc. • Insurance: Bankrisk / Marsh

  17. Observations.… • Financing Complexity, Time & Cost Greater Than Expected • Loan Signing June 04, First Disbursement Nov 04, First Production April 07. • Vulnerability Under Financing Structure • Common Denominator in Negotiations

  18. Observations, ctd.… • Substantial Completion Support • Acceptable EPC Contract with most elements fixed • Marketing Contracts • DFIs & ECAs Important Role • Engage Directly As Early As Possible • Good Approach For Long Term Business, but Not for Faint of Heart.

  19. Moma Annual Production 800k Tonnes - Ilmenite 56k Tonnes - Zircon 21k Tonnes - Rutile

  20. Kenmare Moma Titanium Minerals Mine The Entire Plant was transported from Australia Moma Bunbury

  21. Kenmare Moma Titanium Minerals Mine From Exploration… Blood, Sweat and Tears and a lot of Money

  22. Discovery to Delivery Moma Titanium Minerals Project 31 May 2007

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