Preliminary Results and Interim Management Stat...

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

                          Kenmare Preliminary Results
                      For the year ended 31 December 2010
                                 (LSE/ISE: KMR)
                                 18 April 2011

Kenmare Resources plc which operates the Moma Titanium Minerals Mine (the
"Mine") in Mozambique, today announces its preliminary results for the twelve
months to 31 December 2010.

Production highlights
  * HMC production increased by 16% to 956,900 tonnes
  * Ilmenite production increased by 44% to 678,400 tonnes
  * Zircon production increased by 76% to 37,100 tonnes
  * Rutile production increased by 161% to 4,700 tonnes
  * 43 ships were loaded, bringing total sales for the year to 712,900 tonnes of
    product
  * Mineral resources increased by 20% since June 2010


Financial highlights
  * Revenues of US$91.6 million and EBITDA of US$17.4 million in 2010
  * US$270 million equity raised in March 2010 to fund a 50% expansion of the
    Mine, currently being implemented
  * Kenmare admitted to the FTSE 250 in August 2010
  * Global titanium feedstock consumption estimated to have grown by 20% in
    2010



Michael Carvill, Managing Director of Kenmare said, "Prices of titanium minerals
and  zircon have continued to  strengthen in 2011 and this  trend is expected to
continue.  The Mine  is operating  well and  production is  broadly in line with
expectations.  The expansion programme to increase production capacity by 50% is
well  underway and scheduled  for commissioning and  ramp-up in 2012. We believe
the outlook for 2011 is very positive for Kenmare."
























Chairman's Statement

Dear Shareholder,

I  am pleased to report that Kenmare's  Moma Titanium Minerals Mine is operating
stably  for ilmenite and zircon production  with an expected further increase in
rutile  production  later  this  year.  Our  expansion  plans  to increase total
production  by a further 50% are on course for commissioning in 2012 and markets
for our products are very strong with rising prices.

Markets
The market for our products has transformed over the last twelve months.  At the
start  of 2010, the market  was starting to  show signs of  recovery, but prices
were  still  at  low  levels.   The  ongoing  recovery  in  world economies, and
especially  developing  economies,  has  resulted  in  a significant increase in
underlying  demand. This,  combined with  the requirement  for our  customers to
restock  depleted  inventories,  has  created  a  strong  market. Total titanium
minerals  feedstock consumption increased by an estimated 20% in 2010.  This has
exposed  a supply-demand  imbalance which  was becoming  apparent in  late 2008
before  the onset of the  global financial crisis, but  which was then masked by
subdued  demand. Many existing large mines are mature and cannot easily increase
production,  and several have become depleted  in recent years. Most projects in
the  development pipeline will  not be producing  meaningful amounts for several
years.   Even when these new projects do enter the market, they will not satisfy
the  expected increase in  demand.  It will  take successive developments of new
mines  to re-establish  a balance  between supply  and demand.   We believe that
prices  for titanium minerals and zircon will have to increase significantly and
be sustained at these higher levels to justify the development of these projects
with higher capital and operating costs.

Expansion
In  early 2010, the Mine was still in a production ramp-up phase.  However, most
of  the equipment necessary  to improve the  operation of the Mineral Separation
Plant  (MSP) was either  on site or  on the way.   Management was confident that
they  would be able to increase the levels of production for ilmenite and zircon
by  later in the year,  which they achieved.  We  were also convinced that there
was  a future shortfall  in the supply  of titanium feedstocks  and, in order to
service our customers in the coming tight market, that we needed to move quickly
into an expansion project.

Accordingly, we issued a prospectus on 5 March 2010 to raise US$270 million in a
Placing  and Open Offer in order to  fund an expansion to increase production by
50%. We  then immediately moved forward with a detailed engineering study on the
expansion.   This was  then rolled  into a  contract to perform the Engineering,
Procurement  & Construction Management function with  Aveng Group, a large South
African  engineering  group.   The  activities  of  Aveng  are supervised by our
owner's  team based in  Aveng's office in  Pretoria.  This owner's team includes
senior  Kenmare managers who have  worked at the Mine  for several years and are
familiar with the existing operations and requirements for a successful ramp-up.
They  have employed this  experience to guide  Aveng in the detailed engineering
design, specification of equipment and the current construction works.

The  expansion project has moved to site. Initial site establishment work, which
focused  on building a construction camp and  excavation of the starter pond for
the  new  mining  operations,  started  in  February  and is on schedule.  A new
dredge, which is larger and more powerful than each of our two existing dredges,
is being manufactured in the United States and was approximately 75% complete at
the time of writing this report.  It will be ready for shipping from the U.S. to
the  Mine in  the third  quarter of  2011.  The major  contracts for structural,
mechanical  and electrical work have been awarded and the principal shipping and
logistics  contractor has been  appointed.  This first  expansion is expected to
give  Kenmare a 10% share in the titanium feedstock market and a 7% share in the
zircon market.

