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Kenmare Resources hopes to turn £2.2 million losses into profit as its Mozambique titanium project reaches 800,000 tonnes in annual production.

Fully listed Kenmare, which raised £53 million at 16p in 2004 to develop the Moma titanium project and has £138 million project finance in place to take it forward, aims to increase its annual production of titanium-bearing ilmenite from 800,000 tonnes to 1.2 million tonnes by 2010.

By the same year, managing director Michael Carvill, the Northern Irish entrepreneur who has been developing Moma since 1987, hopes production of other Moma metals, zircon (more expensive and an ingredient for ceramics) and rutile will have reached 80,000 tonnes and 30,000 tonnes respectively.

Next year, Carvill sees the company, which needs to spend another £20 million to reach its 2010 targets, drawing £62.5 million revenues from Moma, with operating costs of only £19 million. That would make Kenmare among the lowest cost of potentially significant producers.

Titanium oxide is an ingredient in a wide range of products including jet engines, air frames, pigments, paints, medical implants, surgical instruments and colouring for cosmetics, toothpaste, ink, paper and clothes. With long-term shortages developing in the face of demand from China, India and other emerging giants, Carvill said Kenmare has off-take agreements covering 60 per cent of its projected revenues for the next five years at price adjustments pegged either to the metal market or inflation.

He said ilmenite deals done at £36 a tonne two years ago are now being agreed at £47. Kenmare shares, which stood at 3p in 1999, have now reached 51.5p, valuing the company at £345 million, should have further to go and could even at some stage attract corporate attention.

Kenmare Resources	LSE	£58.44m	7.35p	-0.65p
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