Kenmare Resources Stock

Good morning, and welcome to the Kenmare Resources plc H1 2026 Results Investor Presentation.

[Operator Instructions]

Before we begin, I would like to submit the following poll. I would now like to hand you over to Managing Director, Tom Hickey. Good morning.

Good morning, and thank you. Thank you all for taking the time to join us today to run through our half year 2026 results. While you're reading the disclaimer, I'll just highlight that in the room with me, I have James McCullough, our CFO; Ben Baxter, our COO; Cillian Murphy, our Head of Marketing, is also on the call; and Katharine Sutton, our Head of Investor Relations.

So we'll be running you through the presentation today and hopefully answering any questions you have. Just a few quick reminders about Kenmare's business. We operate the Moma Titanium Minerals Mine in Mozambique. We've been in Mozambique for nearly 40 years now. We've been producing for nearly 20. And Moma is a pretty unique resource. It's got over 100 years of mineral resources at our current production rate. So of course, we need to think about the long term, about living through multiple cycles and about investing to produce for many years to come.

And suppose if you're going to be in the country for a long time, you've got to behave well, and we believe we do. We're a good corporate citizen. We work hard to improve the lives and outcomes of the community around us to contribute to the country and to the economy as a whole. And I think that's recognized by us being included once again in the FTSE4Good Index. And I'll talk a little later about our negotiations around a critical agreement with the Mozambique government, where I think you may have seen we've seen good progress in recent weeks.

Our production, we produce titanium minerals, principally ilmenite and rutile. You use them every day, you see them every day. They're part of everyday life. We're a decent part of the world market, about 6%. And titanium minerals are part of the critical minerals for Europe, the U.K. and the U.S. So there is a lot of focus on them. But I think we're -- as we hear when we come to talk about the market, the market has been through a couple of ups and downs in recent years. And to go back to my comments about investing for the long term, we have made material investments in recent years to upgrade our biggest mining plant, WCP A to move to our biggest ore body in Nataka.

And Nataka is 70% of our reserves. It's the future of the company. All our mining plants will end up there. And we've been working on WCP A to prepare it to work effectively at Nataka. Taking a little bit longer than we would have liked and that's still work in progress, but Ben Baxter will run you through the good progress we've made there recently and what we expect over the remainder of the year.

Our strategy overall, as I said, we want to operate responsibly. We have a 97% Mozambican workforce. We spent nearly $25 million or over $25 million in working with community over the last 20 years plus. And for our own employees, we're really focused on safety. We had a really good safety performance in the first half. We're over 4 million hours without a lost time incident and our lowest ever all injury frequency rate achieved in the first half. So we're very proud of that. It's something that we work on every day.

We're very focused on our industry position and operating effectively. We've done a good job so far in '26 in managing and reducing our operating costs and enabling us to run through this point of the price cycle. We do want to invest carefully and manage the cash flows that the asset gives us over the long term effectively. We paused our dividend early this year. It's been an important part of our investment case in previous years and hopefully will be again. But it's a sensible thing to do at this point in the cycle when debt is elevated. And we have made over $300 million in shareholder distributions since 2019. So it is something that we do think about.

So just to maybe recap on the first half of the year. I've already talked about our safety performance, and we're proud of that. But it has been a difficult market, and we are just after a big CapEx program. And when we spoke to you all at the start of 2026, we spoke about our priorities for the year. And in reality, our priorities were to control the things we can to ship as much product as we can to generate as much cash as we can to manage our costs well to maintain financial flexibility and to continue to improve the performance of our assets and to conclude our agreements with the government around the implementation. And I think we've made really good progress on all of those in the first half, but there's still plenty we can hope to achieve in the second half.

So from shipments, we're on track to achieve our 2026 shipments guidance. We had some really good successes in the first half with our new ZrTi product. You may have seen that we're reporting that in sales now as opposed to a credit to cost of sales. And that's because it's an important part of our production this year, but it will be an important part of our revenue mix for many years to come. This is something we trialed in 2024 with customers. There was strong take on it, and we sold over 80,000 tonnes in the first half of the year.

We've done a good job on reducing our operating costs. James will run you through that. Maybe a little bit more to go there. The one area where I think we would like to see improvements in the second half is our ilmenite production, a little bit softer than we would have expected, and we kind of modestly adjusted our guidance to approximately 800,000 tonnes, and we are on track to achieve all our guidance at the moment with a close eye needed on second half.

On the financial side, our balance sheet has been an area of focus for us. Our net debt bounces around a bit. You've seen it increase slightly in the first half. But cost discipline gave us a 12% reduction in cash operating costs. Our lenders as ever, have been constructive. They've assisted us with waivers where required. They've increased our revolving credit facility by $30 million. We hope we won't have to use that additional flexibility, but it's nice to have it there because who knows what happens in the future.

