Kenmare Resources Plc · LSE:KMR
Kenmare Resources — Investor Presentation (January 2022)
29 slides from Kenmare Resources's investor presentation, Jan 27, 2022
Slide 1: Investor Presentation January 2022
RESPONSIBLY MEETING GLOBAL DEMAND FOR QUALITY-OF-LIFE MINERALS Investor Presentation January 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: Overview: Kenmare Resources
Overview: Kenmare Resources The world’s largest ilmenite producer Moma Mine in Mozambique Wet Concentrator Plant B mining at Pilivili 15 years of production with >30 years in Mozambique >100 years life of mine Low environmental impact – 90% of power from renewable source (hydropower) Meaning
Slide 4: Delivering increased production and profitability
Delivering increased production and profitability Ramping up to 1.2 Mtpa ilmenite production GROWTH 46% 2021 was a record year for safety, production and production shipments Guidance of 1.125 to 1.225 Mt of ilmenite (plus associated increase co-products) in 2022 MARGIN 49%1 H1 2021 EBITDA margin up
Slide 5: Committed to safety and sustainability
Sustainability Committed to safety and sustainability Over six million hours worked in 2021 without a Lost Time Injury Safety Sustainability COVID-19 Lowest ever Lost Time Injury Inaugural Sustainability Report 96% of employees at the Moma Frequency Rate (LTIFR) in 2021 published for year-end
Slide 6: FY 2021 production review
FY 2021 production review Record year for production and shipments 30% increase in HMC production vs FY 2020 HMC production Ilmenite Benefitted from 19% increase in ore grades (4.63% THM) following WCP B’s relocation to Pilivili in Q3 2020 1,555,900t 1,119,400t +30% +48% 14% increase in excavate
Slide 7: Financial strength and flexibility
Financial strength and flexibility Year -end highlights Capital projects H1 2021 Highlights Net Debt (US$m) RUPS1 Revenue (CIF) (US$m) EBITDA (US$m) US$82.8m Underway US$178.2m US$82.3m 31.12.2020: US$64.0m Expected completion H1 2020: US$116.8m H1 2020: US$37.2m Q1 2022 Cash (US$m) Nataka PFS Profi
Slide 8: Development projects
Development projects 1.2Mtpa ilmenite projects delivering HMC pumped from Pilivili arriving at MSP WCP B Move Substantially complete Work is underway to increase utilisation rate of the pumping system to transport HMC from Pilivili to the MSP Road haulage will continue to be reduced as these i
Slide 9: 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 10: ~US$100m shareholder returns in 2021
~US$100m shareholder returns in 2021 Increased dividend payment in H1 2021 and share buy-back completed Dividends (USc/share) Share buy-back 10 # of shares repurchased % of ISC repurchased 7.7 5 5.5 14.8m 13.5% 7.3 2.7 Total cash returned ISC following completion 2.3 0 2019 2020 2021 US$81.6m 94.9m
Slide 11: Market Update
Market Update Titanium feedstocks
Slide 12: Record sales at higher prices for all products
Record sales at higher prices for all products Market absorbing increased Kenmare production at higher prices Sales price (FOB) (US$/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 st
Slide 13: Strong global demand for Kenmare ilmenite
Strong global demand for Kenmare ilmenite Average received ilmenite price up 13% in Q4 vs Q3 2021 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-19 Jan-19
Slide 14: Positive momentum continuing into 2022
Positive momentum continuing into 2022 Q4 2021 review and 2022 outlook Ilmenite Ilmenite Robust ilmenite market continued through Q4 2021, with demand for Kenmare’s ilmenite exceeding ability to supply Global ilmenite inventories remain at low levels and supply constraints are adding to the dema
Slide 15: Outlook
Outlook R71,125 Jetty at sunrise
Slide 16: 2022 production guidance
2022 production guidance Kenmare is well advanced in achieving targeted production of 1.2 Mtpa ilmenite on a sustainable basis Production FY 2022 Guidance FY 2021 Actual FY 2020 Actual Ilmenite tonnes 1,125,000 - 1,225,000 1,119,400 756,000 Primary zircon tonnes 54,400 - 63,200 56,300 43,300 Rutile
Slide 17: 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 18: Building on our strategy
Building on our strategy Strategy FY 2021 Performance FY 2022 Targets Growth: Production rising to 1.2 Mtpa ilmenite Record year for production and Focused on delivering 1.2 Mtpa Low capital intensity growth to shipments ilmenite production sustainably fully utilise existing installed faciliti
Slide 19: Appendices
Appendices Mining at WCP A
Slide 20: 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 21: 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 22: 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 23: H1 2021: Unit costs reduced on increased production
H1 2021: 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 U
Slide 24: H1 2021: Unit costs down 23% on prior half periods
H1 2021: Unit costs down 23% on prior half periods Unit cost reduction driven by higher product volumes 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 2017 2018 2019 20
Slide 25: Financially well-resourced
Financially well-resourced H1 2021 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$23.5m) Inventories 69.6 63.7 Trade
Slide 26: Financially robust
Financially robust Flexible debt and trade facilities in place 30-Jun-2021 31-Dec-2020 US$ 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 27: 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 28: 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 29: Contact Us
Contact Us Jeremy Dibb / Katharine Sutton +353 1 671 0411 ir@kenmareresources.com Jetty at sunset Follow Us
Kenmare Resources — Investor Presentation (January 2022) on 6ix