Exploration group Kenmare Resources is raising up to $97 million (€80 million) from shareholders to fund the development of a titanium mining project in Mozambique, Africa.

It believes that the mine will generate annual revenues of more than $90 million a year.

The Dublin- and London-listed company has just completed placing 187.5 million shares with institutions to raise $55 million. It is also offering just under 144 million new ordinary shares to existing shareholder to raise a further $42 million.

Subscribers to both the placement and open offer will also be entitled to one warrant, exercisable at 19 pence sterling, for every four shares.

The open offer is not underwritten, but if the combined proceeds of that and the share placement are below $53 million, Kenmare's London broker, Cannacord, has committed itself to finding subscribers in order to meet the targeted amount.

Kenmare managing director Mr Michael Carvill told The Irish Times yesterday that its share placement had been oversubscribed. He said that if the offer was not fully taken up by the group's ordinary shareholders, it was likely that the institutions would be willing to step in to make up any shortfall.

The proceeds of the offer will be partly used to cover a $30 million reserve fund that Kenmare must hold as part of a loan agreement with a group of banks. The company is borrowing a total of $269 million, and finalised the deal with its lenders yesterday.

The lenders include the European Investment Bank, African Development Bank, and Dutch, German and South African development banks. Mr Carvill agreed that the loan was a large one for a small company like Kenmare.

However, he pointed out that, as most of the borrowers were development banks, its terms did not impose an excessive burden on the company.

"It's very long-term debt, it runs for 14 years, and it will allow us to pay dividends to our shareholders immediately," he said. Kenmare has agreed to give the assets of its Moma titanium mineral sands mine in Mozambique as security for the loan.

The Irish company needs $348 million to develop the resource, which will produce titanium. Mr Carvill said yesterday that Kenmare expected it to generate between $92 million and $95 million a year in revenues, while operating costs were projected at $23 million.

He said that the company had forward contracts for 57 per cent of its projected yearly revenues. "That will more than cover our full-year operating costs," Mr Carvill said.

The mine has a projected lifespan of over 90 years.