But look, with the strong performance we had in the first half, we were cash flow positive before development costs in the first half and development CapEx will be much lower in the second half. So we're managing what we can. We're maximizing our cash flow. We're paying attention on a day-to-day basis. And we're positioning ourselves hopefully to recover well when the market recovers. And on the market, we've seen some progress on zircon in the first half, strong price increases. And I think we saw Iluka comment this morning in a manner very similar to us, and we do expect to see those price increases maintain.

Ilmenite is taking a little bit longer. We don't currently see any near-term recovery, although we would be hopeful for next year. But there have been some pigment price increases in recent months and ilmenite generally follows them, albeit with a lag. Just a moment on WCP A. We're making steady progress on the commissioning even in July and August, things have improved. We're working through punch list to get us up to nameplate capacity. No fatal flaws in the project, but it is taking longer than we'd like, and we know it's a focus of attention.

And finally, in this area, just to talk a little bit about the implementation agreement. This is an area that we focus a lot of time on. We work very closely with the government in Mozambique. We've had really good engagements in the first half. There was a little bit of volatility in the first quarter related to the tax authority, but that's now concluded. We've had no more issues. We've had written assurances we continue to operate under the old terms. And the negotiations have continued constructively. I met the Minister for Mineral Resources in late July. It's a really helpful discussion to help understand what was important to their key stakeholders, which we already understood well, but to kind of forge a path towards an agreement.

And I think what the technical team in Mozambique are doing is just trying to foresee any questions or queries that they might receive during the run-up to approval of or consideration of this by the Council of Ministers. We're in that usual part of the process now the back and forth of comments. So while there's no express time line, we're very hopeful this will be the progress that we've achieved will be maintained. And as you can probably tell, our language here is warmer than it has been in the past. We certainly feel that there's a good understanding on both sides and will to reach a conclusion. And obviously, we'll keep you updated as we go through that process.

So with that, I'll hand over to James McCullough, who will run you through our financial results for the first half of the year. Thank you.

Thanks, Tom, and good morning, everyone. Thanks for joining. In summary, as Tom outlined, we have faced challenges in H1, notably the market and where prices are for our products at the same time as we're ramping up WCP A and that's taking a little longer than anticipated. So those factors are certainly reflected in our financial performance. If we start at the top line, average prices received were down significantly in the half versus both H1 last year, we were down 26% and H2 last year down 31%. So our average price came out at $242 per tonne. That's a reflection both of the weak market conditions as well as changes in our own product mix, and I'll talk through that in a little bit more detail shortly.

Shipments were strong as we disclosed back in July, 555,000 tonnes, that's up 13%, but that wasn't sufficient to offset the decline in prices. So revenue outcome was sort of 16% down versus H1 last year. We did, as Tom mentioned, have a very strong focus on costs in the half and managed to reduce total cash operating cost by around $15 million or 12%. I'll talk to that shortly. But notwithstanding that, we still saw the sort of the price impact flow through to the EBITDA line and came out at $4 million for EBITDA for the half.

Net debt went up to $176 million from around $159 million at the end of the year. That as we've kind of seen over the -- well, historically, that's a very lumpy metric. It depends very much on the timing of receipts coming in and cash going out. And we shared in our Q2 update that we had very strong receipts coming in at the beginning of July, which has sort of largely offset the increase. And so the lumpiness is sort of part of the business, but noting that an increase of $16 million.

If you go to the next slide, please. So just looking at a summary income statement, you can see the revenue line there reflecting the market and the mix. So if we think about pricing for the different products that we sell, ilmenite pricing for the half went from $286 per tonne down to $203 per tonne. Zircon from around $1,300 per tonne down to $1,100 per tonne and average price from $326 down to $242.

Looking at that product mix, our actual percentage of zircon tonnes sold stayed flat or went up a little bit from 3% to 4%. And zircon is the most valuable product, so that's positive but it's really offset by the increase in concentrates that we have in the year. So that's particularly ZrTi, which kind of brought us from a concentrate share of tonnes sold from 4% up to 20% or as a share of actual revenue generated from 6% to 17%. And those concentrates sell at a lower price and therefore, impact the revenue generation through deterioration of product mix.

ZrTi has been a tremendous benefit for us this year. Those sales came out of tailings that we previously hadn't valued. So it is very much a positive story, but we do see that reflection in terms of product mix impact on revenue. Look, notwithstanding the lower cash costs that we had, the cost of sales is up significantly from $150 million to $175 million. That's really reflecting the inventory drawdown that we've had in the first half.

So we said all along that shipments is our primary focus and we intended to monetize the inventory that we had accumulated over the course of last year. That's provided very valuable liquidity for us. It doesn't provide as much EBITDA because we took an NRV adjustment to it at the end of last year. So EBITDA from those sales is largely flat, but it does contribute significantly to liquidity, which has been very useful for us over the course of the half.

Finance costs up from last year, reflecting the increased debt that we have. So we're up at around $200 million of debt drawn. And all of that sort of -- well, not the finance cost, but the rest through to lower EBITDA at $4 million and all that fall through to a lower profit number, a loss after tax of $34 million.