To  capitalise on the growing market opportunity, Kenmare has moved forward with
plans  for a  second expansion.   A scoping  study for  a further  expansion was
commissioned  in November 2010 with completion expected by the end of this year.
 Assuming the outcome of this study is favourable, a full feasibility study will
commence  immediately.   Monazite  is  contained  in  the  Moma  orebody  and is
concentrated in the MSP. Presently this material is then returned to the orebody
in  the  reject  stream.  A  study  which  is  focusing  on  the production of a
marketable  monazite concentrate has been  commissioned. Monazite is the primary
feed  material containing Rare Earth  Oxides (REOs), including cerium, lanthanum
and  neodymium. REO's  unique magnetic  and phosphorescent  properties make them
vital ingredients for the automotive, glass and electronics sectors.







Settling pond breach
In  October of last  year there was  a breach of  a settling pond.  This allowed
muddy  water to enter  part of Topuito  village.  This was  a deeply distressing
incident  for  the  residents  of  the  village,  many  of whom are employees of
Kenmare.  This was made more  painful by the loss  of a four year  old girl as a
result of the incident.

The  incident occurred  in the  early hours  of Friday,  8 October. The Mine was
immediately  shut down and equipment and  personnel were diverted to the village
to  help people.   A health  post was  set up  by 7 a.m.  and water and food was
distributed  by mid-day.   By Saturday evening most people had been accommodated
in  a tented village and we were distributing  three meals a day to all affected
people.  There were a small number of minor injuries, which were treated.

On  Sunday  morning  the  Minister  of  Mines  arrived to review the efforts and
offered Government support to the relief efforts.  All affected people were paid
compensation  and were fully compensated for all damaged property.  In addition,
the  work  crews  were  hired  from  the affected village for extensive clean-up
operations, providing further monetary support.  Within two weeks people started
to  move back into their homes and within  four weeks 96% of people were back in
their  homes.  The remaining villagers returned  to their homes in the following
weeks.   The Mine did  not open again  for four weeks  while failsafe provisions
were  put in place to  ensure that something like  this would never be repeated.
The  MSP continued to  operate during this  period at a  reduced throughput rate
using  stockpiled Heavy  Mineral Concentrate  (HMC) and  material that  had been
partially processed during initial plant commissioning.

I  would like to  pay tribute to  the residents of  Topuito village and our site
staff  who worked in close cooperation to  ensure that disruption to the life of
Topuito  village caused by our pond breach  was minimised. It is thanks to their
efforts  that  relationships  with  the  local  community  and the Government of
Mozambique   continue  to  be  excellent.  I  would  also  like  to  assure  all
stakeholders  that every  aspect of  our operations  have been reviewed for risk
both internally and by external experts.  We will work tirelessly to ensure that
such  an incident never happens again and  Kenmare will continue to maintain its
strong community relations.

Operations
HMC  output increased  during 2010 by  16%. The Mine  produced 678,400 tonnes of
ilmenite  in 2010, which is  an increase of  44% from the previous year.  Zircon
production was 37,100 tonnes, representing a 76% increase, and rutile production
was 4,700 tonnes, up 161% from 2009.

Production  in  2010 would  have  been  greater  were  it not for the month long
cessation  of mining  operations while  extensive additional protection measures
against  breaches were put in place at the mine.  This contributed to lower than
expected  production in  the last  quarter.  The  after-effects of this remedial
work  were  still  being  felt  in  early 2011, resulting in slightly diminished
zircon  recovery in the first  quarter of this year.   Zircon recovery is nearly
back  at design level and the shortfall created in early 2011 will be made up by
using partially processed material which was stockpiled during the early ramp-up
period.  Ilmenite production during the first quarter of 2011 was 183,800 tonnes
and zircon production was 10,300 tonnes.

We  anticipate that the Mine will run at design capacity for ilmenite and zircon
for  the rest  of the  year and  that rutile  recovery will gradually improve as
planned modifications to the rutile circuit are implemented.  However there will
be  some breaks in production to allow tie-ins to the expansion facilities.  The
expansion  implementation plan has been designed to minimise these breaks and we
anticipate they will represent an overall loss of production of less than 10%.

In  2010, 43 ships were  loaded, bringing  total sales  for the year to 712,900
tonnes  of product.  This compares  with 24 ships  and 418,000 tonnes in 2009, a
71% increase  in tonnage year  on year. 2010 also  marked a number of milestones
for the shipping department, including the completion of the first bulk shipment
of rutile.

Financial
2010 was  the  first  full  year  when  revenue  and related costs were reported
through  the income  statement; prior  to 1 July  2009 they were  capitalised as
development  expenditure.  Revenues  in  2010 were  US$92  million, up from U$42
million in the previous twelve months and we expect these to continue to improve
substantially  during 2011. We made  a loss for  the year of  US$16 million, but
generated  earnings before  interest, tax  and depreciation  (EBITDA) of US$17.4
million.   These results  were influenced  by the  production ramp-up during the
early  part  of  2010 and  mine  downtime  following  the  settling pond breach.
Revenues  were  also  affected  as  some  sales  in 2010 were based on contracts
negotiated  during the economic crises, though average prices increased later in
the  year as the  global economy started  to recover. Cash  operating costs were
impacted  by  mining  industry  inflation,  albeit  gross  margins are more than
maintained  as product prices  continue to increase  strongly. Cost control will
remain  a key focus for management in 2011. With increased production levels and
significantly  improved  product  prices,  the  outlook  for  the future is very
positive.

