Slide 1: 2020 Results Presentation
RESPONSIBLY MEETING GLOBAL DEMAND FOR QUALITY-OF-LIFE MINERALS 2020 Results Presentation 24 March 2021
Slide 2: Disclaimer
Disclaimer This Presentation (the “Presentation”) has been This Presentation does not constitute or form part statements in this Presentation relating to future prepared and issued by Kenmare Resources plc of, and should not be construed as, an offer, financials, results, plans and expectations (the
Slide 3: Agenda
Agenda Introduction Michael Carvill, Managing Director Financial review Tony McCluskey, Finance Director Operational review Ben Baxter, Chief Operations Officer Market update Cillian Murphy, Marketing Manager Outlook Michael Carvill, Managing Director Q&A Kenmare Resources – 2020 Results Presentatio
Slide 4: COVID-19 Update
COVID-19 Update Safety and well-being of our employees and our host communities are Kenmare’s highest priorities Social distancing & abundant sanitation stations Prompt response to COVID-19 risks Improved sanitation & robust social distancing on site Initiation of travel mandatory isolation Te
Slide 5: Delivering on our strategic plans
Delivering on our strategic plans Ramping ilmenite production to 1.2 Mtpa (million tonnes per annum) Guidance of 1.1-1.2 Mtpa of GROWTH 45-60% ilmenite (plus associated co- products) in 2021 WCP B Move completed in 2020 and expected to deliver a 45-60% production increase year on year MARGIN Kenmare
Slide 6: A strengthened focus on safety and sustainability
A strengthened focus on safety and sustainability Kenmare’s commitment to sustainability recognised by external organisations in H2 2020 Improving sustainability reporting & CO2 reduction Lost Time Injury Frequency Rate1 (12 month rolling basis) Inaugural sustainability report 0.50 0.47 RUPS pro
Slide 7: 2020: A year of transition
2020: A year of transition Growth projects Operational & financial highlights Other financial highlights WCP B Move Shipments (Mt) Sales price (FOB) (US$/t) Net Debt (US$m) 272 1.1 248 1.0 1.0 1.0 229 In production 0.9 200 US$64m 133 First HMC production (2019: US$14m from Pilivili in Q4-20 net cash
Slide 8: Financial Review
Financial Review Tony McCluskey, Finance Director WCP A morning briefing
Slide 9: 2020 Income Statement review
2020 Income Statement review 33% EBITDA margin 2020 2019 Revenue by product (%) – 2020 vs 2019 US$ million US$ million Revenue 243.7 270.9 Ilmenite 2020 2019 72% Ilmenite Freight costs (12.2) (15.3) Zircon Primary 68% Primary zircon 19% 22% Revenue (FOB) 231.5 255.6 Concentrates Concentrates 7% Cost
Slide 10: Increased average sales price
Increased average sales price 2020 product price and shipping (FOB)1 review All products & ilmenite price movements (US$/t, FOB)1 Mixed pricing in 2020 $300/t 9% increase in average sales price (FOB)1 to US$272/t in 2020 (2019: US$248/t) $200/t 20% increase ilmenite prices vs 2019 $100/t 14% d
Slide 11: Net ilmenite unit costs
Net ilmenite unit costs 2020 cash operating costs reconciliation Unit 2020 2019 Analysis reconciles Income Statement to total Cost of sales US$m 179.1 178.3 cash operating cost Other operating costs1 excluding freight US$m 18.1 18.0 1% increase in adjusted cash operating costs, contributed to by
Slide 12: Targeting further unit cost reductions from 2021
Targeting further unit cost reductions from 2021 Production and cash operating cost per tonne profile 1,400 280 Finished product production 1,200 240 Unit costs (US$/tonne) (000’s tonnes) 1,000 200 800 160 600 120 400 80 200 40 0 0 2014 2015 2016 2017 2018 2019 2020 2021 Production Production Guidan
Slide 13: Significant cash flow from operations sustained
