Kenmare Resources (KMR) Status Update summary

Operational and Market Overview

• Q3 2025 production and shipments declined due to WCP A upgrade work, vessel maintenance, and a customer in financial distress, with ilmenite output down 19% YoY and shipments down 25% YoY.

• WCP A upgrade, a $341 million project, is over 80% complete, with commissioning underway and full capacity expected by year-end, unlocking access to the Nataka ore body for long-term production.

• The mine operates with a low environmental footprint, using hydro-generated power and progressive land rehabilitation, and is included in the FTSE4Good Index for sustainability.

• Safety performance improved, with a lost time injury frequency rate of 0.02 per 200,000 hours and the WCP A Projects team remaining LTI-free since project start.

• Concentrates production rose 58% YoY, benefiting from the first commercial shipment of the new ZrTi product.

Financial Performance and Capital Allocation

• EBITDA margins ranged from 28–40% in recent years, with H1 2025 at 30%, and over $300 million returned to shareholders since 2019 through dividends and buybacks.

• Net debt increased from $25 million at end-2024 to $85 million by June 30, 2025, reflecting project investment.

• 2025 interim dividend was set at $0.10 per share, with a policy to return 20–40% of profit after tax as dividends.

• Sustaining and improvement CapEx post-WCP A is expected at $30–50 million annually, with no major new development CapEx planned.

• Future capital allocation will prioritize balance sheet stabilization, continued dividends, opportunistic M&A, and potential share buybacks.

Market Conditions and Outlook

• Ilmenite and zircon prices softened in 2025 due to global oversupply, especially from China, with recovery expected toward late 2026 as supply tightens.

• Demand for high-grade zircon remains stable, and nearly all 2025 zircon production is expected to be sold.

• 2025 ilmenite production guidance is 930,000–960,000 tonnes, now expected at the lower end of the range due to delayed upgrade work.

• A major customer defaulted on a $9–9.3 million payment, with title to goods retained and recovery efforts ongoing.

• HMC and finished product inventories increased in Q3, with drawdown expected in Q4 as shipping capacity normalizes.