2023 Preliminary Results
Kenmare Resources plc
(“Kenmare” or “the Company” or “the Group”)
20 March 2024
2023 PRELIMINARY RESULTS
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, today announces its preliminary results for
the twelve months to 31 December 2023.
Statement from Michael Carvill, Managing
Director:
“In 2023, Kenmare delivered $220 million of
EBITDA, the second strongest in its history and representing a 50%
EBITDA margin. The Board is proposing a full year dividend of
USc56.04 per share for 2023, up 3% on 2022, and bringing
shareholder returns to over $250 million since 2019.
This sound financial performance was
delivered against a backdrop of operational challenges and a weaker
product market. With 2024 well underway, Kenmare is on track to
achieve its annual production guidance, although production is
still expected to be second half weighted. The markets for our
products have been stronger than anticipated in 2024 to date,
driven by improving demand for titanium pigment.
As previously announced, I will be stepping
down as MD later this year. I am very proud of what Kenmare has
achieved over the past 38 years and I am confident that the Company
will continue to create value for all stakeholders.”
2023 overview
Financial
- Recommended 2023 dividend of $50.0
million or USc56.04 per share, a 3% increase compared to 2022
(USc54.31), comprising an interim dividend of USc17.50 per share
(paid in October 2023) and a final dividend of USc38.54 per share
(payable in May 2024)
- Mineral product revenue of $437.1
million, a 12% decrease compared to 2022 ($498.3 million), driven
by a 10% lower average price received for Kenmare’s products, due
to weaker markets and a 3% reduction in shipments
- Total cash operating costs of
$228.1 million, up 4% on 2022 ($218.7 million), due to increased
heavy mobile equipment rental, higher fuel costs, and costs
associated with a severe lightning strike in Q1 2023
- Cash operating costs per tonne of
$209, a 15% increase compared to 2022 ($182 per tonne), due to
higher total cash operating costs and a 9% decrease in production
of finished products
- EBITDA of $220.3 million,
representing a strong EBITDA margin of 50% (2022: 60%), despite
weaker product pricing driving a 26% decrease on 2022 ($298.0
million)
- Profit after tax of $131.0 million,
down 36% on 2022 ($206.0 million)
- Diluted earnings per share of $1.37
per share, a 35% decrease on 2022 ($2.12 per share)
- Net cash of $20.7 million at
year-end 2023 (2022: $25.7 million), with cash and cash equivalents
of $71.0 million (2022: $108.3 million)
- Share buy-back of 5.9% of Kenmare’s
issued share capital for £23.6 million ($30.0 million) completed in
September 2023
- Post-period end, new debt
facilities agreed for a $200 million Revolving Credit Facility to
enhance financial flexibility and support Kenmare’s planned capital
programmes
Operational and corporate
- As announced on 15 March 2024,
Managing Director Michael Carvill will step down from his executive
role and Board position later this year – the Nomination Committee
has commenced a process to find his successor
- Strong safety performance achieved
in Q4 2023 has continued in Q1 2024, with the milestone of three
million hours without a Lost Time Injury (“LTI”) passed in late
February
- Heavy Mineral Concentrate (“HMC”)
production of 1,448,300 tonnes in 2023, a 9% decrease compared to
2022 (1,586,200 tonnes), due to lower ore grades and mining rates
impacted by power interruptions and a severe lightning strike in Q1
2023
- Ilmenite production of 986,300
tonnes in 2023, a 9% decrease on 2022 (1,088,300 tonnes), broadly
in line with a 9% reduction in HMC processed
- Shipments of finished products of
1,045,200 tonnes in 2023, a 3% decrease on 2022 (1,075,600 tonnes),
due to weaker product markets and poor weather conditions in Q4
2023
- Ilmenite production guidance for
2024 is 950,000 to 1,050,000 tonnes
- Production in 2024 will be second
half weighted, with Q1 2024 production expected to be in line with
Q1 2023 – material uplift in production expected in Q2 2024.
Dividend timetable
Kenmare confirms the dates for the proposed 2023
final dividend are as follows:
Ex-dividend date |
11 April 2024 |
Record date |
12 April 2024 |
Currency election date |
16 April 2024 at 12:00 noon (IST) |
AGM date for shareholder approval |
10 May 2024 |
Payment date |
17 May 2024 |
Irish Dividend Withholding Tax (25%) must be
deducted from dividends paid by the Company, unless a shareholder
is entitled to an exemption and has submitted a properly completed
exemption form to Kenmare’s Registrar.
Analyst and investor conference call and
webcast
Kenmare will host a conference call and webcast
for analysts, institutional investors, lenders and media today at
09:00 UK time. Participant dial-in numbers for the conference call
are as follows (a pin code is not required to access the call):
UK: |
+44 20 3481 4247 |
Ireland: |
+353 1 582 2023 |
US: |
+1 (646) 307 1963 |
Conference ID: |
9962365 |
To register for the webcast click here. A
playback of the webcast will be available at
www.kenmareresources.com.
Private investor webinar
There will also be a separate webinar for
private investors on 26 March 2024 at 12:30pm UK time. To access
the webinar, please register in advance by clicking here.
For further information, please contact:
Kenmare Resources plc
Jeremy Dibb / Katharine Sutton / Michael Starke
Investor Relations
ir@kenmareresources.com
Tel: + 353 1 671 0411
Mob: + 353 87 943 0367 / + 353 87 663 0875
Murray Group (PR advisor)
Paul O’Kane
pokane@murraygroup.ie
Tel: + 353 1 498 0300
Mob: + 353 86 609 0221
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.
All monetary amounts refer to United States
dollars unless otherwise indicated.
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.
CHAIRMAN’S STATEMENT
Dear shareholders,
Introduction
Kenmare faced a number of challenges in 2023,
both internal and external. For some of these challenges, such as a
weaker product market, the resilience we have built into the
Company over the past few years has enabled us to continue to
operate profitably. For others, such as the severe lightning strike
close to the Moma Mine in February, we have since built in
additional protective measures to minimise future interruptions to
production. I am proud that, against this backdrop, we delivered
another year of robust financial results and strong shareholder
distributions.
In 2024, we are embarking on a capital programme
to unlock the value from the Nataka ore zone, which
represents over 70% of Moma’s Mineral Resources. I am
confident that we have the skills and experience to navigate the
challenges that come with large projects: we have strong
relationships with our partners in Mozambique, our customers, and
other stakeholders, supported by a team with 17 years of
operational experience and more than 30 years in country.
I would like to recognise Michael Carvill’s role
in developing the Company to this point and in preparing the way
for the Nataka development. The Moma deposit was developed and
Kenmare exists only because of Michael’s focus, determination, and
ability to build enduring relationships. I am very grateful to him
for agreeing to continue to provide the Company with his insights
as a senior advisor on the Nataka transition and our relationship
with the Government of Mozambique.
Transition to Nataka
In 2023, we completed a Definitive Feasibility
Study (“DFS”) for the main elements of the upgrade of Wet
Concentrator Plant (“WCP”) A and its transition to Nataka. Nataka
is the largest ore zone within Moma’s portfolio and WCP A is
expected to mine there for the remainder of its economic life. Our
detailed studies have confirmed the optimal method to mine Nataka
and upgrade the mining plant, with the objective of retaining our
first quartile position on the industry revenue to cost curve.
The capital cost for the Nataka transition to
the end of 2027 is estimated to be up to $341 million. This
includes costs for additional WCP A infrastructure, with the DFS
for this work due to be completed in Q2 2024. Your Directors are
very conscious that this represents a significant increase to the
cost estimates announced following the Pre-Feasibility Study
(“PFS”) and the Board and executive team are focused on detailed
oversight and effective delivery of the project, supporting
successful mining in the new orebody for many years to come.
In order to maintain maximum financial
flexibility during this short period of increased capital spend,
the Board took the decision in late 2023 to defer the upgrade of
WCP B. While we continue to study ways of enhancing production at
WCP B, which is likely to represent an attractive investment, in
the short-term we are prioritising the WCP A investment.
Delivering value for our
shareholders
During the year, I was pleased to get the
opportunity to meet with a number of Kenmare’s shareholders as it
is vital for the Board and management to understand their
perspectives, priorities and concerns. In early 2024, we undertook
an investor perception study to allow a wider group of existing
shareholders, potential investors and sell-side analysts to share
their views on all aspects of the Company. One of the key pieces of
feedback was the importance of maintaining a sound balance sheet,
particularly while undertaking the Nataka transition. My fellow
Directors and I will continue to foster open dialogue with our
shareholders and we remain focused on maximising shareholder
value.
The Board is recommending a final dividend of
USc38.54 per share (2022: USc43.33). This amounts to a total
dividend in respect of 2023 of USc56.04 per share, up 3% (2022:
USc54.31). We also completed a second share buy-back in September
2023, when Kenmare repurchased 5.9% of its issued share capital for
a total consideration of $30.0 million. Including the 2023
dividend, over $250 million will have been returned to shareholders
through a combination of dividends and share buy-backs since
2019.
The majority of the capital investment to
support the Nataka transition will be incurred in 2024 and 2025. We
recently announced a new $200 million debt facility with our
lenders, which is an important element of our capital structure and
financial planning. To the extent possible during this period, we
will aim to pay dividends towards the top of our stated payout
range of 20-40% of underlying Profit After Tax. However, additional
shareholder returns will need to be balanced with a requirement to
maintain a strong balance sheet to fund the programme.
Sustainability
Sustainability has always been central to
Kenmare and from speaking to employees at Moma, I know it is one of
the areas of our business that inspires the most passion and pride
in our workforce. I am encouraged to see a return to strong safety
performance, with no Lost Time Injuries in Q4 and three million
hours worked without a Lost Time Injury achieved by late February
2024. The health, safety and wellbeing of our team at the Moma Mine
remain our top priorities.
Female representation in Kenmare’s workforce
increased again in 2023 – by the end of the year, 16% of Mine
employees were women, up from 14.5% in 2022. This represents a
fourfold increase over the last eight years, and we are making good
progress towards our target of 20% by the end of 2025. Importantly,
an even higher proportion of the senior management at the Mine is
female (40% compared to 25% in 2022) and we are pleased to see
their positive impact being delivered through improved leadership
and collaboration.
Turning to the environment, we take seriously
our responsibility to maintain biodiversity at the Moma Mine. In
June 2023, our Sustainability Committee participated in a strategic
discussion centred on the conservation goals of both the Global
Biodiversity Framework and the Mozambican Government. Work is
underway on our strategies for “No Net Loss” and “15% Net Gain”,
which will be delivered through Moma’s Biodiversity Offset
Management Plan.
Executive and Board
development
As Michael Carvill is stepping down later this
year, Kenmare’s Nomination Committee has initiated a process to
find Michael’s successor and will consider both internal and
external candidates. Michael will step down ahead of the Company’s
2024 Interim Results.
As I mentioned in my last statement, we were
delighted to welcome Issa Al Balushi to the Board in early 2023. He
became a Director in January as the Board nominee of our largest
investor, the Oman Investment Authority.
We are committed to increasing female
representation on Kenmare’s Board and, following a review by the
Nomination Committee, we have initiated a search for an additional
female Non-Executive Director. This will be co-ordinated with the
search for a new Managing Director in order to ensure that the
Board has the appropriate mix of skills. It is also our intention
to appoint one of our female Directors as Senior Independent
Director when Graham Martin retires next year. This will allow us
to benefit from increased diversity, whilst also meeting Listing
Rules for female Directors and their roles in senior Board
positions. Following this, women will represent at least 40% of
Kenmare’s Board.
During the year, I conducted an internal Board
performance review. Similarly to 2022, the review indicated a high
level of satisfaction and found that there is good communication
both within the Board and its Committees, and with management.
However, there is always room for improvement, and we have
identified a number of focus areas to improve Board effectiveness
in 2024. These include strengthening the processes by which the
Board oversees budgeting and capital allocation planning, and how
we evaluate internal and external investment opportunities.
Outlook
2023 was a year of on-going global volatility:
the Chinese economy slowed, and major conflicts erupted or
continued in several parts of the world. The potential for
instability is likely to extend into 2024, with both the USA and
Russia holding elections during the year, in addition to
approximately 70 other countries, including Mozambique.
However, despite the prospect of on-going
macroeconomic uncertainty, Kenmare continues to occupy a
market-leading position: we produce products that the world needs,
we can operate profitably throughout the commodity price cycle, and
the Nataka transition will ensure this continues for future
generations.
Nevertheless, we recognise there is a lot of
work to be done, including continuing to strengthen our safety
culture, improving the consistency of our operational performance,
and ensuring we capture strategic opportunities whenever value can
be created for all of our stakeholders. We recognise that Kenmare’s
share price has experienced significant weakness during the past
year, and we are focused on delivery in order to improve our
valuation in 2024 and beyond.
Acknowledgements
On behalf of the Board, I would like to thank
Michael Carvill for his outstanding commitment and service to
Kenmare over almost forty years. Having worked with him personally
for 25 years, I have seen first-hand his dedication to the highest
personal and corporate values in every facet of our operations, the
inspirational quality of his leadership, and the beneficial impact
of his commitment to the communities in which we work. We are very
grateful for Michael’s tremendous contribution to Kenmare and he
has our very best wishes for the future.