Outlook
In  the coming year, we are looking  forward to operating at design capacity and
to continued improvements in selling prices for our mineral products.  In recent
months,  the ilmenite  market has  continued to  move away  from long term fixed
price  contracts.  In  addition to  spot sales  where pricing  is set at time of
shipment,  we have concluded some ilmenite contracts in 2011 in which prices are
set  on a six monthly basis with renegotiation based on how the market has moved
at  the end of  the period.     The number of  these contracts with shorter term
pricing  is likely to increase  in 2012 as old contracts  are renewed. Rutile is
also  likely to move to short  term pricing in line with  the rest of the market
when  current contracts expire  in 2011. Zircon prices  are set quarterly or per
shipment  and contracts are  volume based. The  indications are that all product
prices will continue to increase as the market tightens.

During  the  period  under  review  production  has  improved,  the  market  has
strengthened  and  our  expansion  has  moved  into  the construction phase. The
Company  has entered  the FTSE  250 and our  shareholder base has broadened. The
search  for my replacement  continues and we  are confident a suitable candidate
will  be selected in the  coming months.  In the  interim, I would like to thank
all  of our shareholders for their continued support over the last year and look
forward to a positive 2011.

Charles Carvill
Chairman

This release incorporates Kenmare's Interim Management Statement relating to the
period from the 1 January 2011 to the 18 April 2011.


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


Murray Consultants
Joe Heron
Tel: [phone]
Mob: + 353 87 690 9735

Tavistock Communications
Charlie Geller
Tel: [phone]
Mob: [phone]

                            www.kenmareresources.com


                             KENMARE RESOURCES PLC
                              PRELIMINARY RESULTS
                         CONSOLIDATED INCOME STATEMENT
                      FOR THE YEAR ENDED 31 DECEMBER 2010




                                                  2010         2009

                                               US$'000      US$'000

 Continuing Operations



 Revenue                                        91,587       26,721



 Cost of sales                                (77,741)     (35,170)



 Gross profit/(loss)                            13,846      (8,449)



 Other operating costs                        (17,369)      (3,662)



 Operating loss                                (3,523)     (12,111)



 Finance income                                  1,522          202



 Finance costs                                (31,024)     (15,533)



 Foreign exchange gain/(loss)                   16,691      (2,910)



 Loss before tax                              (16,334)     (30,352)



 Income tax expense                                  -            -



 Loss for the year

 and total comprehensive loss for the year    (16,334)     (30,352)



 Attributable to equity holders               (16,334)     (30,352)






                                             US$ cents    US$ cents
                                             per share   per  share

 Loss per share: Basic                         (0.01c)      (3.59c)

 Loss per share: Diluted                       (0.01c)      (3.59c)





                             KENMARE RESOURCES PLC
                              PRELIMINARY RESULTS
                           CONSOLIDATED BALANCE SHEET
                             AS AT 31 DECEMBER 2010


                                                2010       2009

                                             US$'000    US$'000



 Assets

 Non-current assets

 Property, plant and equipment               552,786    540,924





 Current assets

 Inventories                                  24,618     21,951

 Trade and other receivables                  12,974     13,311

 Cash and cash equivalents                   238,515     17,408

                                             276,107     52,670



 Total assets                                828,893    593,594



 Equity

 Capital and reserves attributable to the

 Company's equity holders

 Called-up share capital                     195,830     74,670

 Share premium                               299,860    163,147

 Retained losses                            (43,694)   (57,501)

 Other reserves                               14,103     41,795

 Total equity                                466,099    222,111



 Liabilities

 Non-current liabilities

 Bank loans                                  252,814    297,326

 Obligations under finance lease               2,015      2,172

 Provisions                                    6,750      4,347

                                             261,579    303,845



 Current liabilities

 Bank loans                                   85,574     58,791

 Obligations under finance lease                 157         92

 Provisions                                      279        650

 Trade and other payables                     15,205      8,105

                                             101,215     67,638



 Total liabilities                           362,794    371,483



 Total equity and liabilities                828,893    593,594




                             KENMARE RESOURCES PLC
                              PRELIMINARY RESULTS
                        CONSOLIDATED CASH FLOW STATEMENT
                       FOR THE YEAR ENDED 31 DECEMBER 2010


                                                                 2010     2009

                                                              US$'000  US$'000





Cash flows from/(used in) operating activities

Loss for the year                                            (16,334) (30,352)

Adjustment for:

Foreign exchange movement                                    (16,691)    2,910

Share based payments                                            2,374      796

Finance income                                                (1,522)    (202)

