Kenmare Resources Plc · LSE:KMR
Kenmare Resources — Shareholder Meeting (May 2017)
12 slides from Kenmare Resources's shareholder meeting presentation, May 25, 2017
Slide 1: 2017 AGM Presentation
2017 AGM Presentation Thursday, 25 May 2017
Slide 2: Disclaimer
Disclaimer This Presentation (the “Presentation”) based, or any other written or oral made. These assumptions and has been prepared and issued by information made available in connection judgments may or may not prove to be Kenmare Resources plc (the “Company” with the Company. correct and there can
Slide 3: 2016 Highlights
2016 Highlights Delivering growth • Record production and shipments for all products in 2016 • 5‐15% increase in ilmenite production forecast for 2017 Driving efficient operations • Unit cash costs down 18% • Targeting lower costs in 2017 Rebalanced • Strong balance sheet – net debt down 88% t
Slide 4: Company Strategy
Company Strategy Structured and disciplined approach to capital management ST Short Term MT Medium Term LT Longer Term Maintain robust balance sheet and Optimise mining capacity for • Capture 100+ year life of mine • generate free cash flow • market conditions Increase utilisation rates and Potentia
Slide 5: 2016 Operational Review
2016 Operational Review Safety improvements • LTIFR* decreased to 0.20 from 0.47 in 2015 Record production ‐ Finished Products up 19% YoY • Power stability • Improved grade • Improved maintenance leading to higher mechanical availability and utilisation • Introduction of supplemental mining at W
Slide 6: 2016 Revenue Review
2016 Revenue Review Shipments (000’s tonnes) FOB Price (US$/tonne) 1 2 700 $200 $1,000 600 $175 500 $150 $750 400 $125 300 $100 $500 200 100 $75 0 $50 $250 H1 2015 H2 2015 H1 2016 H2 2016 H1 2015 H2 2015 H1 2016 H2 2016 Ilmenite Primary Zircon Secondary Zircon Ilmenite (LHS) Primary Zircon (RHS) H
Slide 7: Sustainable Cost Reductions
Sustainable Cost Reductions $220 1,250 Production volumes (kt tonnes) Cash operating cost (US$/t) $200 $180 1,000 $160 $140 750 $120 $100 500 2012 2013 2014 2015 2016 2017* Final Production (RHS) Unit cash costs (LHS) 2016 Cash Operating Cost US$136/t, 18% reduction on 2015 Finished product prod
Slide 8: Transformed Balance Sheet Post Capital Raise
Transformed Balance Sheet Post Capital Raise Net Debt (US$m) Interest Rates (%) 400 10% 350 9% 300 250 8% 200 7% 150 6% 100 50 5% 0 4% 2010 2011 2012 2013 2014 2015 2016 2010 2011 2012 2013 2014 2015 2016 Reduced gross debt to US$102.6m* • All USD denominated with extended term, reduce interest ra
Slide 9: Capital Costs
Capital Costs Sustaining capital expected to average US$20m annually in medium term 2016 sustaining capital constrained at US$6.7m 2017 sustaining capital approx. US$25m: • including US$5m carry‐over given low 2016 sustaining capital • heavy mobile equipment replacement will reduce hire costs
Slide 10: 2017 Guidance
2017 Guidance 2016 Production 2017 Guidance* YoY % Change Production Ilmenite kt 903,300 950,000‐1,050,000 5‐16% Zircon kt 68,200 72,000‐83,000 6‐22% of which primary kt 44,900 47,000‐52,500 5‐17% of which secondary kt 23,300 25,000‐30,500 7‐31% Rutile kt 7,800 9,000‐10,000 15‐28% Costs Total cash o
Slide 11: Market Overview
Market Overview Sichuan ilmenite spot price Enterprise value vs Quarterly Average Price (RMB/tonne) ('000 TiO2 units) 2,000 1,750 1,500 1,250 1,000 750 500 250 0 Jan‐16 Mar‐16 May‐16 Jul‐16 Sep‐16 Nov‐16 Jan‐17 Mar‐17 May‐10 Oct‐10 May‐11 Oct‐11 Apr‐12 Oct‐12 Apr‐13 Oct‐13 Apr‐14 Oct‐14 Apr‐15 Oct‐1
Slide 12: Summary
Summary 30 100+ year10 largest TiO2 2016 3rd Years in Mozambique feedstock Years in production producer LOM globally of global 1,323 93% Employees Mozambican 7% TiO2 feedstock production Net Debt ↓88% HoH 10 Ilmenite production 2017 guidance ↑ 5 – 16 % Cash of US$57.7m (31.12.16) Cash costs guidance