RNS Number:5646C
Kenmare Resources PLC
25 April 2001
KENMARE RESOURCES PLC ("Kenmare")
Chairman's Statement & Results for Year Ended 31 December, 2000
Chairman's Statement
I am pleased to report that an independent Definitive Feasibility Study on the
Moma Titanium Minerals Project has been completed. This shows the project to
be technically feasible and commercially viable with an ungeared Internal Rate
of Return of 23.3% and a Net Present Value of US$205 million at a 10% discount
rate.
A Mining Licensing Agreement and favourable taxation status have been agreed
with the Government of Mozambique. We have dismantled the concentrator plant,
bought last year from BHP, and transported it to the port of Bunbury (Western
Australia) where it is awaiting transport to Moma. We have purchased a
separator plant from BHP, which came from the same Beenup operation as the
concentrator. We now own two of the three key components of a mineral sands
mining operation. The remaining component is the mining dredge. In addition,
we have developed a set of products to be produced by the Moma mine and have
commenced marketing these to our potential consumers. Finally, we have raised
further funds to progress the development of the project.
The completion of the Definitive Feasibility Study (DFS) on Moma is a notable
milestone for the Company. It is the result of many years work and is a
testimony to the support and help we have received from the Government of
Mozambique, who have actively contributed to this successful outcome.
The Mining Licensing Agreement specifies in detail the relationship between
the project mining company and the regulatory authorities for the life of the
mine. It is the key governing contract under which we will work and, by
clearly specifying the roles and responsibilities of each of the parties, it
will facilitate a good working relationship into the future. Our overall
taxation regime is a combination of two separate regimes. The mining aspects
of the project are governed by a taxation regime emanating directly from the
mining law. The processing aspects are covered by progressive legislation
enacted by the Government of Mozambique to facilitate the creation of
Industrial Free Zones. As a consequence, the processing element of the project
will be exempt from corporation tax, export duties and VAT. The processing
company will pay a 1% turnover tax from the sixth year of production.
The DFS is a significant report and includes contributions from many
consultants working under GRD Minproc, the independent Feasibility Study
contractor. Major individual studies cover mining, geotechnics, hydrology,
metallurgy, tailings disposal, transport, logistics, environment, marketing,
and a comprehensive financial analysis. The results are broadly in line with
the Prefeasibility Study, but are based on much more in-depth analysis and are
now more precise.
The key findings are:
- The project is technically feasible and commercially viable;
- The project is environmentally acceptable;
- Production will be 625,000 tonnes of ilmenite, 24,000 tonnes of zircon, and
12,500 tonnes of rutile;
- The Internal Rate of Return for the ungeared project is 23.3% and the Net
Present Value at a 10% discount is US$205 million. Payback is in 4.4 years;
- The total capital costs are estimated to be US$159.9 million;
- The operating surplus ranges from US$45 million to US$72 million per annum.
Our objective now is to open the mine in early 2003. The next step in order to
achieve this is to agree offtake arrangements with the principal consumers of
our products, ilmenite, zircon, and rutile. To this end we have been engaged
in a process to optimise products for each individual consumer. This involves
producing and dispatching samples of potential products, followed by consumer
testwork and feedback. Discussions then take place on alterations and
modifications of the products to suit each consumer's process requirements. We
have had a positive reaction to our samples from pigment producers, who are
the main consumers of titanium feedstock.
Following the development of offtake arrangements, we have to put in place the
necessary financing. We have had preliminary talks with funding institutions
which have indicated that they are supportive of the project.
Arranging the necessary offtake agreements and project funding, and
progressing the project through detailed design will be the focus of the
company's efforts over the coming months.