Finance costs                                                  29,852   15,533

Depreciation                                                   20,955   12,871

Impairment of property, plant and equipment                     3,066        -

Increase in provisions                                            845      739

Operating cash flow                                            22,545    2,295



Increase in inventories                                       (2,667) (13,749)

Decrease/(increase) in trade and other receivables                319    (700)

Increase in trade and other payables                            6,851    5,898

Cash from/(used in) operations                                 27,048  (6,256)



Interest received                                               1,522      202

Interest paid                                                (10,191) (11,866)



Net cash from/(used in) operating activities                   18,379 (17,920)



Cash flows from/(used in) investing activities

Addition to property, plant and equipment                    (34,790) (40,197)



Net cash used in investing activities                        (34,790) (40,197)



Cash flows from/(used in) financing activities

Proceeds on the issue of shares                               257,873   19,582

Repayment of borrowings                                      (26,374)    (336)

Increase in borrowings                                              -   15,890

Decrease in obligations under finance leases                    (588)    (286)



Net cash from financing activities                            230,911   34,850



Net increase/(decrease) in cash and cash equivalents          214,500 (23,267)



Cash and cash equivalents at beginning of the year             17,408   40,536

Effect of exchange rate changes on cash and cash equivalents    6,607      139



Cash and cash equivalents at the end of the year              238,515   17,408













                        NOTES TO THE PRELIMINARY RESULTS


Note 1. Basis of Accounting and Preparation of Financial Information


During  the first six months ended 30 June 2009, the Group continued to build up
production to target levels. From 1 July 2009 the Kenmare Moma Titanium Minerals
Mine  (the "Mine") was considered to be capable of operating at target levels of
production; as a result, the Group has reported revenue and related costs in the
income statement from July 2009 onwards.

While  the  consolidated  financial  statements  for  the year ended 31 December
2010, from  which the preliminary  results have been  extracted, are prepared in
accordance  with International Financial Reporting  Standards (IFRSs) as adopted
by  the  European  Union,  these  preliminary  results do not contain sufficient
information to comply with IFRSs.

On  15 April  2011 the  Directors  approved  the  full financial statements that
comply  with IFRS  as adopted  by the  European Union  and expect to publish the
financial  statements in April 2011. The financial statements are prepared in US
Dollars  under the  historical cost  convention except  for share based payments
which are recognised at fair value.

The  auditors have reported without qualification  of their audit opinion on the
financial  statements in  respect of  the year  ended 31 December  2010 but drew
attention  to the  disclosures made  in the  financial statements concerning the
recoverability  of property, plant and equipment (see Note 5) and investments in
and  amounts  due  from  subsidiary  undertakings,  which  are  dependent on the
successful  development of economic ore reserves and successful operation of the
mine.  They noted that  the financial statements  do not include any adjustments
relating  to these uncertainties  and the ultimate  outcome cannot at present be
determined.

The financial information presented above does not constitute statutory accounts
within  the meaning of the Companies Acts,  1963 to 2009. A copy of the accounts
in  respect of the financial year ended  31 December 2010 will be annexed to the
Annual Return for 2011.

The  statutory accounts for the year  ended 31 December 2009 prepared under IFRS
upon which the auditors have issued an unqualified opinion, but with an emphasis
of  matter drawing attention to the disclosures made in the financial statements
concerning  the recoverability of property,  plant and equipment and investments
in  and amounts  due from  subsidiary undertakings,  which are  dependent on the
successful  development of economic ore reserves and successful operation of the
mine, have been filed with the Registrar of Companies.

Note 2. Segment Reporting

Information  on the operations  of Moma Titanium  Minerals Mine in Mozambique is
reported to the Board for the purposes of resources allocation and assessment of
segment  performance.  Information  regarding  the  Group's operating segment is
reported below.

 Segment revenues and results

                                               2010       2009

 Moma Titanium Minerals Mine                US$'000    US$'000

 Revenue                                     91,587     26,721

 Cost of sales                             (77,741)   (35,170)

 Gross profit/(loss)                         13,846    (8,449)

 Other operating costs                     (10,363)    (1,770)

 Segment operating profit/(loss)              3,483   (10,219)



 Central other operating costs              (7,006)    (1,892)



 Group operating loss                       (3,523)   (12,111)



 Finance income                               1,522        202

 Finance expenses                          (31,024)   (15,533)

 Foreign exchange gain/(loss)                16,691    (2,910)

 Loss before tax                           (16,334)   (30,352)

 Income tax expense                               -          -

 Loss for the year                         (16,334)   (30,352)





 Segment assets

 Moma Titanium Minerals Mine assets         593,305    571,266

 Corporate assets                           235,588     22,328

 Total assets                               828,893    593,594



 Segment liabilities

 Moma Titanium Minerals Mine liabilities    356,504    366,352

 Corporate liabilities                        6,290      5,131

 Total liabilities                          362,794    371,483



 Other segment information

 Depreciation and amortisation

 Moma Titanium Minerals Mine                 20,912     12,830

 Corporate                                       43         41

 Total                                       20,955     12,871



 Additions to non-current assets

 Moma Titanium Minerals Mine                 32,647     43,651

 Corporate                                    3,236      4,024

 Total                                       35,883     47,675


Depreciation for the first six months to 30 June 2009 of US$5.8 million has been
capitalised in development expenditure in property, plant and equipment.


