Kenmare Resources Plc · LSE:KMR
Kenmare Resources — Investor Presentation (June 2019)
32 slides from Kenmare Resources's investor presentation, June 2019
Slide 1: Investor Presentation June 2019
KENMARE RI eee Ble i A Investor Presentation June 2019
Slide 2: Disclaimer
Disclaimer » This 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 disclaim any and a
Slide 3: Overview: Kenmare Resources
Overview: Kenmare Resources » 4th largest producer of TiO, feedstocks > Representing 7% of global supply > World’s largest ilmenite supplier MOZAMBIQUE Located in Mozambique Vv >10 years of operations, 30 years in Mozambique Wet Concentrator Plant (WCP) A Vv 100+ years life of mine Vv ~5% of Mozambi
Slide 4: Mineral sands: essential to modern life
“a Mineral sands: essential to modern life Two core product streams of minerals sands World GDP vs TiO, pigment consumption Titanium feedstocks (ilmenite and rutile) » TiO, pigment imparts whiteness and opacity in the manufacture of 6 p 450 x . . g paints, plastics and paper g 4 300 z » Non-recyclab
Slide 5: Operational overview
Operational overview me KEY MOMA FEATURES Wet Concentrator C4] Dune itation Heavy Mineral Rehabilitation Concentrate Ta World class resource base > >100 year life of mine P > Low cost, bulk mining operation e > Primarily hydro-generated power > Dedicated on-site export facilities eel Py . . gneti Se
Slide 6: A robust start to the year
A robust start to the year me Q1 2019 vs Q1 2018: Highlights A15% A13% A7T% 238,100t 12,100t IImenite Primary zircon production production 358,700t HMC production > Continued strong safety performance — LTIFR decreased to 0.08 per 200k man-hours worked, Kenmare’s lowest ever level >» HMC production
Slide 7: Development projects on track
Development projects on track » Growing production to 1.2 Mtpa of ilmenite 2018 2019 2020 WCPB WCP C WCP B UPGRADE DEVELOPMENT MOVE WCP C: Q1 2019 update » Fabrication of the dredge pontoons at the shipbuilders completed and in May 2019, dredge launched into water successfully > Construction of the
Slide 8: DFS confirms plans for WCP B move
DFS confirms plans for WCP B move me Board approval for relocation of WCP B to Pilivili Pilivili ore zone > > Highest grade ore zone in Moma’s portfolio - Mineral Reserves of 4.4% Total Heavy Mineral (THM) Other favourable characteristics including free flowing sand, low slimes and close proximity t
Slide 9: WCP B move capital and operating costs
WCP B move capital and operating costs >» US$106m total capital cost Road construction and transportation of WCP B and dredge Contingency Indirect costs General and electrical infrastructure HMC stockpile facility at Pilivili Overland pipeline and HMC pumping system Kenmare Resources — Investor Pres
Slide 10: 2018 review
} KENMARE 2018 review
Slide 11: Guidance achieved for the third consecutive year
Guidance achieved for the third consecutive year me IImenite production (000’s tonnes) Primary zircon production (000’s tonnes) 1,200 60 1,000 ———— 50 800 40 600 30 400 20 200 10 ie) ie) 2016 2017 2018 2016 2017 2018 =2018 Guidance =2018 Guidance > Mid-point of original 2018 production guidance! exc
Slide 12: Strong financial performance
Strong financial performance 2018 financial overview Revenue +26% fo) 2018 US$262.2m 2017 US$208.3m EBITDA +54% 2017 Sales price’? +17% {o} 2018 2017 Profit After Tax +162% 2018 2017 Us$19.4m 1. Weighted average sales price per tonne of product sold 2.FreeonBoard 3. Total cash cost per tonne of fini
Slide 13: Targeting further unit cost reductions by 2021
Targeting further unit cost reductions by 2021 x Production and cash operating cost per tonne seven year profile 1,200 wo i} 1,000 S 5 800 o Bq 600 on Bf 8 § 400 mel g og 200 mol oO c= a - & a 2012 2013 2014 2015 2016 2017 2018 mm Production ——All-Product Costs ——Ilmenite Costs (net of co-product re
Slide 14: EBITDA reflects stronger product markets
EBITDA reflects stronger product markets me EBITDA bridge 2017 to 2018 120 100 93.4 80 60 60.5 USS millions 40 20 (0) 2017 EBITDA Sales volume _ Sales price Sales mix Stock Costs 2018 EBITDA movements > EBITDA benefitted significantly from higher achieved prices for all products and increased sales
Slide 15: US$13.5m net cash at year-end
US$13.5m net cash at year-end me Net cash bridge 2017 to 2018 80 60 » 40 ¢ -2.6 . s 20 —_— ao € & 4 85 n 5 70 a -40 -60 Net debt Dec-17_ Operating cashflow Property, plant & Working capital Interest payment Net cash Dec-18 equipment changes > Net cash of US$13.5m at year-end 2018, compared to US$34.
