Kenmare Resources hoping production picks up after first quarter dip

(Alliance News) - Kenmare Resources PLC on Thursday said it was on track to meet its 2024 production guidance, despite reporting a muted set of first quarter results.

Kenmare is a mining company, which operates the Moma titanium minerals mine on the northeast coast of Mozambique.

Shares in Kenmare were down 6.0% at 337.95 pence each in London on Thursday morning.

In the quarter ended March 31, the company excavated 9.2 million tonnes of ore at a grade of 4.15%, compared to 9.3 million tonnes at 4.13% in the first quarter of 2023.

Shipments dropped 11% to 242,900 in the quarter from 271,700 a year prior.

Production rates fell for almost all commodities other than Ilmenite, which increased 0.6% to 205,500 from 204,300 tonnes.

Primary zircon experienced the sharpest decline, down 27% to 8,300 from 11,400 tonnes.

However, Kenmare said that the zircon market has shown some signs of recovery since January, thanks in part to growing demand for the commodity in India, though it added that European demand remains weak.

Kenmare experienced "higher than expected demand" in the three months, and said it has a "strong" order book for the second quarter.

Looking ahead, the miner said it is on track to meet its 2024 guidance, with production expected to strengthen over the rest of the year "due to improved power stability in the dry season and higher expected grades in H2".

In 2024, Kenmare expects to produce 950,000 to 1.1 million tonnes of ilmenite, 45,000 to 50,000 tonnes of primary zircon, 8,000 to 9,000 tonnes of rutile, and between 37,000 and 41,000 tonnes of concentrates.

Managing Director Michael Carvill said: "Production in Q1 was in line with our expectations and consistent with guidance. We anticipate production will strengthen through the rest of the year, due to a stronger grade profile and typically fewer seasonal power interruptions.

"The markets for our products were encouraging in Q1, with stronger than expected demand, particularly for ilmenite. This was driven by recovering titanium pigment demand and the continued growth of the titanium metal market."

By Hugh Cameron, Alliance News reporter

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