KMR Kenmare Resources Plc

 
TIDMKMR 
 
 
   Kenmare Resources plc ("Kenmare" or "the Company") 
 
   15 April 2021 
 
   Q1 2021 Production Report 
 
   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 ending 31 March 2021 
("Q1 2021"). 
 
   Statement from Michael Carvill, Managing Director: 
 
   "I am pleased to report that the number of people in isolation for 
COVID-19 at Moma has fallen from 177 in mid-March to 41 currently. 
Whilst operations continued throughout, there have been minor 
interruptions as a result. 
 
   It's very pleasing to see the uplift in production as WCP B settles into 
normal operation in Pilivili. We remain confident in the outlook for 
production and re-iterate our guidance of 1.1-1.2 million tonnes per 
annum of ilmenite in 2021. 
 
   Our rising production volumes are also well supported by strong demand 
for our products. Market conditions for ilmenite remain strong and the 
backdrop for zircon has also been improving and we expect prices to 
begin rising in the coming quarters." 
 
   Overview 
 
 
   -- The number of people in isolation due to COVID-19 at Moma was 41 on the 
      13 April, having seen steady reduction from 177 reported on 10 March 
 
   -- Lost time injury frequency rate ("LTIFR") of 0.24 per 200,000 man-hours 
      worked on a 12-month rolling basis, an improvement from 0.25 in Q4 2020 
 
   -- Heavy Mineral Concentrate ("HMC") production increased 46% to 361,900 
      tonnes (Q1 2020: 248,100 tonnes), benefitting from a 37% increase in 
      grade and a 10% increase in tonnes excavated 
 
   -- Ilmenite production increased 73% to 275,100 tonnes (Q1 2020: 159,100) 
 
   -- Primary zircon production increased 39% to 13,300 tonnes (Q1 2020: 9,600) 
 
   -- Rutile production increased 36% to 1,900 tonnes (Q1 2020: 1,400) 
 
   -- Total shipments of finished products up 77% to 344,400 tonnes (Q1 2020: 
      194,600 tonnes), benefitting from increased production volumes and 
      upgraded transhipment capacity 
 
   -- The ilmenite market has remained strong, with further price increases 
      received in Q1 2021 
 
   -- The outlook for the zircon market has improved as increased global demand 
      and low inventories have led to price increases in early Q2 2021 
 
 
   COVID-19 update 
 
   COVID-19 cases at site have been steadily decreasing, with 41 people in 
isolation on 13 April 2021, down from 177 on the 10 March 2021. 
Protecting our people has always been Kenmare's highest priority. In 
addition to the pre-existing physical distancing and hygiene protocols, 
Kenmare has been conducting weekly testing of the complete workforce on 
the site. This has helped identify and isolate positive cases more 
quickly and limit the spread of the virus. 
 
   However, the larger number of cases limited the availability of 
personnel, including senior management, in Q1 2021. While the business 
has been managed to mitigate the impact and production has continued, 
some impacts on production were experienced during the quarter but are 
difficult to quantify. 
 
   Production 
 
   Production from the Moma Mine in Q1 2021 was as follows: 
 
 
 
 
                       Q1 2021        Q1 2020   Variance   Q4 2020    Variance 
-----------------  ----------------  ---------  --------  ----------  -------- 
                        tonnes        tonnes       %        tonnes       % 
-----------------  ----------------  ---------  --------  ----------  -------- 
Excavated ore(1)          8,955,000  8,153,000       10%   7,554,000       19% 
-----------------  ----------------  ---------  --------  ----------  -------- 
Grade(1)                      4.64%      3.39%       37%       5.64%      -18% 
-----------------  ----------------  ---------  --------  ----------  -------- 
Production 
-----------------  ----------------  ---------  --------  ----------  -------- 
HMC production              361,900    248,100       46%     384,700       -6% 
-----------------  ----------------  ---------  --------  ----------  -------- 
HMC consumption             391,200    246,700       59%     338,900       15% 
-----------------  ----------------  ---------  --------  ----------  -------- 
Ilmenite                    275,100    159,100       73%     219,100       26% 
-----------------  ----------------  ---------  --------  ----------  -------- 
Primary zircon               13,300      9,600       39%      11,200       19% 
-----------------  ----------------  ---------  --------  ----------  -------- 
Rutile                        1,900      1,400       36%       1,400       36% 
-----------------  ----------------  ---------  --------  ----------  -------- 
Concentrates(2)               8,900      8,600        3%       8,600        3% 
-----------------  ----------------  ---------  --------  ----------  -------- 
Shipments                   344,400    194,600       77%     321,300        7% 
-----------------  ----------------  ---------  --------  ----------  -------- 
 
 
   1. Excavated ore and grade prior to any floor losses. 
 
   2. Concentrates include secondary zircon and mineral sands concentrate. 
 
 
   During Q1 2021 Kenmare further improved its safety performance, with a 
rolling 12-month LTIFR of 0.24 per 200,000 man-hours worked (Q4 2020: 
0.25) due to new risk assessment processes becoming embedded in 
operations. 
 
   HMC production was 361,900 tonnes in Q1 2021, representing a 46% 
increase compared to Q1 2020 (248,100 tonnes), mainly due to the 37% 
increase in ore grade as WCP B is now mining in the higher grade 
Pilivili deposit. A 10% increase in excavated ore was also a significant 
factor, due to a higher contribution from WCP C, which began operating 
in February 2020, as well as slightly increased volumes at WCP A and WCP 
B. 
 
