Q1 2018 Production Report

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

11 April 2018

Q1 2018 Production Report

Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global producers of titanium minerals and zircon, which operates the Moma Titanium Minerals Mine (the "Mine" or "Moma") in northern Mozambique, is pleased to provide a trading update for the quarter ending 31 March 2018.

Statement from Michael Carvill, Managing Director:

"Product shipments have started the year strongly, the markets for our products have tightened and we have agreed higher ilmenite and zircon prices for Q2 2018. Due to a planned 180 degree turn at WCP A and some unforeseen stoppages, production in Q1 2018 was below our expected average for the year. However, we are expecting higher production volumes for the following quarters and still anticipate achieving the mid-range of 2018 guidance."

Overview

• Heavy Mineral Concentrate ("HMC") production decreased by 12% to 311,000 tonnes (Q1 2017: 353,500 tonnes)
• Ilmenite production decreased by 18% to 211,000 tonnes (Q1 2017: 256,500 tonnes)
• Zircon production decreased by 9% to 16,900 tonnes (Q1 2017: 18,500 tonnes)
• Total shipments of finished products were up 4% to 267,200 tonnes (Q1 2017: 256,100 tonnes)
• Ilmenite markets tightened in Q1 2018, increased spot prices agreed for Q2 2018
• The zircon market continued to strengthen, with further price rises agreed from the beginning of Q2 2018

Production

Production from the Moma Mine in Q1 2018 was as follows:

	Q1-2018	Q1-2017	Variance	Q4-2017	Variance
	tonnes	tonnes	%	tonnes	%
Excavated Ore *	7,805,600	8,407,000	-7%	8,414,300	-7%
Grade*	4.51%	4.86%	-7%	4.34%	4%
Production
HMC	311,000	353,500	-12%	337,800	-8%
Ilmenite	211,000	256,500	-18%	235,900	-11%
Zircon	16,900	18,500	-9%	18,100	-7%
of which primary	11,300	12,800	-12%	10,900	4%
of which secondary	5,600	5,700	-2%	7,300	-23%
Rutile	2,100	2,200	-5%	2,500	-16%
Shipments	267,200	256,100	4%	296,300	-10%

* Excavated Ore and grade prior to any floor losses.

During Q1 2018, Kenmare mined 7.8 million tonnes of ore, down 7% on Q1 2017, at an average grade of 4.51%, producing 311,000 tonnes of HMC, a 12% decrease on Q1 2017. Finished product volumes for the period included 211,000 tonnes of ilmenite, down 18%, and 16,900 tonnes of zircon (including 5,600 tonnes of a lower grade secondary zircon product), down 9%.

HMC production was impacted by lower mining capacity through the quarter due to planned and unplanned stoppages, and lower grades mined. WCP A experienced difficult mining conditions and executed a planned 180 degree turn in the dredge path, which slowed advancement at the mine face. Supplementary dry mining operations at WCP A and WCP B were subject to major relocations in the quarter, further reducing mining capacity.

Additional supplementary dry mining capacity is being added at WCP A and WCP B, which will help to increase mined tonnes for the rest of the year. However, WCP A will remain in a higher slimes zone for Q2 2018. The 20% upgrade of WCP B remains on track and on budget for commissioning in H2 2018.

Ilmenite production decreased, principally as a result of lower HMC production from the mine. The lower throughput allowed time for maintenance at the Mineral Separation Plant, including a dryer shutdown for a refractory refurbishment and automation. This will deliver higher levels of utilisation and control, to aid ilmenite recovery going forward.

Total zircon production includes a 12% decrease in primary zircon production to 11,300 tonnes (Q1 2017: 12,800 tonnes), while secondary zircon volumes declined by 2% to 5,600 tonnes (Q1 2017: 5,700 tonnes). Zircon production was also affected by lower HMC tonnes produced and lower utilisation as new circuits were commissioned in Q1 2018.

During Q1 2018, Kenmare shipped 267,200 tonnes of finished products, up 4% on Q1 2017, comprised of 252,700 tonnes of ilmenite, 13,500 tonnes of zircon (including 3,200 tonnes of secondary grade zircon) and 1,000 tonnes of rutile.

Closing stock of HMC at the end of Q1 2018 was 24,200 tonnes, compared with 16,800 tonnes at the start of the year. Closing stock of finished products at the end of Q1 2018 was 194,200 tonnes, while all product being held for a customer, as previously disclosed, was shipped during Q1 2018.

Market

Kenmare saw steady demand for ilmenite products in Q1 2018 in all regional markets, despite the seasonal slowdown in the pigment industry over the winter months. The outlook for the pigment industry is positive for 2018 as global GDP is expected to grow strongly.

Demand for ilmenite has increased in China, following Lunar New Year (mid-February) and we successfully secured price increases for spot sales in Q2 2018. The ilmenite market is expected to tighten as we enter the northern hemisphere painting season and inventories of low quality ilmenite and concentrates that accumulated in H2 2017 continue to be drawn down. Supply from southern India and Vietnam continues to be restricted. Further consolidation of ilmenite production in China is expected in the coming months, which may have a favourable impact on pricing.

Market conditions for zircon were favourable during the quarter due to a combination of solid demand growth and tight global supply. Kenmare has successfully implemented further significant price increases for its zircon products in Q2 2018, in line with the prevailing movement of the market.

For further information, please contact:

Kenmare Resources plc
Michael Carvill, Managing Director
Tel: [phone]

Tony McCluskey, Financial Director
Tel: [phone]

Jeremy Dibb, Corporate Development and Investor Relations Manager
Tel: [phone]
Mob: + 353 87 943 0367

Murray
Joe Heron / Aimee Beale
Tel: [phone]
Mob: [phone]

Buchanan
Bobby Morse / Chris Judd
Tel: [phone]

Forward Looking Statements

This announcement contains some forward-looking statements that represent Kenmare's expectations for its business, based on current expectations about future events, which by their nature involve risks and uncertainties. Kenmare believes that its expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve risk and uncertainty, which are in some cases beyond Kenmare's control, actual results or performance may differ materially from those expressed or implied by such forward-looking information.

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Source: Kenmare Resources via Globenewswire