Announcements - 21st September 2005
Interim Results for the period ended 30th June 2005
Dear Shareholder,
Implementation of Kenmare's Moma Titanium Minerals Project continues apace with 41% completion already being achieved. Commissioning is on track for the fourth quarter of 2006. Most of the steelwork and process components have arrived safely on site from Western Australia and assembly is due to commence this month. Bulk earthworks and civilworks are nearing completion. Construction of the permanent accommodation village has progressed well and it will soon be ready to receive a large influx of construction workers to erect the plants, jetty and other facilities. Recruitment and the placement of major supply contracts for the operations phase are well underway.
The market outlook for titanium minerals continues to be positive, driven by strong pigment demand most notably in China. Industry analysts forecast tightness in the ilmenite market to continue for the coming years. This has led to a firming of ilmenite prices, which is set to continue as limited new supplies are scheduled to enter the market and Moma is well placed to capitalise on the positive demand outlook. Negotiations are ongoing with a number of customers for the balance of Moma's ilmenite production. Demand for zircon continues to be very strong and prices have increased to circa US$700 per metric tonne for premium grade. This compares to our financing which was based on approximately US$500 per metric tonne. The outlook is for zircon supply to remain tight for the foreseeable future. Kenmare has contracted a significant volume of its zircon to date at market-based prices, ensuring that we benefit from the continuing strong market conditions.
Kenmare has commenced in-fill drilling of the dredge path and recent results have met with expectations. When this programme is completed we plan to investigate more extensively the resource potential beyond the immediate mining area.
The Moma Development Association continues to work with Non-Governmental Organisations (NGOs) to set up initiatives to ensure the local community will benefit from the project. These initiatives include skills and agricultural training, promotion of spin-off businesses and health awareness. The Association has engaged a development consultant to further advance a number of projects.
During the six months ended 30th June 2005 we report a profit of US$3,750,033. This profit arises primarily from foreign exchange gains on Euro-denominated debt and deposit interest earned net of Kenmare's corporate operating costs. In the six months, investment in Deferred Development Expenditure and Construction at Moma increased by US$84,411,649 to US$220,056,203 and bank loans increased by US$64,548,488 to US$119,522,623. Cash and bank balances at the 30th June amounted to US$80,527,088.
We will continue to focus on the successful management of the construction process and look forward to the challenges ahead as we move to production.
Charles Carvill
Chairman
21st September 2005
For further information:
Michael Carvill
Managing Director
+353-1-671 0411
+353-87-674 0110
Murray Consultants
Tom Byrne
+353-1-498 0339
Conduit PR Ltd
Leesa Peters
+44-207-6188708
Mob: +44 781 215 9885
Murray Consultants Ltd
Aoibheann O'Sullivan
Tel: + 353 1 498 0346
Mob: +353 87 629 1453
