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KMR Kenmare Resources Plc

326.50
12.50 (3.98%)
28 Mar 2024 - Closed
Delayed by 15 minutes
Share Name Share Symbol Market Type Share ISIN Share Description
Kenmare Resources Plc LSE:KMR London Ordinary Share IE00BDC5DG00 ORD EUR0.001 (CDI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  12.50 3.98% 326.50 326.50 329.50 329.50 310.50 310.50 240,209 16:35:26
Industry Sector Turnover Profit EPS - Basic PE Ratio Market Cap
0 0 N/A 0

Kenmare Resources Q3 2017 Production Report

11/10/2017 7:00am

UK Regulatory


 
TIDMKMR 
 
 
   Kenmare Resources plc ("Kenmare" or "the Company") 
 
   11 October 2017 
 
 
 
   Q3 2017 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 third quarter ending 30 
September 2017 ("Q3 2017"). 
 
   Statement from Michael Carvill, Managing Director: 
 
   "Q3 2017 represented another record quarter for Kenmare's ilmenite 
production, keeping the Company on track for the highest ever annual 
production, which will be within the guidance range. In the product 
market, Chinese demand for ilmenite is improving again, following a 
slower period in the last couple of months. The zircon market has 
performed strongly, with further price increases in H2 2017." 
 
   Overview 
 
 
   -- Production of total finished products was 277,800 tonnes in Q3 2017 (Q3 
      2016: 265,700). 
 
   -- Ore mined in Q3 2017 increased 9% to 7,788,000 tonnes, compared to the 
      equivalent period in the prior year (Q3 2016: 7,160,800 tonnes). 
 
   -- Production of Heavy Mineral Concentrate ("HMC") in Q3 2017 declined 16% 
      to 272,600 tonnes (Q3 2016: 325,100 tonnes), due to guided lower grades 
      and more challenging mining conditions, which are expected to improve in 
      Q4 2017. 
 
   -- Ilmenite production in Q3 2017 was 257,500 tonnes, up 6% on the prior 
      year period (Q3 2016: 243,500 tonnes) and on track for record annual 
      production. Q4 2017 ilmenite production will be closely related to HMC 
      volumes produced as stockpiles were substantially drawn down in Q3 2017, 
      in line with expectations. 
 
   -- Zircon production in Q3 2017, decreased 8% to 18,100 tonnes (Q3 2016: 
      19,700 tonnes), due to an increase of intermediate zircon stocks, as 
      ongoing circuit modifications progressed. 
 
   -- Total shipments of finished products in Q3 2017 decreased 26% to 208,400 
      tonnes (Q3 2016: 280,800 tonnes), in line with previous guidance, due to 
      planned maintenance of the primary transhipment vessel. 
 
   -- China spot ilmenite prices have begun to strengthen, following a weaker 
      period in recent months, while zircon prices continue to improve 
      strongly. 
 
 
   Production 
 
   Production and shipments from the Moma Mine for Q3 2017 was as follows: 
 
 
 
 
                       Q3-2017    Q3-2016    Variance   Q2-2017   Variance 
                       tonnes      tonnes       %       tonnes       % 
Excavated Ore *       7,788,000   7,160,800        9%  8,976,000      -13% 
Grade*                    4.15%       4.81%      -14%      4.46%       -7% 
Production 
 HMC                    272,600     325,100      -16%    359,200      -24% 
 Ilmenite               257,500     243,500        6%    248,300        4% 
 Zircon                  18,100      19,700       -8%     19,200       -6% 
 of which primary        12,000      12,300       -2%     12,900       -7% 
 of which secondary       6,100       7,400      -18%      6,300       -3% 
 Rutile                   2,200       2,500      -12%      2,300       -4% 
Shipments               208,400     280,800      -26%    279,600      -25% 
 
 
 
 
   * Excavated Ore and grade are prior to any floor losses. 
 
   During Q3 2017, Kenmare mined 7,788,000 tonnes of ore at an average 
grade of 4.15% and produced 272,600 tonnes of HMC. Finished product 
volumes for the period included 257,500 tonnes of ilmenite and 18,100 
tonnes of zircon (including 6,100 tonnes of lower grade secondary 
zircon). 
 
