Q3 2021 Production Report
Kenmare Resources
plc (“Kenmare” or “the Company” or “the Group”)
14 October 2021
Q3
2021 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
quarter ending 30 September 2021 (“Q3 2021”).
Statement from Michael Carvill, Managing
Director:
“Q3 2021 represents the first quarter of
ilmenite production at nameplate capacity of 1.2 million tonnes per
annum, an 87% increase on the production achieved in Q3 2020.
Despite expected lower grades in Q4, we remain confident in the
outlook for 2021 annual production and re-iterate our guidance of
1.1-1.2 million tonnes of ilmenite.
Whilst we continue to remain vigilant against
the threats posed by COVID-19, I am pleased to report that over 90%
of our employees have now received two doses of vaccine. I’m also
delighted to report that this quarter’s record production was
achieved with no Lost Time Injuries (LTIs) and, in the past few
days, we’ve achieved a new company record of 5 million man hours
worked without an LTI.
Market conditions for all products remained
strong in Q3 2021 with pricing strengthening quarter on quarter, a
robust order book in place and positive outlook across
markets.”
Q3
2021
overview
- Improved Lost time injury frequency
rate (“LTIFR”) of 0.08 per 200,000 hours worked to 30 September
2021 (30 September 2020: 0.29), zero lost time injuries recorded
during the quarter
- More than 90% of Mine employees
have now received two doses of COVID-19 vaccine
- Heavy Mineral Concentrate (“HMC”)
production of 413,400 tonnes in Q3 2021, a 60% increase compared to
Q3 2020, in line with expectations
- Ilmenite production of 314,400
tonnes in Q3 2021, an 87% increase compared to Q3 2020, the first
full quarter’s production at nameplate capacity of 1.2 million
tonnes per annum of ilmenite, setting a new record
- Primary zircon production of 15,700
tonnes, representing a 44% increase compared to Q3 2020,
benefitting from increased HMC production
- Total shipments of finished
products of 322,600 tonnes, a 173% increase compared to Q3
2020
- Guidance for 2021 reiterated at
1.1-1.2 million tonnes of ilmenite, plus associated
by-prodcuts
- Demand for Kenmare’s products
remained robust in Q3 2021, supporting strong sales volumes and
further price increases
Operations
update
Operational results for the Moma Mine in Q3 2021
were as follows:
|
Q3 2021 |
Q3 2020 |
|
Q2 2021 |
|
tonnes |
tonnes |
% variance |
tonnes |
% variance |
Excavated ore1 |
10,084,000 |
8,333,000 |
21% |
10,938,000 |
-8% |
Grade1 |
4.83% |
3.58% |
35% |
4.70% |
3% |
Production |
|
|
|
|
|
HMC production |
413,400 |
258,000 |
60% |
436,600 |
-5% |
HMC consumption |
426,800 |
260,400 |
64% |
423,200 |
1% |
Ilmenite |
314,400 |
167,900 |
87% |
283,900 |
11% |
Primary zircon |
15,700 |
10,900 |
44% |
14,900 |
5% |
Rutile |
2,700 |
1,600 |
69% |
2,200 |
23% |
Concentrates2 |
11,900 |
9,000 |
32% |
11,800 |
1% |
Shipments |
322,600 |
118,000 |
173% |
249,600 |
29% |
- Excavated ore and grade prior to
any floor losses.
- Concentrates include secondary
zircon and mineral sands concentrate.
Kenmare’s rolling 12 month lost time injury
frequency rate (LTIFR) for the 12 months to 30 September 2021 was
0.08 per 200,000 man-hours worked (30 September 2020: 0.29), with
no LTIs recorded in Q3 2021. 4.9 million LTI free hours worked
completed by the end of Q3 2021.
HMC production was 413,400 tonnes in Q3 2021, a
60% increase compared to Q3 2020 (258,000 tonnes) due primarily to
a combination of higher tonnes of ore excavated due to a full
period of WCP B mining in this period and higher grades. Ore grades
in Q3 2021 were 4.83%, up 35% on Q3 2020 (3.58%) as a result of WCP
B mining in the Pilivili zone. As previously announced, grades are
expected to fall to ~3.8% in Q4 2021, before normalising at around
4.1% for 2022.
