Kenmare Resources Plc · LSE:KMR
Kenmare Resources — Investor Presentation (November 2022)
33 slides from Kenmare Resources's investor presentation, Nov 1, 2022
Slide 1: Investor Presentation November 2022
RESPONSIBLY MEETING GLOBAL DEMAND FOR QUALITY-OF-LIFE MINERALS Investor Presentation November 2022
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: 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 H1 2022 performance OPERATE • • Safe and engaged workforce Thriving communities 0.00 LOST TIME INJURY • Healthy natural environment RESPONSIBLY • Trusted business FREQUENCY RATE - RECORD LOW DELIVER LONG LIFE, • >100 years of Minera
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 (FOB1) ($/t) 429 Net debt RUPS2 0.7 0.6 366 0.5 0.5 0.4 0.4 0.4 238 258 269 275 282 $66m In operation (31.12.2021: $83m) Began mi
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: Strong safety performance continuing in 2022
Strong safety performance continuing in 2022 Zero Lost Time Injuries in H1 2022 Kenmare’s industry-leading LTIFR 8 0.50 LTIFR per 200k hours Hours worked (millions) 6 0.40 worked 0.30 4 0.20 2 0.10 0 0.00 2017 2018 2019 2020 2021 H1 2022 Hours worked LTIFR Continuing focus on safety performance Al
Slide 10: Sustainability goals continue to be advanced
Sustainability goals continue to be advanced H1 2022 sustainability update • Wellness programme being rolled out to all Moma employees Safe and engaged workforce • >200 leaders developed through Innership leadership training and coaching programme • Moz Parks’ construction of industrial park underwa
Slide 11: Stronger production from late May 2022
Stronger production from late May 2022 Production and shipments review H1 2022 Q3 2022 summary HMC production was impacted by two tropical storms in Q1 and increased slimes1 during H1 HMC production Ilmenite Slimes levels were stabilised by May 2022, leading to stronger HMC production from late
Slide 12: Nataka Pre-Feasibility Study (PFS) in progress
Nataka Pre-Feasibility Study (PFS) in progress Overview of current status of Nataka PFS 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 begin mining Nataka in 2025 and WCP C in 2030 W
Slide 13: RUPS delivering benefits
RUPS delivering benefits Rotary Uninterruptible Power Supply project in operation RUPS building Estimated cost Emissions reduction of RUPS target by 2024 $20m -12% RUPS successful at mitigating supply disruptions The RUPS is improving power stability for the Mineral Separation Plant (MSP) and is e
Slide 14: Market update
Market update Titanium feedstocks
Slide 15: Strong market conditions prevailed in H1 2022
Strong market conditions prevailed in H1 2022 H1 2022 titanium feedstocks market overview Global ilmenite for beneficiation (Mt TiO2 units) Record average price received ($/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,
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) TiO2 Units (Mt) 1.2 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 Q3 2022 market summary Titanium feedstocks Titanium feedstocks Pricing for Kenmare’s products increased again in Q3 and order book for Q4 is largely committed However, pigment demand weakened through the quarter, affected by Chinese and European market c
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 H1 2022 performance 2022 targets • Continue to maintain strong • Lowest ever LTIFR of 0.00 safety performance OPERATE RESPONSIBLY • RUPS in operation • Meet a broad range of ESG targets • On track to achieve 2022 • Record average received pr
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 mining concentrator concentrate Moma is comprised of multiple ore
Slide 24: 2022 production guidance
2022 production guidance 2022 guidance provided on 13 January 2022 Production 2022 Guidance H1 2022 Actual 2021 Actual Ilmenite tonnes 1,125,000-1,225,000 499,700 1,119,400 Primary zircon tonnes 54,400-63,200 26,500 56,300 Rutile tonnes 9,500-11,500 4,000 8,900 Concentrates1 tonnes 40,300-46,800 20,
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 desliming Wet Co
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 zircon 3% 3% H1 2022 H1 2021 Primary 11% $ million $ million zircon 18% Revenue (FOB) 182.1 167.8 Freight costs 15.2 10.4 H1 2022 H1 2021 Revenue (CIF) 197.3 178.2 Ilmenit
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 $429/t $400/t $1,600/t Zircon price ($/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 Unit H1 2022 H1 2021 operating costs, due primarily to: Cost of sales $m 95.2 100.3 Increased labour costs ($4m) Other operating costs excluding freight $m 11.9 8.8 Increased
Slide 29: Further net ilmenite cost reduction expected in H2
Further net ilmenite cost reduction expected in H2 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: Net debt reduced by $17.3m
Net debt reduced by $17.3m H1 2022 balance sheet review 30-Jun-2022 31-Dec-2021 Balance sheet strengthened: $17.3m decrease in net $ million $ million debt to $65.5m given robust operational cashflow Property, plant & equipment 936.9 956.7 PPE included additions of $24.2m, less mine closure Inve
Slide 31: H1 2022 total cash operating costs
H1 2022 total cash operating costs Total cash operating costs breakdown Fuel Electricity Fuel Electricity 7% 11% 7% 11% Production Production Overheads Repairs & Overheads Repairs & 17% Maintenance 17% Maintenance 21% H1 2022 23% H1 2021 Logistics & $87.3m Logistics & US$101.2m Travel Travel 6% 6% D
Slide 32: 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 33: Contact Us
Contact Us Jeremy Dibb / Katharine Sutton +353 1 671 0411 ir@kenmareresources.com Jetty at sunset Follow Us
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