30th Jan 2015 11:42
LONDON (Alliance News) - Kenmare Resources PLC Friday said production and shipments increased in the fourth quarter from the third and also in all of 2014 from the year before, and said it is expecting to finalise a budget for 2015 in the next few weeks.
During the fourth quarter ended December 31, the company produced 366,600 tonnes of heavy mineral concentrate, a 16% rise quarter on quarter. Zircon production saw a small 1% increase to 14,800 tonnes, whilst rutile production rose by 6% to 1,700 tonnes during the quarter.
Production increased partially due to the company averaging a higher grade of 5.24% in the fourth quarter from 4.29% in the third quarter.
Ilmenite production was the only area to see a decline, down 14% quarter on quarter to 188,800 tonnes. The company said it had curtailed production in the second half of the year in reaction to market conditions, Kenmare said.
"Increasing domestic Chinese and international ilmenite production and delayed offtake from pigment and titanium slag plants contributed to soft Chinese market conditions. Therefore, Kenmare continued to curtail shipments to China during the period," it said.
"Ilmenite production was curtailed in the second half of 2014 by temporarily modifying our production strategy by limiting the output of sulphate grade ilmenite while maximising the volume of zircon and rutile produced," Kenmare said.
As a result, Kenmare has accumulated a stockpile of 60,600 tonnes of magnetic concentrate, which is being stored outside.
Sales of total finished products in the three months ended December 31, rose by 19% quarter on quarter to 217,500 tonnes. Shipments of finished products in the fourth quarter increased by 19% to 217,800 tonnes from 183,200 tonnes in the third quarter.
For all of 2014, the company produced 1.3 million tonnes of heavy mineral concentrate, a 13% rise from the 1.1 million tonnes produced in 2013. Zircon production rose by 62% to 50,800 tonnes from 31,400 tonnes.
Full year rutile production increased by 53% from the year before to 6,100 tonnes, whilst ilmenite production increased by 19% to 854,600 tonnes.
Shipments of finished products in 2014 also rose, by 18% to 800,000 tonnes from 677,900 tonnes in 2013. Of the total shipments, 747,400 tonnes was ilmenite, 50,000 tonnes was zircon, and 7,700 tonnes of rutile.
In addition, Kenmare said it is expecting its mineral separation plant to be re-connected to the power grid in the fourth quarter of 2014, after it switched to diesel generators in December due to grid power instability. It continues to run on the generators.
Recent flooding in Mozambique caused the grid power outage in the north of the country, but the company is expecting power to be restored in February. Kenmare said the plant is continuing to run and therefore it does not expect the disruption to the power supply to have a "significant impact on the sales plan for 2015."
Kenmare said it has agreed to extend discussions with Absa Bank Ltd about potential funding for 2015 until the end of February, and is expecting to conclude the talks "in the coming weeks," it said.
At the end of 2014, Kenmare had bank loans totalling USD337.3 million and cash of USD21.8 million.
Kenmare shares were up 7.2% to 3.25 pence per share on Friday morning, the best performer in the FTSE All-Share.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2015 Alliance News Limited. All Rights Reserved.
Related Shares:
Kenmare Resources