We appreciate the support of everyone who has
contributed to the Company over the past year, and I’d like to
finish by thanking my colleagues on the Board, Kenmare’s employees,
our host communities, shareholders, and other valued
stakeholders.
Andrew Webb
CHAIRMAN
MANAGING DIRECTOR’S
STATEMENT
Dear shareholders,
Introduction
In March 2024, I announced that I will be
stepping down as Managing Director later this year. Subject to my
re-election at our Annual General Meeting in May, I will continue
in my executive role and on Kenmare’s Board until the Interim
Results in mid-August, and in a consultancy capacity until at least
the end of 2024. The 38 years I will have served as Managing
Director have been both fascinating and rewarding, and each year
has brought its own challenges and achievements.
Looking back on 2023 in particular, we advanced
a number of major projects, critical for the long-term success of
the business. Preparations began for the transition of WCP A to
Nataka, which will secure production for decades to come. The
refinancing of our debt facilities, which we announced in early
2024, enhanced our financial flexibility and will allow us to
maintain shareholder distributions, while funding our capital
requirements. The contract was also signed for the construction of
a new district hospital by the Kenmare Moma Development Association
(“KMAD”), which will substantially improve the healthcare provision
for communities living close to the Moma Mine.
However, 2023 also presented a number of
operational challenges, principally an unusually severe lightning
strike, that led to a downward revision of our ilmenite production
guidance for the year. I am proud that, despite these issues and
weaker product markets, we delivered a robust financial
performance, with the second strongest EBITDA in Kenmare’s history
and representing a 50% EBITDA margin. We also maintained a net cash
position at year-end. The Board is recommending a dividend per
share of USc56.04 in respect of 2023, up 3% on 2022, and
benefitting from Kenmare’s reduced issued share capital following
our second share buy-back in 2023.
Safety
In late February 2024, we passed the milestone
of three million hours worked without a LTI, which is a credit to
our team at Moma. This built on our strong safety performance in Q4
2023, when we achieved zero LTIs.
While this was encouraging, our Lost Time Injury
Frequency Rate for the 12 months to 31 December 2023 increased
to 0.15 incidents per 200,000 hours worked, due to the five LTIs
earlier in the year, compared to 0.09 in 2022. As part of our
focus on reversing this negative trend, we strengthened our safety
leadership with the appointment of a new Health & Safety
Manager, Babra Mudzanapabwe. She is managing the implementation of
additional training and new safety protocols, including “safety-led
down times”, to reinforce that safety must always be prioritised
above production.
For an eighth consecutive year, Moma retained
its maximum five-star rating by the National Occupational Safety
Association (NOSA).
Operational performance
Operations at the Moma Mine had a difficult
start to 2023, due to an unusually severe lightning strike hitting
power lines close to the Mine in February. Power infrastructure and
electronic devices within our three WCPs were damaged by the
strike, impacting HMC production. We continued to experience power
reliability issues throughout H1, leading us to revise down our
ilmenite production guidance in July. In the months following the
lightning strike, our technical team conducted a thorough
investigation and additional protective measures have since been
put in place, providing an additional line of defence to the grid’s
own safeguards.
To improve future regional power reliability,
Kenmare part-funded the refurbishment of the Nampula STATCOM on the
Electricidade de Moꞔambique (“EdM”) grid and this was commissioned
in Q4 2023. In addition, a new regional 400kV power line is due to
be commissioned by EdM in the coming months. Both of these projects
are expected to enhance power stability at the Mine.
HMC production was also impacted by lower grades
in 2023 than expected. Against this backdrop, we were pleased to
achieve revised ilmenite production guidance for the year, while
meeting or exceeding original production guidance for our other
products, and we are focused on improving operational performance
in 2024.
Shipments in 2023 were down 3% compared to 2022,
due to slightly weaker demand and more cautious buying from our
customers. However, we saw our strongest shipments in Q4 and
volumes would have been higher still had poor weather not impacted
loading time.
In an independent report, TZMI, a mineral sands
industry analyst, declared that Kenmare is in the first quartile on
the industry revenue to cost curve in respect of 2021. It was
pleasing to receive this independent verification of our own
analysis and we are focused on maintaining this leading position,
which will be facilitated through our programme of capital
investment.
In late 2022, Kenmare initiated the renewal
process for the Implementation Agreement, which covers elements of
the fiscal regime governing Moma’s operation. The original
agreement was signed in 2004 with a 20-year term and the Company
has materially exceeded all the undertakings agreed at that time.
This process is continuing and Kenmare is confident the renewal
will be concluded in an orderly manner.
Sustainability
Since the Company’s formation, we have had a
commitment to being a trusted corporate citizen, particularly with
respect to our stakeholders in Mozambique.
In 2004, we established KMAD and I am very proud
of the transformational change it has delivered for people living
close to the Mine. During the past 20 years, over $20 million has
been invested into community development initiatives, including
$4.7 million in 2023. In addition to the agreement to construct a
new district hospital, some of KMAD’s highlights for the year
included the construction of a third community health centre and
the first students graduating from the KMAD-constructed Topuito
Technical College, including 23 female students sponsored by
KMAD.
2023 has been confirmed as the hottest year on
record and climate change is no longer a future threat but a
current reality for our business. With this in mind, we are working
to set 2030 interim targets for operational emissions to
demonstrate a clear route to decarbonisation and our 2040 Net Zero
target. In 2023, we reduced our Scope 1 emissions by 14%, due
primarily to investments in the Rotary Uninterruptible Power Supply
and operational efficiencies at the Mineral Separation Plant.
Product markets
The Moma Mine is a globally significant titanium
minerals deposit, with over 100 years of Mineral Resources at the
current production rate. Titanium minerals are listed as critical
minerals for a number of regions, including the US and in Europe.
They are essential in the production of titanium pigment, which is
used in everyday items such as paint, plastic and paper, as well as
in the fast-growing titanium metal market, which is primarily
consumed by the aerospace industry.
Following a year of record pricing in 2022,
markets softened in 2023 due to increasing global economic
uncertainty. It was nonetheless pleasing to see that demand from
our customers remained relatively robust despite these
macroeconomic pressures and demand for ilmenite has been stronger
in early 2024 than we expected.
Downstream demand for titanium pigment was
subdued in 2023, although it improved through the second half of
the year. The challenges faced by the pigment market prompted
producers to sustain lower-than-normal inventories throughout 2023.
We believe the rebuilding of these inventories through increased
utilisation rates in 2024 will support demand for ilmenite. Market
dynamics continue to favour Kenmare’s ilmenite and we also benefit
from our first quartile margin position, allowing us to generate
positive cash flow throughout the commodity price cycle.
The zircon market was also softer in 2023 as
reduced global economic activity decreased demand for products like
ceramics. Prices for zircon in Europe remained weaker in early 2024
but Kenmare has seen a stabilisation in the Chinese spot market in
recent months, which we expect will provide some support to the
global market.
Despite these short-term pressures, Kenmare
believes that the market fundamentals for our products are strong,
due primarily to medium- and long-term supply constraints within
the titanium feedstocks and zircon industries.
Capital projects
During 2023, we completed the DFS for the core
elements of WCP A’s upgrade and transition to Nataka in late 2025.
Nataka is the largest of Moma’s ore zones and WCP A will mine there
for the rest of its economic life.
The upgrade of WCP A will significantly increase
the plant’s capacity and allow it to more effectively manage
slimes, which are ultra fine particles that negatively impact
production. This will ensure consistent future production, while
maintaining low operating costs. The DFS for additional
infrastructure is continuing and scheduled to be completed in Q2
2024.
Total capital expenditure for the project is
estimated to be up to $341 million to the end of 2027, including
the costs for additional infrastructure. Most of this capital
expenditure is expected to be incurred in 2024 and 2025, with $179
million budgeted for 2024.
The DFS capital cost estimate is higher than the
PFS estimate, which was released in April. This was due to changes
in scope and design, reflecting opportunities to safeguard
Kenmare’s first quartile position on the revenue to cost curve;
additional indirect costs to deliver effective schedule risk
minimisation; increased contingency costs; and capital cost
inflation during the period.
We will be funding this capital investment
through operational cash flows and debt facilities, while
continuing to make shareholder returns. We announced a new $200
million Revolving Credit Facility with our existing lender group in
February 2024, with improved terms that reflect our position as an
established mineral sands producer.
Outlook
With 2024 well underway, our focus is firmly on
delivery. Our team at the Moma Mine are working hard to achieve our
guidance for the year, while maintaining the strong safety
performance we returned to in Q4 2023. Our projects team is
advancing the preparations for the transition to Nataka, while
actively looking for ways to optimise the scope, design, and
execution of the project.
While product markets were impacted in 2023 by
the weaker global economy, ilmenite prices are holding up well in
early 2024. Our first quartile position on the industry revenue to
cost curve supports our ability to generate strong cash flow, even
during periods of weaker pricing, and we are focused on optimising
mining at Nataka to ensure we retain this position.
Finally, I would like to thank all my friends
and colleagues within the Company, as well as our customers,
shareholders, and other partners in Mozambique for their continued
support. It has been a privilege to lead Kenmare for almost four
decades and I am pleased to leave the Company in a position of
strength, with a tier one asset, and as the largest supplier of
ilmenite in the world. I am very proud of all that Kenmare has
achieved to date and confident in our team's ability to continue to
execute on the Company’s strategy to create value for all
stakeholders.
Michael Carvill
MANAGING DIRECTOR
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
|
Notes |
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
|
Revenue |
2 |
458,477 |
525,988 |
Cost of sales |
4 |
(294,927) |
(282,694) |
Gross profit |
|
163,550 |
243,294 |
Administration expenses |
4 |
(8,426) |
(9,862) |
Operating profit |
|
155,124 |
233,432 |
Finance
income |
5 |
5,904 |
1,147 |
Finance
costs |
5 |
(11,118) |
(12,472) |
Profit before tax |
|
149,910 |
222,107 |
Income tax expense |
6 |
(18,928) |
(16,073) |
Profit for the financial year and total comprehensive income for
the financial year |
|
130,982 |
206,034 |
Attributable to equity holders |
|
130,982 |
206,034 |
|
|
|
|
|
|
|
|
|
|
$ per share |
$ per share |
|
|
|
|
Basic earnings per share |
7 |
1.41 |
2.17 |
Diluted earnings per share |
7 |
1.37 |
2.12 |
|
|
|
|
The accompanying notes form part of these financial
statements.
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE
INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
|
Notes |
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
|
Revenue |
2 |
458,477 |
525,988 |
Cost of sales |
4 |
(294,927) |
(282,694) |
Gross profit |
|
163,550 |
243,294 |
Administration expenses |
4 |
(8,426) |
(9,862) |
Operating profit |
|
155,124 |
233,432 |
Finance
income |
5 |
5,904 |
1,147 |
Finance
costs |
5 |
(11,118) |
(12,472) |
Profit before tax |
|
149,910 |
222,107 |
Income tax expense |
6 |
(18,928) |
(16,073) |
Profit for the financial year and total comprehensive income for
the financial year |
|
130,982 |
206,034 |
Attributable to equity holders |
|
130,982 |
206,034 |
|
|
|
|
|
|
|
|
|
|
$ per share |
$ per share |
|
|
|
|
Basic earnings per share |
7 |
1.41 |
2.17 |
Diluted earnings per share |
7 |
1.37 |
2.12 |
|
|
|
|
The accompanying notes form part of these financial
statements.
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL
POSITION
AS AT 31 DECEMBER 2023
|
Notes |
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
|
Assets |
|
|
|
Non-current assets |
|
|
|
Property,
plant and equipment |
8 |
935,848 |
930,759 |
Right-of-use
assets |
9 |
1,368 |
1,608 |
|
|
937,216 |
932,367 |
Current assets |
|
|
|
Inventories |
10 |
99,257 |
84,171 |
Trade and
other receivables |
11 |
153,650 |
124,018 |
Cash and cash equivalents |
12 |
71,048 |
108,271 |
|
|
323,955 |
316,460 |
Total assets |
|
1,261,171 |
1,248,827 |
Equity |
|
|
|
Capital and reserves attributable to the |
|
|
|
Company’s equity holders |
|
|
|
Called-up
share capital |
13 |
97 |
104 |
Share
premium |
|
545,950 |
545,950 |
Other
reserves |
|
229,740 |
232,759 |
Retained earnings |
|
367,504 |
324,721 |
Total equity |
|
1,143,291 |
1,103,534 |
Liabilities |
|
|
|
Non-current liabilities |
|
|
|
Bank
loans |
14 |
15,502 |
46,180 |
Lease
liabilities |
9 |
1,256 |
1,540 |
Provisions |
15 |
20,877 |
19,746 |
|
|
37,635 |
67,466 |
Current liabilities |
|
|
|
Bank
loans |
14 |
32,371 |
32,398 |
Lease
liabilities |
9 |
264 |
245 |
Trade and
other payables |
16 |
38,564 |
35,293 |
Current tax
liabilities |
17 |
6,921 |
8,893 |
Provisions |
15 |
2,125 |
998 |
|
|
80,245 |
77,827 |
Total liabilities |
|
117,880 |
145,293 |
Total equity and liabilities |
|
1,261,171 |
1,248,827 |
|
|
|
|
The accompanying notes form part of these financial
statements.
