Kenmare making solid progress with three-part growth strategy

Titanium and zircon producer Kenmare Resources announced on Monday that the Wet Concentrator Plant C development project produced its first heavy mineral concentrate in late February.

The London-listed firm said that as part of its growth strategy to increase production to 1.2 million tonnes per annum of ilmenite from 2021, it was undertaking three development projects, with the first - a 20% expansion of Wet Concentrator Plant B - commissioned successfully in late 2018.

It said the second project was for the development of a third mining operation, with Wet Concentrator Plant C delivering its first heavy mineral concentrate production in late February.

Acceptance and performance testing would begin “shortly”, after which the management of Wet Concentrator Plant C would be transferred from the development team to the operations team.

The project remained on track to be completed within its $45m budget, Kenmare said.

It explained that the third project, the relocation of Wet Concentrator Plant B from Namalope to the high grade ore zone at Pilivili, was on schedule to take place in the third quarter of 2020.

About 60% of contracts in relation to that project had already been awarded, the board said, and construction of the purpose-built road was said to be well underway.

“The construction of Wet Concentrator Plant C represents the last phase of our outlined mining capacity increase,” said managing director Michael Carvill.

“Later this year we will move Wet Concentrator Plant B from Namalope to the high grade Pilivili ore zone, positioning us to achieve our targeted production rate of 1.2 million tonnes per annum of ilmenite from 2021.”

Carvill said the projects were expected to enhance the company’s margins, provide stronger cash flow stability, and position it in the first quartile of the industry revenue-to-cost curve.

“Following the completion of our capital expenditure programme, we expect to generate significantly stronger free cash flow, which will enable us to provide higher returns to shareholders.”

Kenmare said it would release its 2019 preliminary results on 19 March.

At 0829 GMT, shares in Kenmare Resources were up 4.07% at 230p.