Kenmare Resources plc - Update

Kenmare Resources plc ("Kenmare" or "the Company")

28 November, 2012 

Kenmare provides the following update with respect to market conditions, production and the on-schedule year-end commissioning of the expansion at Moma.

Market

A reduction in the market prices of zircon and titanium feedstocks has been widely reported. Kenmare continues to sell all zircon production at market price but its principal revenue-generating product is ilmenite, which represents 70% of forecast revenue for 2012.  While ilmenite has seen some price weakness, this has not been nearly as great as in zircon, rutile or synthetic rutile.  Although the market for ilmenite is experiencing some temporary softness due primarily to inventory destocking in the pigment supply chain resulting in modest price reductions, the Company believes the destocking process will complete in Q2 2013, followed by a recovery in demand and a return to stronger pricing levels.

Production

As previously reported, upgrades being carried out by Electricidade de Moçambique to the national electricity transmission grid, although ultimately beneficial,  have in the short term resulted in power disruptions that reduced production in Q3 2012, and have continued in Q4 2012.  Additionally, the dredge pond for Wet Concentrator Plant (WCP A) continues to move from a low-lying area to a higher dunal plateau, a transition which will only occur once in the life of the deposit.  The complexities of this transition requiring the pond water level to rise from 12 metres to 32 metres above sea level (currently at 23 metres), have also adversely impacted production to a greater extent than had been experienced in Q3 and to a greater extent than had been anticipated for Q4.  Given these production issues, there is likely to be some divergence, expected to be less than 10%, from previous guidance for full-year production of 630,000 tonnes of ilmenite and 50,000 tonnes of zircon.

Expansion

Expansion of the Moma Titanium Minerals Mine is on track to commence commissioning by the end of this year.  Commissioning teams are preparing to mobilise to site and training of the additional employees who will operate the expanded plants is already well underway.  The new dredge has been mechanically complete for some time and filling of the new mine pond with water will commence in December, which will allow the start of the commissioning of both the dredge and new Wet Concentrator Plant (WCP B).  The Wet High Intensity Magnetic Separation Plant and the Auxiliary Ilmenite Plant will start their commissioning process in December.

For further information, please contact:

Kenmare Resources plc.
Michael Carvill, Managing Director       
Tel: [phone]       
Mob: + 353 87 674 0110 

Tony McCluskey, Financial Director
Tel: [phone]       
Mob: + 353 87 674 0346

Virginia Skroski, Investor Relations Manager       
Tel: [phone] 
Mob: + 353 87 739 1103 

Deirdre Corcoran, Company Secretary
Tel: [phone]       
Mob: + 353 87 638 3742

Murray Consultants       
Joe Heron 
Tel: [phone] 
Mob: [phone] 

Tavistock Communications
Jos Simson / Mike Bartlett
Tel: [phone]
Mob: [phone]

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Source: Kenmare Resources via Thomson Reuters ONE

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