The Moma mine in Mozambique
London-listed Kenmare Resources achieved a 26% year-on-year increase in mineral product revenues to $229.7-million for the six months ended June 30 and a 6% increase in earnings before interest, taxes, depreciation and amortisation to $110.4-billion.
Net profit increased by 8% year-on-year to $67.8-million.
The mineral sands miner, which operates the Moma mine, in Mozambique, attributes the “record” interim revenue and profit to stable markets for all finished products.
It has declared an interim dividend of $0.18 for the interim period – a 59% increase on the interim dividend of $0.11 reported for the prior comparable period.
Kenmare is targeting a full-year dividend of about $50-million.
The company’s heavy minerals concentrate production for the interim period decreased by 14% year-on-year to 633 900 t.
Kenmare attributes the lower output to power supply constraints; lower recoveries at Wet Concentrator Plant (WCP) A as a result of high slimes levels; WCP B being unable to operate in a fully automated mode during the second quarter of the year as a result of spares shortages; and the planned transition of WCP C to a new mining zone having taken longer than expected to conclude.
Total shipments for the six-months period increased by 31% year-on-year to 556 800 t on the back of increased shipping capacity and the drawdown of finished product stocks.
Kenmare MD Michael Carvill says production has improved so far in the second half of the year, on the back of higher grades, better HMC recoveries and increased tonnages mined.
SHARE BUYBACK
Kenmare is seeking to return up to £23.6-million, or about $30-million, to eligible shareholders by way of a tender offer at £4.22 a share.
The offer will provide eligible shareholders with an opportunity to sell part or all of their ordinary shares.
The offer will close on September 8.
CAPITAL PROJECTS
Kenmare plans to start the transitioning of WCP A to the Nataka orezone in 2025. The 18-month project is estimated to cost $247-million.
The majority of the capital cost provides for the replacement of WCP A’s two existing dredges and the addition of a desliming circuit, as well as the implementation of a tailings storage facility.
Kenmare expects to invest a further $23-million in additional pumping infrastructure and up to $25-million on potential power infrastructure upgrades.
Further, the miner believes it will be able to upgrade WCP B by redeploying one of the current dredges from WCP A and increasing the processing capacity of the plant from 2 400 t an hour to 3 400 t an hour.
Kenmare expects to fund the capital expenditures from existing resources and operating cash flows.