Slide 1: Moma Titanium Minerals Mine Preliminary Results and Update
Kenmare Resources Plc Moma Titanium Minerals Mine Preliminary Results and Update | March 2013 1
Slide 2: Disclaimer
Disclaimer This Confidential Presentation (the “Presentation”) has been prepared and issued by Kenmare Resources plc (the “Company” or “Kenmare”). While this Presentation has been prepared in good faith, the Company and its respective officers, employees, agents and representatives expressly discla
Slide 3: Health & Safety
Health & Safety Kenmare 2012 LTIFR 0.33 South African Mineral Sands Competitors 4 year average 0.45 3
Slide 4: Production Data Quarterly 2012
Production Data Quarterly 2012 Ilmenite 000t: Quarterly 200 180 160 140 000t 120 100 80 60 40 20 0 Q1 Q2 Q3 Q4 Zircon 000t: Quarterly Zircon Secondary zircon 14 12 10 8 000t 6 4 2 0 Q1 Q2 Q3 Q4 4
Slide 5: Mining Challenges
Mining Challenges Power reliability – Electricidade de Moçambique (EDM) upgrades; Adverse weather Progressively mining from existing “Nick Zone” up onto the “High Dunes” Geotechnical aspects challenging as the plant moves from “Nick Zone” onto the high dunes – Pond water level rises from 12 me
Slide 6: Power Reliability
Power Reliability Electrical Supply Volatility Commissioning of the SVC at Mocuba - beneficial in the long term but resulted in short term interruptions – now commissioned and are seeing improved stability SVC upgrade at Alto Molocue – delayed by EDM and completion planned for mid February 2013
Slide 7: Mining Summary
Mining Summary Review 2012 Power reliability impacted operations - weather related in last month Moving from “Nick Zone” onto the “High Dunes” more challenging than anticipated Mining conditions presented to the dredges remain variable – better ability to forecast mining throughput Improved
Slide 8: Phase II Expansion – Mining
Phase II Expansion – Mining EXISTING Wet Concentrator Plant A (WCP A) Upgrade WCP A to increase spiral feed capacity from 3,000 to 3,500 tph Enhanced HMC production design 2,000 tph of 2,000 tph of 2,000 tph of NEW Wet Concentrator Plant B (WCP B) mineral sands ore mineral sands ore mineral sa
Slide 9: Phase II Expansion – Processing
Phase II Expansion – Processing Mineral Separation Plant (MSP) Expanding capacity from 135 tph to 225 tph Enhanced processing plant design New Wet High Intensity Magnetic Separation 225 tph of heavy minerals (WHIMS) circuit concentrate (HMC) feed More efficient upfront separation of Magnetic
Slide 10: Schedule
Schedule Risks to schedule: Piping finalisation Plant Schedule WCP A Upgrade Completed WCP B Floating Completed WCP B – Cold Commissioning Started WCP B Dredge – Commissioning Started WHIMS – Cold Commissioning Started Auxiliary Ilmenite – Cold Started Commissioning MSP Brownfields – Upgrade Tie I
Slide 11: Expansion Progress – Dredge
Expansion Progress – Dredge 3rd Dredge floating and resting in its commissioning position 11
Slide 12: Expansion Progress – WCP B
Expansion Progress – WCP B Superstructure complete; Piping and Electrics to be finalised 12
Slide 13: Moma Mine – Processing
Moma Mine – Processing Extended Storage New Storage New Whims New Aux Ilmenite Existing MSP New Belt filter 13
Slide 14: Expansion Progress – WHIMS
Expansion Progress – WHIMS Complete; commissioning in progress (Piping to be finalised) 14
Slide 15: Expansion Progress – Auxiliary Ilmenite Plant
Expansion Progress – Auxiliary Ilmenite Plant Complete; commissioning in progress 15
