JOHANNESBURG (miningweekly.com) – LSE-listed Kenmare Resources expects its Moma titanium minerals mine, in Mozambique, to deliver record full-year production levels at lower unit costs as it enters the final stretch of the year.
During the third quarter to September 30, the operation achieved quarterly records mostly across the board, with Kenmare revising guidance for the full year upwards.
“The third quarter of 2016 represented a record quarter for finished product output, demonstrating the benefits of stable power supply, increased supplemental mining and higher grades. 2016 is also expected to be a record year for production of all final products, and for unit costs to be even lower in the second half of the year,” said Kenmare MD Michael Carvill.
The group’s cash operating costs per tonne of finished product trended downwards in the quarter under review and are expected to be at the lower end of guidance of between $131/t and $141/t for the full year.
During the quarter, Kenmare mined 7.16-million tonnes of ore at an average grade of 4.81% and produced 325 100 t of heavy mineral concentrate, a 4% decrease on the preceding quarter.
Finished product volumes for the period included 243 500 t of ilmenite, up 12% when compared with the prior quarter, but down a marginal 1% year-on-year; and 19 700 t of zircon, including 7 400 t of lower-grade secondary zircon, a 48% surge on the preceding quarter and up 17% on the prior corresponding quarter last year.
The company now expected to deliver 890 000 t to 920 000 t of ilmenite and 65 000 t to 70 000 t of zircon for the full year.
“Not only is production increasing and costs falling, Chinese spot prices for ilmenite have increased by over 70% as a result of the decline in domestic production and falling port inventories. Kenmare is well positioned to benefit from increasingly favourable operational and market dynamics in 2017,” Carvill added.
Total shipments of finished products during the quarter under review increased 48% year-on-year to 280 800 t.
However, while sales demand remains strong, this represents a 9% contraction on the second quarter, owing to an ilmenite shipment being loaded over the period which was not reflected in the shipment figures for the quarter.
Sales comprised 259 400 t of ilmenite, 19 800 t of zircon and 1 600 t of rutile.
Closing stock of finished products at September 30 was 214 900 t, of which 60 000 t were being held for a customer and which has been subject to an advanced payment.