Final Results

Kenmare Resources PLC 9 April 2002 Kenmare Resources plc ('Kenmare' or 'the Company') Kenmare Preliminary Results For the year ended 31st December 2001 9th April 2002 Chairman's Statement Dear Shareholder, In my last statement, contained in the 2001 Interim Report, I stated that the focus of our activities in the coming period would be on financing and development of the Moma Titanium Minerals Project in Mozambique and on marketing of the minerals which will be produced at Moma. These tasks are 'two sides of the same coin' as completion of financing requires that a substantial component of our production be locked up in off-take contracts. Moreover, our potential customers are keen to see progress in funding prior to committing to off-take arrangements. We have therefore been engaged in a process of moving both aspects of this situation forward concurrently. In January, Kenmare and the Government of Mozambique signed an Implementation Agreement and a modified Mineral Licensing Agreement. These documents regulate the operation of the Moma Project through its life and describe precisely the ongoing relationship with the Government. The signing of these agreements allowed Kenmare, accompanied by our financial advisors, N. M. Rothschild, to approach development finance institutions and commercial banks with a financing plan and a proposal that they participate in the debt funding package. The responses to these contacts were positive and we have so far received Expressions of Interest to provide loans totalling US$130 million. These Expressions have been provided by a group of development finance institutions which will shortly begin their due diligence processes and commence detailed negotiations. Kenmare is still awaiting responses from a number of similar institutions, which are expected to join these processes. While the global economic slowdown in 2001 was a difficult environment for market negotiations with customers, substantial progress has been made in advancing long term product offtake commitments. We anticipate being able to convert this progress into signed agreements as our financial arrangements firm up. The loss for 2001 arises largely from the provision for the remaining value of the Niassa Gold Mineral Interest. As outlined in the 2001 Interim Report, this was due the low gold price and the decision to focus Company resources on the Moma Project. I would like to welcome Peter McAleer, who joined the board in October 2001. Peter has extensive experience in financing, development, and running of major resources projects in several countries and we expect he will make a major contribution to the Company. Finally, I see the Placing commitments for €13 million, announced earlier this week as part of the proposed Placing and Open Offer, as a strong endorsement of our strategy for Moma. Together with the Expressions of Interest by the development finance institutions, these are important steps in advancing the financing of the Moma Project and in advancing project implementation later this year. I look forward to presenting further detail in the Listing Particulars, which will be posted to shareholders shortly, and urge you to support the Placing and Open Offer. Charles Carvill Chairman For further information: Kenmare Resources plc Michael Carvill Managing Director Tel: +353-1-671 0411 or +353-87-6740110 Tony McCluskey Financial Director Tel: +353-1-671 0411 or +353-87-6740346 Murray Consultants Tom Byrne Tel: +353-1-632 6400 or +353-86-8104224 Blackstone Business Communications Tim Blackstone Tel: +44-207-2512544 www.kenmareresources.com KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31st DECEMBER 2001 2001 2000 € € Turnover - - ========== ========== Operating Expenses (1,116,142) (973,004) __________ __________ Operating Loss (1,116,142) (973,004) Interest Receivable 125,732 104,785 __________ __________ Loss On Ordinary Activities Before Taxation (990,410) (868,219) Taxation - - __________ __________ Loss On Ordinary Activities After Taxation (990,410) (868,219) ========== ========== Loss and Fully Diluted Loss Per Share ( 0.53c) ( 0.58c) ========== ========== KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS CONSOLIDATED BALANCE SHEET AS AT 31st DECEMBER 2001 Notes 2001 2000 € € FIXED ASSETS Mineral Interests 4 12,637,388 9,095,938 Tangible Assets 5 47,248,301 44,764,682 __________ __________ 59,885,689 53,860,620 __________ __________ CURRENT ASSETS Debtors 87,175 63,435 Cash at Bank and In Hand 1,406,505 1,584,177 __________ __________ 1,493,680 1,647,612 CREDITORS: Amounts falling due within one year (1,684,168) (4,124,286) __________ __________ NET CURRENT LIABILITIES (190,488) (2,476,674) __________ __________ TOTAL ASSETS LESS CURRENT LIABILITIES 59,695,201 51,383,946 CREDITORS: Amounts falling due after one year (1,565,411) (1,215,011) PROVISION FOR LIABILITIES AND CHARGES (1,447,331) (1,489,215) __________ __________ 56,682,459 48,679,720 ========== ========== CAPITAL AND RESERVES Called Up Share Capital 23,470,869 23,025,358 Share Premium Account 18,499,848 14,113,837 Profit and Loss Account - (Deficit) (26,076,491) (25,086,081) Revaluation Reserve 35,799,751 34,905,209 Other Reserve 4,132,696 1,721,397 Capital Reserve 855,786 - __________ __________ Shareholders' Funds 56,682,459 48,679,720 ========== ========== KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS GROUP CASH FLOW STATEMENT FOR THE YEAR ENDED 31st DECEMBER 2001 Notes 2001 2000 € € Net cash (outflow)/inflow from operating activities 6 (71,685) 1,360,651 __________ __________ Returns on Investments & Servicing of Finance Interest received 125,732 104,785 __________ __________ Net cash inflow from Returns on Investment & 125,732 104,785 Servicing of Finance __________ __________ Capital expenditure & financial investment Addition of Mineral Interests (3,973,937) (3,983,834) Purchase of Tangible Fixed Assets - (9,259,278) __________ __________ Net cash outflow from capital expenditure & (3,973,937) (13,243,112) financial investment __________ __________ Net cash outflow before use of liquid resources & financing (3,919,890) (11,777,676) __________ __________ Financing Issue of Ordinary Share Capital 6,138,132 9,107,024 Cost of share issues (450,824) (826,480) Finance Lease (17,481) 37,842 Debt due within one year (2,294,621) 3,572,940 Debt due beyond a year 367,012 1,192,579 __________ __________ Net cash inflow from financing 3,742,218 13,083,905 __________ __________ (Decrease)/Increase in cash (177,672) 1,306,229 ========== ========== KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES FOR THE YEAR ENDED 31st DECEMBER 2001 2001 2000 € € Loss attributable to Group shareholders (990,410) (868,219) Revaluation of Tangible Fixed Assets - 34,905,209 Currency Translation Movement 3,305,841 471,392 __________ __________ Total Recognised Gains and Losses for the year 2,315,431 34,508,382 ========== ========== RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS FOR THE YEAR ENDED 31st DECEMBER 2001 2001 2000 € € Total Recognised Gains and Losses for the year 2,315,431 34,508,382 Issue of Shares- at par 1,301,297 3,172,627 Share premium, net of costs 4,386,011 5,107,916 __________ __________ Net change in Shareholders' funds 8,002,739 42,788,925 Opening Shareholders' funds 48,679,720 5,890,795 __________ __________ Closing Shareholders' funds 56,682,459 48,679,720 ========== ========== KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31st DECEMBER 2001 NOTES TO THE PRELIMINARY ACCOUNTS Note 1. Basis of Accounting The preliminary accounts have been prepared in euro under the historical cost convention, as modified by the revaluation of certain fixed assets, and in accordance with the accounting policies set out on page 22 of the 2000 Annual Report and Accounts. Note 2. Basis of Preparation The financial information presented above does not constitute statutory accounts within the meaning of the Companies Acts, 1963 to 2001. An audit report has not yet been issued on the accounts for the year ended 31st December 2001, nor have they been delivered to the Registrar of Companies. The comparative financial information for the year ended 31st December 2000 has been derived from the statutory accounts for the year. Those statutory accounts, upon which the auditors have issued an unqualified opinion, have been filed with the Registrar of Companies. Note 3. Earnings Per Ordinary Share The calculation of the loss and fully diluted loss per share is based on the loss after taxation of €990,410 (2000 - €868,219) and the weighted average number of shares in issue during 2001 of 187,405,370 (2000 - 149,961,746 shares). Note 4. Mineral Interests The recovery of deferred development expenditure is dependent upon the successful development of economic ore reserves, which in turn depends on the availability of adequate funding. A full provision of €1,328,570 has been made for the remaining value of the Niassa Gold deferred development expenditure. The Directors are satisfied that deferred expenditure is worth not less than cost less any amounts written off and that the exploration projects have the potential to achieve mine production and positive cash flows. Note 5. Tangible Assets Tangible Assets are stated at cost or valuation less accumulated depreciation. GRD Minproc Limited, an independent Australian engineering group, has appraised the Mining and Processing Plant on a depreciated replacement cost basis of valuation as at 30 June 2000. An inspection of the Mining and Processing Plant was carried out by GRD Minproc Limited in March 2002 concluding that no material alteration to the plants had taken place. The recovery of the plant valuation is dependent upon the successful development of the Moma Titanium Minerals Project, which in turn depends on the availability of adequate funding being made available. The historical cost net book value of these assets at 31 December 2001 is €9,211,789. The surplus arising on revaluation amounts to €35,799,751. KENMARE RESOURCES PLC PRELIMINARY UNAUDITED RESULTS FOR THE YEAR ENDED 31st DECEMBER 2001 NOTES TO THE PRELIMINARY ACCOUNTS Note 6. Reconciliation of Operating Loss to Net Cashflow from Operating Loss to Net Cashflow from Operating Activities 2001 2000 € € Operating Loss (1,116,142) (973,004) Depreciation 13,058 40,707 (Increase)/Decrease in debtors (23,740) 1,552 Decrease in operating creditors (144,628) (47,942) (Decrease)/Increase in Provision for Liabilities & Charges (41,884) 1,489,215 Impairment/Write off of Mineral Interests 1,328,570 971,027 Exchange (Gain) on translation of Fixed Assets (3,392,760) (592,295) Exchange Loss on translation of Revaluation Reserve 894,542 - Exchange Loss on translation of Subsidiaries 2,411,299 471,391 __________ __________ Net Cash Flow from Operating Activities (71,685) 1,360,651 ========== ========== Note 7. Analysis of Net Debt At 1 Jan 2001 Cash Flow At 31 Dec 2001 € € € Cash at Bank and in hand 1,584,177 (177,672) 1,406,505 Debt due after 1 year (1,192,579) (367,011) (1,559,590) Debt due within 1 year (3,572,940) 2,294,621 (1,278,319) __________ __________ __________ (3,181,342) 1,749,938 (1,431,404) ========== ========== ========== Note 8. Reconciliation of Net Cashflow to Movement in Net Debt 2001 2000 € € (Decrease)/Increase in cash during the year (177,672) 1,306,229 Outflow/(Inflow) from movements in debt & lease financing 1,927,610 (4,765,519) __________ __________ Movement in net debt in the year 1,749,938 (3,459,290) Net debt at start of year (3,181,342) 277,948 __________ __________ Net debt at end of year (1,431,404) (3,181,342) ========== ========== Note 9. 2001 Annual Report and Accounts The Annual Report and Accounts will be posted to shareholders in due course. END This information is provided by RNS The company news service from the London Stock Exchange

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