Kenmare Resources Plc · LSE:KMR
Kenmare Resources — Investor Presentation (February 2023)
32 slides from Kenmare Resources's investor presentation, Feb 6, 2023
Slide 1: Investor Presentation February 2023
RESPONSIBLY MEETING GLOBAL DEMAND FOR QUALITY-OF-LIFE MINERALS Investor Presentation February 2023
Slide 2: Disclaimer
Disclaimer This Presentation (the “Presentation”) has available in connection with the Company. assurance that any projected results are been prepared and issued by Kenmare attainable or will be realised. In particular, This Presentation does not constitute or form Resources plc (the “Company” or “K
Slide 3: The world's largest ilmenite supplier
The world’s largest ilmenite supplier Overview: Kenmare Resources Moma Mine in Mozambique Wet Concentrator Plant B mining at Pilivili 15 years of production with >30 years in Mozambique >100 years of Mineral Resources at current production rate Low environmental impact – >90% of electricity fr
Slide 4: Creating sustainable competitive advantage
Creating sustainable competitive advantage Strategic priorities and 2022 operational performance OPERATE • • Safe and engaged workforce Thriving communities 0.09 LTIFR at • Healthy natural environment RESPONSIBLY • Trusted business 31.12.2022 AFTER 18 MONTHS LTI-FREE • >100 years of Mineral DELIVER
Slide 5: Positioned to deliver long-term value
Positioned to deliver long-term value Macroeconomic outlook and the impact on Kenmare’s product markets Global uncertainty Short-term global outlook is unpredictable Heightened inflation is leading to intervention by Central Banks and Governments, adding to risk of recession Kenmare’s fundamenta
Slide 6: Strong earnings and compelling interim dividend
Strong earnings and compelling interim dividend H1 2022 operational and financial highlights Other financial highlights Capital projects update Shipments (Mt) Sales price (FOB1429 ) Net cash RUPS2 0.7 ($/t) 0.5 0.5 0.6 269 275 366 282 $27.5m In operation 0.4 0.4 0.4 238 258 31.12.2022 Providing prot
Slide 7: Interim dividend per share up 51%
Interim dividend per share up 51% Shareholder returns Dividends (USc/share) H1 2022 profit after tax H1 2022 dividend/share 40 Interim $62.5m USc10.98 30 25.4 Final 20 H1 2022 dividend1 Dividend/share increase 10 0 5.5 2.7 7.7 2.3 7.3 11.0 $10.4m +51% 2019 2020 2021 2022 Kenmare is targeting a div
Slide 8: Operational review
Operational review Higino Jamisse, General Manager
Slide 9: Focus on maintaining strong safety performance
Focus on maintaining strong safety performance Three Lost Time Injuries (LTI) in 2022, after 18 months of being LTI-free Kenmare’s LTIFR record 8 0.50 Hours worked (millions) LTIFR per 200k hours 6 0.40 worked 0.30 4 0.20 2 0.10 0 0.00 2017 2018 2019 2020 2021 2022 Hours worked LTIFR Continuing focu
Slide 10: Sustainability goals continue to be advanced
Sustainability goals continue to be advanced 2022 sustainability update • Wellness programme being rolled out to all employees Safe and engaged workforce • >200 leaders developed through Innership leadership training and coaching programme • Moz Parks’ construction of industrial park Thriving commun
Slide 11: Strong production and shipments in Q4
Strong production and shipments in Q4 Production and shipments review 2022 2022 summary HMC production in 2022 was 1,586,200 tonnes, a 2% increase on 2021, despite impact on excavated ore and recoveries from power HMC production Ilmenite outages, mining conditions and slimes1, as well as bad weath
Slide 12: Nataka Pre-Feasibility Study (PFS) advances
Nataka Pre-Feasibility Study (PFS) advances Overview of current status of Nataka feasibility studies Nataka is the largest ore zone in Moma’s portfolio Wet Concentrator Plant A Nataka contains 79% of Moma’s total 6.3 bnt Mineral Resources WCP A is expected to transition to Nataka in ~2025, a 20-
Slide 13: RUPS delivering benefits to MSP
RUPS delivering benefits to MSP Rotary Uninterruptible Power Supply project in operation RUPS building Estimated cost Emissions reduction of RUPS target by 2024 $20m -12% RUPS successful at mitigating supply disruptions to MSP The RUPS is improving power stability for the Mineral Separation Plant
Slide 14: Market update
Market update Titanium feedstocks
Slide 15: Strong market conditions prevailed in 2022
Strong market conditions prevailed in 2022 H1 2022 titanium feedstocks market overview Global ilmenite for beneficiation (Mt TiO2 units) Record average price received ($/t FOB) Global slag production1 500 2,500 429 400 366 2,000 TiO2 Units (‘000) Price ($/t FOB) 268 275 282 300 223 236 238 258 1,500
Slide 16: Global inventories at lowest point in >10 years
Global inventories at lowest point in >10 years Supply/demand market balance Forecast TiO2 supply/demand market balance1 Excess industry inventories (Mt TiO2 units)1 10 1.6 1.4 TiO2 Units (Mt) 1.2 TiO2 Units (Mt) 8 1.0 0.8 0.6 6 0.4 0.2 4 0.0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 20
