Kenmare to miss ilmenite production guidance
The stock London-listed Kenmare Resources traded lower on Tuesday, after it said in an announced that it would fail to meet its ilmenite production guidance of 900 000 t to 960 000 t this year.
The operator of the Moma titanium minerals mine, in northern Mozambique, said its ilmenite production would be up to 3% below the lower end of the guidance range. Its new guidance range is 870 000 t to 900 000 t.
Following the successful automation of wet concentrator plant (WCP) B’s dredge, Kenmare is in the process of automating the first of the two dredges at WCP A, with the objective of increasing plant throughput and utilisation.
“Implementation of this project has been more challenging than expected, resulting in unplanned production downtime, and tipping the balance of Kenmare’s FY 2019 ilmenite production below 900 000 t,” the company explained in a statement.
In recent weeks, the Moma mine has also experienced reduced power reliability, owing to upgrade work being undertaken on the national power grid, contributing to decreased heavy mineral concentrate production during the fourth quarter. The upgrade work on the transmission grid was now complete.
Kenmare kept its total cash operating cost guidance unchanged at $151-million to $167-million, but revised the cash operating cost per tonne guidance is to a range of $160/t to $165/t, from $150/t to $160/t previously.
The guidance for coproducts is maintained at 44 500 t to 52 000 t of primary zircon, 8 100 t to 9 500 t of rutile and 33 500 t to 43 500 t of concentrates.
Kenmare also still expects total shipments for the year to exceed one-million tonnes, owing to strong inventory availability.
The company fell 5% to an intraday low of 206p a share, before regaining some losses to trade at 212p by 10:30 in London.
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