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN
EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
|
Unaudited
Called-Up Share
Capital
$’000 |
Unaudited
Share
Premium
$’000 |
Unaudited Other Reserves
$’000 |
Unaudited Retained
Earnings
$’000 |
Unaudited
Total
$’000 |
|
|
|
|
|
|
Balance at 1
January 2022 |
104 |
545,950 |
230,539 |
154,050 |
930,643 |
Total
comprehensive income for the year |
|
|
|
|
|
Profit for the financial year |
- |
- |
- |
206,034 |
206,034 |
Total comprehensive income for the year |
- |
- |
- |
206,034 |
206,034 |
Transactions with owners of the Company – contributions and
distributions |
- |
- |
5,601 |
- |
5,601 |
Recognition of
share-based payment expense |
|
|
|
|
|
Exercise of
share-based payment awards |
- |
- |
(3,363) |
- |
(3,363) |
Shares acquired
by the Kenmare Employee Benefit Trust |
- |
- |
(1,797) |
- |
(1,797) |
Shares
distributed by the Kenmare Employee Benefit Trust |
- |
- |
1,779 |
- |
1,779 |
Odd lot offer
share buy back |
- |
- |
515 |
(515) |
- |
Odd lot offer
share buy back transaction costs |
- |
- |
- |
(122) |
(122) |
Cancellation of
treasury shares |
- |
- |
(515) |
- |
(515) |
Dividends paid |
- |
- |
- |
(34,726) |
(34,726) |
Total contributions and distributions |
- |
- |
2,220 |
(35,363) |
(33,143) |
Balance at 1 January 2023 |
104 |
545,950 |
232,759 |
324,721 |
1,103,534 |
Total
comprehensive income for the year |
|
|
|
|
|
Profit for the financial year |
- |
- |
- |
130,982 |
130,982 |
Total comprehensive income for the year |
- |
- |
- |
130,982 |
130,982 |
Transactions with owners of the Company – contributions and
distributions |
|
|
|
|
|
Recognition of
share-based payment expense |
- |
- |
3,278 |
- |
3,278 |
Exercise of
share-based payment awards |
- |
- |
(3,512) |
(2,197) |
(5,709) |
Shares acquired
by the Kenmare Employee Benefit Trust |
- |
- |
(6,182) |
- |
(6,182) |
Shares
distributed by the Kenmare Employee Benefit Trust |
- |
- |
3,390 |
- |
3,390 |
Tender offer
share buy back |
(7) |
- |
7 |
(29,963) |
(29,963) |
Share buy back
transaction costs |
- |
- |
- |
572 |
572 |
Dividends paid |
- |
- |
- |
(56,611) |
(56,611) |
Total contributions and distributions |
(7) |
- |
(3,019) |
(88,199) |
(91,225) |
Balance at 31 December 2023 |
97 |
545,950 |
229,740 |
367,504 |
1,143,291 |
|
|
|
|
|
|
UNAUDITED CONSOLIDATED STATEMENT OF CASH
FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
|
Notes |
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
|
Cash
flows from operating activities |
|
|
|
Profit for the
financial year after tax |
|
130,982 |
206,034 |
Adjustment
for: |
|
|
|
Foreign
exchange movement included in operating costs |
|
- |
1,123 |
Expected
credit losses |
18 |
46 |
1,110 |
Share-based
payments |
|
3,278 |
5,601 |
Finance
income |
5 |
(5,904) |
(1,147) |
Finance
costs |
5 |
11,118 |
12,472 |
Income tax
expense |
6 |
18,928 |
16,073 |
Depreciation |
8, 9 |
65,122 |
64,596 |
|
|
223,570 |
305,862 |
Change in: |
|
|
|
Provisions |
|
1,341 |
(2,141) |
Inventories |
|
(15,086) |
(23,952) |
Trade and
other receivables |
|
(29,529) |
(47,627) |
Trade and
other payables |
|
299 |
(1,680) |
Exercise of share-based payment awards |
|
(2,319) |
(1,566) |
Cash generated from operating activities |
|
178,276 |
228,896 |
Income tax
paid |
|
(21,119) |
(10,461) |
Interest
received |
|
5,756 |
657 |
Interest
paid |
9 |
(7,323) |
(7,068) |
Factoring and
other trade facility fees |
5 |
(1,467) |
(2,218) |
Debt commitment fees paid and other fees |
5 |
(928) |
(534) |
Net cash from operating activities |
|
153,195 |
209,272 |
Investing activities |
|
|
|
Additions to property, plant and equipment |
8 |
(66,540) |
(59,867) |
Net cash used in investing activities |
|
(66,540) |
(59,867) |
Financing activities |
|
|
|
Dividends
paid |
|
(56,611) |
(34,726) |
Odd lot offer
share buy back |
|
- |
(515) |
Odd lot offer
share buy back transaction costs |
|
- |
(122) |
Tender offer
share buy back |
|
(29,963) |
- |
Tender offer
share buy back transaction costs |
|
572 |
- |
Market
purchase of equity under Kenmare Restricted Share Plan |
|
(6,182) |
(1,797) |
Drawdown of
debt |
14 |
- |
20,000 |
Repayment of
debt |
14 |
(31,429) |
(91,429) |
Payment of lease liabilities |
|
(265) |
(995) |
Net cash used in financing activities |
|
(123,878) |
(109,584) |
Net (decrease) / increase in cash and cash
equivalents |
|
(37,223) |
39,821 |
Cash and cash
equivalents at the beginning of the financial year |
|
108,271 |
69,057 |
Effect of exchange rate changes on cash and cash equivalents |
|
- |
(607) |
Cash and cash equivalents at the end of the financial
year |
12 |
71,048 |
108,271 |
|
|
|
|
UNAUDITED NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
1. Statement of accounting policies
Kenmare Resources plc (the “Company”) is domiciled in the
Republic of Ireland. The Company’s registered address is Styne
House, Hatch Street Upper, Dublin 2. The Company has a premium
listing on the Main Market of the London Stock Exchange and a
secondary listing on Euronext Dublin. These consolidated financial
statements comprise the Company and its subsidiaries (the “Group”).
The principal activity of the Group is the operation and further
development of the Moma Titanium Minerals Mine in Mozambique.
On 19 March 2024, the Directors approved the preliminary results
for publication. While the consolidated financial statements for
the year ended 31 December 2023, from which the preliminary results
have been extracted, are prepared in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European
Union, these preliminary results do not contain sufficient
information to comply with IFRS. The Directors expect to publish on
4 April 2024 the full financial statements that comply with IFRS as
adopted by the European Union.
The auditor, KPMG, has not yet issued their audit opinion on the
financial statements in respect of the year ended 31 December 2023.
The financial information included within this unaudited
preliminary results statement for the year ended 31 December 2023
does not constitute the statutory financial statements of the Group
within the meaning of section 293 of the Companies Act 2014. The
Group financial information in this preliminary statement for the
year ended 31 December 2023 is unaudited. A copy of the statutory
financial statements in respect of the year ended 31 December 2023
will be annexed to the next annual return and filed with the
Registrar of Companies.
The Group financial information for the year ended 31 December
2022 included in this preliminary statement represents an
abbreviated version of the Group’s financial statements for that
year. The statutory financial statements for the Group for the year
ended 31 December 2022, upon which the auditor, KPMG, has issued an
unqualified opinion, were annexed to the annual return of the
Company and filed with the Registrar of Companies.
None of the new and revised standards and interpretations which
are effective for accounting periods beginning on or after 1
January 2023, have a material effect on the Group’s financial
statements.
Basis of preparation
The consolidated financial statements have been prepared in
accordance with International Financial Reporting Standards (IFRSs)
issued by the International Accounting Standards Board (IASB) and
interpretations issued by the IFR Interpretations Committee (IFRIC)
as adopted by the EU and those parts of the Companies Act 2014
applicable to companies reporting under IFRS and Article 4 of the
IAS Regulation.
Going concern
The Directors have, at the time of approving the financial
statements, a reasonable expectation that the Company and the Group
have or will have adequate resources to continue in operational
existence for the foreseeable future. Based on the Group’s cash
flow forecast, liquidity, solvency position and available finance
facilities, the Directors have a reasonable expectation that the
Group has adequate resources for the foreseeable future and,
therefore, they continue to adopt the going concern basis of
accounting in preparing the financial statements.
Management plans assume that all agreements, licences,
concessions and approvals relating to the Group’s mining and
processing activities are in place or will be renewed over the 12
month period, including the Implementation Agreement, from the date
of authorisation of these financial statements. The Group forecast
has been prepared by management with best estimates of production,
pricing and cost assumptions over the period. Key assumptions upon
which the Group forecast is based include a mine plan covering
production using the Namalope, Nataka, Pilivili and Mualadi
reserves and resources as will be set out in the Annual Report’s
unaudited mineral reserves and resources table. Specific resource
material is included only where there is a high degree of
confidence in its economic extraction. Production levels for the
purpose of the forecast are approximately 1.1 million tonnes per
annum of ilmenite plus co-products, zircon, concentrates and
rutile, over the next twelve months. Assumptions for product sales
prices are based on contract prices as stipulated in marketing
agreements with customers or, where contract prices are based on
market prices or production is not presently contracted, prices are
forecast taking into account independent titanium mineral sands
expertise and management expectations. Operating costs are based on
approved budget costs for 2024, taking into account the current
running costs of the Mine and escalated by 2% per annum thereafter.
Capital costs are based on the capital plans and include escalation
at 2% per annum. The 2024 operating costs and forecast capital
costs take into account the current inflationary environment. The
2% inflation rate used from 2025 to escalate these costs over the
life of mine is an estimated long-term inflation rate.
Sensitivity analysis is applied to the assumptions above to test
the robustness of the cash flow forecasts for changes in market
prices, shipments and operating and capital cost assumptions.
Changes in these assumptions affect the level of sales and
profitability of the Group and the amount of capital required to
deliver the projected production levels. As a result of this
assessment, the Board has a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as
they fall due over the 12 month period from the date of
authorisation of these financial statements.
2. Revenue
|
Unaudited
2023
$’000 |
2022
$’000 |
Revenue from
contracts with customers |
|
|
Revenue derived
from the sale of mineral products |
437,091 |
498,339 |
Revenue derived from freight services |
21,386 |
27,649 |
Total Revenue |
458,477 |
525,988 |
|
|
|
Revenue by mineral product
The principal categories for disaggregating mineral products
revenue are by product type and by country of the customer’s
location. The mineral product types are ilmenite, zircon, rutile
and concentrates. Concentrates includes secondary zircon and
mineral sands concentrates.
During the financial year, the Group sold 1,045,200 tonnes
(2022: 1,075,600 tonnes) of finished products to customers at a
sales value of $437.1 million (2022: $498.3 million). The Group
earned revenue derived from freight services of $21.4 million
(2022: $27.6 million).
|
Unaudited
2023
$’000 |
2022
$’000 |
Revenue derived
from sales of mineral products by primary product |
|
|
Ilmenite |
315,138 |
347,446 |
Primary
zircon |
79,628 |
99,152 |
Concentrates |
31,046 |
33,057 |
Rutile |
11,279 |
18,684 |
Total revenue from mineral products |
437,091 |
498,339 |
Revenue derived from freight services |
21,386 |
27,649 |
Total Revenue |
458,477 |
525,988 |
|
|
|
Revenue by destination
In the following table, revenue is disaggregated by primary
geographical market. The Group allocates revenue from external
customers to individual countries and discloses revenues in each
country where revenues represent 10% or more of the Group’s total
revenue. Where total disclosed revenue disaggregated by country
constitutes less than 75% of total Group revenue, additional
disclosures are made on a regional basis until at least 75% of the
Group’s disaggregated revenue is disclosed. There were no
individual countries within Europe, Asia (excluding China) or the
Rest of the World with revenues representing 10% or more of the
Group’s total revenue during the year.
|
Unaudited
2023
$’000 |
2022
$’000 |
Revenue derived
from sales of mineral product by destination
China |
177,511 |
154,704 |
Europe |
86,238 |
130,440 |
Asia (excluding
China) |
76,535 |
108,487 |
USA |
52,826 |
51,600 |
Rest of the World |
43,981 |
53,108 |
Total revenue from mineral products |
437,091 |
498,339 |
Revenue derived from freight services |
21,386 |
27,649 |
Total Revenue |
458,477 |
525,988 |
|
|
|
Revenue by major customers
The Group evaluates the concentration of mineral product revenue by
major customer. The following table disaggregates mineral product
revenue from the Group’s four largest customers.
