KMR Kenmare Resources Plc

 
TIDMKMR 
 
 
   Kenmare Resources plc ("Kenmare" or "the Company") 
 
   11 April 2018 
 
   Q1 2018 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 
2018. 
 
   Statement from Michael Carvill, Managing Director: 
 
   "Product shipments have started the year strongly, the markets for our 
products have tightened and we have agreed higher ilmenite and zircon 
prices for Q2 2018. Due to a planned 180 degree turn at WCP A and some 
unforeseen stoppages, production in Q1 2018 was below our expected 
average for the year. However, we are expecting higher production 
volumes for the following quarters and still anticipate achieving the 
mid-range of 2018 guidance." 
 
   Overview 
 
 
   -- Heavy Mineral Concentrate ("HMC") production decreased by 12% to 311,000 
      tonnes (Q1 2017: 353,500 tonnes) 
 
   -- Ilmenite production decreased by 18% to 211,000 tonnes (Q1 2017: 256,500 
      tonnes) 
 
   -- Zircon production decreased by 9% to 16,900 tonnes (Q1 2017: 18,500 
      tonnes) 
 
   -- Total shipments of finished products were up 4% to 267,200 tonnes (Q1 
      2017: 256,100 tonnes) 
 
   -- Ilmenite markets tightened in Q1 2018, increased spot prices agreed for 
      Q2 2018 
 
   -- The zircon market continued to strengthen, with further price rises 
      agreed from the beginning of Q2 2018 
 
 
   Production 
 
   Production from the Moma Mine in Q1 2018 was as follows: 
 
 
 
 
                       Q1-2018    Q1-2017   Variance   Q4-2017   Variance 
                       tonnes     tonnes       %       tonnes       % 
Excavated Ore *       7,805,600  8,407,000       -7%  8,414,300       -7% 
Grade*                    4.51%      4.86%       -7%      4.34%        4% 
Production 
 HMC                    311,000    353,500      -12%    337,800       -8% 
 Ilmenite               211,000    256,500      -18%    235,900      -11% 
 Zircon                  16,900     18,500       -9%     18,100       -7% 
 of which primary        11,300     12,800      -12%     10,900        4% 
 of which secondary       5,600      5,700       -2%      7,300      -23% 
Rutile                    2,100      2,200       -5%      2,500      -16% 
Shipments               267,200    256,100        4%    296,300      -10% 
 
 
   * Excavated Ore and grade prior to any floor losses. 
 
   During Q1 2018, Kenmare mined 7.8 million tonnes of ore, down 7% on Q1 
2017, at an average grade of 4.51%, producing 311,000 tonnes of HMC, a 
12% decrease on Q1 2017. Finished product volumes for the period 
included 211,000 tonnes of ilmenite, down 18%, and 16,900 tonnes of 
zircon (including 5,600 tonnes of a lower grade secondary zircon 
product), down 9%. 
 
   HMC production was impacted by lower mining capacity through the quarter 
due to planned and unplanned stoppages, and lower grades mined. WCP A 
experienced difficult mining conditions and executed a planned 180 
degree turn in the dredge path, which slowed advancement at the mine 
face. Supplementary dry mining operations at WCP A and WCP B were 
subject to major relocations in the quarter, further reducing mining 
capacity. 
 
   Additional supplementary dry mining capacity is being added at WCP A and 
WCP B, which will help to increase mined tonnes for the rest of the 
year. However, WCP A will remain in a higher slimes zone for Q2 2018. 
The 20% upgrade of WCP B remains on track and on budget for 
commissioning in H2 2018. 
 
   Ilmenite production decreased, principally as a result of lower HMC 
production from the mine. The lower throughput allowed time for 
maintenance at the Mineral Separation Plant, including a dryer shutdown 
for a refractory refurbishment and automation. This will deliver higher 
levels of utilisation and control, to aid ilmenite recovery going 
forward. 
 
   Total zircon production includes a 12% decrease in primary zircon 
production to 11,300 tonnes (Q1 2017: 12,800 tonnes), while secondary 
zircon volumes declined by 2% to 5,600 tonnes (Q1 2017: 5,700 tonnes). 
Zircon production was also affected by lower HMC tonnes produced and 
lower utilisation as new circuits were commissioned in Q1 2018. 
 
   During Q1 2018, Kenmare shipped 267,200 tonnes of finished products, up 
4% on Q1 2017, comprised of 252,700 tonnes of ilmenite, 13,500 tonnes of 
zircon (including 3,200 tonnes of secondary grade zircon) and 1,000 
tonnes of rutile. 
 
   Closing stock of HMC at the end of Q1 2018 was 24,200 tonnes, compared 
with 16,800 tonnes at the start of the year. Closing stock of finished 
products at the end of Q1 2018 was 194,200 tonnes, while all product 
being held for a customer, as previously disclosed, was shipped during 
Q1 2018. 
 
   Market 
 
   Kenmare saw steady demand for ilmenite products in Q1 2018 in all 
regional markets, despite the seasonal slowdown in the pigment industry 
over the winter months. The outlook for the pigment industry is positive 
for 2018 as global GDP is expected to grow strongly. 
 
   Demand for ilmenite has increased in China, following Lunar New Year 
(mid-February) and we successfully secured price increases for spot 
sales in Q2 2018. The ilmenite market is expected to tighten as we enter 
the northern hemisphere painting season and inventories of low quality 
ilmenite and concentrates that accumulated in H2 2017 continue to be 
drawn down. Supply from southern India and Vietnam continues to be 
restricted. Further consolidation of ilmenite production in China is 
expected in the coming months, which may have a favourable impact on 
pricing. 
 
   Market conditions for zircon were favourable during the quarter due to a 
combination of solid demand growth and tight global supply. Kenmare has 
successfully implemented further significant price increases for its 
zircon products in Q2 2018, in line with the prevailing movement of the 
market. 
 
   For further information, please contact: 
 
   Kenmare Resources plc 
 
   Michael Carvill, Managing Director 
 
   Tel: +353 1 671 0411 
 
   Tony McCluskey, Financial Director 
 
   Tel: +353 1 671 0411 
 
   Jeremy Dibb, Corporate Development and Investor Relations Manager 
 
   Tel: +353 1 671 0411 
 
   Mob: + 353 87 943 0367 
 
   Murray 
 
   Joe Heron / Aimee Beale 
 
   Tel: +353 1 498 0300 
 
   Mob: +353 87 690 9735 
 
   Buchanan 
 
   Bobby Morse / Chris Judd 
 
   Tel: +44 207 466 5000 
 
   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. 
 
   This announcement is distributed by Nasdaq Corporate Solutions on behalf 
of Nasdaq Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: Kenmare Resources via Globenewswire 
 
 
  http://www.kenmareresources.com/ 
 

(END) Dow Jones Newswires

April 11, 2018 02:00 ET (06:00 GMT)

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