Q2 and H1 2025 Production Report

Core Viewpoint - Kenmare Resources plc reported stable demand for its products in Q2 2025, with ilmenite prices remaining stable, but the company has lowered its long-term pricing assumptions due to market uncertainties, leading to an expected impairment charge of up to $125 million in H1 2025, which will be a non-cash charge and will not affect operations or dividends [4][40]. Production Overview - Heavy Mineral Concentrate (HMC) production reached 358,300 tonnes in Q2 2025, a 5% increase year-on-year, driven by a 16% increase in ore grades despite a 12% decrease in excavated ore volumes [8][11]. - Ilmenite production was 245,400 tonnes, up 3% year-on-year, while primary zircon production increased by 1% to 13,100 tonnes [8][12]. - Total shipments of finished products were 181,800 tonnes, down 23% year-on-year, primarily due to adverse weather and maintenance of transshipment vessels [8][15]. Operational Update - The company achieved zero Lost Time Injuries (LTIs) in H1 2025, with a Lost Time Injury Frequency Rate (LTIFR) of 0.03 per 200,000 hours worked, an improvement from 0.09 in the previous year [8][10]. - Kenmare is on track to meet its 2025 production and cost guidance, expecting higher production in H2 2025 supported by increased excavated ore volumes [8][14]. Capital Projects - The Wet Concentrator Plant A upgrade project is progressing as planned, with an estimated capital cost of $341 million, and commissioning is expected to begin in Q3 2025 [8][20]. - The company has initiated a Selective Mining Operation (SMO) with a targeted run rate of 300 tonnes per hour, and a second unit is planned for commissioning in H1 2026 [23][25]. Market Conditions - Demand for titanium feedstocks remains robust, with stable ilmenite pricing, while zircon and rutile prices have continued to decline [26][27]. - The zircon market is subdued due to weak demand, particularly in China's construction sector, although demand for high-grade zircon remains strong [30][31]. Corporate Developments - Kenmare has been included in the FTSE4Good Index Series, reflecting strong Environmental, Social, and Governance (ESG) practices [35][36]. - The company terminated discussions with Oryx Global Partners regarding an offer, as the revised pricing was deemed to undervalue Kenmare's business [38][39]. - James McCullough was appointed as the new Chief Financial Officer on 1 May 2025, bringing extensive experience from Rio Tinto Plc [37].