Kenmare Resources plc, one of the leading global producers of titanium minerals and zircon, which operates the Moma Titanium Minerals Mine in northern Mozambique, today announces its half year results for the six month period ended 30 June 2017.
Managing Director, Michael Carvill prefaced these results by saying: “Kenmare has produced a record 1 mil/t of ilmenite in the twelve months to June 2017, whilst improving safety standards, and remains on target for 2017 production guidance. We have also produced record levels of zircon and are capturing more of it in higher quality products. Increased shipments, higher average received prices, and lower unit costs have resulted in H1 EBITDA increasing to US$29.8 million. We look forward to building on these achievements.”
“In relation to our medium-term objective of optimising mining capacity, several development options are under assessment some of which may significantly reduce or defer previously guided capex, whilst optimizing production volumes. Capital investment decisions will be made in the context of market conditions and maintaining balance sheet strength.”
In overview, 1H17 has seen Ilmenite production increased 25% to 504 800 t compared to 1H16, likewise zircon production has increased 32% to 37 700 t. Total shipments of finished products in 2017 increased 21% to 535,700 t, which lead revenues to increase 82% to US$102.4 million. Operating costs declined 14% in to US$131 per t, due to higher production and continued cost control. Meanwhile the current EBITDA of US$29.8 million, compared with negative US$10.7 million in 2016, shows a US$40.5 million positive change. Profits increased to US$9.4 million in 2017, from a US$47.1 million loss in H116, a US$56.5 million positive change. The ilmenite price recovery continued in H117 but with some recent softening in the Chinese market.
Production and cost improvements achieved in 2016 have continued in H117 and the Company remains on track to deliver guided production for 2017. In relation to our medium-term objective of optimising mining capacity, several development options are under assessment some of which may significantly reduce or defer previously guided potential capital expenditure, whilst optimising production volumes. Capital investment decisions will be made in the context of market conditions and maintaining balance sheet strength.
The ilmenite market improvements seen in the H216 have continued in the H117 but with some recent softening of ilmenite prices in China. Kenmare’s supply-demand analysis forecasts growing feedstock deficits globally in the coming years, as inventory levels normalise. The zircon market has strengthened in the first half of 2017. This is expected to continue in the second half of the year as demand recovers and inventories reduce.
Read the article online at: https://www.globalminingreview.com/finance-business/24082017/kenmore-resources-plc-releases-new-half-yearly-results-for-2017/