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Revenue
from external customers |
|
|
Largest
customer |
69,023 |
74,671 |
Second largest
customer |
41,616 |
62,791 |
Third largest
customer |
32,999 |
58,413 |
Fourth largest customer |
31,844 |
41,015 |
Total |
175,482 |
236,890 |
|
|
|
All Group revenues from external customers are generated by the
Moma Titanium Minerals Mine in Mozambique. Further details on this
operating segment can be found in Note 3. Sales to and from Ireland
were $nil (2022: $nil) in the year.
3. Segment reporting
Information on the operations of the Moma Titanium Minerals Mine in
Mozambique is reported to the Group’s Board for the purposes of
resource allocation and assessment of segment performance.
Information regarding the Group’s operating segment is reported
below:
|
Unaudited
2023 |
2022 |
|
|
Corporate |
Mozambique |
Total |
Corporate |
Mozambique |
Total |
|
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
$’000 |
Revenue
& Results |
|
|
|
|
|
|
Revenue* |
- |
458,477 |
458,477 |
- |
525,988 |
525,988 |
Cost of sales |
- |
(294,927) |
(294,927) |
- |
(282,694) |
(282,694) |
Gross profit |
- |
163,550 |
163,550 |
- |
243,294 |
243,294 |
Administrative expenses |
(6,867) |
(1,559) |
(8,426) |
(7,848) |
(2,014) |
(9,862) |
Segment operating profit |
(6,867) |
161,991 |
155,124 |
(7,848) |
241,280 |
233,432 |
Finance
income |
2,585 |
3,319 |
5,904 |
23 |
1,124 |
1,147 |
Finance
expenses |
(40) |
(11,078) |
(11,118) |
(83) |
(12,389) |
(12,472) |
Profit before tax |
(4,322) |
154,232 |
149,910 |
(7,908) |
230,015 |
222,107 |
Income tax expense |
(7,156) |
(11,772) |
(18,928) |
(1,601) |
(14,472) |
(16,073) |
Profit for the financial year |
(11,478) |
142,460 |
130,982 |
(9,509) |
215,543 |
206,034 |
Segment assets & Liabilities |
|
|
|
|
|
|
Segment
Assets |
40,918 |
1,220,253 |
1,261,171 |
12,583 |
1,236,244 |
1,248,827 |
Segment Liabilities |
10,392 |
107,488 |
117,880 |
4,722 |
140,571 |
145,293 |
Additions to non-current assets |
|
|
|
|
|
|
Segment Additions to non-current assets |
- |
69,730 |
69,730 |
- |
59,867 |
59,867 |
*Revenue excludes inter-segment revenue of $22.7 million (2022:
$24.2 million) earned by the corporate segment relating to
marketing and management services fee income. Inter-segment revenue
is not regularly reviewed by the Chief Operating Decision
Maker.
Corporate assets consist of the Company’s property, plant and
equipment including right-of-use assets, cash and cash equivalents
and prepayments at the reporting date. Corporate liabilities
consist of trade and other payables at the reporting date.
4. Cost and income analysis
|
Unaudited
2023
$’000 |
2022
$’000 |
Expenses
by function |
|
|
Cost of
sales |
294,927 |
282,694 |
Administrative
expenses |
8,426 |
9,862 |
Total |
303,353 |
292,556 |
|
|
|
Expenses by nature can be analysed as follows:
|
Unaudited
2023
$’000 |
2022
$’000 |
Expenses
by nature |
|
|
Staff costs |
58,252 |
55,907 |
Repairs and
maintenance |
42,278 |
43,151 |
Power and
fuel |
47,791 |
43,960 |
Freight |
21,386 |
27,649 |
Other production
and operating costs |
83,274 |
78,921 |
Movement of
mineral products inventory |
(14,750) |
(21,628) |
Depreciation of
property, plant and equipment and right-of-use assets |
65,122 |
64,596 |
Total |
303,353 |
292,556 |
|
|
|
Mineral products consist of finished products and heavy mineral
concentrate as detailed in Note 10. Mineral stock movement in the
year was an increase of $14.7 million (2022: $21.6 million
increase). Freight costs of $21.4 million (2022: $27.7 million)
arise from sales to customers on a CIF or CFR basis. There were no
exceptional items within operating profit in 2023 (2022: $nil).
5. Net finance costs
|
Unaudited
2023
$’000 |
2022
$’000 |
Finance
costs |
|
|
Interest on bank
borrowings |
(7,935) |
(8,829) |
Interest on lease
liabilities |
(112) |
(147) |
Factoring and
other trade facility fees |
(1,467) |
(2,218) |
Commitment and
other fees |
(928) |
(534) |
Unwinding of
discount on mine closure provision |
(676) |
(744) |
Total finance costs |
(11,118) |
(12,472) |
Interest earned on bank deposits |
5,904 |
657 |
Foreign exchange gain |
- |
490 |
Total finance income |
5,904 |
1,147 |
Net finance costs recognised in profit or loss |
(5,214) |
(11,325) |
All interest has been expensed in the financial year. The Group
has classified factoring and other trade facility fees in net cash
from operating activities in the Consolidated Statement of
Cashflows.
6. Income tax expense
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Corporation
tax |
18,928 |
16,073 |
Deferred tax |
- |
- |
Total |
18,928 |
16,073 |
Reconciliation of effective tax rate |
|
|
Profit before tax |
149,910 |
222,107 |
Profit before tax multiplied by the applicable tax rate
(12.5%) |
18,739 |
27,763 |
(Over)/under
provision in respect of prior years |
(219) |
546 |
Non-taxable
income |
(9,434) |
(18,120) |
Non-deductible
expenses |
1,204 |
483 |
Differences in
effective tax rates on overseas earnings |
8,638 |
5,401 |
Total |
18,928 |
16,073 |
|
|
|
During the year, Kenmare Moma Mining Limited Mozambique Branch
had taxable profits of $34.1 million (2022: $39.9 million),
resulting in an income tax expense of $11.7 million (2022: $14.5
million) being recognised. The income tax rate applicable to
taxable profits of KMML Mozambique Branch is 35% (2022: 35%).
Kenmare Moma Mining Limited Mozambique Branch has elected, and
the fiscal regime applicable to mining allows for, the option to
deduct, as an allowable deduction, depreciation of exploration and
development expense and capital expenditure over the life of mine.
Tax losses may be carried forward for three years. There are no tax
losses carried forward at 31 December 2023.
Kenmare Moma Processing (Mauritius) Limited Mozambique Branch
has Industrial Free Zone (IFZ) status. As an IFZ Branch, it is
exempted from corporation taxes and hence its income is
non-taxable.
During the year, Kenmare Resources plc had taxable profits of
$89.2 million (2022: $13.3 million) as a result of management and
marketing service fee income earned on services provided to
subsidiary undertakings and dividend income earned from subsidiary
undertakings, resulting in a corporate tax expense of $7.2 million
(2022: $1.6 million).
7. Earnings per share
The calculation of the basic and diluted earnings per share
attributable to the ordinary equity holders of the Company is based
on the following data:
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Profit for the
financial year attributable to equity holders of the
Company |
130,982 |
206,034 |
|
|
|
|
Unaudited
2023
Number of shares |
2022
Number of shares |
|
|
|
Weighted average
number of issued ordinary shares for |
|
|
the purpose of
basic earnings per share |
93,126,115 |
94,919,944 |
Effect of
dilutive potential ordinary shares: |
|
|
Share awards |
2,437,495 |
2,361,819 |
Weighted average number of ordinary shares for |
|
|
the purposes of
diluted earnings per share |
95,563,610 |
97,281,763 |
|
|
|
|
$ per share |
$ per share |
|
|
|
Basic earnings
per share |
1.41 |
2.17 |
Diluted earnings
per share |
1.37 |
2.12 |
|
|
|
The denominator for the purposes of calculating both basic and
diluted earnings per share has been adjusted to reflect shares
acquired during the year.
8. Property, plant and equipment
|
Plant and
Equipment
$’000 |
Development
Expenditure
$’000 |
Construction
In Progress
$’000 |
Other
Assets
$’000 |
Total
$’000 |
|
|
|
|
|
|
Cost |
|
|
|
|
|
At 1 January
2022 |
1,017,429 |
258,172 |
61,430 |
64,431 |
1,401,462 |
Additions
during the financial year |
252 |
112 |
59,261 |
242 |
59,867 |
Transfer from
construction in progress |
48,233 |
1,767 |
(69,918) |
19,918 |
- |
Disposals |
(10,230) |
- |
- |
(7,201) |
(17,431) |
Adjustment to mine closure cost |
(20,080) |
- |
- |
- |
(20,080) |
At 31 December 2022 |
1,035,604 |
260,051 |
50,773 |
77,390 |
1,423,818 |
Additions during the financial year |
- |
- |
69,703 |
27 |
69,730 |
Transfer from
construction in progress |
20,144 |
13,095 |
(40,391) |
7,152 |
- |
Disposals |
(415) |
- |
- |
(9,429) |
(9,844) |
Adjustment to mine closure cost |
241 |
- |
- |
- |
241 |
At 31 December 2023 |
1,055,574 |
273,146 |
80,085 |
75,140 |
1,483,945 |
Accumulated depreciation |
|
|
|
|
|
At 1 January
2022 |
270,113 |
141,489 |
- |
35,302 |
446,904 |
Charge for the
financial year |
44,435 |
6,379 |
- |
12,772 |
63,586 |
Disposals |
(10,230) |
- |
- |
(7,201) |
(17,431) |
At 31 December 2022 |
304,318 |
147,868 |
- |
40,873 |
493,059 |
Charge for the financial year |
44,928 |
8,952 |
- |
11,002 |
64,882 |
Disposals |
(415) |
- |
- |
(9,429) |
(9,844) |
At 31 December 2023 |
348,831 |
156,820 |
- |
42,446 |
548,097 |
Carrying amount |
|
|
|
|
|
At 31 December 2023 |
706,743 |
116,326 |
80,085 |
32,694 |
935,848 |
At 31 December 2022 |
731,286 |
112,183 |
50,773 |
36,517 |
930,759 |
|
|
|
|
|
|
An adjustment to the mine closure cost of $0.2 million (2022:
$20.1 million) was made during the year as a result of an update in
the mine closure cost estimate as detailed in Note 15.
At each reporting date, the Group assesses whether there is any
indication that property, plant and equipment may be impaired. The
Group considers the relationship between its market capitalisation
and its book value, among other factors, when reviewing for
indicators for impairment. As at 31 December 2023, the market
capitalisation of the Group was below the book value of net assets,
which is considered an indicator of impairment. The Group carried
out an impairment review of property, plant and equipment as at 31
December 2023. As a result of the review, and given the performance
and outlook of the Group, no impairment provision was recognised in
the current financial year. No impairment was recognised in the
prior financial year. Given the historic volatility in mineral
product pricing and sensitivity of the forecast to mineral product
pricing, the discount rate and to a lesser extent operating costs,
the impairment loss of $64.8 million, which was recognised in the
consolidated statement of comprehensive income in 2014, was not
reversed.
The cash-generating unit for the purpose of impairment testing
is the Moma Titanium Minerals Mine. The basis on which the Mine is
assessed is its value in use. The cash flow forecast employed for
the value in use computation is from a life of mine financial
model. The recoverable amount obtained from the financial model
represents the present value of the future discounted pre-tax,
pre-finance cash flows discounted at 12% (2022: 14%).
Key assumptions include the following:
• The discount rate is based on the Group’s weighted
average cost of capital. This rate is a best estimate of the
current market assessment of the time value of money, and the risks
specific to the Mine, taking into consideration country risk,
currency risk and price risk. The factors making up the cost of
equity and cost of debt have changed from the prior year review,
resulting in a discount rate of 12% (2022: 14%). The Group’s
estimation of the country risk premium included in the discount
rate has remained unchanged from the prior year. The Group does not
consider it appropriate to apply the full current country risk
premium for Mozambique to the calculation of the Group’s weighted
average cost of capital as it believes the specific circumstances
which have resulted in the risk premium increase over the past
number of years are not relevant to the specific circumstances of
the Moma Mine. Hence, country risk premium applicable to the
calculation of the cost of equity has been adjusted accordingly.
Forecast income tax on intercompany dividends from subsidiary
undertakings is assumed to be exempt from 2025, by way of change to
tax legislation or alternatively group restructuring. Using a
discount rate of 12.0%, the recoverable amount is greater than the
carrying amount by $374.0 million (2022: $86.9 million). The
discount rate is a significant factor in determining the
recoverable amount. A 3.5% increase in the discount rate to 15.5%
reduces the recoverable amount by $374.0 million to $nil, assuming
all other inputs
remain unchanged. The increase in the recoverable amount from
the prior year is a result of increased cash flows over the life of
mine as a result of increased forecast revenue net of increased
capital costs and a decrease in the discount rate from 14% to
12%.
