Kenmare Resources - Interim Results

RNS No 8027q
KENMARE RESOURCES PLC
8 October 1999



KENMARE RESOURCES PLC ("Kenmare")
Interim Results for the Six Months Ended 30 June, 1999


MOMA-CONGOLONE TITANIUM PROJECT
Kenmare has now taken over all the assets owned by the BHP Joint Venture;
these included circa $400,000 worth of field vehicles, trucks, laboratory
equipment, camp equipment, etc. This has allowed us to smoothly take over the
operation of the project.  BHP's chief field geologist is now working for
Kenmare in the same capacity and their laboratory manager is now running our
analytical laboratory. Drilling was restarted 3 weeks after we took over
control of the assets.  The licences have been formally handed back from the
JV to Kenmare.

We are concentrating on drilling a high-grade zone which the BHP field team
discovered immediately prior to their departure.  Our drilling in this zone is
continuing and has demonstrated to date a resource containing 3 million tonnes
of ilmenite at 7% Total Heavy Minerals.  This grade is twice the grade of the
main deposit in Moma, known as Namalope.  While there is already sufficient
mineral to justify a 30-year mine at Namalope, the presence of a high-grade
zone has a significant effect on the economics. 

We are in discussion with interested parties concerning an entry into the
project and are hopeful of a positive outcome.


ANCUABE GRAPHITE MINE
Superior Graphite Inc. has been the distributor of the graphite products from
the Ancuabe Graphite mine for 5 years.  Last year they injected $1.2 million
into the project, in addition to the provision of working capital.  However,
this year they have been experiencing problems in their core businesses and
have reviewed their involvement in the natural flake graphite market.  As a
consequence of this review, they informed us recently that they would be
terminating their European distribution contract and withdrawing the provision
of working capital to the project. Negotiations with Superior have not been
successful in getting them to alter their programme.

While GDAS is now capable of performing its own distribution function, the
withdrawal of working capital leaves the project with a requirement for circa
$2.0 million to fund ongoing operations. The Government which is an equity
partner in the project, has been informed of the situation and is considering
providing the required capital.  In the meantime, it is necessary to put the
plant on a care and maintenance basis.  It is not yet possible to quantify the
effect, but this development may have an impact on the Group Balance Sheet.

Before we received the news from Superior, Kenmare, working with the European
Investment Bank, was well advanced in the preparations for a possible
expansion of the production facility, as customer demand remains strong. 
However this cannot be considered without the prior injection of the necessary
working capital. 


EXPLORATION
The recent increase in the price of gold has had a positive effect on our gold
exploration properties.  We have experienced a direct increase in the interest
of potential joint venture partners with one major mining company already
signing a confidentiality agreement. 

 
CORPORATE
Our unaudited Profit and Loss Account for the six months ending 30th June 1999
is set out as part of this statement.  The increased output from the graphite
project resulted in an increase in turnover.  However, as a result of the BHP
withdrawal, no fee was paid to Kenmare during 1999 in respect of the Mineral
Sands Joint Venture Agreement.  This contributed to the increased loss for the
period.

Charles Carvill
Chairman

INTERIM REPORT

The Group's unaudited Consolidated Profit & Loss Account
for the six months ended 30th June 1999 is as follows :



                                                  6 months to      6 months to
                                                   30 June 99       30 June 98
                                                          IR#              IR#

Turnover                                           1,429,920        1,076,028
                                                ------------------------------

Loss before Taxation                              (1,037,313)        (888,854)

Taxation                                                   -                -
                                                ------------------------------

Loss Attributable to the Group                    (1,037,313)        (888,854)

                                                ==============================

Loss per Share                                        (0.95p)          (0.81p)

                                                ==============================


The Interim Statement is posted to all shareholders and is available for
inspection at Chatham House, Chatham Street, Dublin 2, Ireland.



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