Projects Update
Kenmare Resources plc(“Kenmare”
or “the Company” or “the Group”)
14 December 2023
Projects Update
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, provides an update on capital projects and
outlook.
Statement from Michael Carvill, Managing
Director:
“The Board has given further approvals for the
upgrade of Wet Concentrator Plant (“WCP”) A and transition to the
Nataka ore zone. The project is expected to deliver consistent
production volumes for decades to come and maintain Kenmare’s low
operating costs, targeting the retention of a first quartile
industry position.
Production expectations for 2023 remain in line
with the revised guidance provided in July. Guidance for 2024 will
be provided with the Q4 2023 update in mid-January, with production
expected to be broadly in line with the 2023 revised guidance
range.
Ilmenite pricing in 2024 is expected to be lower
than 2023. However, Kenmare expects improved demand to emerge in
2024, as the year progresses and believes the medium-term and
long-term fundamentals for all products remain strong.”
Overview
- The Board has approved for
execution an upgrade to WCP A and development of a Tailings Storage
Facility (“TSF”), enabling the transition of WCP A to its new
mining zone in Nataka
- As previously announced, a contract
to construct two higher-capacity dredges was awarded in September
and is now in execution phase
- The remaining element of the
project, relating to infrastructure, is currently in Definitive
Feasibility Study (“DFS”) phase, scheduled for completion in Q2
2024
- Capital expenditure to the end of
2026 on the upgrade of WCP A and ancillary infrastructure is now
expected to be between $316-331 million
- The Final Investment Decision
(“FID”) for an upgrade of WCP B has been deferred while the WCP A
investment is prioritised
- Refinancing of debt facilities is
expected to complete in Q1 2024, with the existing $40 million
Revolving Credit Facility already renewed to end 2024
- Dividends in respect of 2023 to be
broadly in line with 2022
WCP A Project Update
WCP A will complete mining at Namalope in late
2025, and commence its transition to the Nataka ore zone, where it
is expected to operate for the remainder of its economic life,
exceeding 20 years.
The principal components of the project include
the replacement of WCP A’s two existing dredges with
higher-capacity dredges, the addition of a desliming circuit, and
the construction of a TSF. The DFS for these elements have now been
completed and execution has been approved by the Board. The DFS for
the supporting infrastructure is underway and is expected to be
completed in Q2 2024. WCP A Capital Costs
Total capital costs for the two new dredges, the
WCP A upgrade and the TSF are estimated at $225 million. While the
WCP A Infrastructure DFS is still underway and scheduled to be
completed in Q2 2024, costs are currently estimated to be $91-106
million. Therefore, the total capital cost to the end of 2026 is
estimated to be between $316-331 million, with approximately $10
million of additional infrastructure in subsequent years.
WCP B Upgrade Project
A DFS to upgrade WCP B is currently underway and
is expected to be completed in Q2 2024. The upgrade would add an
additional 1,000tph of capacity to the existing 2,400tph plant,
increasing its capacity by almost 42%.
The Company has decided to defer the FID on this
project while it prioritises the WCP A investment. Following the
FID, the WCP B upgrade would take approximately 15 months.
Financing and Shareholder
Returns
In September 2023, the Company commenced a debt
refinancing process to support its capital investment plans.
Significant progress has been made and the refinancing is expected
to complete in Q1 2024.
Kenmare’s existing $40 million Revolving Credit
Facility previously had a maturity date of 11 December 2023, and
has now been extended to December 2024, with interest at SOFR plus
4.25% per annum.
Total dividends in respect of 2023 are expected
to be approximately $50 million. In subsequent years revenues and
dividends will be partially subject to commodity prices and may be
lower than 2023, although the Company would expect to use the full
range of its 20-40% Profit After Tax dividend policy.
The person responsible for the release of this
announcement on behalf of the Company for the purposes of MAR is
Chelita Healy, Company Secretary.
For further information, please contact:
Kenmare Resources plcJeremy Dibb / Michael
StarkeInvestor Relationsir@kenmareresouces.comTel: +353 1 671
0411Mob: +353 87 943 0367
Murray (PR advisor)Paul
O’Kanepokane@murraygroup.ieTel: +353 1 498 0300Mob: +353 86 609
0221
Important Notice
This Announcement contains inside
information.
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.
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