Slide 16: Dividend policy announced
Dividend policy announced » Shareholder returns Dividend policy > Commitment to pay a minimum 20% of Profit After Tax » Working towards maiden dividend in 2019 Subject to: > Market conditions, debt and capital requirements » Higher cash balances likely to be maintained until capital development proj
Slide 17: Market update
} KENMARE Market update
Slide 18: Global TiO2 inventories are low
Global TiO, inventories are low » Forecast supply/demand market balance 2 TiO, units (millions tonnes) re) -2 N N N N N N N N N g g g g g 8 8 8 8 a ~ g g io} a x g Source:Company MB Surplus/(Deficit) ——Inventories Current prices profitable for existing producers > Average ilmenite prices up in 2018,
Slide 19: Positive outlook for all products
Positive outlook for all products me Q1 2019 markets update IImenite Zircon Kenmare Resources — Investor Presentation June 2019 IImenite Stronger demand for ilmenite products in Q1 2019 compared to Q1 2018 Chinese demand for imported ilmenite was robust despite destocking and seasonal weakness in pi
Slide 20: Outlook for 2019 and beyond
} KENMARE Outlook for 2019 and beyond
Slide 21: 2019 guidance (provided January 2019)
2019 guidance (provided 10 January 2019) i IImenite tonnes 900,000-960 ,000 958,500 Primary zircon tonnes 44,500-52,000 48,400 Rutile tonnes 8,100-9,500 8,200 Concentrates" tonnes 33,500-43,500 28,200 EE Total cash operating costs USS m 151-167 151.3 Cash costs per tonne of finished product USS/tonn
Slide 22: Five year capital cost guidance
Five year capital cost guidance >» Sustaining capital » 2019: guidance of US$23m » Expected US$20-25m from 2020-2025 Development capital » 2019: guidance of US$70m » Main elements are construction of WCP C and early works for WCP B move in 2020 > 2020-2023: » c.US$75m - WCP B move to Pilivili » c.US
Slide 23: Sustained production at higher levels from 2021
Sustained production at higher levels from 2021 » 20 year production profile (000’s tonnes) 2,000 1,600 1,200 800 400 te) Nn Nn N Nn Nn N Nn Nn Nn N Nn Nn N Nn Nn Nn N Nn Nn N N Nn fo} je} io} oO oO fo} Oo Oo je} io} Oo fo} i=} fo} fo} fo} io} fo} fo} io} lo} lo} za Nn N N N nN Nn Nn N nN ao wa a oO
Slide 24: Growing from a position of strength
Growing from a position of strength me Ya ¢ WCP B upgrade delivered on time and >25% below budget in 2018 * >20% production growth by 2021 Jj MARGIN EXPANSION y GY SHAREHOLDER ¢ Net cash of US$13.5m at year-end 2018 S RETURNS * Dividend policy announced Kenmare Resources — Investor Presentation June
Slide 25: Appendix
} KENMARE
Slide 26: Sustainable operating practices
Sustainable operating practices >» Safety > 67% decrease in Lost Time Injuries in 2018 compared to 2017 (from 9 to 3) > LTIFR of 0.12 per 200k man hours worked in 2018 » Strong improvement due to increased focus on risk assessment and personal accountability >» Retained NOSA 5 star status for third
Slide 27: Increased profitability
Increased profitability me 2018 Income Statement review 2018 2017 2018 revenue contribution by product (%) USS million — US$ million Primary Revenue 262.2 208.3 zircon Freight costs (16.3) (5.5) 23% . Secondary Revenue (FOB) 245.9 202.8 IImenite zircon 69% 6% . Rutile Cost of sales & other operating
Slide 28: Increased cash flow generation
Increased cash flow generation me Operating cash flow per share 80 65p/share i) a x= $ Y 43p/share é Ss 40 & D & rc oO 6 4p/share (0) 2016 2017 2018 51% increase in operating cash flow per share in 2018 compared to 2017 Kenmare Resources — Investor Presentation June 2019 28
Slide 29: Positive market momentum
Positive market momentum 2018 revenue review (FOB) 2018 production/sales (000’s tonnes) > 21% increase in total revenue to US$245.9m compared to 1,200 90 2017 » 3% increase in sales volumes to 1,074,400 tonnes - a new 800 60 annual record 400 30 » 2018 sales volumes weighted towards H1 2018 as stron
Slide 30: Project timeline: low risk, phased approach
Project timeline: low risk, phased approach WCP B Upgrade Execution Po WCP C WCPC DFS Execution WCP B to Pilivili WCP B to Pilivili DFS Execution WCP A to Nataka WCP A to Nataka Scoping, PFS & DFS Execution 2018 PFS: Pre-Feasibility study DFS: Definitive Feasibility Study 2021-23 2024-25 > Progressi
Slide 31: Kenmare Moma Development Association (KMAD)
Kenmare Moma Development Association (KMAD) » Established in 2004, KMAD is a_ not-for-profit organisation with the objective of implementing development programmes in Kenmare’s — host communities. Examples of initiatives KMAD supported in 2018: Economic Development and Livelihoods > Funding provided
Slide 32: Contact Us
} KENMARE Contact Us Jeremy Dibb IR & Corporate Development +353 1671 0411
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