Darren Turgel MD at DirectorsTalk caught up with Colin Grant an Analyst at Davy discussing Kenmare Resources Plc (LON:KMR) recent quarter production figures.
Q. What were the key highlights in your opinion?
A. Ilmenite production of 283,900 tonnes was slightly above our forecast of 280,000 tonnes. Ore grades and operating performance in general is very strong following the relocation of WCP B to Pilivili.
Q. Has your forecast changed in any way?
A. We are not making any changes to our forecasts. The company maintained guidance for 2021 production. Pricing trends are favourable so there is probably some upside risk to our 2021 earnings forecasts but it is too early to change anything now or look at our forecasts in 2022 onwards.
Q. How do you view the company in terms of an investment?
A. I am very positive on Kenmare as a long term investment. All commodity stocks that are well capitalised are likely to benefit from the secular growth trend in commodity prices that is being driven by ultra loose central bank monetary policies (negative real interest rates and money supply growth). Global asset allocations are extremely underweight assets that can protect investors from inflation so I expect significant asset rotation and Kenmare should be a clear beneficiary of this. Investors should be prepared for periods of cyclical correction within this but these should represent buying opportunities.
Kenmare Resources plc is an established mining company, which operates the Moma Titanium Minerals Mine, located on the north east coast of Mozambique.
The Mine has been in commercial production since 2009 and is recognised as a major supplier of mineral sand products to a global customer base operating in over 15 countries.
