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Kenmare conclude amended finance deal

Friday, August 01 10:30:56

Irish-based miner, Kenmare Resources, today said it has agreed an amendment to the project financing terms for its Moma Mine in Mozambique.

It also agreed an extension to the corporate loan provided by Absa Bank Limited, 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 USD20 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.

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