TIDMKMR
Kenmare Resources plc
("Kenmare" or "the Company" or "the Group")
12 October 2023
Q3 2023 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 30 September 2023 ("Q3 2023").
Statement from Michael Carvill, Managing Director:
"Production strengthened in Q3 as expected, putting Kenmare
firmly on track to achieve revised 2023 guidance. Ilmenite
production was up 32% quarter-on-quarter, as operations were
consistently stable, and this robust production is expected to
continue in Q4.
Following strong product pricing in H1 2023, weaker global
economic activity impacted the markets for Kenmare's products in
Q3, although demand for our high-quality ilmenite remains
resilient. Shipments were impacted by the loading of two vessels
completing after quarter-end, meaning they will be attributed to
Q4.
We completed a share buy-back of $30 million during the quarter,
representing 5.9% of our share capital, as part of our policy to
supplement shareholder returns when resources permit."
Q3 2023 overview
-- Lost Time Injury Frequency Rate ("LTIFR") of 0.21 per 200,000 hours
worked for the 12 months to 30 September 2023 (30 September 2022: 0.03)
-- Heavy Mineral Concentrate ("HMC") production of 414,600 tonnes in Q3
2023, a 7% decrease compared to Q3 2022 (443,900 tonnes), driven by lower
ore grades, but up 30% on Q2 2023
-- Ilmenite production of 291,200 tonnes in Q3 2023, a 4% decrease compared
to Q3 2022 (304,700 tonnes) due to lower HMC processed, but up 32% on Q2
2023
-- Primary zircon production of 14,100 tonnes, an 18% decrease compared to
Q3 2022 (17,300 tonnes), due to lower HMC processed and a build of
intermediate stockpiles, but up 22% on Q2 2023
-- Total shipments of finished products of 163,400 tonnes, a 43% decrease
compared to Q3 2022 (285,600 tonnes) as two large ilmenite shipments
completed after quarter-end -- these will be recorded as Q4 2023
shipments
-- Kenmare remains on track to achieve revised 2023 production guidance
-- The Definitive Feasibility Study ("DFS") for the upgrade and relocation
of Wet Concentrator Plant ("WCP") A is expected in H1 2024, with orders
already placed for the replacement dredges given their long lead times
-- Weaker global economic activity led to lower average prices achieved for
ilmenite in Q3 2023, although demand remains strong for Kenmare's high
quality products
-- Contracted zircon prices remained largely stable although reduced global
construction activity is impacting ceramics demand, with zircon spot
prices coming under increasing pressure
Operations update
Production from the Moma Mine in Q3 2023 was as follows:
Q3 2023 Q3 2022 Q3 2022 Q2 2023 Q2 2023
----------------- ---------- ---------- ---------- --------- ----------
tonnes tonnes % variance tonnes % variance
----------------- ---------- ---------- ---------- --------- ----------
Excavated ore(1) 10,822,000 10,424,000 4% 9,606,000 13%
----------------- ---------- ---------- ---------- --------- ----------
Grade(1) 4.32% 4.95% -13% 4.03% 7%
----------------- ---------- ---------- ---------- --------- ----------
Production
----------------- ---------- ---------- ---------- --------- ----------
HMC production 414,600 443,900 -7% 318,900 30%
----------------- ---------- ---------- ---------- --------- ----------
HMC processed 412,900 440,500 -6% 322,900 28%
----------------- ---------- ---------- ---------- --------- ----------
Ilmenite 291,200 304,700 -4% 221,300 32%
----------------- ---------- ---------- ---------- --------- ----------
Primary zircon 14,100 17,300 -18% 11,600 22%
----------------- ---------- ---------- ---------- --------- ----------
Rutile 2,700 2,600 4% 1,900 42%
----------------- ---------- ---------- ---------- --------- ----------
Concentrates(2) 14,700 13,000 13% 10,400 41%
----------------- ---------- ---------- ---------- --------- ----------
Shipments 163,400 285,600 -43% 285,100 -43%
----------------- ---------- ---------- ---------- --------- ----------
1. Excavated ore tonnage and grade prior to any floor losses.
2. Concentrates include secondary zircon and mineral sands concentrate.
Kenmare's rolling 12-month LTIFR to 30 September 2023 was 0.21
per 200,000 hours worked (Q3 2022: 0.03), with two lost time
injuries recorded during Q3 2023. Kenmare is committed to ensuring
the health and safety of its employees and contractors across its
operations. The Company continues to focus on the training and
development of its employees and contractors to be proactive and
consistent in the identification, assessment, management and
mitigation of potential health and safety risks.
