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

31 May 2007

Moma Titanium Minerals ProjectMoma Titanium Minerals Project

Gareth CliftonGareth CliftonMozambique ManagerMozambique Manager

Discovery to Delivery

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

Kenmare Moma Titanium Minerals MineKenmare Moma Titanium Minerals MineTHE EARLY DAYS

Kenmare Moma Titanium Minerals MineKenmare Moma Titanium Minerals MineConcentrator Plant in Australia

Kenmare Moma Titanium Minerals MineKenmare Moma Titanium Minerals MineSeparator Plant in Australia

Kenmare Moma Titanium Minerals MineKenmare Moma Titanium Minerals Mine

The Mining Process

• Location on Coast (No Overland Transport)Location on Coast (No Overland Transport)

• Surface Mineralisation (No Overburden)Surface Mineralisation (No Overburden)

• Low Cost Dredge MiningLow Cost Dredge Mining

• Limited Infrastructure Requirements Limited Infrastructure Requirements

• Low Cost Hydro PowerLow Cost Hydro Power

• Significant Co-product RevenueSignificant Co-product Revenue

• IlmeniteIlmenite Products Suitable for Sulphate & Chloride Products Suitable for Sulphate & Chloride Markets Without Further BeneficiationMarkets Without Further Beneficiation

• Substantial Additional Resources for ExpansionSubstantial Additional Resources for Expansion

Competitive AdvantagesCompetitive Advantages

• 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


Next Steps to be Taken

• Mozambique economic and political

environment

• The small size of Kenmare relative to financing

required

• Marketing commitments

• Potential cost overruns

• Supply of Power


Lender Concerns

• Mineral Licensing Contract and Implementation Agreement signed 21 January 2002 with the Government of Mozambique defining:

1. Fiscal and Legal stability for the duration of the Project

2. Rights and Obligations of the Project Companies

3. Clear dispute resolution mechanisms

4. Clear rights of assignment


Solutions:Mozambique Economic and Political Situation

• Loan disbursements to be conditional upon:

1. Signing of an acceptable contract for construction

of the mine – key elements fixed price.

2. Signing of marketing contracts.

3. Kenmare raising $83m equity, including $30m

Contingency Reserve

Kenmare Moma Titanium Minerals MineKenmare Moma Titanium Minerals MineSolutions:

Kenmare’s Size

• 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


Marketing Commitments


Potential Cost Overruns

MULTIPLEX

Joint Venture BetweenJoint Venture Between

• 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

• 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


Supply of Power

Kenmare Moma Titanium Minerals MineInitial Capital Structure

US$mUS$mEquityEquity

Previously ContributedPreviously Contributed 9090Project Equity Contribution 53

Subordinated DebtSubordinated Debt 6666Senior DebtSenior Debt 200200

446446

SourcesSources

Overrun Contingency 30

Subordinated Stand-by FacilitySubordinated Stand-by Facility 77

Kenmare Moma Titanium Minerals MineKenmare Moma Titanium Minerals MineLender & ECA GroupLender & ECA Group

$ 40$ 40

$195 + € 62$195 + € 62

$ 80$ 80

€ € 5555

$ 15$ 15

$ 26$ 26

TotalTotal

--

$10 + € 47$10 + € 47

--

€ € 4040

--

--

Sub-DebtSub-Debt

AfDBAfDB

ABSA : ECICABSA : ECIC

TotalTotal

KfW : HermesKfW : Hermes

US$m & € mUS$m & € m

$ 40$ 40

$185 + € 15$185 + € 15

$ 80$ 80

€ € 1515

$ 15$ 15

$ 26$ 26

Senior-DebtSenior-Debt

$ 19 + € 7$ 19 + € 7 € € 77FMOFMO $ 19$ 19

EIBEIB

KfW : MIGAKfW : MIGA

$ 15$ 15$ 10$ 10EAIFEAIF $ 5$ 5

US$m & € mUS$m & € m US$m & € mUS$m & € m

Subordinated Lender Stand-by Subordinated Lender Stand-by FacilityFacility

$4 + €2.7$4 + €2.7

Kenmare Project AdvisorsKenmare Project Advisors

Stockbrokers: Canaccord Capital & Davy Corporate Financial: N M Rothschild Legal: Sullivan & Cromwell Client Engineer: Aker Kvaerner Insurance: AON

Lender AdvisorsLender Advisors Legal: Milbank Tweed Hadley & McCloy

Independent Engineer: SRK Consulting

Industry Expert: IBMA Inc.

Insurance: Bankrisk / Marsh

Observations.…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

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.

Observations, ctd.…Observations, ctd.…

Moma Annual Production

800k Tonnes - 800k Tonnes - IlmeniteIlmenite

56k Tonnes - 56k Tonnes - ZirconZircon

21k Tonnes - 21k Tonnes - RutileRutile

Moma

Bunbury

Kenmare Moma Titanium Minerals Mine

The Entire Plant was transported from AustraliaThe Entire Plant was transported from Australia

Kenmare Moma Titanium Minerals Mine

From Exploration…

Blood, Sweat and Tears and a lot of Money

31 May 2007

Moma Titanium Minerals ProjectMoma Titanium Minerals Project

Discovery to Delivery

Documents

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