Q4 2025 Production Report and 2026 Guidance

Core Viewpoint - Kenmare Resources plc has provided a trading update for the full year 2025 and Q4 2025, highlighting production achievements, operational challenges, and guidance for 2026, focusing on value over volume in production strategy. Production and Operational Summary - The company achieved revised production guidance for ilmenite and rutile in 2025, exceeding original guidance for primary zircon and concentrates [3][13] - Heavy Mineral Concentrate (HMC) production in 2025 was 1,233,300 tonnes, down 15% year-on-year due to lower excavated ore volumes related to the upgrade of the Wet Concentrator Plant (WCP) A [6][10] - Ilmenite production was 842,300 tonnes in 2025, down 17% year-on-year, while primary zircon production was 50,000 tonnes, down only 1% year-on-year [14] - The company plans to produce over 1.1 million tonnes in 2026, representing a more than 15% increase compared to 2025, while targeting a minimum ilmenite production of 800,000 tonnes [4][39] Financial Overview - Kenmare reported a net debt of $158.8 million at the end of 2025, significantly up from $25.0 million in 2024, primarily due to capital expenditure on the WCP A upgrade project [27][28] - An impairment charge of up to $300 million is expected for 2025, reflecting lower revenue assumptions and market conditions [5][32] - Total cash operating costs for 2026 are expected to be between $215 million and $225 million, lower than in 2025, as the company aims to minimize operating costs [12][42] Market Conditions - Demand for Kenmare's products remained stable in 2025, but pricing declined due to market oversupply, particularly in the titanium feedstocks and zircon markets [22][26] - The zircon market showed signs of stability towards the end of Q4 2025, despite a general decline in prices throughout the year [25][26] - The company has a strong order book for Q1 2026, although continued market softness is expected to impact demand and pricing [26] Capital Projects and Future Guidance - The upgrade of WCP A is nearing completion, with a total capital cost estimate of $341 million, and expected capital expenditure for 2026 is approximately $30 million [20][43] - The company is focusing on a value-over-volume approach for 2026, which includes a significant drawdown of finished product inventories [4][40] - Kenmare is committed to maintaining a strong balance sheet and deferring discretionary capital costs where possible to navigate the current market challenges [43]