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Hitt og þetta 30. apríl 2007

Kenmare Preliminary Results for the year ended 31 December 2006

* Moma Titanium Minerals Mine now in production * Strong market demand and price growth for minerals * Expansion to annual production of 1.2 million tonnes of ilmenite plus co-products by end 2009 * Active uranium exploration programme in Mozambique 30 April 2007 Chairman's Statement Dear Shareholder, I was delighted to announce on 25th April 2007 that Kenmare had commenced mining operations at its Moma Titanium Minerals Mine and had begun to stockpile heavy minerals concentrate for further processing. While we have only been operating for a short while, the plant has been performing well and we are now looking forward to a successful ramp-up of the mine and processing plant to full production over the coming months. Demand for our products is buoyant and the Company is already developing plans for a phased expansion. Following a recent drilling programme, the mineral resources at Moma have increased by over 60%. This confirms Moma's position as one of the premier deposits of titanium minerals and zircon in the world, and provides great opportunity for Kenmare's continued growth. Kenmare expects to ramp-up initially to annual production levels of 800,000 tonnes of ilmenite (the main titanium-bearing mineral), 56,000 tonnes of zircon (a zirconium mineral used in the ceramics industry) and 21,000 tonnes of rutile (a titanium dioxide mineral). Product Market We continue to experience strong market demand for Moma minerals and have entered into a number of heads of agreements with new customers. These are presently being converted into full sales agreements, which are expected to be concluded shortly. The titanium feedstock market continues to perform well, driven by strong demand from the end-use markets, the most important of which are titanium dioxide (TiO2) pigment and titanium metal. Pigment demand growth rates of over 3% are predicted to be sustainable into the future. This growth, combined with the depletion of existing mines which are coming to the end of their resource lives, will give Moma plenty of scope for expansion. Demand for feedstock from the smaller titanium metal market is also very robust with production growth of over 20% in 2006. This strong demand from end use markets resulted in a tight market for titanium feedstocks in 2006. Despite some new sources of supply entering the market in 2007, the market for our products is expected to remain in tight supply, which will continue to put upward pressure on prices. The zircon market performed strongly in 2006 and prices increased by around 20% over the previous year. Operations The 170 km overhead power transmission line was successfully energised in January 2007 and cold commissioning of the two mining dredges followed immediately. The commissioning process was subsequently extended to the floating wet concentrator plant and, following the resolution of snags, the plant was successfully tested and a taking-over certificate for the mining component was issued by Kenmare. This represents the first step of a phased handover of the works under a contract amendment between Kenmare and the contractor in which all changes to the original contract were agreed. Mining is now taking place using one dredge on a 24 hour basis. The Kenmare operations team are continuing to fine-tune the systems for maximum efficiency. As the mining pond is widened and deepened over the coming months, the second dredge will be brought into production. Once the mineral separation plant is taken over from the contractor, the heavy minerals concentrate will be further separated into the final products prior to export. The accommodation village, roads, product storage warehouse, overland conveyor and export jetty are all substantially complete. Construction of the self-propelled, 4,000 tonne capacity product transportation barge has been completed in Singapore and sea-trials have been carried out. Drilling activities during the past year continued to examine the numerous deposits within our Moma licences. This has yielded excellent results at the Nataka deposit, where the inferred resource has increased from 49 million tonnes to 110 million tonnes of contained ilmenite, with associated increases in co-products. These results have been independently verified by SRK Consulting. This increases the total resource under licence to Kenmare by more than 60%, from 101 million tonnes to 163 million tonnes of contained ilmenite, with associated increases in co-products to 12.4 million tonnes of zircon and 3.6 million tonnes of rutile. As the Nataka orebody remains open laterally and at depth, further increased tonnage is probable. Social Responsibility The Kenmare Moma Development Association (KMAD), a not-for-profit organisation, is continuing its activities in the area surrounding the mine. The key objective of KMAD is to use the presence of the