Significant cash flow from operations sustained Operating cash flow per share 0.70 Operating cash flow per share (£/share) 0.60 65p/share 65p/share 50p/share 0.50 43p/share 0.40 0.30 0.20 0.10 4p/share 0.00 2016 2017 2018 2019 2020 Increased operating cash flow expected from 2021 Kenmare Resources –
Slide 14: Strong and flexible balance sheet
Strong and flexible balance sheet Balance sheet review 31-Dec-2020 31-Dec-2019 US$ million US$ million Development projects additions of US$113.8 million mainly relate to WCP B Move. Additions to existing plant amount to Property, plant & equipment 961.7 852.0 US$27.7 million, mainly sustaining ca
Slide 15: Investment in growth & margin expansion
Investment in growth & margin expansion Movement in Net Cash / Debt Reduced operating cash flow in 2020 due to lower production and reduced shipping. Operating cashflow for 2021 will increase as production increases in a positive pricing environment WCP B Move was the principal driver of increas
Slide 16: Financial robustness
Financial robustness Flexible debt & trade facilities in place 31-Dec-2020 31-Dec-2019 US$ million US$ million Interest rate Term Term Loan 110.0 67.5 LIBOR +5.4% March 2025 Revolving Credit Facility 40.0 - LIBOR +5.0% December 2022 Total debt 150.0 67.5 Cash 87.2 81.2 Facilities Summary Debt faci
Slide 17: Dividend policy in action
Dividend policy in action Maiden interim dividend paid in October 2020 and balancing final dividend expected to be paid in May 2021 Dividend per share increase Total dividend distribution Dividend policy delivery Policy is to pay a minimum 20% of profit after tax, subject to +22% US$11.0m prevaili
Slide 18: Operational Review
Operational Review Ben Baxter, Chief Operations Officer WCP B mining Pilivili
Slide 19: Focused on sustainable business practices
Focused on sustainable business practices Our guiding principles: We Care, We Grow, We Excel Continuous commitment to safety 0.6 Increased sustainability disclosure First disclosure to CDP in 2020 & Modern Slavery Statement 0.4 LTIFR1 Inaugural sustainability report to be published in coming wee
Slide 20: WCP C: producing since Feb 2020
WCP C: producing since Feb 2020 Delivering HMC volumes to expectation Dredge in operation Small scale, high grade production WCP C is mining a high grade area of the Namalope ore zone that is inaccessible to the larger WCPs Forecasted average grade of 4.69% THM during first 5 years Located clo
Slide 21: WCP B successfully moved to Pilivili
WCP B successfully moved to Pilivili Pilivili is the highest grade ore zone in Moma’s portfolio, with Mineral Reserves of 180Mt at 4.4% THM Video of the WCP B Move COVID-19 impacts ameliorated Global COVID-19 restrictions led to delayed fabrication and delivery of electrical infrastructure and HMC
Slide 22: WCP B progressing well in Pilivili
WCP B progressing well in Pilivili Float-over pond / raw water dam Infrastructure Terrace Estuary Mouth Tails storage facility 2 July ’21 Start-up tailings River Mualadi Start-up pond Dec ‘21 Walkway Mining path Kenmare Resources – 2020 Results Presentation 22
Slide 23: Infrastructure Terrace in operation
Infrastructure Terrace in operation Mining area Float-over pond/ Raw water storage HME Workshop HMC Stockpile HMC Reclaim screen Kenmare Resources – 2020 Results Presentation 23 PD pipeline (now connected)
Slide 24: 2020 – transitioning to higher production
2020 – transitioning to higher production Operational performance maintained as growth projects advanced HMC production Ilmenite HMC (and final product production) impacted by: 1,201,100t 756,000t Lost mining time whilst transitioning WCP B to Pilivili and Covid limitations preventing an earlier m
Slide 25: 2021 production guidance up 45-60%
