TIDMKMR
Kenmare Resources plc
("Kenmare" or "the Company" or "the Group")
12 April 2023
Q1 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 31 March 2023 ("Q1 2023").
Statement from Michael Carvill, Managing Director:
"The first quarter was a challenging period for Kenmare, with
operations and production significantly disrupted by a severe
lightning strike in February. Despite this, production guidance for
the year remains unchanged, albeit towards the bottom end of
guidance for ilmenite and rutile.
The market for ilmenite stabilised in Q1 2023, with evidence of
spot price increases in recent weeks supported by recovering
Chinese pigment demand. While received prices are lower than the
peaks achieved in 2022, they nevertheless remain near all-time
highs."
Overview
-- Lost Time Injury Frequency Rate ("LTIFR") of 0.15 per 200,000 hours
worked on a 12-month rolling basis (Q1 2022: 0.00); 1.3 million LTI-free
hours achieved by end March 2023
-- Heavy Mineral Concentrate ("HMC") production decreased 18% in Q1 2023 to
315,000 tonnes (Q1 2022: 384,700 tonnes), heavily impacted by the
lightning strike and lower recoveries
-- Ilmenite production decreased 20% in Q1 2023 to 204,300 tonnes (Q1 2022:
256,800) and primary zircon production decreased 12% to 11,400 tonnes (Q1
2022: 12,900 tonnes) due primarily to lower HMC availability
-- Rutile production decreased 15% to 1,700 tonnes (Q1 2022: 2,000 tonnes),
in line with lower HMC consumption
-- Concentrates production decreased 6% to 10,100 tonnes (Q1 2022: 10,700
tonnes) benefitting from the processing of stockpiles
-- Total shipments of finished products increased 17% in Q1 2023 to 271,700
tonnes (Q1 2022: 231,500 tonnes), benefitting from increased
transshipment capacity and availability of ocean-going vessels
-- The market for ilmenite stabilised in Q1 2023, at lower levels than Q4
2022, with evidence of spot price increases in recent weeks
-- Kenmare reiterates 2023 production guidance for all products, with
ilmenite and rutile expected to be towards the bottom end of the guidance
range
Operations update
Operational results from the Moma Mine in Q1 2023 were as
follows:
Q1 2023 Q1 2022 Variance Q4 2022 Variance
--------------- --------- --------- -------- ---------- --------
tonnes tonnes % tonnes %
--------------- --------- --------- -------- ---------- --------
Excavated ore1 9,258,000 9,391,000 -1% 10,145,000 -9%
--------------- --------- --------- -------- ---------- --------
Grade1 4.13% 4.49% -8% 4.75% -13%
--------------- --------- --------- -------- ---------- --------
Production
--------------- --------- --------- -------- ---------- --------
HMC production 315,000 384,700 -18% 404,000 -22%
--------------- --------- --------- -------- ---------- --------
HMC processed 314,800 373,300 -16% 397,900 -21%
--------------- --------- --------- -------- ---------- --------
Ilmenite 204,300 256,800 -20% 283,900 -28%
--------------- --------- --------- -------- ---------- --------
Primary zircon 11,400 12,900 -12% 14,600 -22%
--------------- --------- --------- -------- ---------- --------
Rutile 1,700 2,000 -15% 2,200 -23%
--------------- --------- --------- -------- ---------- --------
Concentrates2 10,100 10,700 -6% 11,700 -14%
--------------- --------- --------- -------- ---------- --------
Shipments 271,700 231,500 17% 365,700 -26%
--------------- --------- --------- -------- ---------- --------
1. Excavated ore and grade prior to any floor losses.
2. Concentrates include secondary zircon and mineral sands
concentrate.
The end of Q1 2023 saw a Lost Time Injury Frequency Rate
("LTIFR") of 0.15 per 200,000 hours worked on a 12-month rolling
basis (Q1 2022: 0.00), with two lost time injuries recorded during
the quarter. 1.3 million LTI-free hours were achieved by the end of
March 2023.
HMC production was 315,000 tonnes in Q1 2023, representing an
18% decrease compared to Q1 2022 (384,700 tonnes). Mining
operations were impacted by the previously disclosed severe
lightning incident in Q1 2023, impacting HMC production. Though
lower than expected, excavated ore tonnes only decreased 1% to
9,258,000 tonnes compared to Q1 2022 (9,391,000 tonnes), despite
the lightning strike. Recoveries were impacted by higher slimes
levels in Q1 2023 at WCP A compared to Q1 2022. Seasonal power
interruptions, including those related to the lightning strike,
also affected mining recoveries.