   Mining utilisations are expected to rise for the remainder of the year, 
supporting higher excavated ore volumes. This is a principal area of 
management focus. Grades are expected to be maintained between 4.5-5% 
Total Heavy Mineral until Q4 (when grades are anticipated to drop to 
3.7%), before normalising at around 4.3% in 2022. 
 
   Production of all finished products from the Mineral Separation Plant 
increased during Q1 2021 as a result of increased HMC production from 
the mine. Ilmenite production was 275,100 tonnes, up 73% (Q1 2020: 
159,100 tonnes); primary zircon production was 13,300 tonnes, up 39% (Q1 
2020: 9,600 tonnes); rutile production was 1,900 tonnes, up 36% (Q1 
2020: 1,400 tonnes); and concentrates production was 8,900 tonnes, up 3% 
(Q1 2020: 8,600 tonnes). Concentrate production increased less than 
primary zircon due to an intermediate stock build of 3,600 tonnes during 
the quarter, which is expected to reverse. 
 
   Total shipments in Q1 2021 increased 77% compared to Q1 2020 (Q1 2020: 
194,600 tonnes), reflecting strong product market conditions and aided 
by the increased capacity of the transhipment vessels, following 
previously announced upgrade works. Kenmare shipped 344,400 tonnes of 
finished products during the period. Shipments comprised of 326,700 
tonnes of ilmenite, 8,500 tonnes of primary zircon, and 9,300 tonnes of 
concentrates. No rutile was shipped during the quarter. 
 
   Closing stock of HMC at the end of Q1 2021 was 20,900 tonnes, compared 
with 50,200 tonnes at the start of the year. Closing stock of finished 
products at the end of Q1 2021 was 101,000 tonnes (Q4 2020: 145,500 
tonnes). 
 
   Capital projects update 
 
   The final parts of the HMC pumping pipeline for WCP B operations at 
Pilivili have been installed, with commissioning now underway. The total 
capital cost of the WCP B move is estimated at US$127 million, as 
outlined in the 2020 Preliminary Results. 
 
   Market update 
 
   The ilmenite market continued to perform strongly into 2021 and Kenmare 
achieved price increases for ilmenite in Q1 2021. 
 
   Following on from the strong recovery in H2 2020, demand for titanium 
pigment remained buoyant in Q1 2021, as downstream markets saw a strong 
uplift from the ongoing global economic recovery. Pigment producers are 
operating at high utilisation rates to meet demand and due to low 
inventory levels, this is flowing directly through to demand for 
titanium feedstocks. The titanium metal market is also starting to 
recover in key regions such as Asia, which has further bolstered 
ilmenite demand. 
 
   Ilmenite supply continues to be constrained in India, while recent mine 
closures in Australia have also reduced supply. This has been more than 
offset by increased ilmenite supply from Vietnam in recent months and 
higher ilmenite production in China. Despite higher supply from these 
sources, ilmenite demand has exceeded Kenmare's ability to supply in Q1 
2021 even after drawing on finished product inventories. 
 
   The outlook remains positive as demand for Kenmare's products is strong 
across all major geographical regions, with many recovering faster than 
anticipated. We have secured the majority of sales for Q2 2021 and 
expect ilmenite demand to remain robust as pigment inventories remain 
low through the supply chain. 
 
   Market dynamics for zircon improved in Q1 2021, benefitting from higher 
global demand and low inventories. As a result, prices have shown 
increases in early Q2 2021. 
 
   For further information, please contact: 
 
   Kenmare Resources plc 
 
   Jeremy Dibb 
 
   Investor Relations 
 
   ir@kenmareresources.com 
https://www.globenewswire.com/Tracker?data=W5MNckJl9lbTEHz3AI-EQyPgFbmYKImiNVKZ2ZJThn2e8GvUc_UNeh41OVqcJ5YENl4IlmELbWMygkQxKsc_8oxMB_gylCXvWyEd46x-xd0= 
 
 
   Tel: +353 1 671 0411 
 
   Mob: + 353 87 943 0367 
 
   Murray (PR advisor) 
 
   Joe Heron 
 
   Tel: +353 1 498 0300 
 
   Mob: +353 87 690 9735 
 
   About Kenmare Resources 
 
   Kenmare Resources plc is one of the world's largest producers of mineral 
sands products. Listed on the London Stock Exchange and the Euronext 

Dublin, Kenmare operates the Moma Titanium Minerals Mine in Mozambique. 
Moma's production accounts for approximately 5% of global titanium 
feedstocks and the Company supplies to customers operating in more than 
15 countries. Kenmare produces raw materials that are ultimately 
consumed in everyday "quality-of life" items such as paints, plastics 
and ceramic tiles. 
 
   Forward Looking Statements 
 
   This announcement contains some forward-looking statements that 
represent Kenmare's expectations for its business, based on current 
expectations about future events, which by their nature involve risks 
and uncertainties. Kenmare believes that its expectations and 
assumptions with respect to these forward-looking statements are 
reasonable. However, because they involve risk and uncertainty, which 
are in some cases beyond Kenmare's control. Actual results or 
performance may differ materially from those expressed or implied by 
such forward-looking information. 
 
 
 
 
 
 

(END) Dow Jones Newswires

April 15, 2021 02:00 ET (06:00 GMT)

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