Just looking at the cash -- or sorry, at the cost side of things. So the bridge from cost of sales to cash costs, first of all, admin expenses were down by around $3.5 million. That reflects the recognition of ilmenite stock or the recovery of ilmenite stocks from a sale that we have made to a customer last year, which that customer went into administration. We recovered those stocks last year -- sorry, earlier this year. And so the recovery of those stocks come through in the admin expenses line. There's also a reduction in head office costs there contributing to that reduction.

We'll also see the contribution of inventory in the other stock movements of $20.5 million. So that's really reflecting that inventory drawdown that we had in the first half. And then when we get down to cash costs, you can see that reduction from $124 million to just shy of $110 million. So taking around $15 million out of the cost base. That's across all categories.

So the major contributors there were labor where our costs reduced by around $5 million, just over $5 million versus H1 last year. Production overheads also came down by around $5 million. Major contributor to that was equipment rentals and reduction in the amount of heavy mobile equipment that we're renting. And power fuel and chemicals, so we had significant reduction in our diesel consumption and electricity consumption.

So notwithstanding the increases in unit prices for those things, particularly diesel, reflecting the U.S.-Iran conflict, our overall power fuel and chemical costs came down around $1.5 million. Unit costs, notwithstanding the reduction in total costs, unit costs were up to $255 per tonne, and that's really the reduction in production overall, so a reduction in tonnes to absorb those total costs. And that applies both at the total cost line as well as the net ilmenite cost line.

Just to note, Tom mentioned the IA and the discussions ongoing there. As we've disclosed before, we're accruing at a rate of 2.5% on the royalty that we pay under the IA, but we're only actually paying at 1%, which are 1% being our historical terms, 2.5% being the terms that we proposed to the government. So our total cash payments on that 1% royalty was $1.5 million in the half. Over and above that, we accrued a further $2.2 million and that total accrued amount now is $7.9 million. So that's the total amount that we've accrued since December 2024 under the proposed new terms.

Just looking at cash movements, you can see really that the standout feature here is the contribution of liquidity or cash from the inventory drawdown. And as I said, given the net realizable value adjustments that we took predominantly to ilmenite of $14 million at the end of 2025. Those tonnes don't generate significant EBITDA, but they do generate significant cash. That cash has been absorbed through both the higher interest costs, but also sustaining capital. So sustaining capital, we incurred $12 million of costs and paid out $7 million. So the cash outflow was $7 million in the half, leaving us with a cash flow before development CapEx of $6.1 million.

The development CapEx outflow was $23 million. A large chunk of that $12 million related to spend from 2025. So there was $11 million of new incurrence effectively in 2026 H1, but a $23 million outflow, which led to a $17 million change in net debt.

Looking at the balance sheet, just a few things to note. First of all, that large inventory reduction. So we had 128,000 tonne drawdown of finished products all in. That's a mix. We had more than that, around 140,000 tonnes, 150,000 tonnes of ilmenite drawdown, but we also had a ZrTi buildup, which offset some of that.

The inventory value does include a further NRV adjustment at the end of H1 of around $5.9 million. That's reflective of the current elevated unit costs that we have predominantly relating to the WCP A ramp-up means that the cost reduction is actually above the net realizable value of those products. And so we took a $5.9 million adjustment at the end of the half.

Net current assets at $135 million, so a very comfortable position, a strong position on the net current asset side. And just to note, we test for impairment at the end of each period at the moment, and we have headroom of $67 million on that. And the RCF upsize that we did as well as $30 million of upsize that we agreed with the banks, we also agreed a number of waivers and new covenants in the debt package. Those new covenants are predominantly balance sheet related, reflecting kind of where we are in the cycle. And all of those covenants have been met at the end.

With that, I will pass over to Ben.

Good morning, everybody. I'll commence with our sustainability goals and how they've advanced in the year. But to start off with, let's talk about health and safety. And it really was an excellent performance through the first half of the year. We had 0 LTIs and we've amassed more than 4 million hours now since our last recordable lost time injury.

Over and above that, all injuries are also down, and this is actually our best ever half year or it's our best ever year for all injury frequency rate, and that's a record. So we're very chuffed about that.

To support thriving communities, around the mine, we've now completed more than 95% of the building of a hospital -- a district hospital, which supports the other KMAD health centers that have been built over the years. And then we've also launched what we're calling our Padrinho projects. This is the outsourcing to small micro enterprises within the local community for goods and services that can support the mine. That's a process that we've been working on for some time and that's now been launched this year.

We continue to advance agroforestry and our waste management approaches. We get more yield from the farms that we support now and our recycling levels have increased dramatically over the last year, and we're now more than 97% of our waste has been recycled.

And then lastly, on trusted business, our governance continues to improve and has been recognized by EcoVadis this year. And on the ground to support the safety of the operation and the people there, we're making sure that all employees involved in security take part in voluntary principles training.

