Kenmare Resources reports record sales volumes on strong demand

Kenmare Resources reported record sales volumes for the second quarter of 2016 on the back of strong demand, the Irish mining group said in a trading update on Tuesday.

Michael Carvill, managing director, said, "The strengthening of the balance sheet, allied with falling cash costs and consistent productivity gains at Moma, positions Kenmare to benefit from the improvement in the titanium feedstock market we are currently experiencing as higher ilmenite prices are reflected in revenues for the second half of 2016."

During the second quarter of 2016, Kenmare mined 7,386,200 tonnes of ore at an average grade of 4.91 per cent and produced 331,300 tonnes of HMC. Ilmenite production for the quarter was 217,900 tonnes, up 18 per cent compared to 185,000 tonnes in Q1 2016, while total zircon production for the period increased 46 per cent over Q1 2016 to 16,900 tonnes.

On the pricing front, Kenmare said that it saw an improvement in the sulphate ilmenite market in Q2 as supply/demand conditions continued to tighten.As a result, Kenmare has implemented price increases on spot sales during Q2 to be shipped in the early part of Q3.

Kenmare completed its capital restructuring and material deleveraging at end of July, resulting in a 74 per cent reduction gross debt to $100 million and $75 million of additional cash for working capital purposes and fees and expenses. As at June 30th, Kenmare said it had cash and cash equivalents of $12.3 million, compared with $14.4 million at December 31st 2015.

Kenmare will publish its half-year results on August 24th.