Kenmare Resources Results Of Dfs For Relocation Of Wet Concentrator Plant B To Pilivili

 
TIDMKMR 
 
 
   Kenmare Resources plc ("Kenmare" or "the Company") 
 
   4 June 2019 
 
   Results of DFS for Relocation of Wet Concentrator Plant B to Pilivili 
 
   Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global 
producers of titanium minerals and zircon, is pleased to announce the 
results of the Definitive Feasibility Study ("DFS") for the relocation 
of its Wet Concentrator Plant ("WCP") B to the Pilivili ore zone at its 
Moma Titanium Minerals Mine (the "Mine" or "Moma") in northern 
Mozambique. 
 
   Overview 
 
 
   -- The project has been approved by the Board, following the completion of 
      the DFS 
 
   -- The DFS confirms the technical and economic feasibility of relocating WCP 
      B to Pilivili, following the completion of the existing mining path at 
      Namalope in Q3 2020 
 
   -- The move of WCP B is the last of three internal growth projects required 
      to increase production to 1.2 million tonnes per annum ("Mtpa") of 
      ilmenite (plus co-products of zircon and rutile) 
 
   -- Pilivili is the highest grade ore zone in Moma's portfolio and is 
      expected to contribute an additional 130,000 tonnes per annum of heavy 
      mineral concentrate ("HMC") production 
 
   -- WCP B will be relocated by specialist contractors on a purpose-built road 
      from Namalope to Pilivili 
 
   -- The key additional infrastructure required to commence production from 
      Pilivili includes a HMC pumping system and power infrastructure, in 
      addition to a 23 kilometre ("km") purpose-built road 
 
   -- The total capital cost estimate for the relocation is US$106 million, 
      including US$15 million contingency, which Kenmare expects to fund from 
      its balance sheet and internally generated cash flow 
 
   -- Approval was received for the Environmental, Social and Health Impact 
      Assessment ("ESHIA") for Pilivili in May 2019 
 
   -- The relocation and re-establishment of WCP B is expected to commence in 
      Q3 2020 for a period of up to 12 weeks -- the commissioning of WCP B at 
      Pilivili is anticipated in Q4 2020 
 
 
   Statement from Michael Carvill, Managing Director: 
 
   "The results of the DFS confirm our plans for relocating WCP B to 
Pilivili. Kenmare is on track to deliver a 20% increase in production at 
Moma on a sustainable basis from 2021 and the move of WCP B to Pilivili 
will be the final step in achieving this goal. Earlier this month we 
received the first of two environmental permits required for the 
relocation and we expect to receive the second in Q3 2019, with the 
construction of the purpose-built road commencing immediately 
thereafter. I look forward to providing further updates on our progress 
with this growth project during the coming 18 months." 
 
   To view Kenmare's latest investor presentation, which includes the 
results of the DFS, please visit: 
https://www.globenewswire.com/Tracker?data=gTCVK9gLH-iSm3tX5-WLeGTrJu41RBICkNrPW5lj9huFKvsLfOdC5tQMIJdiSYf1YMKMB8RjhvzsMoiJ0gqC2jdQMatsstfryn6Yx4tBv8CsQ8e8rGpzfB9-J0ldJx05y9obmROpaBS6mufZeRKRSd--IaWEnfqt84iIqyVM-4gVPqBAAl7a3UZfHtAVdWef67f730O5M9qhUaqhNTKiRg== 
https://www.kenmareresources.com/investors/reports-and-presentations 
 
   An animation outlining the various stages of the move of WCP B from 
Namalope to Pilivili is available at: 
https://www.globenewswire.com/Tracker?data=gTCVK9gLH-iSm3tX5-WLeGTrJu41RBICkNrPW5lj9hv9u1hNY60ARBMFKlcUWsiKCW6vf8c9-VGrc4M5DrwgDuYMZ1u0OmE9rB9JALyEPu2nejs83Wf-y6CPpCZnK2zrvpZCEGQa5UX6I7spgdfYXHABc7MgDB1-AfRvQkQPbCs= 
https://www.kenmareresources.com/media/video-library 
 
   Context for relocation of WCP B 
 
   Kenmare previously announced three development projects that together 
have the objective of increasing production to 1.2 Mtpa of ilmenite 
(plus co-products) on a sustainable basis from 2021. The first 
development project, the 20% capacity expansion of WCP B, was 
commissioned by the end of 2018, on time and at a cost of more than 25% 
below budget. The second development project, the construction of WCP C, 
is well underway, with commissioning scheduled for Q4 2019. The third 
project is the relocation of WCP B to Pilivili, which is planned to be 
completed by the end of 2020. This final project targets increased total 
production by accessing higher grade ore in the Pilivili ore zone. 
 