Moving to the next slide. I talk to the production. The highlight of half was the strong demand for the new product called ZrTi. This partially offset the mining performance, which -- where HMC production was down 34%. That was mostly 26% down due to lower ore grades at WCP A but also due to the lower excavated ore volumes that were mined at WCP A because of the slower commissioning and also the paused dry mining that took part that we did in Q2.

Right now, production is improving and as we expect it to do through the second half of the year, and that's supported by the fact that WCP A continues to make steady improvements. And also we're having very strong performance from the other plants, particularly from WCP B.

Finished products were down 14% year-on-year, and that was really down to the lower HMC production that I've mentioned. However, it was boosted by the concentrate production. The concentrate production was up 599% year-on-year, and that's principally due to this new product type. We prepared 102,000 tonnes of this form of tailings and converted it to saleable product during the first half of the year and we'll continue to draw down those stocks with sales during the second half.

Shipments are our main principal KPI metric for the year. They were up 14% year-on-year, and that's because of our focus on drawing down the stocks that we had and consistent and supported by the consistent transshipment performance to meet demand through the first half. We drew down 128,000 tonnes of product stockpiles and our ilmenite stocks on site are now what we would say is a normalized level.

There is a remaining 17,000 tonne stockholding of our ilmenite product that remains in Malaysia awaiting sale. So overall, we've got improved production through the -- into the early part of this half, and that's giving us the confidence around our ilmenite production, which is expected to be approximately 800,000 tonnes for the full year.

On to the next slide, and I'll talk a little bit more about the WCP A project. We've been making steady improvements and as we've said before, the major construction and installation works are all complete. And you can see that in the spend profile, we've spent $23 million in the first half of the year, of which $12 million was an accrual coming from 2025. And we expect to only spend $7 million in the second half of this year as we spend capital on the preparations for the transition to Nataka.

Our performance though has been underwhelming so far. We have not got to the nameplate capacities that we had expected to in Q2. And in the first half of the year, we averaged 2,800 tonnes per hour compared to the nameplate of 3,500 tonnes an hour. There's a lot of focus on this area, as you would expect. We had some good breakthroughs in Q2 and those continuing into H2. The feed preparation units were debottlenecked successfully and they're performing very well now. And the off plant tails management has been made significantly more reliable at the densification pad and the tailings storage facility.

However, on the -- what's holding us back or what's limiting production at this moment remains the dredge and throughputs and utilizations are being addressed with the dredge supplier in order to strengthen the consistency of the feed that we can get into the plant. We have a good win in that we've redesigned with the OEM the dredge winch braking system. That has been approved and we are now -- orders are placed, and we expect to commission the new system in Q4.

But we also do have remaining issues around the pumping system performance, and that's our main focus right now. We are mitigating that with continued improvements in the way we operate the plant and also making sure that we have increased levels of spares available to us to bring those mitigations when reliability fails.

But overall, we've seen throughput and utilization increase through Q2 into Q3. And we've taken an approach to make our improvement profile a more realistic forecast through the rest of this year, and that's what's incorporated into our guidance state.

I'll also talk a little bit on the next slide, Slide 17, about our Selective Mining Operations and our expectation to increase production from those units in the second half of the year. You'll recall that SMO 1 has been making a really valuable HMC contribution at particularly low capital cost, and it's been delivering to the expectation. That's prompted us to design and order a second SMO called which will be SMO 2. That's -- it will have some upgrades on it based on the knowledge and the learnings that we've had with SMO 1. And those design improvements will be brought into place to eventually have a 1,000 tonne per hour SMO 2 in place.

Construction of the first phase has just started, and that will be for 500 tonnes per hour. It's expected to be commissioned in Q4 of this year and Phase 2 will follow on in 2027.

And so with that, I will pass on to Cillian, who's going to deliver the market update.

Thanks, Ben, and good morning, everyone. Start really on this slide. And the first half of this year was challenging. We saw strong demand across all of our products. However, particularly on the ilmenite side, there was sufficient supply to meet that. And that's what resulted in the decrease in price through the first half. The second impact that's kind of clearly impacting pricing in the first half was the freight. So following the U.S. and Iran conflict in late Q1, we saw elevated freight increases, particularly on ilmenite shipments into China.

And given the weak market, we've been unable to pass them through and that has impacted ROC prices further.

The steady demand has allowed us to destock, which I think James was talking about. And that, coupled with the strong ZrTi demand and strong ZrTi sales kind of resulted in the steeper gradient of lower prices -- lower average prices across all products as the product mix worsened in the first half as a result of those sales. Zircon is the bright spot. We saw stronger zircon price in the first half across all of our products, and that kind of accelerated in the second quarter. As we've said previously, we see that more of a supply constraint issue rather than an improvement in demand.