Production of all finished products increased
substantially in Q3 2021 compared to Q3 2020. This was due to a 64%
increase in HMC consumption, benefitting from higher HMC
availability. Ilmenite production was 314,400 tonnes, representing
an 87% increase compared to Q3 2020 (167,900 tonnes), higher than
the increase in HMC consumption, benefitting from increased
ilmenite content in the HMC and improved recoveries relative to Q3
2020.
Primary zircon production was 15,700 tonnes,
representing a 44% increase compared to Q3 2020 (10,900 tonnes),
lower than the increased HMC consumption, due to lower zircon
contained in the HMC (particularly at WCP B) and a temporary
increase in intermediate stockpiles. Rutile production was 2,700
tonnes, a 69% increase (Q3 2020: 1,600 tonnes) as the recovery
improvement programme delivered positive results. Concentrates
production was 11,900 tonnes, a 32% increase compared to Q3 2020
(9,000 tonnes), reflecting a temporary increase in secondary zircon
intermediate stock.
Kenmare shipped 322,600 tonnes of finished
products during the quarter, which represents a 173% increase
compared to Q3 2020 (118,000 tonnes), as steady shipments were made
through the period. This comprised 283,400 tonnes of ilmenite,
18,800 tonnes of primary zircon, 3,600 tonnes of rutile and 16,800
tonnes of concentrates.
Closing stock of HMC at the end of Q3 2021 was
21,000 tonnes, compared with 34,300 tonnes at the end of Q2 2021.
Closing stock of finished products at the end of Q3 2021 was
186,300 tonnes, compared to 164,100 tonnes at the end of Q2
2021.
Capital projects update
The ramp up of the HMC pumping system from
Pilivili has continued to progress. Less road haulage was required
in the quarter and is now being wound down. The overall forecast
capital cost for the WCP B project remains in line with prior
guidance of US$127 million.
The Rotary Uninteruptible Power Supply (RUPS)
project has moved into the execution phase with civil engineering
and building construction underway. Fabrication of the RUPS units
is complete and transportation to site is underway. The project is
expected to be completed in Q1 2022.
Work on the Nataka Prefeasibility Study (PFS)
continues. Detailed orebody investigations are progressing well
with a view to optimally mining with WCP A at Nataka from 2025. It
is expected that the PFS will be finalised in 2022.
Market update
Demand for Kenmare’s products remained robust in
Q3 2021, supporting strong sales volumes and further price
increases.
The recovery in the downstream titanium markets
continued, supporting high utilisations at pigment plants globally
and strong demand from titanium metal producers. In 2021, despite
an increase in the supply of ilmenite from mines in China and
concentrate products from Mozambique, the market has continued to
be tight. Positive momentum continued in Q3 2021, as demand for
ilmenite product to upgrade into high-grade feedstocks continued to
grow strongly in China.
The outlook for Q4 2021 remains positive, with a
strong order book in place. The Company continues to monitor the
impact of power disruption to downstream industries in China, and
the potential effect on demand related to the uncertainty in the
Chinese real estate market. However, demand remains strong from our
customers in China, and elsewhere, into Q4 and global feedstock
inventories remain at low levels.
Demand for zircon improved in Q3 2021, as major
economies continued the recovery from COVID-19 restrictions being
lifted. Demand from the ceramics and foundry industries has
recovered particularly quickly. In China, Kenmare’s zircon
concentrate benefited from a tight spot market. Coupled with supply
disruptions, the strong demand has resulted in an undersupplied
market and prices for zircon are expected to increase again in Q4
following increases in Q2 and Q3.
For further information, please contact:
Kenmare Resources plcJeremy DibbInvestor
Relationsir@kenmareresources.com Tel: +353 1 671 0411Mob: + 353 87
943 0367 / + 353 87 663 0875
Murray (PR advisor)Joe Heron Tel: +353 1 498
0300Mob: +353 87 690 9735
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 5% 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.
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