Slide 16: Expansion Progress – Product Storage
Expansion Progress – Product Storage Ilmenite store complete; in use 16
Slide 17: Upgrade Of Export Facilities
Upgrade Of Export Facilities 2nd Wharf Added to Jetty Northern Wharf Upgraded Significant Increase in Loading Rates and Availability 17
Slide 18: TiO2 Feedstock & Zircon Market
TiO2 Feedstock & Zircon Market TiO2 Feedstock Strong demand in H1 2012 and good price traction H2 2012 demand was more subdued as pigment producers curtailed production and de-stocked De-stocking more pronounced for high grade feedstocks as pigment plants favoured greater use of ilmenite and s
Slide 19: TiO2 Feedstock Supply/Demand
Ti02 Feedstock Supply/Demand TOTAL TiO2 Feedstock Supply/Demand (with Committed Supply Projects) 12,000 Existing Supply NEW Supply Total Feedstock Demand 10,000 8,000 '000 TiO2 units 6,000 4,000 2,000 - 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Source: Kenmare 19
Slide 20: Revenue & EBITDA 2009 – 2012
Revenue & EBITDA 2009 – 2012 250 120 Sales EBITDA 100 200 80 150 EBITDA US$m Revenue US$m 60 100 40 50 20 0 0 2009 2010 2011 2012 20
Slide 21: 2012 Income Statement Review
2012 Income Statement Review 2012 2011 Comment on 2012 US$m US$m Revenue 234.6 167.5 Sales up 40% on 2011 CoS & Opex (154.2) (114.6) Costs up 35% on 2011 Operating profit 80.4 52.9 Net finance costs (27.0) (28.4) $7.0m paid & balance accrued Foreign exchange loss (0.6) (6.3) On Euro debt & SA Rand c
Slide 22: 2012 Cash Operating Costs Review
2012 Cash Operating Costs Review US$m US$m Cost of Sales 134.5 Other operating costs 19.7 154.2 Freight (CIF charged to customers) (3.2) Total costs less freight 151.0 Non-cash costs: Depreciation 18.5 Share-based payments 3.2 (21.7) 129.3 Inventory Movements: Finished Product Movements (5.9) Adjust
Slide 23: 2011 – 2012 EBITDA Bridge
2011 – 2012 EBITDA Bridge (US$ millions) 160.0 140.0 120.0 100.0 80.0 60.0 40.0 20.0 0.0 EBITDA increase of 38% 50% increase in average product prices WCP A pond elevation costs and supplemental dry mining costs Higher labour and repairs & maintenance costs 23
Slide 24: 2012 Cash Operating Costs
2012 Cash Operating Costs Production Overheads Other 13% 13% Logistics & Travel 7% Power and fuel 11% Distribution costs 6% Labour 28% Repairs & Maintenance 22% 24
Slide 25: 2012 Balance Sheet Review
2012 Balance Sheet Review 2012 2011 Comment on 2012 & movement US$m US$m Property, plant & equipment 887.5 714.1 Largely expansion investment Deferred tax asset 2.2 5.5 Used with increasing profitability Inventories 22.4 25.8 Lower product stocks & higher spares Trade & other receivables 35.7 38.8 N
Slide 26: Group Debt
Group Debt Project Debt at 31 Dec. 2012: US$324.4m (2011: US$327.1m) Lenders: Project - Absa, KfW, FMO, EIB, EAIF & AfDB; Group - Absa/Barclays Guarantors: ECIC (of Absa), MIGA & Hermes (of KfW) Average project interest rate at Dec. 2012 was 8.7% Senior: US$107m, floating @ LIBOR + 3.5% to
Slide 27: Trading Update
Trading Update 40% revenue increase to US$234.6m, up from US$167.5m in 2011 EBITDA US$98.9m, up from US$71.7m in 2011 Profit after tax US$49.5m, compared with US$23.7m in 2011 Mine operating safely: LTIFR rate 0.33pa vs. industry average 0.39pa Produced 574.4kt ilmenite and 46.9kt zircon
Slide 28: Kenmare Resources plc contact details
Kenmare Resources plc Chatham House , Chatham Street Dublin 2, Ireland www.kenmareresources.com