Mining company open to international expansion

Kenmare Resources chief Michael Carvill hasn’t ruled out the mining company expanding its international presence and asset base, but said that will only happen when the company’s Moma titanium mine in Mozambique hits full potential in the next couple of years.

Speaking on the back of a strong set of first-half results, Mr Carvill said Kenmare’s plan remains to build Moma into a world-class titanium feedstock asset, operating at full production.

“As soon as that is achieved we’ll look at all possibilities,” he said.

Last month, the Dublin-headquartered company — via a pre-close trading update — reported a 95% year-on-year increase in first half revenues to $109m (€87.4m), up from $56m for the first half of 2011.

Yesterday, the company expanded with its full-set of financial results covering the first six months of this year.

These showed a year-on-year increase of 370% in operating profit to $47m, a 218% rise in gross profit to $55m, and a 182% jump in earnings before interest, taxes, depreciation, and amortisation to $55.5m. The company also recorded a first-half pre-tax profit of $38.8m, up from a loss figure of nearly $14.2m for the same period last year.

Earnings per share amounted to 1.61c, up from a loss of 0.59c last year.

Kenmare Resources returned to full-year profitability in 2011.

Mr Carvill, who is the company’s managing director, said yesterday that management expects to see another improvement in the second half of the year, followed by further financial gains next year.

“Revenues and profits, this year, have benefited greatly from price increases and the falling away of legacy contracts. While production was challenging during the first half of 2012, we have taken steps to address the issues and have experienced a significant step-up in production since June,” he said.

Ilmenite production levels reached 276,600 tonnes in the first half, with zircon production measuring 23,600 tonnes. Overall production has improved since the end of June, the company added, and is expected to show a significant improvement on the first half of the year.

Adverse weather and clay build-ups have lowered production levels at Moma this year, but the company is still anticipating total production of around 630,000 tonnes for 2012, down from 730,400 last year.

Management reiterated that it remains on course to complete Moma’s second phase expansion by the end of this year. That will boost production by 50% — to around 1.2m tonnes — by the end of next year. The raising of $60m, via a successful recent share placing, will largely go to funding that expansion process.