Friday 18 October 2019

Production decreases at Kenmare, but company 'on track' to deliver 2019 guidance

Michael Carvill, managing director of Kenmare Resources
Michael Carvill, managing director of Kenmare Resources
Ellie Donnelly

Ellie Donnelly

Kenmare Resources reported a 27pc decrease in Heavy Mineral Concentrate ("HMC") production year-on-year to 274,700 tonnes in the three months to 30 June.

This was due to a planned mining of lower ore grades, with grades expected to improve in the second half of 2019, according to a trading update from the company.

The group reported an 8pc year-on-year decrease in ilmenite production to 220,100 tonnes, and a 6pc decrease in primary zircon production to 11,000 tonnes due to the lower HMC production.

Mozambique-focused Kenmare said it "on track" to achieve its 2019 guidance on all stated metrics.

Michael Carvill, managing director of the company, said: "Excavated ore volumes continued to increase during quarter two, as the investments we are making to grow our mining capacity are already beginning to deliver."

"Quarter two was the weakest quarter forecasted for 2019 in terms of grade, which resulted in lower HMC production, but consequently higher grades are anticipated for the remainder of the year."

As at 30 June the Irish company had a net cash position of $3.5m (€3.1m), a reduction on the net cash of $13.5m (€12m) at 31 December 2018. This was due to reduced shipments in the first half of this year and development capital spends on the company’s growth projects.

Market conditions for ilmenite continued to improve in the second quarter of 2019, with further price strengthening continuing into the second half of this year, the group said.

The zircon market remained stable in the three months to 30 June, with strong long-term fundamentals, the company added.

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