Companies: KMR ��

Titanium play Kenmare Resources lost �2.16 million last year but is starting to boost production from Moma in Mozambique.

Fully listed Kenmare, steered by Northern Irish entrepreneur Michael Carvill, turned 2005’s �2.4 million pre-tax profit into a loss of almost the same dimensions in 2006 as a result of foreign exchange losses on euro-denominated debt and rising corporate costs. Capitalised construction costs hit �39 million, while deferred project development costs rose by �18 million and bank loans reached �133 million at the end of tbe year.

This borrowing and spending has helped the company increase its resources at Moma by 60 per cent to 163 million tonnes of ilmenite, the chief titanium-bearing mineral, with 12.4 million tonnes of zircon, used to make ceramics, and 3.6 million tonnes of rutile, a titanium dioxide mineral. Encouraged by strong demand for these materials to make pigments, titanium metal and other items, Kenmare plans to move as quickly as possible to annual production of 800,000 tonnes of ilmenite, 56,000 tonnes of zircon and 21,000 tonnes of rutile.

This will make Moma a major world-scale producer by the end of this year. The company, which also has an ‘active’ uranium exploration programme in Mozambique, says its target is to be producing ilmenite at the rate of 1.2 million tonnes a year by the end of 2009, with proportionate increases in zircon and rutile.

Shares in Kenmare – which raised �53 million three years ago at 16p – were recommended at 24p by Growth Company Investor two years ago and now stand at 48.5p (down 0.75p this morning) valuing the company at �324.5 million. They should do well over the longer term, although further fundraising could be a possibility at some stage.