Kenmare Resources managing director Tom Hickey said the titanium minerals miner, whose business is centred around a mine in Mozambique, assessed potential projects in countries such as Australia, Saudi Arabia, Namibia and Cameroon in the past year as it continues to look for opportunities.
“The frog-kissing business is an important one in mining until you find the right [project],” Mr Hickey told shareholders at the company’s annual general meeting (agm) on Thursday.
The comments came as Kenmare said its former managing director, Michael Carvill, and an Abu Dhabi private equity firm have been given second extension to at least announce a firm intention to make a bid for the business.
The Irish Takeover Panel had originally set an April 17th deadline for the duo to make a move, after their initial indicative offer of £5.30 per share – or £473 million (€547 million) in total – was rejected by the company, which Mr Carvill founded in 1986 and led until his exit last August.
The deadline was subsequently extended to close of business on Thursday. However, Kenmare said on Thursday morning that the Irish Takeover Panel has agreed to another extension of the so-called put-up or shut-up deadline, to June 20th.
“In order to facilitate ongoing discussions with the consortium and to provide additional time for the consortium to progress its due diligence, the board has requested, and the takeover panel has consented to, an extension to the date by which the consortium is required to either announce a firm intention to make an offer for the company or announce that it does not intend to make an offer,” Kenmare said.
Asked by shareholders about the two extensions, Mr Hickey said it was “not unusual” for private equity bidders to seek to raise debt to fund a deal – lenders would need to be comfortable with what they are financing.
A key issue is that Kenmare remains in discussions with the government of Mozambique on an extension of a production royalty agreement, or what is called an implementation agreement. A 20-year agreement expired before Christmas last year. However, the terms of that accord remain in place until a new one is reached, allowing it to continue to process minerals and export final products.
The agm was told that both sides are “engaged in constructive dialogue”. However, timelines had been affected by a change in government earlier this year.
Kenmare chairman Andrew Webb said the potential bidders could not make an offer conditional on a new implementation agreement being struck.
“Either you have to take the risk yourself [as a bidder] or wait until it is resolved and then make a bid,” he said.
Kenmare said in a trading update last month that it experienced stable market conditions in the first quarter of this year, with encouraging demand for its key product, ilmenite, which is used in the manufacture of everything from paints and plastics to ceramics and textiles.
Although demand remained healthy, the market continued to be modestly oversupplied due to new supply from concentrates producers entering the market, it said. This continued to negatively impact average received prices, however prices “now look to be stabilising”, it added.
