Kenmare Resources Plc · LSE:KMR
Kenmare Resources — Shareholder Meeting (July 2016)
16 slides from Kenmare Resources's shareholder meeting presentation, Jul 25, 2016
Slide 1: 2016 AGM & EGM
2016 AGM & EGM LISTED Dublin, 25 July 2016 PREMIUM
Slide 2: Disclaimer
Disclaimer Important: You must read the following before continuing. This presentation and any oral information based upon such presentation and the question-and-answer session that follows it (collectively hereinafter the "Presentation") has been prepared and issued by Kenmare Resources plc (the “C
Slide 3: Disclaimer
Disclaimer This Presentation also includes track record information regarding the performance of the Company and the Group. Such information is not necessarily comprehensive or complete and prospective investors should not consider such information to be indicative of the possible future performance
Slide 4: Overview
Overview ➢ Large, long life (+100 years), low cost resource in a favourable location ➢ >US$1.1bn of capital invested in the mine including own port and loading facilities ➢ Production forecast to increase 24% in 2016 to 950,0001 tonnes of ilmenite (plus associated by-products) ➢ Cash costs falling b
Slide 5: Moma Ore Body - 100+ Year Life of Mine
Moma Ore Body - 100+ Year Life of Mine Reserves (Mt) Ilmenite Rutile Zircon Proved 7.6 0.2 0.5 Probable 34.4 0.8 2.3 Total P&P 42 0.9 2.8 Resources (Mt) Ilmenite Rutile Zircon Measured 7.9 0.2 0.6 Indicated 43.5 0.9 2.8 Total M&I 51.4 1.1 3.4 Inferred 104.2 2.4 7.2 Total M,I&I 156 3.4 11 1 Based on
Slide 6: Moma Mine Simplified Flow Sheet
Moma Mine Simplified Flow Sheet 6
Slide 7: Yearly Capex 2012 - 2015
Yearly Capex 2012 - 2015 Expansion capex Sustaining capex 200 180 160 140 US$' millions 120 100 80 60 40 20 0 2012 2013 2014 2015 ➢ Long period of investment completed in 2013 ➢ Sustaining capex tightly controlled in 2015 at US$5.6m (2014: US$5.2m) ➢ Sustaining capital is expected to average ~US$20m
Slide 8: Capital raise and debt restructuring
Capital raise and debt restructuring Capital raise - total capital raised of US$275m ➢ US$154.6m Placing and Open Offer ➢ US$20.4m Lender Underwriting ➢ 109.6m shares on issue following 1 for 200 consolidation of shares Debt restructuring – simplified debt structure and enhanced working capital posi
Slide 9: Transformed balance sheet post capital raise
Transformed balance sheet post capital raise Gross Debt (US$m)1 Cash (US$m)2 Net Debt (US$m)3 450 80 400 400 70 350 350 60 300 300 50 250 250 40 200 200 30 150 150 20 100 100 50 10 50 0 0 0 Debt pre-completion Debt post- Cash as at Minimum cash post- Net debt pre- Maximum net debt completion 31/12/2
Slide 10: Debt repayment profile
Debt repayment profile Annual Interest (US$m)1,2 Repayment Profile (US$m)2 Interest Rates (%)1 35 25 10% 30 20 8% 25 15 6% 20 15 10 4% 10 5 2% 5 0 0 0% Aug-16 Aug-17 Aug-18 Aug-19 Aug-20 Aug-21 Feb-17 Feb-18 Feb-19 Feb-20 Feb-21 Feb-22 2015 interest cost Annualised new 2015 avg. New debt New debt in
Slide 11: Final Product Production and Cash Operating Costs
Cash Operating Costs Final Product Production (kt) - Right Axis Final Product Production (kt) - Right Axis Ongoing Cash Operating Cost per Tonne (US$/t) - Left Axis Ongoing Cash Operating Cost per Tonne (US$/t) - Left Axis $250 $250 500 950 450 Final Product Production Final Product Production $225
Slide 12: Guidance
Guidance Production 2016 Guidance 2015 Actual Variance Ilmenite kt 950 764 24% Zircon kt 70 52 35% of which primary kt 50 39 27% of which secondary kt 20 12 61% Rutile kt 8 6 33% Costs Total cash operating costs US$m 145 136 6% Cash operating costs per tonne of finished product US$/t 141 166 -15% ➢
Slide 13: TiO2 market overview
TiO2 market overview • Demand for titanium dioxide closely tracks growth in global GDP • Titanium feedstocks are used for the production of titanium pigment (~90%), welding rods (~5%) and titanium metal (~5%) • Titanium pigment is used in the production of paints (~60%), plastics (~26%) and paper (~
Slide 14: Tightening Chinese market conditions
Tightening Chinese market conditions Domestic Ilmenite Production Chinese Port Stocks 3,500 175 400 3,000 150 350 2,500 125 300 2,000 100 250 1,500 75 200 1,000 50 150 500 25 0 0 100 Mar-15 Mar-16 Jun-15 Sep-14 Dec-14 Sep-15 Dec-15 2014 2005 2006 2007 2008 2009 2010 2011 2012 2013 2015 2016 Chinese
Slide 15: Supply/demand outlook
Supply/demand outlook • Demand is expected to continue to TZMI TiO2 Feedstock Supply/Demand ('000 TiO2 units) trend upwards with global GDP 8,000 • Supported by increasing per capita 7,000 incomes in emerging economies - expanding Chinese urban middle 6,000 class fuelling consumer-driven growth 5,00
Slide 16: Kenmare Resources plc
Kenmare Resources plc Chatham House │ Chatham Street │ Dublin 2 │ Ireland www.kenmareresources.com