Kenmare Resources PLC on Thursday said production was down across the board in the second-quarter of 2023, but it expects a recovery in the second half.

It hailed its cash generation, however, and said a $30 million share buyback may be in the offing.

The Mozambique-focused titanium minerals and zircon producer said second-quarter heavy mineral concentrate production totalled 318,900 tonnes, down 10% from 353,600 tonnes a year ago.

The second quarter was hurt by unreliable power, as well as the ‘lingering effects’ from lightning strikes in the first-quarter.

Ilmenite production fell by 9% to 221,300 tonnes in the second quarter. Zircon production fell by 15% to 11,600 tonnes.

Looking ahead, the firm said it expects ilmenite production to be between 980,000 tonnes and 1.0 million tonnes for the full-year, lower than its original guidance of between 1.1 million tonnes and 1.2 million tonnes.

However, the firm noted that it expects the second half of the year to be a stronger period of production.

Managing Director Michael Carvill said: ‘Production in H1 2023 has unfortunately been lower than our expectations as mining experienced lingering effects of the severe lightning strike in Q1 and power reliability impacts in Q2. We are therefore updating guidance for ilmenite production for the full year. However, guidance for other products remains unchanged. We anticipate significantly stronger production in H2 2023, supported by higher grades and increased tonnes mined.

‘Cash generation has remained strong, supported by product pricing and shipments. In addition to paying record dividends and scheduled debt repayments, the business has continued to build cash. In line with our capital allocation policy, we are considering a share buyback of approximately $30 million.’

It will update on the possible buyback in its half-year results penned for mid-August.

Kenmare shares fell 0.2% to 437.00 pence each on Thursday afternoon in London.

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