Irish mining firm Kenmare Resources has budget deadline extended
The Dublin-based company — whose chief asset is the Moma titanium mine in Mozambique — made the announcement yesterday in tandem with a positive trading update in which it said that it expects to see further production growth during 2015.
In essence, Kenmare’s lenders have granted the company a four-week extension — to the end of February — in which to deliver its budget for 2015, something which the firm agreed to do on an annual basis, as an element of a previous debt arrangement.
Kenmare is talking to Absa Bank and other lenders with a view to finalising the terms of a financing amendment, which the company expects to be completed in the coming weeks.
Yesterday’s update also detailed that ore mined from Moma during 2014 increased by 42% to 34.12m tonnes. Ilmenite production was up by 19%, with zircon mining increasing by 62% and heavy mineral concentrate ahead by 13%.
“I’m pleased to see production and shipments growth in 2014, notwithstanding challenging commodity markets,” said Kenmare’s managing director, Michael Carvill.
“We expect further production growth this year as the mine benefits from upgrade work completed in the second half of 2014.”
Kenmare’s share price rose nearly 7% yesterday, although analysts struck a note of caution.
“On balance, while production growth is to be welcomed, commentary on current market conditions, while not a surprise to us, provides a difficult backdrop to discussions with the banks, given limited visibility on any improvement in near term pricing,” said Gerry Hennigan at Goodbody Stockbrokers.
Meanwhile, yesterday’s update made no mention of talks between Kenmare and Australian player Iluka Resources.
The two companies began discussions late last year, after Kenmare had initially rebuffed an earlier potential takeover approach from Iluka.
On January 8, Kenmare said that discussions were continuing and that while the Australians had been conducting significant technical and non-technical due diligence at Dublin and Moma, there was no certainty that an offer will ultimately be forthcoming.
