Kenmare Resources shares jump on increased ilmenite production

Shares in FTSE 250-listed mining and exploration company Kenmare Resources rose on Tuesday after the company reported an increase in its ilmenite and zircon production in the first quarter of 2013.

Production of Heavy Mineral Concentrate (HMC) was 189,800 tonnes, up 20.9% from the fourth quarter of 2012, when it was 157,000 tonnes.

This was processed into 137,500 tonnes of ilmenite and 10,400 tonnes of zircon including 4,700 tonnes of a secondary zircon product. This compared to 123,600 tonnes of ilmenite, 10,700 tonnes of zircon and 4,500 tonnes of secondary zircon in the fourth quarter of 2012.

The company said that production for March increased from previous months as the dredge pond came towards the end of its transition from the low lying Namalope Flats zone onto a raised dunal plateau where it is to mine for the coming years.

Some 48,500 tonnes of ilmenite was shipped during the first quarter of 2013, compared to 201,400 tonnes in the fourth quarter of 2012.

Kenmare Resources said that the lower level of shipment was due to both low levels of stocks at year end and subdued market demand. It said that shipments had picked up in the second quarter, with six scheduled for April and five for May.

The company reported that construction activity relating to the development of expanded facilities at Moma is nearing a close, with handover of Wet Concentrator Plant B and the new dredge from the contractor expected in the coming weeks.

Ilmenite is a magnetic material comprised of titanium-iron oxide which is commonly used by the steelmaking industry. Zircon is a mineral which is frequently used in the decorative ceramics sector.

Kenmare Resources' share price rose 6.21% to 29.95p at 09:28 on Tuesday.

MF