• The forecast assumes that all agreements, licences,
concessions and approvals relating to the Group’s mining and
processing activities including the Implementation Agreement are in
place or will be renewed. The mine plan is based on the Namalope,
Nataka, Pilivili and Mualadi proved and probable reserves and
resources. Specific resource material is included only where there
is a high degree of confidence in its economic extraction. The Mine
life assumption of 40 years has not changed from the prior year
review. Average annual production is approximately 1.3 million
tonnes (2022: 1.2 million tonnes) of ilmenite and co-products
zircon, rutile and concentrates over the life of the Mine. Medium
term production over the next three years is approximately 1.1
million tonnes. This mine plan does not include investment in
additional mining capacity. Certain minimum stocks of final and
intermediate products are assumed to be maintained at period
ends.
• Product sales prices are based on contract prices
as stipulated in marketing agreements with customers, or where
contracts are based on market prices or production is not currently
contracted, prices are forecast by the Group taking into account
independent titanium mineral sands expertise provided by TiPMC
Solutions and management expectations including general inflation
of 2% per annum. Forecast prices provided by TiPMC Solutions have
been reviewed and found to be consistent with other external
sources of information. Average forecast product sales prices have
increased over the life of mine from the prior year-end review as a
result of revised forecast pricing. A 9.0% reduction in average
sales prices over the life of mine reduces the recoverable amount
by $374.0 million to $nil, assuming all other inputs remain
unchanged.
• Operating costs are based on approved budget costs
for 2024 taking into account the current running costs of the Mine
and estimated forecast inflation for 2024. From 2025 onwards,
operating costs are escalated by 2% per annum as management expects
inflation to normalise and average 2% over the life of mine period.
Average forecast operating costs has decreased from the prior
year-end review as a result of a reduction in the estimated future
power costs and further optimisation of unit price for mining in
Nataka. A 6.5% increase in operating costs over the life of mine
reduces the recoverable amount by $374.0 million to $nil, assuming
all other inputs remain unchanged.
Whilst the Group has set ambitions to be net zero by 2040, the
full financial impact of the transition plan is still being
assessed as the Group considers how it will work towards meeting
this target. The mine financial model includes the cost of using
bio-diesel in its forecast operating costs. The cost of studies on
plant electrification and other sustainable methods of operating
are also included in forecast operating and capital cost. No
savings associated with the Company’s ambition to become net zero
have been factored into the forecast.
• Capital costs are based on a life of mine capital
plan including inflation at 2% per annum from 2025. Average
forecast capital costs have increased and their scheduling has
changed from the prior year-end review based on updated sustaining
and development capital plans required to maintain the existing
plant over the life of mine. A 47% increase in capital costs over
the life of mine reduces the recoverable amount by $374.0 million
to $nil, assuming all other inputs remain unchanged.
9. Right-of-use assets and lease
liabilities
|
Plant and Equipment
$’000 |
Land and Buildings
$’000 |
Total
$’000 |
Cost |
|
|
|
At 1 January
2023 |
3,319 |
2,590 |
5,909 |
Additions |
- |
- |
- |
Disposals |
(3,319) |
- |
(3,319) |
At 31 December 2023 |
- |
2,590 |
2,590 |
|
|
|
|
Accumulated Depreciation |
|
|
|
At 1 January
2023 |
3,319 |
982 |
4,301 |
Depreciation
expense |
- |
240 |
240 |
Disposals |
(3,319) |
- |
(3,319) |
At 31 December 2023 |
- |
1,222 |
1,222 |
Carrying amount |
|
|
|
At 31 December 2023 |
- |
1,368 |
1,368 |
At 31 December 2022 |
- |
1,608 |
1,608 |
On 1 January 2019, the Group recognised a lease liability of
$3.3 million in relation to electricity generators at the Mine. The
lease for the electricity generators was renewed in November 2017
for a five-year period and rental payments were fixed for the five
years. The lease agreement expired in November 2022 and following
negotiations the Group completed the acquisition process of the
electricity generators in February 2023.
On 1 January 2019, the Group recognised a lease liability of
$1.7 million in respect of the rental of its Irish head office. The
lease has a term of 10 years commencing August 2017 and rental
payments are fixed to the end of the lease term. This lease
obligation is denominated in Euros.
In February 2019, the Group recognised a lease liability of $0.4
million in respect of its Mozambican country office in Maputo. The
lease has a seven-year term commencing February 2019 and rental
payments are fixed for seven years. This lease obligation is
denominated in US Dollars. The Branch has discounted lease payments
using its incremental borrowing rates. The weighted average rate
applied is 7%.
In December 2022, the Maputo Office lease was modified and
remeasured. The lease term was extended to 10 years commencing 1
December 2022. In addition, additional floor space of 250 square
meters was leased as an addendum to the existing lease. The Group
has determined that the lease modification should not be accounted
for as a separate lease because the lease payments for the new
office space are not considered commensurate with market rentals
for office space of that size and characteristic. The incremental
borrowing rate applied to the remeasured lease is 10.2%.
At each reporting date, the Company assesses whether there is
any indication that right-of-use assets may be impaired. No
impairment indicators were identified as at 31 December 2023 or 31
December 2022.
The Group has recognised a rental expense of $12.4 million
(2022: $3.9 million) in relation to short term leases of machinery
and vehicles which have not been recognised as a right-of-use
asset.
Set out below are the carrying amounts of lease liabilities at
each reporting date:
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Current |
264 |
245 |
Non-current |
1,256 |
1,540 |
Total |
1,520 |
1,785 |
|
|
|
The consolidated income statement includes the following amounts
relating to leases:
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Depreciation
expense |
240 |
1,010 |
Interest expense on lease liabilities |
112 |
147 |
Total |
352 |
1,157 |
|
|
|
Reconciliation of movements of lease liabilities to cash
flows arising from financing activities |
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Lease
liabilities |
|
|
Balance at 1
January |
1,785 |
2,178 |
Cash movements |
|
|
Lease interest
paid |
(112) |
(147) |
Principal
paid |
(265) |
(1,142) |
Non-cash movements |
|
|
Lease
modification |
- |
749 |
Lease interest
accrued |
112 |
147 |
Balance at 31 December |
1,520 |
1,785 |
|
|
|
10. Inventories
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Mineral
products |
58,405 |
43,655 |
Consumable spares |
40,852 |
40,516 |
|
99,257 |
84,171 |
|
|
|
At 31 December 2023, total final product stock was 259,100
tonnes (2022: 213,500 tonnes). Closing stock of heavy mineral
concentrate was 16,700 tonnes (2022: 18,800 tonnes).
Net realisable value is determined with reference to forecast
prices of finished products expected to be achieved. There is no
guarantee that these prices will be achieved in the future,
particularly in weak product markets. During the financial year,
there was a write-down of $nil (2022: nil) to mineral products
charged to cost of sales to value mineral products at net
realisable value.
11. Trade and other receivables
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Trade
receivables |
127,442 |
104,970 |
VAT
receivable |
6,377 |
4,527 |
Prepayments |
19,831 |
14,521 |
|
153,650 |
124,018 |
|
|
|
Further details on trade receivables can be found in Note
18.
12. Cash and cash equivalents
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Bank
balances |
71,048 |
108,271 |
|
|
|
Cash and cash equivalents comprise cash balances held for the
purposes of meeting short-term cash commitments and investments
which are readily convertible to a known amount of cash and are
subject to an insignificant risk of change in value. Where
investments are categorised as cash equivalents, the related
balances have a maturity of three months or less from the date of
investment.
13. Called-up share capital
|
Unaudited
2023
€’000 |
2022
€’000 |
|
|
|
Authorised share capital |
|
|
181,000,000 ordinary shares of €0.001 each |
181 |
181 |
|
181 |
181 |
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Allotted,
called-up and fully paid |
|
|
Opening
balance |
|
|
94,829,551 (2022:
94,921,970) ordinary shares of €0.001 each |
104 |
104 |
Acquired and cancelled
5,601,390 (2022: 92,419) ordinary shares of €0.001 each |
(7) |
- |
Closing balance |
|
|
89,228,161 (2022: 94,829,551) ordinary shares of €0.001 each |
97 |
104 |
Total called-up share capital |
97 |
104 |
|
|
|
No ordinary shares were issued during the year (2022: $nil).
On 11 September 2023, a total of 5,601,390 shares were purchased
under the Tender Offer, representing 5.9% of the Company’s issued
ordinary share capital. The shares were purchased at the Tender
Price of £4.22 per share and, at this price, the total value of all
shares purchased was £23.6 million (circa $30 million). Transaction
costs associated with the transaction amounted to US$0.6 million
and were accounted for as a deduction from retained earnings.
On 3 October 2022, under the authority granted at the Company’s
Annual General Meeting held on 26 May 2022, and in accordance with
Section 1075 of the Companies Act 2014 and article 147 of the
Articles of Association, the Company completed an odd lot offer
which involved the acquisition of 92,419 ordinary shares of €0.001
each in the capital of the Company representing 0.1% of the then
called-up share capital of the Company for a total cash
consideration of $0.5 million. The odd lot offer buy back was
funded from distributable reserves and all ordinary shares acquired
by the Company were subsequently cancelled. Transaction costs
associated with the transaction amounted to $0.1 million and were
accounted for as a deduction from retained earnings.
14. Bank loans
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Borrowings |
47,873 |
78,578 |
The borrowings are repayable as
follows: |
|
|
Less than one
year |
33,087 |
33,653 |
Between two and five years |
15,712 |
47,142 |
|
48,799 |
80,795 |
Transaction costs |
(926) |
(2,217) |
Total carrying amount |
47,873 |
78,578 |
|
|
|
Borrowings
On 11 December 2019, the Group entered into debt facilities with
Absa Bank Limited (acting through its Corporate and Investment
Banking Division) (“Absa”), The Emerging Africa Infrastructure Fund
(part of the Private Infrastructure Development Group) (“EAIF”),
Nedbank Limited (acting through its Nedbank Corporate and
Investment Banking division) (“Nedbank”), Rand Merchant Bank and
Standard Bank Group (“Standard Bank”).
The debt facilities comprise a $110 million Term Loan Facility
and a $40 million Revolving Credit Facility that share common terms
and a common security package. The finance documentation also
accommodates for a Mine Closure Guarantee Facility (provided by
either the existing lenders or other finance providers) of up to
$40 million, with the provider(s) of such a facility sharing in the
common security package. The potential total aggregate principal
amount of indebtedness secured under the finance documentation is
therefore $190 million. The transaction costs for arrangement of
the debt facilities amounted to $6.5 million.
The Term Loan Facility has a final maturity date of 11 March
2025. Interest is at SOFR plus 5.40% per annum. Repayment is in
seven equal semi-annual instalments, beginning 11 March 2022.
On 11 November 2023 the Revolving Credit
Facility was extended by 12 months and has a final maturity date of
11 December 2024. Interest is at SOFR plus 4.25% per annum.
The Group entered into a mine closure guarantee
facility with Absa Bank Moçambique SA effective from 1 July 2023
for an amount of $26.6 million. This guarantee shares the security
package with the Term Loan Facility and Revolving Credit Facility
on a pro rata and pari passu basis.
The security package consists of (a) security over the Group’s
bank accounts (subject to certain exceptions), (b) pledges of the
shares of Kenmare Moma Processing (Mauritius) Limited and Kenmare
Moma Mining (Mauritius) Limited (the “Project Companies”), (c)
security over intercompany loans, and (d) Mozambican law security
interests over certain rights and agreements with Mozambican
authorities, including over the Implementation Agreement, the
Mineral Licensing Contract and the Mining Licence.
The carrying amount of the secured bank accounts of the Group
was $70.9 million as at 31 December 2023 (2022: $102.9 million).
The shares of the Project Companies and intercompany loans are not
included in the consolidated statement of financial position as
they are eliminated on consolidation. They, therefore, do not have
a carrying amount but, upon enforcement of the pledges on behalf of
the lender group, the shares in the Project Companies would cease
to be owned or controlled by the Group. The secured rights and
agreements do not have a carrying amount. They are, however,
necessary for the Project Companies to operate the Mine in
Mozambique.
At 31 December 2023, total debt of $47.9 million (2022: $78.6
million) was recognised by the Group after $31.4 million of
principal repayments were made against the term loan over the
course of the year. Unamortised transaction costs of $0.9 million
(2022: $2.2 million) plus interest amortised of $1.7 million (2022:
$2.2 million) were recognised by the Group at 31 December 2023.
Reconciliation of movements of debt to cash flows arising
from financing activities |
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Bank
loans |
|
|
Balance at 1
January |
78,578 |
148,099 |
Cash
movements |
|
|
Loan interest
paid |
(7,211) |
(6,921) |
Principal
paid |
(31,429) |
(91,429) |
Loan drawn
down |
- |
20,000 |
Non-cash
movements |
|
|
Loan interest accrued |
7,935 |
8,829 |
Balance at 31 December |
47,873 |
78,578 |
|
|
|
Covenants
The finance documents contain a number of representations,
covenants and events of default on customary terms, the breach of
which could lead to the secured parties under the finance
documentation accelerating the outstanding loans and taking other
enforcement steps, such as the enforcement of some or all of the
security interests, which could lead to, in extremis, the Group
losing its interest in the Mine. The most salient of the relevant
terms that could lead to acceleration of the loans and/or
enforcement of security are the financial covenants.