mine to generate long term sustainable opportunities for people in the local communities. Working with local and international partners, initiatives during the past year included a HIV/AIDS awareness programme, a savings and credit programme, a partnership with Worldwide Wildlife Fund on creating and promoting cooperatives of local food producers and other initiatives, and the construction of a new primary school in Topuito, a local village. The local soccer field has been upgraded and Kenmare's operations staff has pitched in very enthusiastically and have voluntarily organised sporting events. Their support in this area is most appreciated. Exploration Kenmare also has an active uranium exploration programme underway in northern Mozambique. We have been granted licences over 1,400 km2 to explore in both the Tete and Niassa provinces. Further licence applications covering 900 km2 have been submitted. Initial field work has involved ground surveying using gamma radiation meters followed by trenching and sampling. Uranium mineralisation has already been identified in both Karoo sedimentary and granitic rocks. As a result, we have increased the size of our exploration team and look forward to reporting to shareholders on our progress. Financial Results During 2006, we report a loss of US$4.3 million, arising primarily from foreign exchange losses on Euro-denominated debt and Kenmare's corporate operating costs, net of interest earned. Construction costs capitalised during the year amounted to US$78 million while deferred project development costs and mineral exploration costs deferred increased by US$36.5 million. Bank loans amounted to US$266.1 million at the year end. Board Appointment Tony Lowrie has joined the Board of Directors and it is my pleasure to recommend him for election at the Annual General Meeting. Tony commands great respect in the equity markets and brings a wealth of experience which will assist Kenmare's continued development. Now that we have commenced mining we are pushing for a rapid start up of the minerals separation plant and the first shipments to customers. We are in the fortunate position that the market for our products is strong with positive price trends throughout. This, together with the strong indications of support we have received from our customers, gives us the necessary comfort to push rapidly into a major capacity expansion which we hope will bring us to production of 1.2 million tonnes of ilmenite plus co-products by the end of 2009. We in Kenmare are extremely proud of what has been achieved so far. I would like to take this opportunity to thank everyone who has worked so hard to reach this point. I would also like to thank you, our shareholders, for your support and the Government of Mozambique for its support of Kenmare. Charles Carvill Chairman For more information: Kenmare Resources plc Michael Carvill, Managing Director Tel: + 353 1 671 0411 Mob: + 353 87 674 0110 Tony McCluskey, Financial Director Tel: + 353 1 671 0411 Mob: + 353 87 674 0346 Conduit PR Ltd Leesa Peters Tel: + 44 (0) 207 429 6600 Mob: + 44 (0) 781 215 9885 Murray Consultants Ltd Elizabeth Headon Tel: + 353 1 498 0300 Mob: + 353 87 989 7234 www.kenmareresources.com KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS GROUP INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 US$'000 US$'000 Revenue - - Operating (expenses)/gains (7,255) 2,861 Operating (loss)/profit (7,255) 2,861 Finance income 2,925 1,838 (Loss)/profit before tax (4,330) 4,699 Income tax expense - - (Loss)/profit for the year (4,330) 4,699 Attributable to Equity holders (4,330) 4,699 (Loss)/earnings per share: Basic (0.63c) 0.72c (Loss)/earnings per share: Diluted (0.63c) 0.61c KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS GROUP BALANCE SHEET AS AT 31 DECEMBER 2006 2006 2005 US$'000 US$'000 Assets Non-Current Assets Deferred Development Expenditure 140,751 104,228 Construction in Progress 265,718 187,721 406,469 291,949 Current Assets Receivables 810 1,787 Cash and cash equivalents 87,230 75,520 88,040 77,307 Total Assets 494,509 369,256 Equity Capital and reserves attributable to the Company's equity holders Called Up Share Capital 55,940 54,847 Share Premium 108,512 105,713 Retained Earnings (21,504) (17,174) Other Reserves 41,101 36,373 Total Equity 184,049 179,759 Liabilities Non-Current Liabilities Bank loans 266,152 164,725 Accrued liabilities and other loans - 8,616 Long-term provision 2,365 - 268,517 173,341 Current Liabilities Accrued liabilities and other loans 41,943 16,156 Total Liabilities 310,460 189,497 Total Equity and Liabilities 494,509 369,256 KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 2006 2005 US$'000 US$'000 Operating Activities Operating (loss)/profit for the year (7,255) 2,861 Adjustment for: Foreign exchange movement 1,972 2,095 Share-based payment expense 473 166 Operating cashflows (4,810) 5,122 Decrease/(increase) in receivables 977 (230) Increase in accrued liabilities and other loans 17,171 15,045 Increase in provisions 2,365 - Net cash from operating activities 15,703 19,937 Investing Activities Interest received 2,925 1,838 Addition to Deferred Development Expenditure (36,523) (42,566) Addition to Construction in Progress (77,997) (113,738) Net cash used in investing activities (111,595) (154,466) Financing Activities Issue of Share Capital 3,892 8,047 Share Option Reserve 4,255 1,495 Increase in debt 101,427 109,751 Net cash from financing activities 109,574 119,293 Net increase/(decrease) in cash and cash 13,682 (15,236) equivalents Cash and cash equivalents at beginning of the 75,520 92,851 year Effect of exchange rate changes on cash and cash (1,972) (2,095) equivalents Cash and cash equivalents at the end of the year 87,230 75,520 Additions to Deferred Development Expenditure include loan interest capitalised of US$17,971,000 (2005: US$8,118,000). NOTES TO THE PRELIMINARY RESULTS Note 1. Basis of Accounting and Preparation of Financial Information The preliminary results have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. The financial statements are prepared in US Dollars under the historical cost convention. The financial information presented above does not constitute statutory accounts within the meaning of the Companies Acts, 1963 to 2006. An audit report has not yet been issued on the accounts for the year ended 31 December 2006, nor have they been delivered to the Registrar of Companies. The statutory accounts for the year ended 31 December 2005 prepared under IFRS upon which the auditors have issued an unqualified opinion, have been filed with the Registrar of Companies. Note 2. Loss per share The calculation of the loss and fully diluted loss per share is based on the loss after taxation of US$4,330,000 (2005: profit US$4,699,000) and the weighted average number of shares in issue during 2006 of 679,602,594 (2005: 656,428,548 shares). The loss per share and the fully diluted loss per share are the same in 2006, as the effect of the outstanding share options is anti-dilutive. Note 3. Deferred Development Expenditure Analysed by Geographical Area Mozambique Mozambique Ireland Total Moma Titanium Uranium Minerals Project Project US$'000 US$'000 US$'000 US$'000 Opening Balance 104,192 - 36 104,228 Additions 35,801 710 12 36,523 Closing Balance 139,993 710 48 140,751 Additions include loan interest capitalised of US$17,971,000 (2005:US$8,118,000). Loan interest is net of deposit interest earned on the temporary deposit of loan balances. The recovery of deferred development expenditure is dependent upon the successful development of the Projects, which in turn is dependent on the continued availability of adequate funding for the Projects. The Directors are satisfied that deferred expenditure is worth not less than cost less any amounts written off and that the Moma Titanium Minerals Project has the potential to achieve planned mine production and positive cash flows. Note 4. Construction in Progress 2006 2005 US$'000 US$'000 Opening Balance 187,721 73,983 Additions 77,997 113,738 Closing Balance 265,718 187,721 Construction in Progress represents expenditure under a construction contract for the engineering, procurement, building, commissioning and transfer of facilities at the Moma Project in Mozambique. This contract was entered into on 7 April 2004. The Contractor is a joint venture formed for this project, between subsidiaries of Multiplex Limited and Bateman B.V.. Multiplex is a large contracting group based in Australia with operations stretching around the globe and specialises in large complex construction projects. Bateman is an international engineering group with specific mineral sands experience and experience of working in Mozambique. The recovery of Construction in Progress is dependent upon the successful development of the Moma Titanium Minerals Project, which in turn is dependent on the continued availability of adequate funding for the Project. The Directors are satisfied that Construction in Progress is worth not less than cost less any amounts written off and that the Moma Titanium Minerals Project has the potential to achieve planned mine production and positive cash flows. Note 5. Capital Commitments Group 2006 2005 US$'000 US$'000 Construction contract 67,440 107,428 The construction contract with the Multiplex-Bateman Joint Venture was amended whereby the handover of the Moma Titanium Minerals Project works will take place in sections and all changes to the original contract price were agreed. Based on this contract amendment, the total amount payable to the Contractor is estimated to be US$265 million, net of projected applicable delay penalties, of which US$67.4 million was outstanding at the year end. The Company has access to sufficient sources of funding and cash in hand to cover these capital commitments. Note 6. 2006 Annual Report and Accounts The Annual Report and Accounts will be posted to shareholders in due course. ---END OF MESSAGE---