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Kenmare ups production in March quarter

Titanium dioxide minerals producer Kenmare Resources has increased March quarter output of heavy mineral concentrate and finished mineral sands products from its Moma mine in northern Mozambique.
Kenmare ups production in March quarter Kenmare ups production in March quarter Kenmare ups production in March quarter Kenmare ups production in March quarter Kenmare ups production in March quarter

Kenmare had a strong March quarter at its Moma mine in Mozambique

HMC production rose 15% year-on-year to 358,700 tonnes as ore mined rose 19% to 9.3 million tonnes but the average grade fell 10% on the year to 4.07%.

Kenmare said HMC output had been helped by an increased contribution from wet concentrator plant B after its 20% capacity upgrade last year, and improved utilisation of the plant, and additional dry mining.

"In line with 2019 guidance, ore grades are expected to be lower for the remainder of the year," it said.

Ilmenite production was up 13% on the year to 238,100t and primary zircon output 7% higher at 12,100t, while rutile output was steady at 2,100t.

The company said both ilmenite and zircon production benefitted from higher HMC volumes, although primary zircon's increase was lower than ilmenite's due to reduced non-magnetic feed during the quarter, which would be processed from stockpiles during the rest of the year.

Concentrates production climbed 80% on the year to 10,100t, with Kenmare citing the introduction of its mineral sands concentrate product.

Adverse weather conditions, including Cyclone Idai, and unscheduled maintenance work on the product dispatch conveyor hit total shipments of finished products, which fell 34% to 176,500t. However, Kenmare said total shipments for 2019 were not expected to be affected.

Planned maintenance work on the mineral separation plant during the quarter reduced HMC processing capacity, leaving Kenmare with stock of 36,600t of HMC at the end of March, up from 19,600t at the start of the year.

Managing director Michael Carvill said production for the quarter had been robust, mostly due to the increased contribution from WCP B.

Kenmare said the definitive feasibility study for the WCP B move to Pilivili was progressing well and on track for completion before the end of June.

Looking at the market, Kenmare said there had been improved demand for ilmenite during the quarter and it expected the market to tighten further during the rest of the year

The zircon market was stable, with strong long-term fundamentals.

"Titanium feedstock markets strengthened in Q1 2019 and we expect ilmenite prices to continue to rise in Q2 2019, driven by increasing Chinese demand," Carvill said.

Kenmare's shares (LSE:KMR) have dropped 17.8% in the past six months to the current £2.01 (US$2.63) per share level.