So we move to the next slide. I want to talk about the supply and really the reason we've seen the weaker prices, we believe, is supply driven and coming from 2 main areas and centered around China. So firstly, the major reason is elevated ilmenite production in China. We've seen that increasing in recent years and remain at elevated levels. Encouragingly, the major reason in -- or the major region in China, Panzhihua, has reduced over the last 12 months. That's been partially offset by increase in Xinjiang, but that's on the back of environmental reasons, which is encouraging. So that ilmenite really all enters the sulfate pigment market in China. And the second place we're seeing strong competition is the import of HMC into China. That's increased again over the last 12 months and principally from Mozambique, but there are other regions in Africa as well. And that's stepping up the competition. It's important to say that still this product, both the domestic and the ilmenite contained in HMC, it's all staying in China. So that's -- it's captive there. It's leading to intense competition there, but is captive. However, lower prices in China do have the ability to impact global pricing, and that is something we've seen really in the first half. So we move to slide -- the next slide, yes.

Encouragingly, we are seeing strong demand, and that's what supported the drawdown of stocks and the ZrTi demand. It's all on the back of, I suppose, improving pigment conditions. So the graph on the left, looking at pigment is Chinese pigment production. So record in the first half on both sulfate and chloride, which is a positive for us. But what's particularly encouraging for Kenmare is that the chloride pigment continues to gain market share. That is accelerating at the moment due to the high sulfur and sulfuric acid prices. And we have customers that are ramping up capacity of both chloride pigments and of beneficiation in order to take advantage of those market conditions. So that's a real positive for the demand for Kenmare type ilmenite. And even outside China, I think the last couple of weeks, we've seen results from the Western pigment producers, which talk of improving volumes and prices to levels we haven't seen recently. So I think encouraging both inside and outside China on the pigment side there. On the metal side, continue to see strong growth. It's a market that we like and a market that likes our type of product. So one, we will continue to try and push more of our ilmenite towards.

Just turning to the outlook then on the next slide. Those positive demand trends continue into Q3. Obviously, we have to compete on price, but the demand is there. And as a result, we see solid order book for the third quarter. One point probably important to make is in the first half, as we were drawing down stocks, that was predominantly IP 2, so our lowest TiO2 product. So as we move forward in the year, we expect a more balanced ilmenite supply mix and therefore, higher value ilmenite products being sold.

On the zircon side, we expect the momentum to continue, particularly in China. I think we saw European prices was more stable over the last 12 months and starting to increase now, whereas China decreased. So it has a bit of catching up to do, and we expect that to continue in the third quarter.

Finally, just to touch, I think Ben mentioned it, on our stockpile in Malaysia, we have title to it. We understand that sales process is ongoing. We're in discussions with the potential buyer, and we would hope to be a supplier to that plant in the future. So yes, we hope to see that conclude quickly and the plant restarting and then we can restart our supply into it, starting with that stockpile. And with that, I will pass back to you, Tom.

Thanks very much, Cillian. So look, thank you for your time today. In summary, before we move to Q&A, at the half year, we're still on track to achieve our guidance and deliver our 1.1 million tonne shipments, which is the biggest objective for us. And as Cillian said, the third quarter demand and order book certainly supports that objective. But of course, we have a keen focus as well on achieving all the other metrics and particularly the continued ramp-up of WCP A as we go through the work program that Ben mentioned. But I think that there's certainly been some good achievements in the first half on all of those areas.

And if we look more generally to the business, a couple of things just to emphasize before we close. First, just to remind everybody, this is a world-class asset that's going to be around for a very long time. We're investing to be ready for that and to be ready for the recovery in our markets that maybe we're seeing signs of, but certainly, there's a little more proof that needs to come through before we start to promote a little bit more. But we are invested for it. We're ready for it. Our development CapEx is behind us. Our SMO or second SMO is coming to help maintain and increase our production. So we're certainly prepared.

We've worked hard in the first half to achieve operating cost improvements, as James said, and they've supported our liquidity objectives. And I think that's been something that we've done well on in the first half. And despite the wider geopolitical uncertainty, which obviously has caused some turbulence, but I think we've managed so far to navigate it well and mitigate its impact.

The nature of the Moma asset, as Cillian said, the quality of our products means that we're a preferred supplier to most of our suppliers and our suppliers -- excuse me, our customers, and our customers stay with us a long time. Many have been with us 20 years plus. We're amongst the first ones they buy. That hasn't changed. And that's what gives us the visibility on our sales and our order book and means that we can achieve our shipment objectives.

And as you can probably detect, we're certainly more hopeful regarding our position in Mozambique, the ongoing conclusion of our implementation agreement, the eagerness shared by government to get that finished and to enable us to get back to our long-term investments in the business, in the community and work for the next 20 years plus in Mozambique.

So thanks very much for your time this morning. We'll now move to Q&A and take any questions you might have.

[Operator Instructions] While the company take a few moments to read those questions submitted today, I would like to remind you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed via investor dashboard.

Katharine, at this point, if I may hand over to you to chair the Q&A, and I'll pick up from you -- from Tom at the end.