Production of HMC was further impacted by an 8% decrease in ore
grades to 4.13% in Q1 2023 (Q1 2022: 4.49%). Ore grades are
expected to normalise at 4.2% for the remainder of 2023.
Production of ilmenite, Kenmare's primary product, decreased by
20% to 204,300 tonnes in Q1 2023 (Q1 2022: 256,800 tonnes), due
primarily to the 16% reduction in HMC processed and lower
recoveries, though partially offset by a build in intermediate
stockpiles. Primary zircon production decreased by 12% to 11,400
tonnes (Q1 2022: 12,900 tonnes), which was also impacted by the
reduced HMC processed, but supported by higher zircon contained in
the HMC.
Rutile production was down 15% in Q1 2023 to 1,700 tonnes (Q1
2022: 2,000 tonnes) in line with lower HMC processed. Concentrates
production decreased by only 6% to 10,100 tonnes (Q1 2022: 10,700
tonnes), with drawdown of intermediate stockpiles partially
offsetting lower HMC processed.
Shipments increased by 17% in Q1 2023 to 271,700 tonnes (Q1
2022: 231,500 tonnes), comprising 259,000 tonnes of ilmenite, 8,600
tonnes of primary zircon and 4,200 tonnes of concentrates. A
further large ilmenite shipment, partially-loaded at the end of the
quarter, will be included in Q2 2023 figures.
Closing stock of HMC at the end of Q1 2023 was 19,000 tonnes,
compared with 18,800 tonnes at year-end 2022. Closing stock of
finished products at the end of Q1 2023 was 169,300 tonnes (Q4
2022: 213,500 tonnes), reflecting the drawdown of finished product
stocks in Q1 2023.
Capital projects
Further updates will be provided at the Capital Markets Day on
26 April 2023.
Market update
Kenmare continued to see robust demand for all products in Q1
2023. However, received prices of ilmenite decreased
quarter-on-quarter, because of weaker demand for pigment in Q4
2022.
The global pigment market remained weak as destocking of
inventories only halted in early 2023 and underlying demand was
impacted by higher interest rates. However, chloride pigment
production in China rebounded strongly in Q1 2023 and demand from
the titanium metal sector continued to increase, supporting demand
for Kenmare's ilmenite.
Despite increased supply from domestic ilmenite producers and
Chinese concentrate producers operating in Mozambique, spot
ilmenite prices in China have increased in recent weeks,
benefitting from stronger pigment production.
Customer enquiries for ilmenite shipments in Q2 2023 have also
risen with pigment demand, while demand for ilmenite beneficiation
remains strong.
Demand for zircon weakened in H2 2022 and this continued in Q1
2023; while the Chinese market has remained subdued, India has
continued to show strong demand growth.
Zircon prices remained stable in Q1 2023 benefitting from lower
supply, due to production issues in Australia and South Africa.
Kenmare continues to receive strong demand for its zircon products
in Q2 2023.
For further information, please contact:
Kenmare Resources plc
Jeremy Dibb / Michael Starke
Investor Relations
ir@kenmareresources.com
https://www.globenewswire.com/Tracker?data=VaivKMIm5694_umqstYujpOZoDhMY1UUn8A9ixRTBRcQJyeNKwVjpWaM0booRNAFkEUQ1IY8bq6B9suSq5YJUdKi045az_4zZrAqH1_-5Gbb0a7TBdU8VlKNghhmr-F8M4w6aGgf33DDbPmdSYDa_DNdjduKkGZUwEZnUyzvQEP661v59avr9TJhjcJOwFOb5pHuEqq7go1S7bpTxayXOGzc1LPVQ03egyAYjjRhWK29knHBZjzbaUwph4wUdYy0WCgmy0mnkqV-HXboWxiX1g==
Tel: +353 1 671 0411
Mob: +353 87 943 036
Murray (PR advisor)
Paul O'Kane / Andrew Smith
pokane@murraygroup.ie / asmith@murraygroup.ie
Tel: +353 1 498 0300
Mob: +353 86 609 0221 / +353 83 076 5717
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
April 12, 2023 02:00 ET (06:00 GMT)
Copyright (c) 2023 Dow Jones & Company, Inc.
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