Mining company Kenmare Resources said production in the first half of the year was lower than expected, but the company expected that to pick up in the second half of 2023.
A severe lightning strike in the early months of 2023 combined with power reliability impacts in the second quarter caused the company to update guidance for ilmenite production for the full year.
“Production in H1 2023 has unfortunately been lower than our expectations as mining experienced lingering effects of the severe lightning strike in Q1 and power reliability impacts in Q2. We are therefore updating guidance for ilmenite production for the full year.
However, guidance for other products remains unchanged,” said managing director Michael Carvill. “We anticipate significantly stronger production in H2 2023, supported by higher grades and increased tonnes mined.”
Your work questions answered: Can bonuses be deducted pro-rata during a maternity leave?
Palantir, company at centre of row surrounding TD Eoin Hayes, is no stranger to controversy at home or abroad
Tips for avoiding a January credit-card hangover
Can I work for my foreign employer from my home in Ireland?
The company produced 318,900 tonnes of heavy mineral concentrate in the second quarter of the year, down 10 per cent year on year as lower grades and mining rates hit production. Ilmenite production was 221,300 tonnes, 9 per cent lower compared to the second quarter of 2022.
Primary zircon production was down 15 per cent to 11,600 tonnes, and total shipments of finished products rose 48 per cent to 285,100 tonnes as the company drew down on finished product stockpiles
Looking ahead, the company said it was predicting ilmenite production in the range of 980,000 tonnes to 1,040,000 tonnes, with no changes to guidance for zircon, rutile or concentrates.
A weaker titanium pigment market is feeding into lower ilmenite prices in the third quarter of the year, and global macroeconomic conditions are also hitting demand for zircon.
At the end of the first half of the year, net cash was $42.2 million, up from $25.7 million at the end of December. Cash and cash equivalents were $108.8 million at the end of June, while gross bank loans and lease obligations, including accrued interest, were $66.6 million.
“Cash generation has remained strong, supported by product pricing and shipments,” said Mr Carvill. “In addition to paying record dividends and scheduled debt repayments, the business has continued to build cash. In line with our capital allocation policy, we are considering a share buyback of approximately $30 million.”
Kenmare paid its final dividend for 2022 in May, at 43.33 cents per share, the balancing payment of a 54.31 cent per share full-year dividend, representing a dividend payout ratio of 25 per cent of profit after tax.
