Kenmare Resources plc – Q2 and H1 2019 Production Report
Thursday, July 11th, 2019
Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global producers of titanium minerals and zircon, which operates the Moma Titanium Minerals Mine (the “Mine” or “Moma”) in northern Mozambique, is pleased to provide a trading update for the quarter and half year ending 30 June 2019 (“Q2 2019” and “H1 2019”).
Q2 2019 overview
- Continued strong safety performance with lost time injury frequency rate (“LTIFR”) of 0.12 per 200,000 man-hours worked (Q2 2018: 0.30)
- Kenmare on track to achieve 2019 guidance on all stated metrics
- Despite an 18% increase in tonnes of excavated ore, Heavy Mineral Concentrate (“HMC”) production decreased by 27% to 274,700 tonnes (Q2 2018: 377,900 tonnes) due to planned mining of lower ore grades, with grades expected to improve in Q3 2019
- 8% decrease in ilmenite production to 220,100 tonnes (Q2 2018: 238,500 tonnes) and a 6% decrease in primary zircon production to 11,000 tonnes (Q2 2018: 11,700 tonnes) due to lower HMC production
- 84% increase in concentrates production to 9,400 tonnes (Q2 2018: 5,100 tonnes), benefitting from the introduction of a mineral sands concentrate product
- 5% decrease in total shipments of finished products to 307,000 tonnes (Q2 2018: 322,000 tonnes) but a 74% increase compared to Q1 2019 (176,500 tonnes) – 2019 total shipment volumes are expected to be in line with 2018
- Project execution has commenced for the relocation of WCP B to Pilivili, following completion of a Definitive Feasibility Study (“DFS”) and Board approval
- At the end of H1 2019 Kenmare had a net cash position of US$3.5 million (31 December 2018: US$13.5 million net cash), with cash and cash equivalents of US$77.0 million (31 December 2018: US$97.0 million) due to reduced shipments in H1 2019 and development capital spend on the Company’s growth projects
- Market conditions for ilmenite continued to improve in Q2 2019, with further price strengthening continuing into H2 2019
- Zircon market remained stable in Q2 2019, with strong long-term fundamentals
Statement from Michael Carvill, Managing Director:
“At the end of the first half, we are on track to achieve our 2019 guidance on all stated metrics. Excavated ore volumes continued to increase during Q2, as the investments we are making to grow our mining capacity are already beginning to deliver. Q2 was the weakest quarter forecasted for 2019 in terms of grade, which resulted in lower HMC production, but consequently higher grades are anticipated for the remainder of the year.
Shipments recovered significantly in the second quarter, following Cyclone Idai in March 2019, despite further adverse weather. We remain confident that full year 2019 sales volumes will not be impacted.
We continued to see stronger market conditions in Q2 2019, with increased demand for ilmenite leading to higher prices and we expect this trend to continue through the second half of 2019.http://www.kenmareresources.com/