All covenants have been complied with during the year. The key
financial covenants are detailed below:
|
As at
31 December
2023 |
As at
31 December
2022 |
|
Covenant |
|
|
|
|
|
Interest
Coverage Ratio |
65.35:1 |
34.96:1 |
Not less than |
4.00:1 |
Net Debt to
EBITDA |
(0.09):1 |
(0.09):1 |
Not greater than |
2.00:1 |
Debt Service
Coverage Ratio |
4.88:1 |
3.11:1 |
Not less than |
1.20:1 |
Liquidity |
$111,048,000 |
$148,271,000 |
Not less than |
$15,000,000 |
Reserve Tail
Ratio |
81% |
81% |
Not less than |
30% |
|
|
|
|
|
The definition of the covenants under the debt facilities are
set out below:
• Interest Coverage Ratio is defined as the ratio of
EBITDA to Net Interest Cost.
• Net Debt is defined as total financial indebtedness
excluding leases less consolidated cash and cash equivalents.
• The Debt Service Coverage Ratio is the ratio of
cash and cash equivalents at the beginning of a reporting period
plus available facilities plus cash generated in the period to debt
repayments in the period.
• Liquidity is defined as consolidated cash and cash
equivalents plus undrawn amounts of the Revolving Credit
Facility.
• Reserve Tail Ratio means the reserve tail ratio,
expressed as a percentage of the termination date reserves
(estimated remaining reserves in March 2025) divided by the initial
reserves (estimated reserves in December 2019).
15. Provisions
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Mine closure
provision |
17,540 |
16,623 |
Mine
rehabilitation provision |
5,462 |
4,121 |
Other provisions |
- |
- |
|
23,002 |
20,744 |
Current |
2,125 |
998 |
Non-current |
20,877 |
19,746 |
|
23,002 |
20,744 |
|
|
|
|
Mine
Closure
Provision
$’000 |
Mine
Rehabilitation
Provision
$’000 |
Other
Provisions |
Total
$’000 |
|
|
|
|
|
At 1 January
2022 |
35,959 |
3,998 |
2,264 |
42,221 |
(Decrease)/increase in provision during the financial year |
(20,080) |
4,131 |
948 |
(15,001) |
Provision
utilised during the financial year |
- |
(4,008) |
(3,212) |
(7,220) |
Unwinding of the discount |
744 |
- |
- |
744 |
At 1 January 2023 |
16,623 |
4,121 |
- |
20,744 |
Increase in
provision during the financial year |
241 |
1,720 |
- |
1,961 |
Provision
utilised during the financial year |
- |
(379) |
- |
(379) |
Unwinding of the discount |
676 |
- |
- |
676 |
At 31 December 2023 |
17,540 |
5,462 |
- |
23,002 |
|
|
|
|
|
The Mine closure provision represents the Directors’ best
estimate of the Project Companies’ liability for close-down,
dismantling and restoration of the mining and processing site. A
corresponding amount equal to the provision is recognised as part
of property, plant and equipment. The costs are estimated on the
basis of a formal closure plan, are subject to regular review and
are estimated based on the net present value of estimated future
costs. Mine closure costs are a normal consequence of mining,
and the majority of close-down and restoration expenditure is
incurred at the end of the life of the Mine. The unwinding of the
discount is recognised as a finance cost and $0.7 million (2022:
$0.7 million) has been recognised in the statement of comprehensive
income for the financial year.
The main assumptions used in the calculation of the estimated
future costs include:
• a discount rate of 4.0% (2022: 4.0%);
• an inflation rate of 2% (2022: 2%);
• an estimated life of mine of 40 years (2022: 40
years). It is assumed that all licences and permits required to
operate will be renewed or extended during the life of mine;
and
• an estimated closure cost of $36.8 million (2022:
$34.1 million) and an estimated post-closure monitoring provision
of $2.6 million (2022: $3.9 million).
The life of mine plan is based on the Namalope, Nataka, Pilivili
and Mualadi reserves and resources as set out in the reserve and
resources table. Specific resource material is included only where
there is a high degree of confidence in its economic extraction.
The Mine closure provision has increased by $0.2 million as a
result of a change in the estimated closure cost.
The discount rate is a significant factor in
determining the Mine closure provision. The Branch uses rates as
provided by the US Treasury. 30-year US Treasury yields are the
longest period for which yields are quoted. This discount rate is
deemed to provide the best estimate of the current market
assessment of the time value of money. Risks specific to the
liability are included in the cost estimate. A 1% increase in the
estimated discount rate results in the Mine closure provision
decreasing by $2.5 million (2022: $5.6 million). A 1% decrease in
the estimated discount rate results in the Mine closure provision
increasing by $4.3 million (2022: $12.4 million).
The Mine rehabilitation provision represents the Directors’ best
estimate of the Company’s liability for rehabilitating areas
disturbed by mining activities. Rehabilitation costs are recognised
based on the area disturbed and estimated cost of rehabilitation
per hectare, which is reviewed regularly against actual
rehabilitation cost per hectare. Actual rehabilitation expenditure
is incurred approximately 12 months after the area has been
disturbed. During the financial year, there was a release of $0.4
million (2022: $4.0 million) to reflect the actual mine
rehabilitation costs incurred, and an addition to the provision of
$1.7 million (2022: $4.1 million) for areas newly disturbed.
Other provisions comprise an amount of $nil (2022: $nil) in
relation to a potential indirect tax liability. The matter was
resolved in 2022 following a final settlement of $3.2 million
agreed with the Mozambican Tax Authority.
16. Trade and other payables
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Trade
payables |
6,510 |
7,305 |
Deferred
income |
2,752 |
2,740 |
Accruals |
29,302 |
25,248 |
|
38,564 |
35,293 |
|
|
|
Included in accruals at the financial year end is an amount of
$1.4 million (2022: $1.6 million) for payroll and social insurance
taxes.
Deferred income relates to sales contracts which contain
separate performance obligations for the sale of mineral products
and the provision of freight services. The portion of the revenue
representing the obligation to perform the freight service is
deferred and recognised over time as the obligation is fulfilled,
along with the associated costs.
17. Current tax liabilities
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Current tax
liabilities |
6,921 |
8,893 |
|
|
|
Refer to Note 6 for further information on the Group’s tax
expense.
18. Financial instruments
|
Unaudited
2023 |
2022 |
|
Carrying amount
$’000 |
Fair value
$’000 |
|
Carrying amount
$’000 |
Fair value
$’000 |
|
Financial assets at fair value through profit and
loss
Trade receivables 1 |
|
- |
- |
31,188 |
31,188 |
Level 2 |
Financial assets at fair value through OCI |
|
|
|
|
|
|
Trade
receivables 2 |
110,534 |
110,534 |
|
43,065 |
43,065 |
Level 2 |
Financial assets not measured
at fair value |
|
|
|
|
|
|
Trade
receivables 3 |
16,908 |
16,908 |
|
30,717 |
30,717 |
Level 2 |
Cash and cash equivalents |
71,048 |
71,048 |
|
108,271 |
108,271 |
Level 2 |
|
198,490 |
198,490 |
|
213,241 |
213,241 |
|
Financial liabilities not measured
at fair value |
|
|
|
|
|
|
Bank loans |
47,873 |
48,799 |
|
78,578 |
80,795 |
Level 2 |
|
|
|
|
|
|
|
1 Relates to trade receivables which will be
discounted through the Barclay’s Bank facility.
2 Relates to trade receivables which may be factored
through the ABSA facility or discounted through the Barclays’s Bank
facility.
3 Relates to trade receivables which will not be
discounted or factored.
The carrying amounts and fair values of financial assets and
financial liabilities including their levels in fair value
hierarchy are detailed above. The table does not include fair value
information for other receivables, prepayments, trade payables and
accruals as these are not measured at fair value as the carrying
amount is a reasonable approximation of their fair value.
Trade receivables or letters of credit where it is not known at
initial recognition if they will be factored are classified as fair
value through other comprehensive income (FVOCI). Trade receivables
which will not be factored and for which balances will be recovered
under the sale contract credit terms are initially measured at fair
value and subsequently measured at amortised cost.
In the case of factored receivables, the Group derecognises the
discounted receivable to which the arrangement applies when payment
is received from the bank as the terms of the arrangement are
non-recourse. The payment to the bank by the Group’s customers are
considered non-cash transactions for the purposes of the
consolidated statement of cashflows.
The valuation technique used in measuring Level 2 fair values is
discounted cash flows, which considers the expected receipts or
payments discounted using adjusted market discount rates or where
these rates are not available estimated discount rates.
The Group has exposure to credit risk, liquidity risk and market
risk arising from financial instruments.
Risk management framework
The Board is ultimately responsible for risk management within the
Group. It has delegated responsibility for the monitoring of the
effectiveness of the Group’s risk management and internal control
systems to the Audit and Risk Committee. The Board and Audit and
Risk Committee receive reports from executive management on the key
risks to the business and the steps being taken to mitigate such
risks. The Audit and Risk Committee is assisted in its role by
internal audit. Internal audit undertakes both regular and ad hoc
reviews of risk management controls and procedures, the results of
which are reported to the Audit and Risk Committee.
Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or a counterparty to a financial instrument fails to meet
its contractual obligations and arises principally from the Group’s
trade receivables from customers. The carrying amount of financial
assets represents the maximum credit exposure.
The Group’s exposure to credit risk is influenced by the
individual circumstances of each customer. The Group also considers
the factors that may influence the credit risk of its customer
base, including the default risk associated with the industry and
country in which customers operate.
Before entering into sales contracts with new customers, the
Group uses an external credit scoring system to assess the
potential customer’s credit quality. The credit quality of
customers is reviewed regularly during the year and where
appropriate credit limits or limits to the number of shipments
which can be outstanding at any point are imposed.
The Group’s customers have been transacting with the Group for a
significant number of years, and no customers’ balances have been
written off or are credit impaired at the financial year end. In
monitoring customer credit risk, customers are reviewed
individually and the Group has not identified any factors that
would merit reducing exposure to any particular customer. The Group
does not require collateral in respect of trade receivables.
The gross exposure to credit risk for trade receivables by
geographic region was as follows:
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
China |
38,693 |
19,009 |
Asia (excluding
China) |
24,905 |
17,243 |
Europe |
34,150 |
45,806 |
USA |
29,597 |
22,776 |
Africa |
97 |
136 |
Total |
127,442 |
104,970 |
|
|
|
At 31 December 2023, $63.8 million (2022: $35.4 million) is due
from the Group’s three largest customers.
A summary of the Group’s exposure to credit risk for trade
receivables is as follows:
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
External credit
ratings at least Baa3 (Moody’s) |
65,266 |
31,188 |
Other |
63,756 |
75,316 |
Total gross carrying amount |
129,022 |
106,504 |
Loss allowance |
(1,580) |
(1,534) |
Total |
127,442 |
104,970 |
|
|
|
The following table provides ageing information relevant to the
exposure to credit risk for trade receivables from individual
customers. No balances were considered credit impaired at 31
December 2023 or 31 December 2022.
|
Current
$’000 |
More than
30 days
past due
$’000 |
More than
60 days
past due
$’000 |
More than
90 days
past due
$’000 |
Total
$’000 |
|
|
|
|
|
|
2023 |
127,383 |
- |
- |
59 |
127,442 |
2022 |
104,962 |
- |
- |
8 |
104,970 |
|
|
|
|
|
|
Expected credit loss assessment of trade
receivables
For trade receivables measured at fair value through OCI and trade
receivables measured at amortised cost, the Group allocates to each
customer a credit risk grade based on data that is determined to be
predictive of the risk of loss (including but not limited to
external ratings, financial statements and available market
information about customers) and applying experienced credit
judgement.
The following table provides information about the exposure to
credit risk and expected credit losses as at 31 December 2023.
Equivalent to Moody’s credit rating |
Weight average loss rate |
Gross carrying amount
$’000 |
Impairment loss allowance
$’000 |
Credit impaired |
|
|
|
|
|
Other |
2.0% |
63,756 |
1,580 |
No |
|
|
|
|
|
|
|
|
|
|
The following table provides information about the exposure to
credit risk and expected credit losses as at 31 December 2022.
Equivalent to Moody’s credit rating |
Weight average loss rate |
Gross carrying amount
$’000 |
Impairment loss allowance
$’000 |
Credit impaired |
|
|
|
|
|
|
|
Other |
2.0% |
75,316 |
1,534 |
No |
|
|
|
|
|
|
|
|
|
|
|
The movement in expected credit losses in respect of trade
receivables were measured at amortised cost or fair value through
other comprehensive income during the year was as follows:
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
Balance at 1
January |
1,534 |
424 |
Net remeasurement of loss allowance |
46 |
1,110 |
Balance at 31 December |
1,580 |
1,534 |
|
|
|
The credit risk on cash and cash equivalents is limited because
funds are deposited with banks with high credit ratings assigned by
international credit rating agencies. For deposits in excess of $75
million the Group requires that the institution has an A-
(S&P)/A3 (Moody’s) long-term rating. For deposits in excess of
$50 million, the Group requires that the institution has a BB-
(S&P)/Ba3 (Moody’s) long-term rating.