 Revenue from major products

                                                     2010      2009

                                                  US$'000   US$'000

 Mineral products (ilmenite, zircon and rutile)    91,587    26,721


Revenue for the first six months to 30 June 2009 of US$15.6 million has not been
included  in  the  2009 amount  as  this  has  been  capitalised  in development
expenditure  in property, plant and equipment,  being generated at a time before
the Mine was operating in the manner intended by management.


 Geographical information

                                      2010      2009

 Revenue from external customers   US$'000   US$'000

 Europe                             51,169    13,700

 Asia                               25,059     4,563

 USA                                13,153     8,458

 Rest of World                       2,206         -

 Total                              91,587    26,721


The  Group's revenue from  external customers is  generated by the Moma Titanium
Minerals  Mine,  the  non-current  assets  of  which are US$546.6 million (2009:
US$536.8 million).

Information about major customers

Included  in revenues  are US$17.5  million (6  months ended  31 December 2009:
US$8.5  million) from sales  to the Group's largest customer, US$15.1 million (6
months ended 31 December 2009: US$7.7 million)  from sales to the Group's second
largest  customer,  US$13.2  million  (6  months  ended 31 December 2009: US$4.6
million)   from sales to  the Group's third  largest customer and US$9.8 million
from sales to the Group's fourth largest customer. All revenues are generated by
the Moma Titanium Minerals Mine.






Note 3.  Other Operating Costs

                                                                    2010    2009

                                                                 US$'000 US$'000



Distribution costs                                                 3,777   1,770

Freight costs                                                      4,098       -

Administration costs                                               7,660   1,892

Cost of the settling pond breach incident net of insurance claim   1,834       -

                                                                  17,369   3,662



Included in administration costs are:

Share based payments                                               2,063     796

Litigation costs                                                   1,839      78


Distribution,  freight and certain administration and share based payments costs
for  the first six  months to 30 June  2009 have been capitalised in development
expenditure  in property, plant and equipment.   Freight costs of US$4.1 million
are  reimbursable  by  customers  or  factored  into the sales price for product
delivered to customers on a CIF (cost, insurance and freight) basis.
Total  share based payments for 2010 amounted  to US$2.5 million of which US$0.3
million  relate to staff  at the Mine  and are included  as a production cost of
inventories. US$0.1 million relate to staff working on the expansion project and
have been capitalised in property, plant and equipment and the balance of US$2.1
million  included in administration costs in  the income statement.  Total share
based  payments for 2009 amounted to US$2.0  million of which US$0.8 million was
included  in administration costs in the income statement and US$1.2 million was
capitalised in property, plant and equipment.
During  the year  the Company  incurred and  provided for  litigation costs as a
result  of High Court proceedings in a defamation case taken by a former Company
Director.  On  17 November  2010, the  High  Court  jury  delivered a verdict of
damages of €10 million. The Company has submitted an appeal to the Supreme Court
with a view to setting aside both the verdict and the amount, with the intention
of securing a retrial. The High Court granted a stay on the award subject to the
payment  of €0.5  million until  the hearing  of the  Supreme Court  appeal. The
Company's legal team strongly advise that the award will be set aside on appeal.
The  same former  Director has  also served  notice that  he intends to pursue a
number  of non-defamation actions against the Company.  The Company has provided
US$1.3  million for  the costs  associated with  the defamation  case appeal and
retrial and further actions taken by the former Director.
On  8 October  2010, a  settling  pond  at  the  Mine  breached a retaining wall
resulting  in the release of  water, sand and clay  which flowed through part of
the  nearby village  of Topuito.  The Group  provided help  and support to those
affected  by the breach  and all families  were settled back  in their homes and
compensated.  Improvements to the settling pond  berm complex were completed and
following a review by the Mozambican authorities mining operations resumed on 9
November  2010. The  total  costs  incurred  in  relation  to  compensation  and
reinstating  production was US$3.0 million. An insurance claim of US$1.2 million
has  been made under the Group's public liability policy and this is included in
other  receivables as at 31 December 2010 resulting  in the net charge of US$1.8
million included in the income statement.

Note 4.  Loss per share

The  calculation of  the basic  and diluted  loss per  share attributable to the
ordinary  equity  holders  of  the  Parent  Company  is  based on the loss after
taxation  of  US$16.3  million  (2009:  loss  US$30.4  million) and the weighted
average number of shares in issue during 2010 for the purposes of basic loss per
share  of 2,029,895,059 (2009:  844,314,758) and for  diluted loss  per share of
2,093,498,317 (2009:891,343,016).