   WCP B began mining the Namalope ore zone in 2013 and it is expected to 
complete the current mine path in Q3 2020. All ore zones within the Moma 
portfolio were considered for the relocation of WCP B but Pilivili was 
selected due to the favourable combination of higher grades, strong 
co-product credits and free flowing sand with low slimes, enabling ease 
of mining and processing. Additionally, Pilivili is located 23 km from 
Namalope and the existing Mineral Separation Plant ("MSP"), allowing for 
ease of HMC transportation by pipeline. 
 
   The Pilivili ore zone has the highest grades within Moma's portfolio, 
with Mineral Reserves of 220 million tonnes averaging 4.4% Total Heavy 
Mineral ("THM"). The life of mine average grade mined by WCP B at 
Pilivili is expected to be 4.6% THM and in the first four years of 
production the average grade mined is expected to be 5.3% THM. Due to 
these higher grades, production from Pilivili is expected to increase 
overall HMC production by an average of 130,000 tonnes per annum, 
contributing to a total of 1.2 Mtpa of ilmenite production (plus 
co-products) from 2021. Additionally, Pilivili's Mineral Reserves have 
higher zircon and rutile co-product credits than Namalope (with 0.25% 
zircon and 0.08% rutile in ore), which are expected to contribute to 
lower cash operating costs per tonne of ilmenite. 
 
   As a result of the relocation, Kenmare expects production from WCP B to 
be suspended for up to 12 weeks, from the completion of mining at 
Namalope to the start of commissioning at Pilivili. Additional mining 
areas have been identified for WCP B at Namalope to ensure that 
production is maintained, in the event of delays to the project 
execution schedule. 
 
   Pilivili has a mine life of eight years, after which WCP B will mine its 
way to the adjacent ore zones of Mualadi and Nataka. Consequently, 
Kenmare believes that the relocation of WCP B from Namalope to Pilivili 
will be the only move of this kind that is necessary during WCP B's 
economic life. 
 
   The DFS was completed by Hatch Africa (Pty) Ltd, a specialist EPCM 
consulting firm with strong experience in mineral sands, and overseen by 
Kenmare's project development team. It included an independent peer 
review process. 
 
   Transportation of WCP B 
 
   A number of different methods of relocating WCP B to Pilivili were 
considered, including disassembly/reassembly and alternate 
transportation options for the assembled plant by road and/or sea. 
Moving the assembled plant by road has the lowest risk profile, and 
accordingly Kenmare will appoint a specialist heavy lifting and 
transport contractor to relocate WCP B and its dredge by road. 
 
   The contractor will use self-propelled modular transporters ("SPMTs") to 
transport WCP B out of its mining pond at Namalope, along a 
purpose-built road, including a causeway estuary crossing into the new 
mining pond at Pilivili. This is the same method that was used to 
transport the recently completed WCP C dredge in the Netherlands. 
 
   A video showing WCP C being transported on SPMTs and launched into water 
for the first time is available at: 
https://www.kenmareresources.com/media/video-library 
 
   Capital and operating costs 
 
   The total capital cost estimate for the relocation of WCP B to Pilivili 
is US$106 million, including US$15 million contingency. Kenmare intends 
to fund the total capital cost from its balance sheet and internally 
generated cash flow. 
 
   The most significant infrastructure requirement for the relocation of 
WCP B is the construction of the purpose-built road for the 
transportation of WCP B and its dredge. The road will be 23 km in length 
and 66 metres wide, and construction is expected to take approximately 
eight months from Q3 2019. HMC produced at Pilivili will be transported 
to the MSP using a 16 km overland pipeline and positive displacement 
pumping system. Electrical power at Pilivili will be provided by a new 
16 km 110 kV power line adjacent to the purpose-built road, supported by 
a static synchronous compensator to improve reliability. 
 
   Additional annual operating costs of up to US$5 million are expected for 
the WCP B operation at Pilivili, primarily due to the increased cost of 
transporting HMC from Pilivili to the MSP. However these overall 
increased operating costs are expected to be more than off-set by the 
additional production due to the higher grades at Pilivili, which will 
lead to a decrease in unit operating costs. Kenmare is targeting cash 
operating costs per tonne of US$120-130 (in 2018 real terms) from 2021. 
 
 
   Permitting 
 
   Kenmare received approval of the ESHIA for Pilivili from the Ministry of 
Land, Environment and Rural Development in Mozambique in May 2019, in 
line with the project delivery timeline. The Company expects the ESHIA 
for the purpose-built road to be approved in Q3 2019. 
 
   For further information, please contact: 
 
   Kenmare Resources plc 
 
   Michael Carvill, Managing Director 
 
   Tel: [phone] 
 
   Tony McCluskey, Financial Director 
 
   Tel: [phone] 
 
   Jeremy Dibb, Corporate Development and Investor Relations Manager 
 
   Tel: [phone] 
 
   Mob: + 353 87 943 0367 
 
   Murray 
 
   Joe Heron 
 
   Tel: [phone] 
 
   Mob: [phone] 
 
   Buchanan 
 
   Bobby Morse / Chris Judd 
 
   Tel: [phone] 
 
   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. 
 
   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

June 04, 2019 02:00 ET (06:00 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.