LSE-listed titanium minerals and zircon producer Kenmare Resources produced 43% more heavy mineral concentrate (HMC) year-on-year during the first half of this year, at 798 500 t.

HMC production was 436 600 t in the second quarter, representing a 41% increase compared with the corresponding period of 2020, which is mainly attributable to a 43% increase in ore grades and a 6% increase in excavated ore volumes, at 10.9-million tonnes.

This production performance set a new quarterly record of HMC production.

During the second quarter, excavated ore volumes also increased by 22% compared with the first quarter, benefitting from higher mining rates from all plants.

Ilmenite production rose broadly in line with increased HMC production to 283 900 t, representing a 35% increase year-on-year.

Despite ilmenite recoveries being slightly lower than expected in the second quarter of this year, Kenmare notes that production set a new quarterly record and recoveries have now returned to expected levels.

Primary zircon production increased by 28% to 14 900 t in the second quarter on the back of increased HMC consumption.

Rutile production was 2 200 t, up 47% on production of the second quarter of 2020 as a result of increased feed and improved circuit recoveries.

Concentrates production was 11 800 t, up 31% on the second quarter of 2020, as a result of increased HMC consumption.

MD Michael Carvill says the company’s capital investment over the past three years continues to deliver as the second quarter was a record quarter of production for ilmenite, improving on the record set in the first quarter of the year.

“Wet concentrator plant [WCP] B continues to perform well in Pilivili, supporting higher volumes of ore mined and final product output. We remain confident in the outlook for annual production and reiterate our guidance of 1.1-million to 1.2-million tonnes of ilmenite in 2021.”

Meanwhile, the $127-million capital project to move WCP B to Pilivili, including associated infrastructure, is now substantially complete, the company reports.

As such, the final parts of the HMC pumping pipeline for WCP B operations at Pilivili have been installed and are undergoing ramp-up. Heavy mineral product is being transported through the pipeline and a reduced trucking operation.

Kenmare expects the pipeline to be operating at capacity in the coming months.

However, he says Kenmare is concerned by the rise in Delta variant of Covid-19 cases in Southern Africa.

“Therefore, I am particularly pleased that we expect to offer Covid-19 vaccinations to all mine employees and contractors, as well as local communities, later this month.”

Carvill adds that market conditions for ilmenite and titanium feedstocks, in general, remained strong in the second quarter of the year, with pricing strengthening quarter-on-quarter. “The outlook for zircon has also continued to improve, with price increases during the quarter and continuing to date.”

Meanwhile, the company paid its 2020 final dividend of $0.08 on May 19 – the balancing payment of a 2020 full year dividend of $0.10, which was up 22% from 2019.

Going forward, Kenmare is targeting a 25% profit after tax dividend payment for this year.

In early April, Kenmare drew down, in full, its $40-million revolving credit facility to provide increased liquidity and flexibility in an unprecedented period.

However, the company repaid $20-million of this facility in June.

Consequently, as of June 30, Kenmare’s cash and cash equivalents were $56.6-million, while its gross bank loans, including accrued interest, were $132.7-million.

Accordingly, at the time, Kenmare had net debt of $76.1-million, compared with $64-million net debt as at December 31, 2020; which is mainly owing to the timing of capital expenditure payments and a reduction in the use of invoice factoring.