KMR Kenmare Resources Plc

 
TIDMKMR 
 
Kenmare Resources Plc. 
 
Chatham House, Chatham St, Dublin 2, Ireland. 
Tel: +353 1 671 0411   Fax: +353 1 671 0810 
Rua de Chuindi No.67, Maputo, Mozambique. 
Tel: +258 21 499 701  Fax:  +258 21 499 731 
Website: www.kenmareresources.com     Email:info@kenmareresources.com 
 
 
           Kenmare Resources Plc ("Kenmare" or "the Company") 
 
20(th) January, 2011 
                                Moma Mine Update 
 
Highlights 
 
  * Production of heavy mineral concentrate increased by 8% in the second half 
    of 2010 
  * Production of ilmenite increased by 12% in the second half of 2010 
  * Production of zircon increased by 21% in the second half of 2010 
  * 346,202 tonnes of finished products were shipped from Moma in the second 
    half of 2010 
  * Production expansion project proceeding on schedule 
  * Successfully negotiated significant price increases with customers for 2011 
  * Demand for all products continued to increase during the fourth quarter of 
    2010 
  * Strong interest from feedstock consumers to enter new sales agreements 
 
Operations 
 
Production of heavy mineral concentrate at the Company's Moma Titanium Minerals 
Mine was at nameplate capacity in the second half of 2010 and increased by 8% to 
496,190 tonnes compared with the first half.  This was a very strong performance 
given that mining operations ceased for a month due to a tailings pond breach in 
October. 
 
During the second half of 2010, the mineral separation plant produced 358,420 
tonnes of ilmenite, which is a 12% increase on the first half's production. 
Zircon output was 20,322 tonnes, representing a 21% increase, and rutile output 
was 3,314 tonnes, representing a 147% increase. The Company is pleased with the 
recovery improvements made during the period. Additional projects comprising the 
installation of extra separation machines are underway to further improve rutile 
recovery. 
 
The total finished products sold was 346,202 tonnes in the second half of 2010. 
This brought total shipments for the year to 712,650 tonnes compared to 418,000 
tonnes for 2009, representing an increase of 71%. 
 
A second trans-shipment vessel acquired by the Group arrived at the Moma Mine on 
31(st) December 2010. Following planned modifications, this vessel will increase 
the load-out capacity and flexibility of the export facilities. 
 
Site work will commence shortly on the upgrade of the jetty, which will enhance 
operational flexibility by allowing berthing and loading of the trans-shipment 
vessels on both sides of the jetty. This project is on schedule for completion 
in the second quarter of 2011. 
 
As previously reported, on 8(th) October a settling pond at the Moma Mine 
breached a retaining wall resulting in a release of water, sand and clay which 
flowed through part of the nearby village of Topuito. Kenmare has provided help 
and support to those affected by the breach. All affected families have returned 
to their homes and have received compensation. After extensive earthworks to 
ensure there could be no repetition of the spillage, mining operations resumed 
on 9(th) November and have been operating at full capacity levels since the 
latter part of the fourth quarter of 2010. 
 
Expansion 
 
Kenmare is advancing the implementation of a 50% expansion of output of the Moma 
Mine. The expansion team now consists of approximately 110 Moma expansion 
project personnel from the Engineering, Procurement and Construction Management 
(EPCM) contractor. Kenmare has a very experienced owner's team, with specific 
expertise gained from working on the Moma orebody. The owner's team supervises 
the EPCM contractor and participates in the design and specification of 
equipment. The first members of the construction team were mobilised to site on 
6(th) December 2010 and immediately commenced preliminary work, including the 
establishment of the construction camp.  Full mobilisation to site is planned by 
the end of first quarter of 2011. 
 
The construction of long lead-time items is well underway, while the remaining 
packages have been tendered and further contract awards are due shortly. The 
project is operating according to schedule, with expansion production ramp-up to 
take place during 2012. 
 
Product Market 
 
Increased underlying pigment demand, coupled with inventory rebuilding, led to 
continued strong demand growth for titanium feedstocks in the fourth quarter of 
2010. Some spot ilmenite sales were curtailed as a precautionary measure in the 
immediate aftermath of the pond spill to safeguard inventories for contracted 
customers. These spot ilmenite sales have since been concluded. 
 
The speed and strength of the demand recovery in 2010 caught many industry 
participants by surprise and feedstocks are now in tight supply, despite 
producers returning production to full capacity. This shortage will become more 
acute in the coming years, and prices are expected to increase significantly as 
limited new supply is expected to enter the market within this time horizon. 
 
In 2011, Kenmare's main product, ilmenite, is in strong demand from consumers in 
USA, Europe and the rapidly growing Chinese market. Following successful 
negotiations with customers and taking account of some legacy contracts, 
significant price increases for ilmenite sales volumes for 2011 over 2010 levels 
are expected.  Total forecasted ilmenite production volume has not been 
contracted, which will allow Kenmare to capitalise on further upward price 
movements in the spot market which are expected during 2011. 
 
There is strong interest from feedstock consumers to enter new sales agreements 
covering the expanded production from the Moma Mine, due to ramp-up in 2012. 
 
Demand for zircon continued to increase during the fourth quarter of 2010, 
driven by strong Chinese demand and recovering European demand. The zircon 
market currently remains tight with inventories at record low levels and this is 
expected to persist in 2011. Zircon prices increased significantly during 2010 
compared to 2009 levels, and further price increases are being implemented for 
sales during the first quarter of 2011. 
 
 
For further information, please contact: 
 
Kenmare Resources plc. 
Michael Carvill, Managing Director 
Tel: +353 1 6710411 
Mob: + 353 87 674 0110 
 
Tony McCluskey, Finance Director 
Tel: +353 1 6710411 
Mob: + 353 87 674 0346 
 
Murray Consultants 
Joe Heron 
Tel: +353 1 498 0300 
Mob: + 353 87 690 9735 
 
Tavistock Communications 
Charlie Geller/Leesa Peters 
Tel: +44 207 920 3150 
Mob: +44 7528 233 383 
 
 
 
 
 
 
 
This announcement is distributed by Thomson Reuters on behalf of 
Thomson Reuters clients. The owner of this announcement warrants that: 
(i) the releases contained herein are protected by copyright and 
    other applicable laws; and 
(ii) they are solely responsible for the content, accuracy and 
     originality of the information contained therein. 
 
Source: Kenmare Resources via Thomson Reuters ONE 
 
[HUG#1480919] 
 

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