Thank you. So our first question comes from Colin Grant at Davy. You noted that production improved in July and August. How does this shape your outlook for ilmenite production in 2027?

Maybe Ben will -- hand over on that. I think that's something we will focus on over the remainder of this year and finalize our plans for next year. But Ben, do you want to give a bit more color?

Yes. I was sort of going to say the same thing. I think we are entering the transition towards Nataka with WCP A. And you saw that the grades came down this year because of that, and that will be the same next year. So I think that's a main consideration there. But to try and offset that, we have the SMO capacity that we need to bring further into place. And you saw in the table on the slide there that we have an increase of 1,500 tonnes per hour of SMO capacity to try and offset that grade shortfall. So it's certainly top of mind. We're going through -- starting our detailed planning processes right now. Ready for 2027, and that's where we're going to be able to get to by the end of the year.

The next question also from Colin. Is there a price level where you expect oversupply in the ilmenite market to diminish?

I'll hand that to Cillian, but I think we are already seeing some distress amongst certain producers. And I think when we've talked about Chinese concentrate producers or concentrate producers generally, one thing we should emphasize is they're very dependent on diesel as their primary fuel source and obviously very exposed to the costs as a consequence of that. But Cillian, I'll let you jump into a bit more detail on that.

Yes. Okay, I think that's a key point. We do hear anecdotally that these diesel prices, coupled with the lower price of finished products in the Chinese market are really hurting these concentrate producers. So that is an indication we're getting there. And then the other thing is we have seen significant supply come out of the market over the last 12 months as a result of those prices. And while maybe we're not seeing new announcements, I think we're also not seeing the restart of those. And that's because they probably would have needed higher prices, but it's not coming back in line at the moment because it's not profitable to do so. So I think we're getting there, but there's no clear sign yet that there's been sufficient product taken out of the market that's going to swing it in the near term.

The next question -- well, a few questions come from Peter Mallin-Jones at Peel Hunt. First question, how much further cost-cutting performance can we expect in H2 on H1?

Thanks for that. Look, we're looking at it very closely, obviously. There's a couple of things that I see as potential headwinds, which is just as we ramp up production, obviously, we'll consume more electricity and the more tonnes we produce more electricity we'll consume. So that will be a headwind.

Against that, we'll be looking to continue the programs that we put in place across all the different cost categories. So I think I would expect we'll be able to offset that. And I wouldn't be expecting that there would be significant other cost areas that we'll be able to get big benefits out of in the second half. But I think it will be a series of incremental benefits across all the different categories. So I think continuing on the same trend, keeping the sort of run rate that we have with small gains where we can find them.

Yes. I mean we haven't changed our guidance. So I mean, there's a message in that as well.

Yes. So we came out at -- we're right in the middle of guidance at the moment, that guidance was $215 million to $225 million for the full year. We came out at just shy of $110 million. So if we continue that progress, we'll be within that range. But we're looking at it very closely. And obviously, we'll execute on any opportunities that we do see.

Next question also from Peter Mallin-Jones. Can we expect a step-up in realized ilmenite prices in H2 simply from selling more to Western customers than in H1? Does this come from a higher quality product mix or higher prices for like-for-like product?

Yes. I think, Cillian, touched on that, and maybe I'll let you develop a little bit more.

Yes. So I think we'll guide on the H2 prices, and we've said a strong order book for quarter 3, but we still have work to do on quarter 4. Freight will come into it. But I suppose what we are seeing is that H2 will have better product mix, and that is supportive for pricing, but we're not seeing a step-up in prices in the second half on the same product as the first half. So it's not an increase in prices. It's really product mix driven, particularly in quarter 3 that we can see at the moment. Yes, I think that probably answers it.

Third question from Peter Mallin-Jones. How big a step-up in output at WCP A in volumes mined are you expecting when the new winch brakes are installed? Is that the single biggest factor in releasing increased asset utilization?

It's certainly one of the big ones to get the utilization up. I think that you're looking at sort of between 10% and 15% is my rough answer to that in terms of how much extra utilization we will get out of the plant. But there are also other ones which we're actively talking with. I mentioned the pumping system performance, which is probably the -- that's the one where we're placing most of our energies with the manufacturer right now. So I think we are -- we have made some improvements over and above the numbers that were in the H1 report here. Probably they've come up already by a good 10%. And as I've said, there's been some steady progress. But before we sort of talk too much about those, I'm looking for August and September to really bed those numbers in and to be able to be more sure about them.

Then we get to the winch brake change out in, hopefully, in earlier part of Q4 than the later part of Q4, and we'll sort of bed that in by the end of the year and be able to see the true benefits of that. In the meantime, the pump system will be -- we're working very closely with the OEM to get to a conclusion on that. So yes, there's more tonnes to come. I'm confident that those things can be remedied. Where it's a bit more tricky to give detail is exactly how long it takes to fix those things because in some cases, those pumping system challenges have not yet been resolved.

The next question comes from Jasper Mainwaring at Berenberg. Noting the more positive language around the implementation agreement, could you please provide a steer as to when you expect this to be finalized?

