Slide 1: H1 2021 Results Presentation
RESPONSIBLY MEETING GLOBAL DEMAND FOR QUALITY-OF-LIFE MINERALS H1 2021 Results Presentation 18 August 2021
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: Agenda
Agenda Introduction Michael Carvill, Managing Director Financial review Tony McCluskey, Finance Director Operational review Ben Baxter, Chief Operations Officer Market update Cillian Murphy, Marketing Manager Outlook Michael Carvill, Managing Director Q&A Kenmare Resources – H1 2021 Results Presenta
Slide 4: Delivering increased production and profitability
Delivering increased production and profitability Ramping up ilmenite production to 1.2 Mtpa (million tonnes per annum) GROWTH 49% Guidance maintained based on H1 performance production Guidance of 1.1-1.2 Mtpa of ilmenite (plus associated co- increase products) in 2021 MARGIN 49%1 EBITDA margin up
Slide 5: Record earnings & interim dividend
Record earnings & interim dividend Operational & financial highlights Other financial highlights Capital projects Shipments (Mt) Sales price (FOB) (US$/t) Net Debt (US$m) RUPS1 269 275 283 0.59 0.59 238 258 0.55 223 236 0.49 0.48 0.41 0.44 US$76.2m Underway (31.12.2020: US$64.0m) Expected completion
Slide 6: Committed to safety & sustainability
Committed to safety & sustainability Sustainability Safety COVID-19 Building on our long-term 44% reduction in Lost Time Injury COVID-19 testing & vaccination commitment to Sustainability Frequency Rate programme in place Kenmare Resources – H1 2021 Results Presentation 6
Slide 7: Financial Review
Financial Review Tony McCluskey, Finance Director WCP A morning briefing
Slide 8: EBITDA margin increased to 49% (H1 2020: 33%)
EBITDA margin increased to 49% (H1 2020: 33%) H1 2021 income statement Revenue (FOB) by product (%) H1 2021 H1 2020 H1 2021 H1 2020 US$ million US$ million Concentrates Rutile Rutile Revenue (CIF) 178.2 116.8 Zircon 3% Concentrates 3% 0% 11% 7% Freight costs (10.4) (5.6) Zircon Revenue (FOB) 167.8 1
Slide 9: Increased average sales price
Increased average sales price Pricing and shipping review All products & ilmenite price movements (US$/t, FOB)1 Strong market conditions continue in H1 2021 5% increase in overall average sales price (FOB) to $300/t US$282/t in H1 2021 (H1 2020: US$269/t) $200/t Ilmenite price up 18% on H1 2020
Slide 10: Unit costs reduced on increased production
Unit costs reduced on increased production H1 2021 cash operating costs reconciliation1 Unit H1 2021 H1 2020 16% (US$12.1m) increase in adjusted cash operating costs, due primarily to: Cost of sales US$m 100.3 82.7 Increased COVID-19 costs US$2m Other operating costs excluding freight US$m 8.8 8
Slide 11: Unit costs down 23% on prior half year periods
Unit costs down 23% on prior half year periods Net ilmenite costs expected to benefit from higher co-product sales in H2 2021 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 $0/t H1 H2 H1 H2 H1 H2 H1 H
Slide 12: Net cash/debt flows
Net cash/debt flows Reduced investment in capital expenditure in H1 2021 compared with previous year H1 2021 cash bridge (US$m) $50m 74 $0m -32 -$50m -64 -42 -8 -4 -76 -$100m Net Debt: Operating cash flow Property, Plant & Working capital Dividends Interest & financing Net Debt: Dec-20 Equiptment ch
Slide 13: Financially well-resourced
Financially well-resourced Balance sheet review 30-Jun-2021 31-Dec-2020 PPE movement includes additions US$23.6m (H1 US$ million US$ million 2020: US$59.2m), less mine closure adjustment Property, plant & equipment 956.6 961.7 (US$5.2m) & depreciation (US$23.5m) Inventories 69.6 63.7 Trade & other
Slide 14: Interim dividend tripled
Interim dividend tripled Increased dividends based on rising profitability and elevated 25% target payout rate Dividends (USc/share) H1 2021 profit after tax Interim dividend/share 10 7.7 US$48.0m USc7.29 5.5 5 7.3 2021 Interim Dividend1 Dividend increase 2.7 2.3 0 2019 2020 2021 US$8.0m +217% Inter
Slide 15: Operational Review
Operational Review Ben Baxter, Chief Operations Officer WCP B starting mining in Pilivili
Slide 16: Enhancing our commitment to Sustainability
Enhancing our commitment to Sustainability Sustainability Strategy under development Climate resilience & decarbonisation strategy under development Emissions reduction projects underway: RUPS Rehabilitation plan updated to improve soil fertility & biodiversity Ongoing improvement in gender
Slide 17: Record excavated ore volumes in H1 2021
