Exploration company Kenmare Resources has reported profits of $3.75m for the six months to the end of June, as a result of foreign exchange gains on euro denominated debt and deposit interest earned in the six months, minus the company's corporate operating costs.
The company's Moma Titanium Minerals project in Mozambique is now 41% completed and commissioning is on track for the fourth quarter of 2006. Kenmare said that most of the steelwork and process components have arrived on site and assembly is due to start this month.
Kenmare says that the market outlook for titanium minerals continues to be positive, driven by strong pigment demand, especially in China. Industry analysts forecast tightness in the ilmenite market - used in paint and plastics coatings - to continue for the coming years and this had led to a firming of ilmenite prices. The company says it is well placed to capitalise on the positive demand outlook.
Demand for zircon - a by-product of the mine used in the production of ceramic tiles - continues to be very strong and prices have increased by about 50% to $700 per metric tonne for premium grade. Kenmare says this compares to its financing which was based on about $500 per metric tonne.
Zircon supply is forecast to remain tight for the foreseeable future and the company has contracted a significant volume of its zircon to date at market based prices.
Kenmare said the Moma Development Association continues to work with non-governmental organisations to set up initiatives to ensure the local community will benefit from the project. These include skills and agricultural training, promotion of spin-off businesses and health awareness.
'We will continue to focus on the successful management of the construction process and look forward to the challenges ahead as we move to production,' Kenmare's Chairman Charles Carvill said in its results statement today.
Kenmare shares closed down four at 55 cent in Dublin.
