London-listed Kenmare Resources says it experienced a pivotal time in the fourth quarter of last year, benefitting from higher ore grades and higher ilmenite prices.
During the quarter under review, the company started mining the Pilivili orezone at its Moma titanium minerals mine, in Mozambique, following a successful move of its Wet Concentrator Plant B to the new site in the third quarter.
Kenmare says that, after the plant began operating in October, it started making a significant contribution to overall production, benefitting from "exceptionally high" grades.
This while a strong quarter for shipments was also recorded, with more than 300 000 t shipped in the fourth quarter.
Kenmare says it achieved or exceeded the midpoint of its August 2020 guidance ranges for all finished products and was targeting an increase in ilmenite production of between 45% and 60% for this year.
In addition to higher revenues, increased production is also expected to contribute to lower unit costs and higher cash flows, as well as to bring the company closer to its target of becoming a first quartile producer on the industry revenue to cost curve.
Global demand for ilmenite, Kenmare's primary product, exceeded supply in the fourth quarter last year and led to significant price increases.
Kenmare points out that, following its second and third consecutive dividends paid in 2020, these positive operational and market dynamics are expected to support increased cash flow, and, in turn, support Kenmare’s objective to increase shareholder returns.
Meanwhile, the company produced 1.2-million tonnes of heavy minerals concentrate (HMC) for the full year, compared with 1.2-million tonnes of HMC produced in the year ended December 31, 2019.
Ilmenite production of 756 000 t was 15% lower compared with the 892 900 t produced in the prior year, owing to lower HMC consumption, changes in immediate stocks and lower ilmenite recoveries in 2020.
Kenmare shipped 853 100 t of product − a 17% decrease year-on-year. The company says shipments were impacted by poor sea conditions and works to upgrade transshipment capacity.
The company has set its 2021 ilmenite production guidance at between 1.1-million and 1.2-million tonnes.
It will release its 2020 financial results on March 24.