Kenmare Resources posts loss in excess of $9m

EXPLORATION FIRM Kenmare Resources yesterday blamed the weak dollar and equipment problems for a $9.6 million loss last year.

The figure is up on the $4.3 million loss reported for 2006. To December 31st, 2007, Kenmare had operating expenses of $12.5 million compared with $7.255 million for the same period in 2006.

The company began shipping ilmenite from the Moma mining operation towards the end of last year.

In a statement to the Irish Stock Exchange, Kenmare chairman Charles Carvill said production at its mine in Mozambique had been hit by "considerable problems with certain equipment supplied under the construction contract".

This meant that production had been lower than expected. Following the installation of newer, more robust, equipment, Mr Carvill said, the company was now "set to achieve its targeted production rate, albeit somewhat later than was originally envisaged".

The new equipment was installed by the contractor under warranty.

Kenmare would continue to plan for the expansion of the Mozambique mine to 1.2 million tonnes per annum of ilmenite, the main ore from which titanium is derived. It expects to reach this target by the end of 2009, Mr Carvill said in his statement,

He noted that demand from China had seen the price of imported ilmenite rise by some 50 per cent since the start of 2008.

Slowing demand from the US was being more than compensated for by strong growth in Europe and Asia. Mr Carvill said although the mine was experiencing some salary and fuel cost increases "we are very confident that Moma will achieve its targeted production rates in 2008".

Losses at Kenmare rose to 1.4 cent per share in 2007 from 0.63 cent per share the previous year.