2021 production guidance up 45-60% Kenmare is well advanced in achieving targeted production of 1.2 Mtpa ilmenite on a sustainable basis Production 2021 Guidance 2020 Actual Ilmenite tonnes 1,100,000-1,200,000 756,000 Primary zircon tonnes 53,100-57,900 43,300 Rutile tonnes 9,500-10,300 6,000 Concen
Slide 26: RUPS: Power Stability & Carbon Reduction Project
RUPS: Power Stability & Carbon Reduction Project Driving maximum utilisations from our hydro-electric power source & reducing site CO2 emissions by 15% Background Culmination of extensive research efforts (including sustainable solar and battery options), balancing the low cost of our access to hy
Slide 27: Market Update
Market Update Cillian Murphy, Marketing Manager Product Warehouse
Slide 28: Positive outlook for titanium pigment
Positive outlook for titanium pigment Broad geographic & sector demand growth in early 2021 Segment demand trends Downstream segment 2020 2021 Global stimulus supporting demand growth in all major regions Architectural Coatings Demand strength is observed in most major downstream Industrial Coatin
Slide 29: Favourable supply/demand dynamics
Favourable supply/demand dynamics Forecast supply/demand market balance 10,000 TiO2 units (000’s tonnes) 8,000 6,000 4,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Existing Supply Potential New Supply Total Feedstock Demand Strong fundamentals for TiO2 feedstoc
Slide 30: Market poised to absorb expanded production
Market poised to absorb expanded production Positive outlook for all products Titanium Feedstocks Kenmare is experiencing strong market conditions in Q1 2021 and has a strong order book for Q2 Stronger demand is coming from all major ilmenite consuming regions Market is absorbing Kenmare’s exp
Slide 31: Outlook
Outlook Michael Carvill, Managing Director WCP B dredge passing the MSP
Slide 32: Becoming a first quartile margin producer
Becoming a first quartile margin producer Industry revenue to cash cost curves 4 3 R/C Ratio 2 KMR KMR 1 2023 KMR 2018 Q1 2013 Q2 Q4 0 0% 25% 50% 75% 100% 2013 2018 2023 Kenmare is on track to become a first quartile margin producer from 2021 This is expected to deliver increased cash flow stabi
Slide 33: Building on our strategy
Building on our strategy Strategy 2020 Performance 2021 Targets Growth: Production rising to 1.2 Mtpa ilmenite from 2021 Low capital intensity growth to WCP C production from February Guidance of 1.1-1.2 Mt of ilmenite, fully utilise existing installed 2020 plus associated co-products, in 2021
Slide 34: Appendices
Appendices WCP C mining in Namalope
Slide 35: Mineral sands: essential to modern life
Mineral sands: essential to modern life Two core product streams, titanium feedstocks & zircon World GDP vs TiO2 pigment consumption1 Titanium feedstocks (ilmenite and rutile) TiO2 pigment imparts whiteness and opacity in the 6 450 Global GDP Index Million tonnes manufacture of paints, plastics an
Slide 36: Overview: Moma Titanium Minerals Mine
Overview: Moma Titanium Minerals Mine Globally significant Mineral Reserves Tier 1 resource base Operational process outline >100 year life of mine at targeted production rate of 1.2 Mtpa Moma is comprised of multiple ore zones – 6.4 Wet Heavy mineral Dredge + dry mining concentrator billion ton
Slide 37: Total cash operating costs largely in line with 2019
Total cash operating costs largely in line with 2019 Total cash operating costs breakdown Fuel Fuel Power 7% Production Power 8% Production 10% Overheads 11% Overheads 16% Distribution Distribution Costs 12% Costs 3% 4% Repairs & Maintenance 2020: Logistics & Repairs & 2019: Logistics & Travel Trave
Slide 38: Contact Us
Contact Us Jeremy Dibb +353 1 671 0411 ir@kenmareresources.com Follow Us