In 2010 the basic loss per share and the diluted loss per share are the same, as
the effect of the outstanding share options are anti-dilutive.
Note 5. Property, plant and equipment

                            Plant &   Other  Construction Development   Total

                           Equipment Assets  In Progress  Expenditure

                            US$'000  US$'000   US$'000      US$'000    US$'000

Cost

At 1 January 2009            259,516  12,798       45,705     236,406    554,425

Transfer from construction    47,354   1,511     (48,865)           -          -
in progress

Reclassification to          (1,797)       -            -           -    (1,797)
inventory

Additions during the year      6,360     268        7,473      33,574 47,675

Adjustment as a result of          -       -            -    (25,758)   (25,758)
the DOS&R

Impairment during the year         -   (362)            -        (48)      (410)



At 1 January 2010            311,433  14,215        4,313     244,174    574,135

Transfer from construction     4,224   1,894      (6,118)           -          -
in progress

Additions during the year      4,510      24       27,180       4,169     35,883

At 31 December 2010          320,167  16,133       25,375     248,343    610,018



Accumulated Depreciation

At 1 January 2009             10,220   4,533            -           -     14,753

Charge for the year           11,042   2,440            -       5,188     18,670

Impairment during the year         -   (212)            -           -      (212)



At 1 January 2010             21,262   6,761            -       5,188     33,211

Charge for the year           10,949   2,488            -       7,518     20,955

Impairment during the year     3,066       -            -           -      3,066

At 31 December 2010           35,277   9,249            -      12,706     57,232



Carrying Amount

At 31 December 2010          284,890   6,884       25,375     235,637    552,786



At 31 December 2009          290,171   7,454        4,313     238,986    540,924


An  EPC Contract for  the engineering, procurement,  building, commissioning and
transfer  of facilities  at the  Moma Titanium  Minerals Mine  in Mozambique was
entered  into on 7 April 2004. The EPC Contractor was a joint venture formed for
this  project  by  subsidiaries  of  Multiplex  Limited and Bateman B.V.. On 12
December  2009, a Deed of  Settlement and Release  (DOS&R) was signed by Kenmare
Moma  Mining (Mauritius) Limited and Kenmare Moma Processing (Mauritius) Limited
and  the EPC Contractor.  Under the terms  of the DOS&R  all outstanding rights,
obligations  and liabilities of  all parties under  the EPC contract and related
agreements  have been mutually  settled and released.  As a result  of the DOS&R
US$25.8  million of EPC Contract accruals net of receipts of US$10 million, were
credited to development expenditure in December 2009.

At  the 30 June  2010 the Group  finalised drilling  work on  the Nataka deposit
resulting  in an increase in the total  reserves from 25 million tonnes of total
heavy  mineral to 33 million tonnes  of total heavy mineral.  This resulted in a
change  in the depreciation rate for plant and machinery which is depreciated on
a unit of production basis.

The  jetty was  initially damaged  in December  2007 when the Bronagh J collided
with  it during  loading. While  the jetty  remains operational using a modified
mooring  and loading procedure, there has been some further deterioration to the
structure  over time.  During 2010, an  assessment of  the permanent repair work
required  was carried  out. Based  on this  assessment, an  impairment of US$3.0
million was recognised in the income statement and property plant and equipment.
In  addition, during the year repair costs of US$0.5 million were incurred.  The
Group  has  commenced  repair  and  upgrade  work  on  the jetty which will both
strengthen  the  current  structure  and  increase  its  operational capacity by
allowing  the transhipment  vessels to  load from  both sides  of the  jetty. An
insurance  claim relating to  the damage to  the jetty structure  was settled in
June  2010 for  US$3.5  million  and  this  has  been  recognised  in the income
statement.

Included  in plant  and equipment  are capital  spares of  US$1.4 million (2009:
US$1.0 million).

Substantially  all the property, plant and equipment  of the Group is or will be
mortgaged,  pledged or  otherwise secured  to provide  collateral for the wholly
owned  subsidiary  undertakings  Kenmare  Moma  Mining  (Mauritius)  Limited and
Kenmare Moma Processing (Mauritius) Limited (the "Project Companies") senior and
subordinated   loans,  or  in  the  case  of  the  transhipment  barge  Peg  and
tug/workboat Sofia III, a loan provided to the Group as detailed in Note 8.

Additions to development expenditure include mine expansion development costs of
US$4.2  million  (2009:  US$1.0  million).  Expansion development costs incurred
during  the  period  before  the  expansion  assets  are capable of operating at
production  levels in a manner intended  by management are deferred and included
in property, plant and equipment.

The  recovery of property, plant and  equipment is dependent upon the successful
operation  of  the  Moma  Titanium  Minerals  Mine and continued availability of
adequate  funding for the Mine. The Directors  are satisfied that at the balance
sheet  date the recoverable amount of  property, plant and equipment exceeds its
carrying  amount and based on  the planned mine production  levels that the Moma
Titanium Minerals Mine will achieve positive cash flows.

