{"id":203626,"date":"2025-12-21T14:22:22","date_gmt":"2025-12-21T14:22:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/203626\/"},"modified":"2025-12-21T14:22:22","modified_gmt":"2025-12-21T14:22:22","slug":"kenmares-long-mine-life-meets-a-short-supply-of-investor-patience-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/203626\/","title":{"rendered":"Kenmare\u2019s long mine life meets a short supply of investor patience \u2013 The Irish Times"},"content":{"rendered":"

The exodus from the Irish stock market ramped up to turbo speed this year, with Dalata Hotel Group<\/a> and FD Technologies<\/a> being acquired, and Datalex, Corre Energy and Molten Ventures delisting.<\/p>\n

With departures vastly outstripping initial public offerings over the past decade, the committee that reviews membership of the Iseq<\/a> 20 found itself scraping the bottom of the barrel earlier this month to fill a vacancy in the once-proud index.<\/p>\n

The solution? <\/p>\n

Promote Great Western Mining, an explorer with a market capitalisation of just \u20ac4.3 million. Yet to generate any meaningful revenues in two decades chasing gold, silver and copper in Nevada, the company officially joins the index on Monday.<\/p>\n

Investors in fellow miner Kenmare Resources<\/a> \u2013 which has been producing ilmenite at its Moma mine in Mozambique since 2007 \u2013 could be forgiven for wishing their company had taken the opportunity to exit the index this year.<\/p>\n

While Kenmare\u2019s shares surged as much as 37 per cent in the first half on hopes of a sale to its founding managing director Michael Carvill and Abu Dhabi private equity firm Oryx Capital Partners, the collapse of those talks and a series of subsequent setbacks have left the stock on track to end 2025 down by about a third.<\/p>\n

That would make Kenmare this year\u2019s Iseq 20 laggard \u2013 aside from new entrant Great Western, which has shed almost 90 per cent of its value following a deeply dilutive share sale.<\/p>\n

Carvill, who exited the business in August 2024, was told to take a hike by his successor Tom Hickey in June after he and Oryx indicated they would only proceed with a bid below their initial \u2013 and rejected \u2013 \u00a3473 million (\u20ac540 million) proposal.<\/p>\n

Hickey said on a podcast a week later that he had since spoken to holders of more than 60 per cent of the shares, who were overwhelmingly \u201cvery comfortable\u201d with the decision. He later told The Irish Times the process had \u201cshone a light\u201d on the fundamental value of Moma \u2013 a mine that produces about 6 per cent of global titanium feedstocks and is estimated to have another 100 years of life at current output rates.<\/p>\n

Ilmenite, the main mineral extracted by Kenmare through dredging titanium-rich sands in mining ponds, lacks the allure of the precious metals Great Western Mining is pursuing in the mountains of western Nevada. But it is a workhorse material, used in everything from paints and plastics to ceramics and textiles.<\/p>\n

The problem is price. Ilmenite, which surged amid tight global supplies in the wake of the Covid-19 pandemic and Russia\u2019s invasion of Ukraine, has fallen by more than a fifth over the past three years to about $286 a tonne, as new supply \u2013 particularly from Chinese-backed producers operating in Africa \u2013 has flooded the market.<\/p>\n

Hickey said in late summer that prices were \u201cbottoming out\u201d and that some producers \u2013 especially those that have not invested in the costly machinery Kenmare uses to maximise extraction \u2013 would be forced to exit. That has yet to materialise.<\/p>\n

Davy analysts now expect ilmenite prices to fall for a fourth consecutive year in 2026, to about $255 a tonne.<\/p>\n

Operational issues have compounded the pressure as Kenmare completes a $341 million project to upgrade and relocate its main processing facility \u2013 the wet concentrator plant known as WCP A \u2013 to Moma\u2019s large ore zone. The company has cut its 2025 ilmenite production guidance three times in as many months.<\/p>\n

The initial downgrades were attributed to delays in commissioning the plant, while the latest \u2013 announced this week \u2013 was blamed on problems managing the slimes generated by dredging titanium-rich sands from mining ponds.<\/p>\n

More troubling for investor sentiment, however, is Kenmare\u2019s failure to agree a new production and export royalties deal \u2013 the so-called implementation agreement \u2013 with Mozambique following the expiry of its previous 20-year arrangement just before last Christmas.<\/p>\n

Talks with the authorities have dragged on for more than three years and lost momentum after last year\u2019s presidential election triggered months of civil unrest.<\/p>\n

\u201cWe think Kenmare will be in a transitional year in 2026 and needs to execute operationally, as well as secure an updated implementation agreement, for the shares to de-risk and re-rate,\u201d German investment bank Berenberg said in a report this week.<\/p>\n

Uncertainty around the agreement was a key sticking point for the financial backers of the Carvill-Oryx consortium.<\/p>\n

If a deal is finally struck with Mozambique, might Carvill be tempted to mount another approach?<\/p>\n

Much would depend on whether investors would then give Kenmare credit for what analysts see as the company\u2019s underlying value. The shares currently trade at around half of net asset value, Berenberg noted.<\/p>\n

Ultimately, though, what may determine whether Kenmare has a future as an independent listed company is the plan Hickey devises over the next 12 months for deploying the cash it will generate after emerging from its largest investment cycle \u2013 beyond dividends and buy-backs.<\/p>\n

Few have more riding on a strong plan to reignite investor interest in Kenmare than the Iseq 20 committee, fast running out of companies to prop up a waning index.<\/p>\n","protected":false},"excerpt":{"rendered":"The exodus from the Irish stock market ramped up to turbo speed this year, with Dalata Hotel Group…\n","protected":false},"author":2,"featured_media":203627,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[72,56114,61,60,5781,107294],"class_list":{"0":"post-203626","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-business","9":"tag-euronext","10":"tag-ie","11":"tag-ireland","12":"tag-kenmare-resources","13":"tag-tom-hickey"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/203626","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=203626"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/203626\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/203627"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=203626"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=203626"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=203626"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}