HMC production was 414,600 tonnes in Q3 2023, representing a 7%
decrease compared to Q3 2022 (443,900 tonnes). This was a product
of a 13% decrease in ore grades to 4.32% (Q3 2022: 4.95%) partially
offset by a 4% increase in excavated ore volumes to 10.8 million
tonnes (Q3 2022: 10.4 million tonnes). HMC recoveries improved at
all Wet Concentrator Plants. The introduction of clean water to
spiral separation at WCP A has had a meaningful impact and WCP C is
now mining ore after the tailings crossing.
Ilmenite production was 291,200 tonnes, the strongest quarterly
production of the year to date. However, it represented a 4%
decrease compared to Q3 2022 (304,700 tonnes) due to the reduction
in HMC processed.
Primary zircon production was 14,100 tonnes in Q3 2023, an 18%
decrease compared to Q3 2022 (17,300 tonnes). Recoveries were
impacted in Q3 2023 by power reliability issues leading to
increased stock spillage. The Rotary Uninterruptible Power Supply
("RUPS") is now back in service following implementation of design
corrections and it will help protect against grid power
instability. Lower utilisation of the circuit caused a build-up of
intermediate feedstocks, which are expected to be largely drawn
down in Q4 2023.
Rutile production was 2,700 tonnes, up 4% on the prior year and
42% on the prior quarter (Q3 2022: 2,600 tonnes, Q2 2023: 1,900
tonnes). This reflects increased rutile feed grade in HMC and
improved recoveries as a result of separation equipment
upgrades.
Concentrates production was 14,700 tonnes, up 13% on Q3 2022
(13,000 tonnes), benefitting from increased feed availability and
debottlenecking of the circuit, which facilitated increased
throughputs.
Total shipments in Q3 2023 were 163,400 tonnes, a 43% decrease
compared to Q3 2022 (285,600 tonnes), largely due to two ilmenite
shipments being completed after quarter-end and falling into Q4
2023. Shipments comprised 143,200 tonnes of ilmenite, 9,200 tonnes
of primary zircon, and 11,000 tonnes of concentrates.
Closing stock of HMC at the end of Q3 2023 was 16,700 tonnes,
compared to 15,000 tonnes at the end of Q2 2023. Closing stock of
finished products at the end of Q3 2023 was 288,400 tonnes,
compared to 129,000 tonnes at the end of Q2 2023, reflecting
shipments carried into Q4 2023.
Capital projects update
The DFS for the WCP A upgrade and transition to Nataka is
scheduled for completion in H1 2024. Studies have been completed
for the replacement dredges, which are long lead time items, and an
order has been placed, thereby providing price certainty on the
construction costs for this important element of the project. The
construction, transportation and installation costs of the dredges
are now expected to be approximately 15% higher than the
Pre-Feasibility Study estimate.
Market update
Demand for titanium feedstocks and zircon softened in Q3,
reflecting weaker global economic activity, and consequently
Kenmare achieved lower average prices compared to the previous
quarter. Despite the current headwinds, the Company believes the
medium- and long-term fundamentals for all of its products remain
strong.
Pigment production in China, one of Kenmare's key markets,
continues at high levels supported by new capacity. Pigment exports
from China are at record levels and competing aggressively in the
global market, with major producers outside of China lowering
utilisations and closing selected plants in response.
Feedstock supply has remained flat during the year. Ilmenite
concentrates entering China remain the largest source of new supply
offsetting supply disruptions at several large operations outside
China, which are continuing in Q4 2023. This is coupled with major
producers reducing their supply to the market, reflecting the
weaker demand.
Demand for high-quality ilmenite has been more resilient than
other titanium feedstocks, benefiting from the strong pigment
production in China and the thriving titanium metal market,
supporting relatively stable demand for Kenmare's ilmenite
products.
Kenmare expects to achieve higher sales volumes in Q4 2023, as
the loading of some vessels at the end of Q3 was completed after
quarter-end so these will be recorded in Q4. Some other shipments
were also delayed by customers from Q3 into Q4.
Demand for zircon is following a similar trend to ilmenite.
Subdued global construction activity is impacting demand for
ceramics and this is flowing through to the zircon market.
Contracted prices have remained relatively stable, although spot
prices have come under increasing pressure.
Kenmare expects to achieve strong zircon sales in Q4 2023, with
contracts in place for most of its volume.
For further information, please contact:
Kenmare Resources plc
Jeremy Dibb / Michael Starke
Investor Relations
ir@kenmareresouces.com
Tel: +353 1 671 0411
Mob: +353 87 943 0367
Murray (PR advisor)
Paul O'Kane
pokane@murraygroup.ie
Tel: +353 1 498 0300
Mob: +353 86 609 0221
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 7% 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.
All monetary amounts refer to United States dollars unless
otherwise indicated.
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
October 12, 2023 02:00 ET (06:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
Kenmare Resources (LSE:KMR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Kenmare Resources (LSE:KMR)
Historical Stock Chart
From Apr 2023 to Apr 2024