At 31 December 2023 and 2022 cash was deposited with the
following banks:
|
2023 |
2022 |
|
Long-term credit rating |
Long-term credit rating |
|
$ million |
S&P |
Moody’s |
$ million |
S&P |
Moody’s |
|
|
|
|
|
|
|
Nedbank
Ltd |
25.8 |
BB- |
Ba2 |
- |
- |
- |
Barclays Bank
plc |
23.2 |
A/+ Stable |
A1/ Stable |
81.4 |
A + |
A1/ Stable |
FirstRand Bank
Limited |
10.1 |
BB- |
Ba2 |
- |
BBB - |
Ba2/ Stable |
HSBC Bank
plc |
- |
- |
- |
1.0 |
AA / Stable |
A1/ Stable |
Absa Bank
Mauritius Limited |
4.9 |
- |
Ba |
20.5 |
|
Ba2/ Negative |
|
|
|
|
|
|
|
Liquidity risk
Liquidity risk is the risk that the Group will encounter difficulty
in meeting the obligations associated with its financial
liabilities that are settled in cash payments. The Group’s
objective when managing liquidity is to ensure that it will have
sufficient liquidity to meet its liabilities when they are due.
The Group monitors Mine payment forecasts, both operating and
capital, which assist it in monitoring cash flow requirements and
optimising its cash return on investments. The Group aims to
maintain the level of its cash and cash equivalents at an amount in
excess of expected cash outflows on financial liabilities. The
Group monitors the level of expected cash inflows on trade
receivables together with expected cash outflows on trade and other
payables.
The Group has a trade finance facility with Absa Bank for three
of the Group’s largest customers. In accordance with this facility,
the bank purchases 80% of the receivable without recourse. The
facility is for a maximum amount of $30.0 million with limits on
the maximum amount that can be factored for each of the customers
named in the facility. During the period, no trade receivables were
factored under this agreement. At the year end, trade receivables
amounting to $45.3 million (2022: $43.1 million) may be factored
under this facility and are therefore included in trade receivables
measured at fair value through OCI as at 31 December 2023. The cost
of this facility for the period, which amounted to $nil million
(2022: $0.2 million), is included in finance costs in the statement
of comprehensive income and in net cash from operating activities
in the statement of consolidated cash flows.
The Group has a trade facility with Barclays Bank for customers
which it sells to under letter of credit terms. Under this
facility, Barclays Bank confirms the letter of credit from the
issuing bank and therefore assumes the credit risk. Barclays Bank
can also discount these letters of credit thereby providing early
payment of receivables to the Group. There is no limit under the
Barclays Bank facility. During the period, trade receivables of
$10.9 million (2022: $201.4 million) were discounted under this
facility. At the year end, there were $65.2 million (2022: $31.2
million) of trade receivables which can be discounted under this
facility. The cost of this facility for the period, which amounted
to $1.5 million (2022: $2.0 million), is included in finance costs
in the statement of comprehensive income and in net cash from
operating activities in the statement of consolidated cash
flows.
The table below summarises the maturity profile of the Group’s
financial liabilities at 31 December 2023 based on the gross
contractual undiscounted payments:
Financial liabilities |
Total
$’000 |
Less than
one year
$’000 |
Between
two and five years
$’000 |
More than
five years
$’000 |
|
|
|
|
|
Bank
loans |
48,799 |
33,087 |
15,712 |
- |
Lease
liabilities |
2,019 |
390 |
1,173 |
456 |
Trade and other payables |
38,564 |
38,564 |
- |
- |
|
89,382 |
72,041 |
16,885 |
456 |
|
|
|
|
|
The table below summarises the maturity profile of the Group’s
financial liabilities at 31 December 2022 based on the gross
contractual undiscounted payments:
Financial liabilities |
Total
$’000 |
Less than
one year
$’000 |
Between
two and five years
$’000 |
More than
five years
$’000 |
|
|
|
|
|
Bank
loans |
80,795 |
33,653 |
47,142 |
- |
Lease
liabilities |
2,409 |
390 |
1,447 |
572 |
Trade and other payables |
35,293 |
35,293 |
- |
- |
|
118,497 |
69,336 |
48,589 |
572 |
|
|
|
|
|
As disclosed in Note 14, the Group has bank loans that contain
loan covenants. A future breach of covenant may require the Group
to repay the loan earlier than indicated in the above table. Under
the loan agreement, the covenants are monitored on a regular basis
by Group finance and regularly reported to management and the
lenders to ensure compliance with the agreement.
Furthermore, the group has authorised and committed expenditure
on operations-related capital projects amounting to $93,7 million
(2022: $11.5 million).
Risk concentration
Concentrations arise when a number of counterparties are engaged in
similar business activities, or activities in the same geographical
region, or have economic features that would cause their ability to
meet contractual obligations to be similarly affected by changes in
economic, political or other conditions. Concentrations indicate
the relative sensitivity of the Group’s performance to developments
affecting a particular industry.
The Group evaluates the concentration of risk with respect to
trade receivables as low, as its customers are located in several
jurisdictions and industries and operate in largely independent
markets. Details of concentration of revenue are included in Note
2.
Market risk
Market risk is risk that changes in market prices, foreign exchange
rates and interest rates will affect the Group’s income statement.
The objective of market risk management is to manage and control
market risk exposures while optimising returns.
Currency risk
The Group is exposed to transactional foreign currency risk to the
extent that there is a mismatch between the currencies in which
sales, purchases, receivables and borrowings are denominated and
the respective functional currencies of Group companies. The
functional currency of all Group entities is US Dollars. The
presentational currency of the Group is US Dollars. Sales and bank
loans are denominated in US Dollars, which significantly reduces
the exposure of the Group to foreign currency risk. Payable
transactions are denominated in Mozambican Metical, South African
Rand, Euro, Sterling, Australian Dollar and Renminbi.
During the year the Group entered into an agreement with Absa
Bank Mauritius Ltd for the purchase and sale of US Dollars and
South African Rand and the purchase of Mozambican Metical. The
limit on the facility is $24 million and the maximum tenor is 3
months. The Group also entered into an agreement with Standard Bank
Mauritius Ltd for the purchase of South African Rand. The limit on
the facility is approximately $12.0 million and the maximum tenor
is 3 months. There were no forward contracts in place at the period
end.
Exposure to currency risk
The Group’s gross exposure to currency risk as at 31 December 2023
is as follows.
|
|
Mozambican Metical
$’000 |
South African Rand
$’000 |
Euro
$’000 |
Sterling
$’000 |
Australian Dollar
$’000 |
Renminbi
$’000 |
|
|
|
|
|
|
|
|
Trade and
other receivables |
|
12,956 |
1,712 |
338 |
395 |
156 |
- |
Cash and cash
equivalents |
|
5,371 |
9,296 |
571 |
499 |
3 |
17 |
Bank
loans |
|
- |
- |
- |
- |
- |
- |
Leases |
|
- |
- |
(1,255) |
- |
- |
- |
Trade and other payables |
|
(12,919) |
(1,741) |
(296) |
- |
- |
- |
Net exposure |
|
5,408 |
9,267 |
(642) |
894 |
159 |
17 |
|
|
|
|
|
|
|
|
The Group’s exposure to currency risk as at 31 December 2022 is
as follows.
|
|
Mozambican Metical
$’000 |
South African Rand
$’000 |
Euro
$’000 |
Sterling
$’000 |
Australian Dollar
$’000 |
Renminbi
$’000 |
|
|
|
|
|
|
|
|
Trade and
other receivables |
|
12,172 |
756 |
489 |
72 |
88 |
- |
Cash and cash
equivalents |
|
1,397 |
12,894 |
892 |
1,129 |
17 |
34 |
Bank
loans |
|
- |
- |
- |
- |
- |
- |
Leases |
|
- |
- |
(1,255) |
- |
- |
- |
Trade and other payables |
|
(20,367) |
(2,178) |
(502) |
(10) |
- |
- |
Net exposure |
|
(6,798) |
11,472 |
(376) |
1,191 |
105 |
34 |
|
|
|
|
|
|
|
|
Sensitivity analysis
A reasonably possible strengthening or weakening of the Mozambique
Metical, South African Rand, Euro, Sterling, Australian Dollar and
Renminbi by 10% against the US Dollar would have affected profit or
loss by the amounts shown below. The analysis assumes that all
other variables remain constant.
Profit or loss |
Mozambican Metical
$’000 |
South African Rand
$’000 |
Euro
$’000 |
Sterling
$’000 |
Australian
Dollar
$’000 |
Renminbi
$’000 |
|
|
|
|
|
|
|
31
December 2023 |
|
|
|
|
|
|
Strengthening |
540 |
927 |
(64) |
89 |
16 |
2 |
Weakening |
(540) |
(927) |
64 |
(89) |
(16) |
(2) |
31
December 2022 |
|
|
|
|
|
|
Strengthening |
(680) |
1,147 |
(38) |
119 |
11 |
3 |
Weakening |
680 |
(1,147) |
38 |
(119) |
(11) |
(3) |
|
|
|
|
|
|
|
Interest rate risk
The loan facilities are arranged at variable rates and expose the
Group to cash flow interest rate risk. Variable rates are based on
six-month SOFR. The borrowing rate at financial year end was 11.3%
(2022: 9.2%). The interest rate profile of the Group’s loan
balances at the financial year end was as follows:
|
Unaudited
2023
$’000 |
2022
$’000 |
|
|
|
|
|
|
|
Variable rate
debt |
48,799 |
80,795 |
|
- |
|
|
|
|
|
Under the assumption that all other variables remain constant, a
reasonable possible change of 1% in the six-month SOFR rate results
in a $0.5 million (2022: $0.8 million) change in finance costs for
the financial year.
The above sensitivity analyses are estimates of the impact of
market risks assuming the specified change occurs. Actual results
in the future may differ materially from these results due to
developments in the global financial markets, which may cause
fluctuations in interest rates to vary from the assumptions made
above and therefore should not be considered a projection of likely
future events.
Interest rate benchmark reform
A fundamental reform of major interest rate benchmarks is being
undertaken globally, including the replacement of some interbank
offered rates (IBORs) with alternative nearly risk-free rates
(referred to as “IBOR reform”), including LIBOR (the London
Interbank Offered Rate).
Pursuant to an Amendment and Restatement Agreement entered into
on 9 March 2023 in respect of the Group’s debt facilities, the
basis on which interest is calculated in respect of those
facilities was amended with effect from 11 March 2023. As a result
of the amendment, interest rates for interest periods commencing
from 11 March 2023 onwards were no longer determined by reference
to US LIBOR; instead they are determined on the basis of the
applicable Term SOFR Rate. While US LIBOR represented an inter-bank
lending rate, Term SOFR is a published screen rate derived from
SOFR, being the secured overnight financing rate (SOFR)
administered by the Federal Reserve Bank of New York. As SOFR
represents a risk-free rate, a credit adjustment spread is applied
in addition, which spread varies according to the length of the
relevant interest period.
The Group has concluded that the new basis for determining
cashflows is economically equivalent to the previous basis.
19. Events after the statement of financial position
date
New Debt Facility
On 4 March 2024, the Group entered into a $200
million Revolving Credit Facility (“RCF”) provided by Absa Bank
Limited (acting through its Corporate and Investment Banking
Division), Nedbank Limited (acting through its Nedbank Corporate
and Investment Banking division) (“Nedbank”), Rand Merchant Bank
and Standard Bank Group (“Standard Bank”). The Mandated Lead
Arranger in respect of the Facility was Rand Merchant Bank.
The interest rate is 4.85% plus SOFR with a term
of five years. The facility replaces the existing corporate debt
facilities that were put in place in 2019. The facility envisages
the debt sharing of security with mine closure guarantee facility
of up to $50 million (an increase from the $40 million facility
under the existing facilities).
Proposed dividend
On 19 March 2024, the Board proposed a final dividend of USc38.54
per share. This proposed dividend is subject to approval by the
shareholders at the Annual General Meeting. These financial
statements do not reflect this dividend.
GLOSSARY – ALTERNATIVE PERFORMANCE MEASURES
Certain financial measures set out in the Annual Report to 31
December 2023 are not defined under International Financial
Reporting Standards (IFRS), but represent additional measures used
by the Board to assess performance and for reporting both
internally and to shareholders and other external users.
Presentation of these Alternative Performance Measures (APMs)
provides useful supplemental information which, when viewed in
conjunction with the Group’s IFRS financial information, allows for
a more meaningful understanding of the underlying financial and
operating performance of the Group.
These non-IFRS measures should not be considered as an
alternative to financial measures as defined under IFRS.
Descriptions of the APMs included in this report, as well as their
relevance for the Group, are disclosed below.
