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Mozambique Mining: Kenmare revenues incresead by 82% in half year results

Aerial view of the mine pond, processing plant and the jetty. Image courtesy of Kenmare Resources plc.
Aerial view of the mine pond, processing plant and the jetty. Image courtesy of Kenmare Resources plc.

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 in northern Mozambique, announced today strong results regarding its six month period ended 30 June 2017 (“H1 2017”).

According to Kenmare Resources Managing Director, Michael Carvill, the company has produced a record one million tonnes of ilmenite in the twelve months to June 2017, whilst improving safety standards, and remains on target for 2017 production guidance. We have also produced record levels of zircon and are capturing more of it in

Carvill added that Kenmare also produced record levels of zircon and are capturing more of it in higher quality products. Increased shipments, higher average received prices, and lower unit costs have resulted in H1 EBITDA increasing to US$29.8 million. We look forward to building on these achievements.

Kenmare’s increased shipments, higher average received prices, and lower unit costs have resulted in H1 EBITDA increasing to US$29.8 million. We look forward to building on these achievements.

In relation to the company medium-term objective of optimising mining capacity, several development options are under assessment some of which may significantly reduce or defer previously guided capex, whilst optimising production volumes. Capital investment decisions will be made in the context of market conditions and maintaining balance sheet strength.

Overview

  • Ilmenite production in H1 2017 increased 25% to 504,800 tonnes compared to H1 2016, zircon production in H1 2017 increased 32% to 37,700 tonnes;
  • Total shipments of finished products in H1 2017 increased 21% to 535,700 tonnes;
  • Revenues increased 82% to US$102.4 million, as a result of increased prices and sales volumes;
  • Unit cash operating costs declined 14% in H1 2017 to US$131 per tonne (H1 2016: US$153 per tonne), a result of higher production and continued cost control
  • EBITDA of US$29.8 million, compared with negative US$10.7 million in H1 2016, a US$40.5 million positive change;
  • Profits increased to US$9.4 million in H1 2017, from a US$47.1 million loss in H1 2016, a US$56.5 million positive change;
  • The ilmenite price recovery continued in H1 2017 but with some recent softening in the Chinese market
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