Kenmare Resources has agreed a new deal with its banks, giving the Irish-listed titanium producer the flexibility to borrow up to €30 million to fund the expansion of its Mozambique mine.

The company is working on the final stages of an expansion of its titanium feedstock mine in Moma, Mozambique, which was due to be completed by the start of this year.

Kenmare said yesterday that given the extra time needed to complete the expansion, its banks had agreed to extend the period during which it could use cashflow from Moma to fund the work to June 30th, from December 15th last.

“This agreement also provides Kenmare the flexibility to raise up to $40 million [€30 million] of additional debt,” the company confirmed.

Kenmare had agreed with its lenders that it would pay for the expansion using $65 million in cash generated from the mine’s production and the proceeds of an Aug- ust €45 million rights issue. The expansion will increase capacity by 50 per cent.

Its net debt on December 31st was $279 million. Kenmare said it was continuing to repay its banks.