Charles Carvill, Chairman
25th April 2001
For more information :
Michael Carvill
Managing Director
+353-1-671 0411 or +353-87-6740110
Tony McCluskey
Financial Director
+353-1-671 0411 or +353-87-6740346
Tom Byrne
Murray Consultants
+353-1-6614666 or +353-86- 8104224
Tim Blackstone
Blackstone Business Communications
+44-207-2512544
www.kenmareresources.com
KENMARE RESOURCES PLC
CONSOLIDATED PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31st DECEMBER 2000
2000 1999
EURO EURO
Turnover - 2,705,346
Cost of Sales - (2,985,882)
-------------------------
Gross Loss - (280,536)
Other Operating Expenses (973,004) (3,778,832)
Other Operating Income - 10,677
-------------------------
Operating Loss (973,004) (4,048,691)
Interest Receivable 104,785 2,579
Interest Payable - (143,973)
-------------------------
Loss On Ordinary Activities Before Taxation (868,219) (4,190,085)
Taxation - -
-------------------------
Loss On Ordinary Activities After Taxation (868,219) (4,190,085)
Opening Balance - Profit and Loss
Account (deficit) (24,217,862) (20,027,777)
-------------------------
Closing Balance - Profit and Loss
Account (deficit) (25,086,081) (24,217,862)
=========================
Loss and Fully Diluted Loss Per Share (E 0.58c) (E 3.72c)
=========================
All amounts dealt with above relate to continuing operations.
KENMARE RESOURCES PLC
CONSOLIDATED BALANCE SHEET
AS AT 31st DECEMBER 2000
2000 1999
EURO EURO
FIXED ASSETS
Mineral Interests 9,095,938 6,096,971
Tangible Assets 44,764,682 34,767
-------------------------
53,860,620 6,131,738
-------------------------
CURRENT ASSETS
Debtors 63,435 64,987
Cash at Bank and In Hand 1,584,177 277,948
-------------------------
1,647,612 342,935
CREDITORS:
Amounts falling due within one year (4,124,286) (583,878)
-------------------------
NET CURRENT LIABILITIES (2,476,674) (240,943)
-------------------------
TOTAL ASSETS LESS CURRENT LIABILITIES 51,383,946 5,890,795
CREDITORS:
Amounts falling due after one year (1,215,011) -
PROVISION FOR LIABILITIES
AND CHARGES (1,489,215) -
-------------------------
48,679,720 5,890,795
=========================
CAPITAL AND RESERVES
Called Up Share Capital 23,025,358 19,852,731
Share Premium Account 14,113,837 9,005,921
Profit and Loss Account - (Deficit) (25,086,081) (24,217,863)
Revaluation Reserve 34,905,209 -
Other Reserve 1,721,397 1,250,006
-------------------------
Shareholders' Funds 48,679,720 5,890,79
=========================
KENMARE RESOURCES PLC
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31st DECEMBER 2000
2000 1999
EURO EURO
Net cash inflow/(outflow) from
operating activities 389,624 (2,445,550)
-------------------------
Returns on Investments & Servicing of Finance
Interest received 104,785 2,579
Interest payable - (143,973)
-------------------------
Net cash inflow/(outflow) from Returns on Investment &
Servicing of Finance 104,785 (141,394)
-------------------------
Capital expenditure & financial investment
Addition of Mineral Interests (3,012,807) (461,251)
Fixed Assets of Excluded Subsidiary - 10,446,514
Disposal of Tangible Fixed Assets - 13,554
Purchase of Tangible Fixed Assets (9,259,278) (4,246)
-------------------------
Net cash (outflow)/inflow from capital expenditure &
financial investment (12,272,085) 9,994,571
-------------------------
Net cash (outflow)/inflow before use of liquid
resources & financing (11,777,676) 7,407,627
-------------------------
Financing
Issue of Ordinary Share Capital 9,107,024 1,260,971
Cost of share issues (826,480) (45,035)
Finance Lease 37,842 -
Debt due within one year 3,572,940 -
Debt due beyond a year 1,192,579 (8,838,687)
-------------------------
Net cash inflow/(outflow) from financing 13,083,905 (7,622,751)
-------------------------
Increase/(Decrease) in cash 1,306,229 (215,124)
=========================
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