Record excavated ore volumes in H1 2021 Excavated ore volumes profile (Mt) Grade profile (% Total Heavy Mineral) 25 5% 20 4% 15 3% 10 2% 5 1% 0 0% H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 H1 H2 2018 2019 2020 2021 2022 2023 2018 2019 2020 2021 2022 2023 Actual Forecast Actua
Slide 18: H1 2021 production review
H1 2021 production review Production and shipments consistently delivering +43% HMC production HMC production Ilmenite Increased output from WCP B at higher grade Pilivili orebody Full half year of production from WCP C 798,500t 559,000t Increased final products: +52% ilmenite production: +43% +
Slide 19: Development Projects
Development Projects 1.2Mt Ilmenite projects delivering HMC pumped from Pilivili arriving at MSP WCP B Move Substantially complete Ramp-up of Positive Displacement pumping underway, design throughputs proven, however reliability of some components limiting utilisation Expecting to continue som
Slide 20: Nataka PFS on track for delivery in 2022
Nataka PFS on track for delivery in 2022 Nataka mining expected to commence in 2025 Hydromining trial at WCP A Developing orebody knowledge for resource confidence and mining resilience To be completed in 2021: Geotechnical testing including wide coverage CPTu drilling and trial pit Hydrogeolo
Slide 21: Market Update
Market Update Cillian Murphy, Marketing Manager Titanium feedstocks
Slide 22: Robust markets for all Kenmare products
Robust markets for all Kenmare products Kenmare achieved further price increases in H1 2021 Sales price (FOB) (US$/t) $300/t $200/t $100/t $0/t H1 H2 H1 H2 H1 H2 H1 H2 H1 2017 2018 2019 2020 2021 Ilmenite price ($/t) Average price ($/t) Recovery in downstream markets resulted in strong demand for Ke
Slide 23: Strong global demand for Kenmare ilmenite
Strong global demand for Kenmare ilmenite Ilmenite market absorbing Kenmare’s increased ilmenite production Ilmenite sales volumes by region Ilmenite upgrading in China remains a key growth market1 40 15 Asia ex-China Americas 30 10 '000 tonnes '000 tonnes 20 5 10 Europe 0 0 Jul-19 Jul-20 Jul-21 Oct
Slide 24: Positive market conditions set to continue
Positive market conditions set to continue H2 2021 market outlook Ilmenite Ilmenite Solid demand has continued into H2 2021 and Kenmare expects to achieve higher prices in Q3 2021 Ilmenite inventories remain at low levels and supply constraints are adding to the demand for Kenmare ilmenite Mar
Slide 25: Outlook
Outlook Michael Carvill, Managing Director Jetty at sunrise
Slide 26: 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 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 on track to become a first quartile marg
Slide 27: Building on our strategy
Building on our strategy Strategy H1 2021 Performance 2021 Targets Growth: Production rising to 1.2 Mtpa ilmenite Low capital intensity growth to 49% increase in final product A 45-60% increase in final product fully utilise existing installed production in H1 2021 vs H1 2020 compared to 2020
Slide 28: Appendices
Appendices Mining at WCP A
Slide 29: Mineral sands: essential to modern life
Mineral sands: essential to modern life Two core product streams, titanium feedstocks & zircon World GDP vs TiO2 pigment consumption1 Titanium feedstocks (ilmenite and rutile) TiO2 pigment imparts whiteness and opacity in the 6 450 Global GDP Index Million tonnes manufacture of paints, plastics an
Slide 30: 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 Dredge + dry mining concentrator concentrate Moma is comprised of multiple ore zones – 6.4
Slide 31: Financial robustness
Financial robustness Flexible debt & trade facilities in place 30-Jun-2021 31-Dec-2020 US$ million US$ million Interest rate Term Term Loan 110.0 110.0 LIBOR +5.4% March 2025 Revolving Credit Facility 20.0 40.0 LIBOR +5.0% December 2022 Total debt 130.0 150.0 Cash 56.5 87.2 Facilities Summary Debt
Slide 32: 2021 production guidance reiterated
2021 production guidance reiterated Kenmare is well advanced in achieving targeted production of 1.2 Mtpa ilmenite on a sustainable basis Production 2021 FY Guidance 2021 HY Actual 2020 Actual Ilmenite tonnes 1,100,000-1,200,000 559,000 756,000 Primary zircon tonnes 53,100-57,900 28,200 43,300 Rutil
Slide 33: Total cash operating costs
Total cash operating costs Adjusted cash operating costs breakdown Power Fuel Power Fuel 11% 7% 12% 8% Production Production Repairs & Overheads Overheads Maintenance 17% Repairs & 15% 24% H1 2021 Maintenance H1 2020 Logistics & 22% Travel US$87.3m Logistics & US$75.2m 6% Travel 6% Distribution Othe
Slide 34: 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 35: Contact Us
Contact Us Jeremy Dibb +353 1 671 0411 ir@kenmareresources.com Jetty at sunset Follow Us