I'd love to. Look, I think we have to be cautious on this. The steps once we reach an agreement and an agreed form text with the MIREME who are effectively the Ministry of Mineral Resources are that it goes to the Council of Ministers for approval. And that's the key step. Council of Ministers meets regularly, probably 3 times a month, generally every Tuesday. We certainly are not far off being in that position, assuming the current momentum is maintained. But I think the experience we've had on this process reflects challenges that the government in Mozambique can have from time to time with other priorities emerging. And so I think we just need to be cautious and note that there's no set timetable, but we're very hopeful that they're as committed to maintaining the momentum we have at the moment as we are. So I'm sorry, I can't be more definitive, but we've had a couple of false starts on this over the last year, 1.5 years, and I don't want to promise something that it really isn't within our control.

The next question comes from Charles Lamport-Beale at Fortified Securities. Given the mixed results for H1 and promising outlook for H2 and 2027, do you expect the $230 million RCF to be sufficient funding for production against a mixed and unpredictable economic and market backdrop?

James, do you want to take that? I touched on it earlier.

Yes. Thanks, Charles. Look, at the moment, we haven't drawn nor do we have plans to draw the additional $30 million. So the upside from $200 million to $230 million at June. I think it provides buffer. We did have a shock or a surprise last year when we had a customer who we had shipped tonnes to didn't pay, that was $9 million. Now we've recovered substantially all of that. But equally, we need the flexibility to be able to do that and to make some of the investments that Ben has talked about in terms of Supplemental Mining Operation 2 and renewal of HME fleet and that sort of thing. So it gives us more flexibility.

And look, as you noted, it's a very uncertain market, and it's -- we're still working through the WCP A upgrade. As we've said, we expect and we need the WC upgrade to continue to see those improvements that Ben has mentioned to see those added in and to start to see the tonnes come out. And as Cillian has gone through to see stabilization at least in the TiO2 market. So those are our expectations.

If there's deterioration from that, then obviously, we'll have to look at our -- at what capital we have available, but that's the nature of being in the industry. So at the moment, quite comfortable, but always sort of looking at and making sure we're prepared for anything that's coming down the track.

Yes. I suppose maybe just to say that the step-up or the increase wasn't to address an identified need. It was just purely precautionary to reflect the volatility and uncertainty that's around at the moment.

Please give color on development CapEx going forward for the rest of 2026 and 2027.

Okay. I'll take that one. So we just -- we said in this release that we will spend about $7 million in the second half of this year. Those monies are related to infrastructure. So as the plant moves into the transition channel and moves -- starts to move towards Nataka, we have to bring in additional pumps, additional pipes, a terrace for stepping the HMC at and also electrical infrastructure. So nearly all of the $7 million relates to those sorts of items.

Now there are rectification costs and debottlenecking costs that the project has been taking on, but they are so far small and they are sitting in the contingency and they don't make a large difference to and certainly don't put us in jeopardy on the overall project costs that we've previously outlined. And of course, something -- many things are being done on the warranty at the moment, which -- so they're not reflecting as a cost project.

Looking into 2027, it's a little bit more of the same. I don't have it to hand here, but the -- in our prelim results this year that we published in March, there is a curve that showed that we have quite a tail in the development cost project -- in the development costs for the project as we progress quite a lot of distance into Nataka itself. That remains broadly correct. In fact, I think that we -- certainly, we've been looking at 2027 to see where we could reduce some of those commitments. And certainly, that's our focus to try and close out there maybe in a more capital-light form than previously. But for now, I would say if you can take a look at the prelim results presentation, you'll see the curve of spend that's expected.

What cost quartile do you sit in?

Look, I think we've talked in the past about where we want to be. I think probably at the moment, we're sitting in and around the midpoint. And certainly, our objective is to get well into the lower cost quartiles. Of course, some of -- that curve changes as the mix of participants in the market changes. And I think what we've emphasized and Cillian talked about earlier was certainly, over the last couple of years, the Chinese concentrate producers have lower operating capital costs. They increased production quickly. But when perhaps the resources or ore bodies they are mining become more challenging, where costs increase, they can reduce those -- that production quickly, too.

So look, I think we're comfortable that we're working hard to be as efficient as we can be and to survive through cycles. And because of the long life of our assets, in many other cases, we're talking about assets with much shorter lives.

Another question in a similar vein. Where would Kenmare be on the global cash cost curve once Nataka starts production, assuming elevated diesel prices and your base case scenario for the IA?

Yes. Look, as Tom mentioned, the cost curve is moving around quite a lot and certainly has evolved significantly over the last couple of years. And you're now seeing Q1 of the cost curve largely occupied by iron ore miners for whom TiO2 is a byproduct, which means that we're sort of looking at Q2 really as where we would like to get to in the context of the overall industry cost curve. So that's over, as Tom said, to the left-hand side of sort of the cost curve of mineral sands producers. When Nataka is up and running and under the terms of the IA as you say, I think as Tom said, we would be looking at being somewhere in the middle of Q2 would be where we would be assuming nothing else changes, assuming.