Note 6. Cash and cash equivalents

                                2010        2009
                                US'000        US$'000

Immediately available
without restriction                        55,892        10,255

Contingency Reserve Account                        172,753        1
Shareholder Funding Account                        -
       25
Project Companies Accounts                        9,870        7,127
                               238,515        17,408

Cash  and  cash  equivalents  comprise  cash  balances  held for the purposes of
meeting   short-term   cash   commitments  and  investments  which  are  readily
convertible  to a known amount of cash  and are subject to an insignificant risk
of  change in value. Where investments  are categorised as cash equivalents, the
related  balances  have  a  maturity  of  three  months or less from the date of
investment.

The  Contingency Reserve Account (the "CRA") and Shareholder Funding Account are
accounts  established under  a cash  collateral and  shareholder funding deed to
secure  the obligations of  the Company and  Congolone Heavy Minerals Limited (a
wholly-owned  subsidiary undertaking) under the Completion Agreement as detailed
in Note 8.

On  5 March 2010 the Company,  Congolone Heavy Minerals  Limited and the Project
Companies  entered into a  deed of waiver  and amendment (the "Expansion Funding
Deed")  with the Project lenders and  the lenders' agents. The Expansion Funding
Deed  required  that,  as  a  condition  to its effectiveness, US$200 million be
deposited  to the CRA to  fund the expansion by  30 June 2010, and provides that
funds  deposited into  the CRA  may be  transferred by  Congolone Heavy Minerals
Limited, at its sole discretion, to the secured Project bank accounts controlled
by  the Project  Companies.  Once  deposited in  those accounts,  such funds are
required  to  be  applied  in  accordance  with  the provisions of the financing
agreements  (as amended, including  pursuant to the  Expansion Deed) pursuant to
which  such funds may in the absence of an event of default be spent on, amongst
other things, the expansion. Funds deposited into the CRA may not be transferred
other than to the Project Accounts.  It is a completion requirement that all the
funds  initially deposited to the CRA as a condition to the effectiveness of the
Expansion  Funding Deed be  transferred to Project  bank accounts.  There are no
continuing  funding requirements in relation to  the CRA, and no minimum balance
is required to be maintained in the CRA.

Note 7. Called up share capital

On  1 April 2010, 1,497,030,066 new ordinary shares were issued by way of a firm
placing  and  placing  and  open  offer  which  raised  US$257.8  million net of
expenses.  The primary purpose of this equity raising is to fund an expansion of
the existing mine operations to increase production capacity from 800,000 tonnes
per  annum  of  ilmenite  plus  co-products  to  1.2 million tonnes per annum of
ilmenite  plus co-products. US$121.12 million of this issue has been credited to
share  capital.  US$136.68  million  of  this  issue  has been credited to share
premium.

508,333 million  new ordinary shares were issued during  the year as a result of
share options exercised and resulted in US$0.039 million being credited to share
capital and US$0.032 million credited to share premium.


Note 8. Bank loans

                                                        2010       2009

                                                     US$'000    US$'000



 Project Loans

 Senior Loans                                        159,968    188,079

 Subordinated Loans                                  176,372    165,525

 Total Project Loans                                 336,340    353,604

 Mortgage Loan                                         2,048      2,513

                                                     338,388    356,117



 The borrowings are repayable as follows:

 Within one year                                      85,574     58,791

 In the second year                                   40,578     41,722

 In the third to fifth years inclusive               120,656    124,979

 After five years                                     91,580    130,625

                                                     338,388    356,117

 Less: amount due for settlement within 12 months   (85,574)   (58,791)

 Amount due for settlement after 12 months           252,814    297,326



 Project Loans

 Balance at 1 January 2010                           353,604    334,824

 Loan interest accrued                                29,024     28,600

 Loan interest paid                                 (10,026)   (11,809)

 Loan repayment                                     (25,911)      (336)

 Foreign exchange movement                          (10,351)      2,325

 Balance at 31 December 2010                         336,340    353,604



 Mortgage Loan

 Balance at 1 January 2010                             2,513          -

 Drawdown                                                  -      2,500

 Loan interest accrued                                   163         70

 Loan interest paid                                    (165)       (57)

 Loan repayment                                        (463)          -

 Balance at 31 December 2010                           2,048      2,513



Project loans
Project loans have been made to the Mozambique branches of Kenmare Moma Mining
(Mauritius) Limited and Kenmare Moma Processing (Mauritius) Limited (the Project
Companies). The Project loans are secured by substantially all rights and assets
of the Project Companies, and, amongst other things, the shares in and
intercompany loans to the Project Companies.

The  Company and  Congolone Heavy  Minerals Limited  have guaranteed the Project
loans   during  the  period  prior  to  Completion  (achievement  of  "Technical
Completion" and "Non-Technical Completion").

