Announcements - 29th April 2005
2004 Preliminary Results Chairman's Statement
Dear Shareholder,
With the construction of the Moma Titanium Minerals project now well advanced and on schedule, the key task for the company is the successful management of this construction process.
With Moma, as with most major projects, approximately 30% of the development programme is required for detailed design, planning and the procurement of major components. We are 30% through the contractual period and most of the design and procurement has been completed. The temporary accommodation village has been built, while the hard standing for the dry plant, the road for the conveyor, the construction pond, the powerline, the 20km access road, the airstrip, and the quarry and stone crushing for aggregate are well underway. The largest components of the plants we purchased from BHP in Australia are about to be shipped from Bunbury in Western Australia and are due to arrive at Moma at the end of May.
In the meantime, Kenmare has been making organisational changes to allow us control and manage this major mining project. Dr. Chris Gilchrist has been appointed as Chief Operations Officer of the company. His previous career has been spent working on the operations side in de Beers and Anglo American, with his last job being General Manager of Cleveland Potash. Chris will ensure that implementation proceeds smoothly and that Kenmare is ready to take up the baton when the project is handed to us by the contractor in mid 2006. He has been drawing up a management and personnel plan and the hiring of production staff will commence shortly with the pace picking up towards the end of the year.
Marketing has been going extremely well with the establishment of heads of agreement with major consumers for the supply of sulphate grade ilmenite. These agreements are in the process of being converted into full legal contracts. The general market for the supply of ilmenite has picked up considerably and we believe that our average revenue per tonne will be in excess of the numbers used in our financing documents. The markets for zircon and rutile are also very strong. It is expected that by the time Moma commences operations, its present level of production capacity will be fully sold.
Kenmare has bought a new exploration drill which is presently being shipped to site with the view to performing detailed infill drilling on the first years of the mine path. It will also be used to investigate more fully the resource potential beyond the immediate mining area.
The development of the Moma mine will have a profound affect on the local environment and social structure. We have a duty to ensure that this affect is positive. As such, we have registered the Moma Development Association as a non-profit organisation with the aim of enhancing the capacity of the local people to gain benefit from the presence of a major mine in their vicinity, and also to ensure that the mine management maximises the inclusion of local people in its plans. In conjunction with a Danish aid organisation, ADPP, the Moma Development Association has commenced a major AIDS awareness programme in the local community and is consulting with local people and Government agencies about further initiatives.
During 2004 Kenmare made a profit of US$36,555, largely arising from interest received net of operating expenses. In December 2004 the initial disbursement of Moma project debt, approximately US$55 million, took place.
The financing of Moma, which we understand to be the biggest structured finance package ever put together by a non-major mining company, has received two awards. The Mining Journal awarded Moma its International Mining Finance Award and Project Finance Magazine awarded Moma the African Mining Deal of the year award.
It is very exciting that the long years of hard work to get the Moma project to mine development phase have yielded such a positive result. I am looking forward to the opening ceremony next year and further to the first shipment of mineral into a positive market environment.
Charles Carvill
Chairman
29th April 2005
For further information:
Michael Carvill
Managing Director
+353-1-671 0411
+353-87-674 0110
Murray Consultants
Elizabeth Headon
Tel: +353-1-498 0300
Mob: +353 87 989 7234
Conduit PR Ltd
Leesa Peters
+44-207-6188708
Mob: +44 781 215 9885
