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[August 2009]
Kenmare Resources Comments On 2009 Interim Results
Kenmare Resources plc (Dublin, Republic of Ireland), which owns and operates the Moma Titanium Minerals Mine in northern Mozambique, issued its interim 2009 Results on 31 August 2009. In the second quarter of 2009, production of Heavy Mineral Concentrate (HMC) was up 23% from the first quarter, production of ilmenite was up 12.2%, production of zircon was up 45% and production of rutile increased by 158%.A Performance Improvement Project (PIP) is 97% complete at the time of writing, compared to 75% on 16 April, as noted in Kenmare’s Annual Report. This has contributed to the steady increase in output. Results have continued to improve with July being a record month for HMC and ilmenite production.
To date, Kenmare has relied on one trans-shipment vessel, the ‘Bronagh J’. While this vessel has performed well, it is prudent to manage the risk that the mine could have to shut down for a period in the event of a failure of the ‘Bronagh J’. In August, the group purchased an additional trans-shipment vessel and tug which will provide loadout capacity beyond the envisaged production rate as well as reducing operational risk.
Demand for titanium feedstocks is related to global economic activity and has declined in 2009 due to the onset of the global recession though the extent is still uncertain. A strong industry inventory destocking process which occurred during the first quarter of 2009 has abated in the second quarter, with a subsequent increase in shipments from the Moma port facility. In response to the reduction in demand the major mineral feedstock producers in the industry have reduced output in order to more closely align production to current market conditions.
Industry commentators anticipate that the contraction phase of the cycle will come to an end during the fourth quarter of 2009 with strong growth restored in 2010.
Since, with the completion of the PIP, Kenmare’s management believes that the plant has the capacity to operate at design levels, the company will be reporting operating costs and revenue in the income statement from 1 July 2009. Previously, costs net of revenues had been capitalised in development expenditure.
Charles Carvill, Kenmare’s Chairman, said: “We are delighted that the Performance Improvement Project is virtually finished and has been completed according to schedule. As a consequence we are on target for full production before the end of the year”.
www.kenmareresources.com
ENDS