Slide 1: BMO Global Metals & Mining Conference Presentation
BMO Global Metals & Mining Conference Presentation February 2020
Slide 2: Disclaimer
Disclaimer This Presentation (the “Presentation”) has been information made available in connection with These assumptions and judgments may or may prepared and issued by Kenmare Resources plc the Company. not prove to be correct and there can be no (the “Company” or “Kenmare”). While this assurance
Slide 3: Overview: Kenmare Resources
Overview: Kenmare Resources World’s largest merchant ilmenite supplier 4th largest producer of TiO2 feedstocks Currently representing 7% of global supply Growing to 10% of global supply from 2021 Moma Titanium Minerals Mine >12 years of operations, 30 years in Wet Concentrator Plant (WCP) A Mo
Slide 4: Kenmare: Investment case
Kenmare: Investment case Kenmare’s three strategic pillars Targeted production rate represents a GROWTH 35% 35% increase compared to 2019 Third of three development projects scheduled for completion in Q4 2020 to deliver 1.2 Mtpa ilmenite production Through increased production, EBITDA margins are e
Slide 5: Mineral sands: Essential to modern life
Mineral sands: Essential to modern life Emerging market demand growing rapidly World GDP vs TiO2 pigment consumption Two core product streams of minerals sands 6 450 Titanium feedstocks (ilmenite and rutile) Global GDP Index Millions tonnes TiO2 pigment imparts whiteness and opacity in the manufac
Slide 6: Financial snapshot
Financial snapshot US$13.7m net cash at year-end 2019 Robust financial position Strong revenue generation (US$m) US$81.1m cash and cash equivalents at year-end 2019 300 US$16.1m reduction in gross debt during 2019 200 Increasing revenue and EBITDA generation 2018 revenue: US$262.2m, H1 2019 re
Slide 7: Delivering shareholder returns
Delivering shareholder returns Maiden dividend (interim) paid in October 2019 H1 2019 profit after tax Dividend policy Commitment to deliver shareholder value US$21.9m Policy to pay a minimum 20% of profit after tax Subject to: Total dividend distribution Market conditions, debt and capital re
Slide 8: New debt facilities
New debt facilities First disbursement of US$67.4m made on 18 December 2019 New facilities agreed in December 2019 Term Loan Revolving Credit Facility New facilities provided by a syndicate of existing lenders and new lenders US$110m US$40m Proceeds of the initial drawdown were used to repay in
Slide 9: Overview: Moma Titanium Minerals Mine
Overview: Moma Titanium Minerals Mine Globally significant Mineral Reserves Tier 1 resource base Operational process outline >100 year life of mine at targeted production rate of 1.2 Mtpa Wet Heavy mineral Moma is comprised of multiple ore zones – 8 Dredge + dry mining concentrator concentrate b
Slide 10: Sustainable operating practices
Sustainable operating practices Our guiding principles: We Care, We Grow, We Excel Named Best Mine (open cast) at 2018 NOSCARS LTIFR of 0.27 per 200k man hours worked to 31 Dec 2019 Increased focus on employee empowerment and personal accountability for safety Five star rating achieved from NO
Slide 11: 2019 production update
2019 production update A record year for excavated ore HMC production Ilmenite HMC production impacted by anticipated lower grades 12% decrease in HMC production in 2019 compared to 2018 1,202,100t 892,900t Expected decline in ore grades partially offset by record -12% -7% excavated ore tonnes i
Slide 12: Targeting unit cost reductions from 2021
Targeting unit cost reductions from 2021 Production and cash operating cost per tonne profile 1,400 240 1,200 Finished product production 200 1,000 160 (US$/tonne) 800 Unit costs (kt) 120 600 80 400 200 40 0 - 2013 2014 2015 2016 2017 2018 2019 2020 2021 Production Production Guidance All-Product Un
Slide 13: Three development projects
Three development projects Adding capacity and accessing higher grade ore WCP B upgrade WCP C development WCP B move 20% capacity upgrade of WCP B First HMC production expected Project execution commenced to complete and delivering to from WCP C by end of February move WCP B to Pilivili in scope 202
Slide 14: WCP C development: Adding capacity
WCP C development: Adding capacity Smaller scale, high grade production Why develop WCP C? Forecast WCP C excavated ore and grade WCP C will target a high grade area of the Namalope ore zone 4.0 6.0% that is inaccessible to either of the larger WCPs 3.5 5.0% Excavated ore (Mt) 3.0 Fit for purpos
Slide 15: WCP B move: Accessing higher grade ore
WCP B move: Accessing higher grade ore Relocation scheduled to take up to 12 weeks Pilivili ore zone Watch an animation of the WCP B move Highest grade ore zone in Moma’s portfolio – Mineral Reserves of 4.4% THM Other favourable characteristics including free flowing sand, low slimes and close p
Slide 16: Supply deficit for titanium feedstocks
Supply deficit for titanium feedstocks Forecast supply/demand market balance 10,000 TiO2 units (kt) 8,000 6,000 4,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Existing Supply Increased Moma Supply Potential New Supply Total Feedstock Demand Source: Company Strong fu
Slide 17: Positive outlook for all products
Positive outlook for all products Q4 2019 markets update Ilmenite Higher average price achieved for ilmenite in 2019 than 2018, with H2 received prices up >10% on H1 2019 Despite lower global pigment production in 2019, strong ilmenite market conditions were supported by continuing supply constr
Slide 18: Targeting strong free cash flow from 2021
Targeting strong free cash flow from 2021 Limited anticipated capital expenditure from 2021 to 2023, prior to the move of WCP A Development Sustaining Ilmenite Cash operating capital capital production costs per tonne <US$5m per US$20-25m US$125-135 1.2 Mtpa annum per annum per tonne1 Minimal develo
Slide 19: Conclusion: Building on our strategy
Conclusion: Building on our strategy Strategy 2019 Focus 2020 Focus Growth: targeting 1.2 Mtpa ilmenite production from 2021, representing a 35% increase compared to 2019 Low capital intensity growth to fully WCP B delivering 20% increase in First HMC production expected from utilise existing
Slide 20: Appendices
Appendices
Slide 21: Becoming a first quartile margin producer
Becoming a first quartile margin producer Kenmare is well-positioned to deliver strong free cash flow Industry revenue to cash cost curves 4 3 R/C Ratio 2 KMR KMR 1 2023 KMR 2018 Q1 2013 Q2 Q4 0 0% 25% 50% 75% 100% 2013 2018 2023 Kenmare is on track to become a first quartile margin producer from
Slide 22: 2020 guidance
2020 guidance Provided on 9 January 2020 Production 2020 Guidance 2019 Actual Ilmenite tonnes 800,000-900,000 892,900 Primary zircon tonnes 44,500-50,100 46,900 Rutile tonnes 7,700-8,700 8,300 Concentrates1 tonnes 34,700-39,000 40,200 Costs Total cash operating costs US$ m 153-172 N/R2 Cash costs pe
Slide 23: Optimisation of operations progressing well
Optimisation of operations progressing well Margin expansion initiatives delivering positive results Increased excavated ore mitigating lower grades 5% increase in throughputs to 4,822 tonnes per hour in 2019 40 36.8Mt compared to 2018, driven by 20% capacity increase at WCP B 33.5Mt 34.0Mt 30.0Mt
Slide 24: Margin expansion in 2019 including a new product
Margin expansion in 2019 including a new product First shipment of mineral sands concentrate (MSC) despatched in 2019 Strong project economics MSC in the product storage warehouse Monetises former tailing streams, including monazite Net present value (NPV)10% of approximately US$30m1 Internal
Slide 25: WCP C: Timeline to build our third mining plant
WCP C: Timeline to build our third mining plant Development progressing within US$45m budget Development of Starter pond Disassembled dredge and other WCP C project earthworks equipment arrives at site Before end of commences underway Late May 2019 Late November 2019 WCP C is floated February 2020 A
Slide 26: WCP B move: Key contracts awarded
WCP B move: Key contracts awarded ~60% of contracts now awarded and four key contracts in place Electricals Civil engineering RXHK (China) & TGC (South Africa) Teichmann Earthworks & Civils (Mozambique) Task: Construction of statcom and sub-station. Task: Constructing a 23km purpose-built road Statu
Slide 27: KMAD: 2019 Highlights
KMAD: 2019 Highlights Focused on leaving a positive and sustainable legacy >40 small businesses New ambulance provided to Construction of a primary supported by KMAD by year- community health centre school in Cabula village end 2019 57.9% Second phase of technical Nurses sponsored to Mozambican NGO
Slide 28: Follow Kenmare on social media
Follow Kenmare on social media Facebook, Twitter and LinkedIn Kenmare has gone social Kenmare has profiles on Facebook, Twitter and LinkedIn, which feature regular updates on our corporate social responsibility initiatives, operational and development milestones, news flow and more Click the nam
Slide 29: Contact Us
Contact Us Jeremy Dibb / Katharine Sutton +353 1 671 0411 ir@kenmareresources.com Follow Us