   Ore mined in Q3 2017 was 7,788,000 tonnes, an improvement of 9% versus 
Q3 2016 (Q3 2016: 7,160,800 tonnes). The volume of ore mined declined 
13% when compared to the previous quarter, due to more challenging 
dredge mining conditions. Mining conditions are expected to improve in 
Q4 2017, enabling higher tonnages of ore to be processed. 
 
   HMC production declined 16% to 272,600 tonnes in Q3 2017 compared with 
325,100 tonnes in Q3 2016, principally as a result of the decline in 
grade and higher slimes levels affecting recoveries. It is expected that 
grades will increase modestly in Q4, increasing HMC production for the 
final quarter, when combined with expected higher tonnes mined. 
 
   Production of ilmenite was 257,500 tonnes in Q3 2017, a new quarterly 
record, up 6% over the prior year period (Q3 2016: 243,500 tonnes). 
Production of ilmenite is on track for record annual production, within 
the guided range. However, in Q4 2017 ilmenite production will be 
closely related to HMC production volumes as HMC and intermediate 
stockpiles were substantially drawn down in Q3 2017, as expected. 
 
   Zircon production declined 8% to 18,100 tonnes in Q3 2017, compared with 
19,700 tonnes in Q3 2016. Of this, primary zircon production declined 2% 
to 12,000 tonnes (Q3 2016: 12,300 tonnes). Secondary zircon volumes were 
6,100 tonnes, down 18% (Q3 2016: 7,400 tonnes). Production was affected 
by a modification to the zircon circuit in Q3 2017, which while 
increasing overall recoveries to higher revenue products, has built a 
stockpile of intermediate zircon which will be processed following 
further circuit upgrades in Q4 2017. Intermediate zircon stockpiles are 
expected to persist beyond the year end, reducing zircon production to 
the lower half of the guidance range, particularly affecting secondary 
zircon volumes. 
 
   Shipment volumes in Q3 2017 were 208,400 tonnes, 26% lower than Q3 2016 
and 25% lower when compared with Q2 2017 (Q3 2016: 280,800 tonnes, Q2 
2017: 279,600 tonnes). As previously guided, Q3 2017 shipments were 
negatively impacted by reduced ship loading capacity, as the main 
transhipment barge underwent its five-yearly classification renewal in 
South Africa. Shipments were further impacted by extended periods of 
adverse weather during the quarter. Both transhipment vessels returned 
to full service in September, with high loading rates achieved and 
expectations of Q4 2017 shipments being the highest of the year. Sales 
in Q3 2017 comprised 197,000 tonnes of ilmenite, 9,300 tonnes of zircon 
and 2,100 of rutile. Closing stock of finished products at 30 September 
2017 was 271,400 tonnes (30 June 2017: 202,500 tonnes), of which 19,200 
tonnes were being held for a customer and which have been paid for. 
 
   Wet Concentrator Plant B ("WCP B") Upgrade 
 
   Following the completion of a Definitive Feasibility Study by Hatch 
Engineering, Kenmare is proceeding with a 20% upgrade of WCP B (from 
2,000 to 2,400 tonnes per hour). The upgrade will be delivered in phases 
through 2018 and is expected to cost up to US$16 million. The additional 
capacity will help to offset declining ore grades from the Namalope 
orebody in the coming years and is required to maintain average 
production of 1 million tonnes per annum of ilmenite until the end of 
2019. 
 
   Market 
 
   Following strong purchasing in H1 2017, sulphate ilmenite offtake in 
China softened over the summer months as seasonal pigment demand slowed 
and ilmenite inventories were drawn down. The pigment market improved in 
September and Chinese domestic ilmenite prices increased with tighter 
domestic supply. However, stricter enforcement of environmental 
regulations continues to create uncertainty regarding pigment plant 
operating rates for a number of producers. Outside of China, Q3 2017 
demand for ilmenite was solid as high pigment plant operating rates were 
maintained to meet strong market demand. 
 
   Zircon market conditions continued to improve in Q3 due to more 
favourable supply/demand dynamics, leading to further upward pricing 
pressure. This has continued into Q4 with further significant price 
increases implemented. 
 
   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

October 11, 2017 02:00 ET (06:00 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.

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