Slide 17: Pricing momentum has continued in H2 2022
Pricing momentum has continued in H2 2022 Q4 2022 market summary Titanium feedstocks Titanium feedstocks Despite the impact of weaker macroeconomic factors, Kenmare continued to see robust demand for its high-quality ilmenite products, achieving a ninth consecutive ilmenite price increase in Q4 20
Slide 18: Outlook
Outlook Mining at WCP A
Slide 19: Targeting a first quartile margin position
Targeting a first quartile margin position Kenmare is well-positioned to deliver strong free cash flow Industry revenue to cash cost curves 4 Revenue to Cash Cost Ratio 3 2 KMR KMR 1 2023 KMR 2018 Q1 2013 Q2 Q4 0 0% 25% 50% 75% 100% 2013 2018 2023 Kenmare is targeting a first quartile position on
Slide 20: Building on our strategy
Building on our strategy Strategic performance and targets 2022 performance 2023 targets • LTIFR of 0.09, following 18- • Continue to focus on safety month LTI-free period performance OPERATE RESPONSIBLY • RUPS commissioned and in • Achieve a broad range of ESG operation targets • HMC production inc
Slide 21: Appendices
Appendices Rosalina Moma, owner of a KMAD-supported vegetable business
Slide 22: Mineral sands: essential to modern life
Mineral sands: essential to modern life Two core product streams: titanium feedstocks and zircon Titanium feedstocks (ilmenite and rutile) Titanium feedstocks Zircon industry TiO2 pigment imparts whiteness and opacity in the industry revenues p.a. revenues p.a. manufacture of paints, plastics and
Slide 23: A globally significant titanium minerals deposit
A globally significant titanium minerals deposit Overview: Moma Titanium Minerals Mine Tier 1 resource base Operational process outline >100 years of Mineral Resources at production rate of ~1.2 Mtpa Wet Heavy mineral Dredge + dry concentrator concentrate Moma is comprised of multiple ore zones
Slide 24: 2023 production and cost guidance
2023 production and cost guidance 2023 guidance provided on 18 January 2023 Production 2023 Guidance Q4 2022 Actual 2022 Actual Ilmenite tonnes 1, 050,000-1,150,000 283,900 1,088,300 Primary zircon tonnes 51,000-57,000 14,600 58,400 Rutile tonnes 8,000-9,000 2,200 8,900 Concentrates1 tonnes 37,000-4
Slide 25: Slimes management measures taking effect
Slimes management measures taking effect Managing increasing slimes impacts Area of impact xxx Mitigation measure Dredging Investigation underway to (harder mining, higher cost improved dredge cutting and supplementary mining) throughputs Analysing benefits of bringing forward WCP A Wet Concentrator
Slide 26: EBITDA margin increased to 58%
EBITDA margin increased to 58% H1 2022 income statement Revenue (FOB) by product (%) Concentrates Concentrates Rutile 6% Primary 3% 3% H1 2022 H1 2021 Primary zircon $ million $ million zircon 18% Revenue (FOB) Freight costs 182.1 15.2 167.8 10.4 H1 2022 H1 2021 Revenue (CIF) 197.3 178.2 Ilmenite Il
Slide 27: Record average sales price achieved
Record average sales price achieved H1 2022 pricing and shipping review Product price movements ($/t, FOB)1 Strong market conditions continued in H1 2022 $500/t $2,000/t Average and ilmenite price 52% increase in average price received (FOB) to $400/t $1,600/t Zircon price ($/t) $429/t in H1 2022
Slide 28: 7% decrease in net ilmenite unit cost
7% decrease in net ilmenite unit cost H1 2022 cash operating costs reconciliation1 16% ($13.9m) increase in total cash H1 H1 operating costs, due primarily to: Unit 2022 2021 Increased labour costs ($4m) Cost of sales $m 95.2 100.3 Increased electricity, fuel and Other operating costs excludin
Slide 29: Higher volumes expected to lower H2 '22 unit costs
Higher volumes expected to lower H2 ‘22 unit costs Production and unit cost profile Production and unit cost profile 800kt $200/t 700kt $175/t 42.8 600kt $150/t 500kt $125/t Cost per tonne ($/t) Production (kt) 400kt $100/t 300kt $75/t 200kt $50/t 100kt $25/t 0kt $0/t H1 H2 H1 H2 H1 H2 H1 H2 H1 2018
Slide 30: H1 2022 total cash operating costs
H1 2022 total cash operating costs Total cash operating costs breakdown Electricity Fuel Electricity Fuel 11% 7% 11% 7% Production Production Overheads Overheads Repairs & Repairs & 17% 17% Maintenance Maintenance 23% H1 2021 21% H1 2022 Logistics & $87.3m Logistics & US$101.2m Travel Travel 6% 6% D
Slide 31: Follow Kenmare on social media
Follow Kenmare on social media Facebook, Twitter and LinkedIn 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 name of the social network
Slide 32: Contact Us
Contact Us Jeremy Dibb / Michael Starke +353 1 671 0411 ir@kenmareresources.com Jetty at sunset Follow Us
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