Please give some color on the underlying commodity markets you're in. Why are the prices down? Is it a supply or demand issue?

Cillian, do you want to take that? I think you covered it in the slides, but probably just worth talking about some of the key factors.

Yes. Look, from our perspective, we see it as mostly supply. We see the increase of production of ilmenite in China and this new trend of shipping concentrates into China as adding a lot of supply to the market, and that's the primary driver. Demand could be better, I think, is the thing. We have seen slow housing markets in China, U.S., Europe. Improvement in them would give a boost. So demand isn't bad, but it's not as good as it could be, and we would expect it to improve. But I think the primary reason for prices being down is an oversupply mostly concentrated in China.

Now a question on dividends. For someone who relies on dividends to finance my retirement, when will we be able to receive dividends again on a regular basis?

Maybe I'll start with that, and James can jump in. Look, as I said at the outset, dividends, we recognize it has been an important part of the investment case in the past, and we'd like it to be in the future. I think we need to see an improvement in the market. We need to see an improvement in our balance sheet. And I think the important thing with dividends is when we recommence paying dividends that we can do it on a stable continuous basis.

We recognize that we have investors on our register to whom this is important, and we do speak to those investors regularly. And I think we will give good notice of our plans for resuming dividends or resuming shareholder return in any form as we navigate the next number of months and see how the market evolves. But certainly, from where we stand now, maybe the easiest way to say this is the reasons why we suspended or paused our dividend in the first quarter of this year haven't changed. And until they do, I think we'll have to assume that, that will remain the case.

Next question. Why does the management team continue to be negative in relation to the company's announcements to the market?

I don't think we do, but the market -- I mean, it's very hard to be unremittingly positive when your resource price is falling. And look, I think we have a responsibility to be balanced in our commentary and to try and give people a fair view on what's happening in the market and what their expectations should be. It's worth noting, for example, that one of our peers, Iluka Resources in Australia, reported this morning. And if you read their commentary, it's pretty much exactly the same as ours. So I think we -- as I said at the outset, we have a lot of things that we want to achieve this year, and I think we've made really good progress on achieving them or working towards them and controlling the things that we can. And the team has worked really hard on it.

Our shipments have been good. We're making progress on WCP A, albeit slower than we might have thought or liked at the start of the year. We're making progress on our implementation agreement. And we've stabilized and maintained our cash flow and balance sheet. And these are all the things that you do and the behaviors you show when you're at trough or difficult points in the market. As the market recovers, and as Cillian said, maybe there are some signs that it will, but we're not seeing it today. As the market recovers, our commentary will reflect that.

Given the significant decline in the share price, does management believe the current valuation represents an attractive opportunity for long-term investors? And what key factors could drive a rerating?

Look, we feel that Kenmare is well positioned for the long term. I suppose it depends on your investment horizon. It's worth noting that we all committed to investing our bonuses for 2025 in company stock. And obviously, there have been external factors that have limited our ability to do that, but we all are holders of stock. I think history would show that the cycle -- price cycles turn, significant returns are achievable. And what we're trying to do is give people a view on how we see that trajectory playing out. I think it's -- many of our investors have been with us for many years, and they take a multiyear view. I suppose it just depends on people's investment horizon. Of course, there's risk at any point. But certainly, we believe that if we continue to control the things we can control, that Kenmare will perform well over the coming years, assuming our markets recover.

That was the final question. Handing back to you, Tom.

Okay, thank you all. It was a good range of questions. I think we've got good feedback on the results today. We've done a lot, but we've quite a bit more to do in the second half of the year, and we'll continue to report on that. And obviously, as ever, if you have any queries or questions or anything you'd like to follow up on or prompted to question us on, please get in touch and we'd be delighted to respond and help you. Thank you all, and have a good day.

Fantastic. Thank you all once again to investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations.

On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.

Good afternoon, and welcome to the Kenmare Resources plc Q2 2026 Production Update. [Operator Instructions] Before we begin, I would like to submit the following poll.

And I would now like to hand you over to Managing Director, Tom Hickey. Good afternoon.

Thank you. Thank you very much. Thank you all for taking the time to join us after we announced our Q2 and H1 production update this morning. I'm accompanied here by James McCullough, CFO; Cillian Murphy, Head of Marketing; and Ben Baxter, COO, and I'll hand over to them for different segments of the presentation. But if we move ahead, please.

So just a quick reminder. Kenmare Resources is the owner and operator of the Moma Titanium Minerals Mine in Mozambique. We've been there for nearly 40 years. We've been producing for nearly 20 years. And we've got a very, very long mine life, a very long-term resource base. We've invested for the long term over recent years. And I suppose if you're going to be somewhere for a long time, you want to behave yourself, you want to be a good citizen, you want to integrate well with the community. