KMR Kenmare Resources Plc

RNS No 6299v
KENMARE RESOURCES PLC
24th October 1997


                        KENMARE RESOURCES PLC.

                         CHAIRMAN'S STATEMENT


Dear Shareholder,

During the period, the company concentrated on its 3 projects in Mozambique:
Congolone Mineral Sands, Ancuabe Graphite Mine and Gold Exploration in Niassa
Province.   Drilling operations have also commenced on a new exploration
opportunity in Yugoslavia.

Congolone

BHP are on site performing grid drilling to increase the confidence level of
the resource in the Moma area of our licence.   The objective is to upgrade
the categorisation from a resource towards a proven reserve.   After a slow
start, the programme is progressing well.  Over 10,000 metres of drilling has
been performed since the start of September.   A bulk sample of material from
Moma has been transported to Australia for metallurgical testwork.   Due to
the importance of this project to its overall operations, BHP has started
including progress at Congolone in quarterly statements to the Australian
stock exchange.

A decision by Gencor to build a large aluminium refinery in Mozambique
(investment circa $1.3 billion) has shown the country is now being judged as
suitable for major resource investments.

Ancuabe

The equipment necessary to upgrade our production level was commissioned on
the 10th of October.   We were immediately able to manufacture 99% carbon
graphite with one pass through the plant.   Previously this product was
manufactured by processing it through the plant and then laboriously
reprocessing it. The time required for this double processing was a
significant constraint on our production capacity.   The ability to make 99%
carbon material in one pass frees up capacity.   In addition the rate at which
we can make 98% carbon graphite will be substantially enhanced by this
upgrade.

We are faced with considerable unsatisfied demand from the market and are
being urged to expand again, and by a larger quantum, by our customers.  
Several companies in the graphite industry have expressed interest in funding
such an expansion.

Niassa

The drilling of the S1 vein on our southern licence indicated that the vein is
mineralised along its whole 2km length but the average of the drill samples
gives a sub-economic grade.   There are zones of higher grade mineralisation
within the 2km and further work is necessary.   However, the size of the
project is such that it would be difficult for Kenmare's shareholders to fund
the large scale bulk sampling which will be required.   Hence we have decided
to seek a joint venture partner to assist us in the development of this
project.

On the OD1 zone, our last hole, completed October 7, gave a very good
intersection of highly mineralised quartz.   Since then we have been
performing a geophysical programme to investigate the continuation of the zone
to the north and south.   The results of the geophysics indicate that at
either end the vein runs into a fault which displaces it by around 150 meters.
  Trenching has commenced on the areas indicated by the geophysics as being
the extensions of the vein.

Yugoslavia

Drilling has commenced on the Deli Jovan licence area.   The drilling is being
performed by our Joint Venture partners Geoinstitut, supervised by Kenmare.  
Deli Jovan has a history of gold production prior to World War II.   Kenmare
and Geoinstitut have performed geochemical and geophysical programmes over the
area.   The results of these programmes are positive.   They also tie in well
with historical records and the locations of old workings.   All this
information has been used to decide on suitable drilling sites.   Kenmare has
4 projects in Yugoslavia which are the subject of JV agreements and is looking
at other interesting areas.

Corporate Prospects/Outlook

The first three quarters of 1997 have been difficult for Kenmare.   We have
had to absorb the effect of the Bre-X fiasco and the fall in the gold price
which between them have caused a drop of 52% in the Toronto Africa index since
March.   In addition, the start up difficulties and delays at Ancuabe have
resulted in a cashflow deficit.  These factors combined to produce the
significant drop in share price which we have suffered.   However, BHP is
vigorously moving ahead with Congolone which is where the majority of
Kenmare's value lies.   Drilling has just commenced on a highly interesting
new gold opportunity in Yugoslavia.   At Niassa geophysics has reopened the
potential for OD1 to be a stand alone gold mine.   The equipment is finally in
place to allow Ancuabe to start generating cash for Kenmare.   We anticipate a
recovery in the share price.

Charles Carvill
Chairman.


                            INTERIM REPORT

The Group's unaudited Consolidated Profit & Loss Account for the six months
ended 30th June 1997 is as follows:

                        Note       6 months ended   6 months ended
                                     30 June 1997     30 June 1996
                                              IR#              IR#
               
Turnover                                  903,768          435,347
                                          -------          -------

Loss before Taxation                     (853,309)        (976,194)

Taxation                                         -                -
                                          --------         --------

Loss after Taxation                      (853,309)        (976,194)

Minority Interest        1               (113,567)         290,220

                                          --------         --------

Loss Attributable to the Group           (966,876)        (685,974)
                                          ========         ========

Loss per Share                             (0.97p)          (0.76p)
                                           =======          =======

Note 1. 

In the period under review, Kenmare Graphite Company Limited, a subsidiary of
Kenmare Resources plc., increased its stake in Grafites de Ancuabe, S.A.R.L.,
from 65% to 77%.  This transaction had the effect of transferring losses of
IR#113,567, which were previously attributable to the minority interest, to
Kenmare Resources plc. Group on consolidation.


The Interim statement is available for inspection at Chatham House, Chatham
Street, Dublin 2. Ireland.

END

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