The  Expansion  Funding  Deed  dated  5 March  2010 extended  the final date for
achieving Completion to 31 December 2013. Completion occurs upon meeting certain
tests  and  satisfying  certain  conditions,  all  as  verified  by the lenders'
independent engineer, including installation of all required facilities, meeting
certain cost, efficiency, and production benchmarks and social and environmental
requirements  ("Technical Completion"), meeting  marketing, legal and permitting
requirements,  including filling of  specified reserve accounts  to the required
levels   ("Non-Technical   Completion").  Upon  Completion,  the  Company's  and
Congolone   Heavy  Minerals  Limited's  guarantee  of  the  Project  loans  will
terminate.  Under  the  Expansion  Funding  Deed  failure  to  achieve Technical
Completion by 31 December 2011 ceases to be an event of default but Senior Loans
and  Subordinated Loans will attract an additional interest margin of 1% and 2%
respectively  from  31 December  2011 until  Technical  Completion  is achieved.
Failure  to achieve Non-Technical Completion by  31 December 2013 is an event of
default.  Three  of  the  four  certificates  required  for Technical Completion
(Physical  Facilities, Production, and Efficiency)  were submitted to lenders on
20 February  2011.  A  small  number  of  items  are  being  addressed  prior to
submitting the fourth certificate (Environmental).

Interest  and principal on the subordinated loans is due to be paid each year in
February  and August but if cash is insufficient in the Project Companies on the
scheduled payment dates, interest is capitalised and both interest and principal
becomes  payable  on  the  next  semi-annual  payment  date  thereafter on which
sufficient  cash is available, in  whole or in part,  to the extent of available
cash.  Included  in  loan  amounts  due  within  one  year is US$55.4 million in
relation to subordinated loans. The final installments are due on 1 August 2019.

Under  the  second  Deed  of  Waiver  and  Amendment referred to above, interest
margins  on subordinated  loans were  increased by  3% per annum until Technical
Completion  and  by  1% per  annum  until  Completion. This additional margin is
scheduled  to be  paid after  senior loans  have been  repaid in full but may be
prepaid without penalty.

Amendments to Project loan agreements
Under  the existing financing documentation,  the marketing certificate required
for  Completion must be  delivered no later  than 30 June 2011, and thereafter a
marketing  covenant  which  tests  ratios  relating projected revenue from sales
contracts  with a term of  at least 12 months with  eligible buyers to projected
costs  and debt service over a 12 month horizon  is to be observed at all times.
This  covenant was  negotiated when  long term  sales contracts prevailed in the
titanium  minerals industry. As  the supply of  titanium minerals has tightened,
the   length  of  contracts  has  shortened  and  this  covenant  is  no  longer
appropriate.  Accordingly, the Company, Congolone Heavy Minerals Limited and the
Project  Companies have agreed the terms of a Deed of Amendment with the lenders
and   lenders'  agents  that  provides  flexibility  when  entering  into  sales
contracts.  The  Deed  of  Amendment  is  currently  in  the final stages of the
lenders'  approval processes  and the  main provisions  of the Deed of Amendment
include the following:
  * The  marketing covenant is to be tested semi-annually as at 1 January and 1
    July,  the calculation to be set out  in a periodic marketing certificate to
    be  delivered no later than 1 March (45  days after the effectiveness of the
    Deed of Amendment in the case of 2011) and 1 September of each year;
  * In  determining projected revenues  for the marketing  covenant, all offtake
    agreements  with eligible buyers entered  into on or before  the date of the
    marketing  certificate would be  considered regardless of  term. At present,
    only  offtake agreements  with eligible  buyers with  a term  of one year or
    greater may be considered;
  * The  amended marketing covenant would  require sales contracts with eligible
    buyers  with a  term of  at least  1 year for  a specified  tonnage of final
    products, to be tested annually as at 1 January;
  * Failure  to comply with the marketing covenant  would no longer give rise to
    an event of default; rather, such a failure would result, pre-Completion, in
    majority  lenders  being  able  to  convene  a  meeting at which the Project
    Companies  would present  their marketing  plan, and  post-Completion in the
    inability  of the Project  Companies to make  restricted payments (dividends
    and  payments  on  intercompany  loans)  on  the next semi-annual restricted
    payment date.


Other Group bank borrowings
On  the  7 August  2009 Mozambique  Minerals  Limited (a wholly-owned subsidiary
undertaking)   entered   into  a  loan  agreement  with  Banco  Comerical  e  de
Investimentos,  S.A. for  US$2.5 million  to fund  the purchase of an additional
product  transhipment  barge,  Peg,  and  a  tug/work  boat, Sofia III. Interest
accrues  at a 6 month LIBOR plus 6%, and is payable monthly commencing September
2009 with principal scheduled to be repaid in 54 monthly installments commencing
March 2010. This loan was fully drawn on 10 August 2009. The loan was secured by
a  mortgage on the Peg  and Sofia III and  by a guarantee from Kenmare Resources
plc. This loan was repaid in full on the 5 March 2011.


Note 9.  2010 Annual Report and Accounts

The  Annual Report and  Accounts will be  posted to shareholders before 30 April
2011.







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Source: Kenmare Resources via Thomson Reuters ONE

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