APM |
Description |
Relevance |
EBITDA |
Operating profit/loss before depreciation and amortisation |
Eliminates the effects of financing, tax and depreciation to allow
assessment of the earnings and performance of the Group |
EBITDA margin |
Percentage of EBITDA to Mineral Product Revenue |
Provides a group margin for the earnings and performance of
the Group |
Capital costs |
Additions to property, plant and equipment in the period |
Provides the amount spent by the Company on additions to property,
plant and equipment in the period |
Cash operating cost per tonne of finished product produced |
Total costs less freight and other non-cash costs, including
depreciation and inventory movements divided by final product
production (tonnes) |
Eliminates the non-cash impact on costs to identify the actual cash
outlay for production and, as production levels increase or
decrease, highlights operational performance by providing a
comparable cash cost per tonne of product produced over time |
Cash operating cost per tonne of ilmenite net of co-products |
Cash operating costs less revenue of zircon, rutile and mineral
sands concentrates, divided by ilmenite production (tonnes) |
Eliminates the non-cash impact on costs to identify the actual cash
outlay for production and, as production levels increase or
decrease, highlights operational performance by providing a
comparable cash cost per tonne of ilmenite produced over time |
Net cash/debt |
Bank loans before transaction costs, loan amendment fees and
expenses plus lease liabilities net of cash and cash
equivalents |
Measures the amount the Group would have to raise through
refinancing, asset sale or equity issue if its debt were to fall
due immediately, and aids in developing an understanding of the
leveraging of the Group |
ROCE |
Return on capital employed |
ROCE measures how efficiently the Group generates profits from
investment in its portfolio of assets. |
Shareholder returns |
Dividends and share buy backs |
Shareholder returns comprise the interim dividend, the proposed
final dividend to be approved by shareholders at the AGM and any
share buy backs
|
EBITDA
|
2019
$m |
2020
$m |
2021
$m |
2022
$m |
2023
$m |
|
|
|
|
|
|
Operating
profit |
57.3 |
33.4 |
151.1 |
233.4 |
155.1 |
Depreciation |
33.4 |
42.3 |
63.1 |
64.6 |
65.2 |
EBITDA |
90.7 |
75.7 |
214.2 |
298.0 |
220.3 |
|
|
|
|
|
|
EBITDA margin
|
2019
$m |
2020
$m |
2021
$m |
2022
$’m |
2023
$’m |
|
|
|
|
|
|
EBITDA |
90.7 |
75.7 |
214.2 |
298.0 |
220.3 |
Mineral Product Revenue |
255.5 |
231.5 |
420.5 |
498.4 |
437.1 |
EBITDA margin (%) |
35% |
33% |
51% |
60% |
50% |
|
|
|
|
|
|
Cash operating cost per tonne of finished
product
|
2019
$m |
2020
$m |
2021
$m |
2022
$m |
2023
$m |
|
|
|
|
|
|
Cost of
sales |
195.7 |
192.3 |
295.0 |
282.7 |
294.9 |
Administrative expenses |
17.9 |
18.1 |
9.8 |
9.9 |
8.4 |
Total operating costs |
213.6 |
210.4 |
304.8 |
292.6 |
303.3 |
Freight |
(15.4) |
(12.2) |
(35.4) |
(27.6) |
(21.4) |
|
|
|
|
|
|
Total operating costs less freight |
198.2 |
198.2 |
267.5 |
265.0 |
281.9 |
Non-cash
costs |
|
|
|
|
|
Depreciation
and amortisation |
(33.4) |
(42.3) |
(63.1) |
(64.6) |
(65.2) |
Expected credit
losses |
- |
- |
(0.2) |
(1.1) |
- |
Share-based
payments |
(1.8) |
(0.5) |
(1.1) |
(2.2) |
(3.3) |
Mineral product
inventory movements |
(4.5) |
4.9 |
(9.3) |
21.6 |
14.7 |
|
|
|
|
|
|
Total cash operating costs |
158.5 |
160.3 |
195.7 |
218.7 |
228.1 |
Final product production tonnes |
988,300 |
840,500 |
1,228,500 |
1,200,800 |
1,091,500 |
Cash operating cost per tonne of finished product |
$160 |
$191 |
$159 |
$182 |
$209 |
|
|
|
|
|
|
Cash operating cost per tonne of ilmenite
|
2019
$m |
2020
$m |
2021
$m |
2022
$’m |
2023
$’m |
|
|
|
|
|
|
Total cash
operating costs |
158.5 |
160.3 |
195.7 |
218.7 |
228.1 |
Less revenue from co-products zircon,
rutile and mineral sands concentrate |
(84.5) |
(63.2) |
(85.8) |
(150.9) |
(122.0) |
Total cash costs less co-product revenue |
74.0 |
97.1 |
109.9 |
67.8 |
106.1 |
Ilmenite product production tonnes |
892,900 |
756,000 |
1,119,400 |
1,088,300 |
986,300 |
Cash operating cost per tonne of ilmenite |
$83 |
$128 |
$98 |
$62 |
$108 |
|
|
|
|
|
|
Net cash/debt
|
2019
$’m |
2020
$’m |
2021
$’m |
2022
$’m |
2023
$’m |
|
|
|
|
|
|
Bank debt |
(60.9) |
(145.8) |
(148.1) |
(78.6) |
(47.9) |
Transaction costs |
(6.6) |
(5.4) |
(3.8) |
(2.2) |
(0.9) |
Gross debt |
(67.5) |
(151.2) |
(151.9) |
(80.8) |
(48.8) |
Lease
liabilities |
(4.5) |
(3.4) |
(2.2) |
(1.8) |
(1.5) |
Cash and cash equivalents |
81.2 |
87.2 |
69.1 |
108.3 |
71.0 |
Net cash/(debt) |
9.2 |
(67.4) |
(85.0) |
25.7 |
20.7 |
|
|
|
|
|
|
Return on Capital Employed
|
Restated
$m |
Restated
$m |
Restated
$m |
2022
$’m |
2023
$’m |
|
|
|
|
|
|
Operating
profit |
57.3 |
33.4 |
151.1 |
233.4 |
155.1 |
Total Equity and Non-Current Liabilities |
984.0 |
1,087.5 |
1,045.4 |
1,170.4 |
1,180.9 |
ROCE |
6% |
3% |
15% |
20% |
13% |
|
|
|
|
|
|
GLOSSARY – TERMS
Term |
Description |
AIFR |
All injuries frequency rate. Provides the number of injuries at the
Mine in the year, per 200,000 hours worked. |
AGM |
Annual general meeting |
CIF |
The seller delivers when the goods pass the ship’s rail in the port
of shipment. Seller must pay the cost and freight necessary to
bring goods to named port of destination. Risk of loss and damage
are the same as CFR. Seller also has to procure marine insurance
against buyer’s risk of loss/damage during the carriage. Seller
must clear the goods for export. This term can only be used for sea
transport. |
CFR |
This term means the seller delivers when the goods pass the ship’s
rail in port of shipment. Seller must pay the costs and freight
necessary to bring the goods to the named port of destination, but
the risks of loss or damage, as well as any additional costs due to
events occurring after the time of delivery, are transferred from
seller to buyer. Seller must clear goods for export. This term can
only be used for sea transport. |
The Company or Parent Company |
Kenmare Resources plc. |
DFS |
Definitive feasibility studies are the most detailed and will
determine definitively whether to proceed with the project. A
definitive feasibility study will be the basis for capital
appropriation, and will provide the budget figures for the project.
Detailed feasibility studies require a significant amount of formal
engineering work and are accurate to within approximately
10–15%. |
EdM |
Electricidade de Moçambique. |
EGM |
Extraordinary General Meeting |
EPCM |
Engineering, Procurement and Construction Management. |
FOB |
Free on Board means that the seller delivers when the goods pass
the ship’s rail at the named port of shipment. This means the buyer
has to bear all costs and risks to the goods from that point. The
seller must clear the goods for export. This term can only be used
for sea transport. |
Free Cash Flow |
Free Cash Flow is the cash generated by the Group in a reporting
period before distributions to shareholders. |
Gender diversity |
Percentage of females in the workforce at the Moma Mine. The Group
recognise the benefits to our business of supporting diversity,
equity, and inclusion for long-term sustainable success. |
GHG emissions |
Scope 1 & 2 Greenhouse Gas emissions. The Group acknowledges
the human contribution to climate change and aim to reduce
emissions its already low carbon intensity operations. |
GISTM |
Global Industry Standard of Tailings Management |
Group or Kenmare |
Kenmare Resources plc and its subsidiary undertakings. |
HMC |
Heavy mineral concentrate extracted from mineral sands deposits and
which include ilmenite, zircon, rutile and other heavy minerals and
silica. |
Implementation Agreement |
The agreement for the Moma Heavy Mineral Sands Industrial Free Zone
Project between Kenmare Moma Processing Limited (a company
incorporated in Jersey whose rights and interests were transferred
to KMPL in November 2002), a wholly owned subsidiary of Kenmare,
and Mozambique dated 21 January 2002. |
KMAD |
Kenmare Moma Development Association |
KMML Mozambique Branch |
Mozambique branch of Kenmare Moma Mining (Mauritius) Limited
(KMML). |
KMPL Mozambique Branch |
Mozambique branch of Kenmare Moma Processing (Mauritius) Limited
(KMPL). |
KRSP |
Kenmare Resources plc Restricted Share Plan |
Lenders |
Absa Bank Limited (acting through its Corporate and Investment
Banking Division) (“Absa”), The Emerging Africa Infrastructure Fund
(part of the Private Infrastructure Development Group (“PIDG”))
(“EAIF”), Nedbank Limited (acting through its Nedbank Corporate and
Investment Banking division) (“Nedbank”), Rand Merchant Bank and
Standard Bank Group (“Standard Bank”). |
LTI |
Lost time injury. Measures the number of injuries at the mine that
result in time lost from work. |
LTIFR |
Lost time injury frequency rate. Measures the number of injuries
causing lost time per 200,000 man hours worked on site |
Marketing – finished products shipped |
Finished products shipped to customers during the period. Provides
a measure of finished products shipped to customers |
Mining – HMC produced |
Heavy mineral concentrate extracted from mineral sands deposits and
which includes ilmenite, zircon, rutile, concentrates and other
heavy minerals and silica. Provides a measure of heavy mineral
concentrate extracted from the Mine |
Moma, Moma Mine or the Mine |
The Moma Titanium Minerals Mine consisting of a heavy mineral sands
mine, processing facilities and associated infrastructure, which is
located in the north east coast of Mozambique under licence to the
Project Companies. |
Mine Closure Guarantee Facility |
$40 million debt facility dated 11 December 2019 between the
Lenders and KMML Mozambique Branch and KMPL Mozambique Branch. |
MTA |
Mozambique Ministry of Land and Environment. |
MSP |
Mineral Separation Plant. |
Mtpa |
Million tonnes per annum. |
NOSA |
National Occupational Safety Association |
OIA |
Oman Investment Authority formerly the State General Reserve Fund
of the Sultanate of Oman. |
Odd lot offer |
The offer made by the Company to members in the UK and Ireland who
held certificated holdings of less than 200 ordinary shares as
described in the circular to shareholders dated 21 April 2022. |
Ordinary Shares |
Ordinary shares of €0.001 each in the capital of the Company. |
PFS |
A feasibility study is an evaluation of a proposed mining project
to determine whether the mineral resource can be mined
economically. Pre-feasibility study is used to determine whether to
proceed with a detailed feasibility study and to determine areas
within the project that require more attention. Pre-feasibility
studies are done by factoring known unit costs and by estimating
gross dimensions or quantities once conceptual or preliminary
engineering and mine design has been completed. |
Processing – finished products produced |
Finished products produced by the mineral separation process.
Provides a measure of finished products produced from the
processing plants |
Project Companies |
Kenmare Moma Mining (Mauritius) Limited and Kenmare Moma Processing
(Mauritius) Limited, wholly owned subsidiary undertakings of
Kenmare Resources plc, which are incorporated in Mauritius. |
Revolving Credit Facility |
$200 million debt facility which was executed 11 March 2024 between
the Lenders and KMML Mozambique Branch and KMPL Mozambique
Branch. |
RUPS |
Rotary Uninterruptible Power Supply |
TCFD |
Task Force on Climate Related Financial Disclosures |
Tender Offer |
The invitation by the Company to eligible shareholders to tender
Ordinary Shares for purchase on-market by Peel Hunt LLP on the
terms and subject to the conditions set out in the circular dated
15 August 2023. |
Term Loan Facility |
$110 million debt facility dated 11 December 2019 between the
Lenders and KMML Mozambique Branch and KMPL Mozambique Branch. |
THM |
Total heavy minerals in the ore of which ilmenite (typically 82%),
rutile (typically 2.0%) and zircon (typically 5.5%) total
approximately 90%. |
UK |
United Kingdom |
WCP |
Wet Concentrator Plant. |
WCP A |
The original WCP which started production in 2007. |
WCP B |
The second WCP which started production in 2013. |
WCP C |
The third WCP which started production in 2020. |
WHIMS |
Wet High Intensity Magnetic Separation Plant. |
Kenmare Resources (LSE:KMR)
Historical Stock Chart
From Mar 2024 to Apr 2024
Kenmare Resources (LSE:KMR)
Historical Stock Chart
From Apr 2023 to Apr 2024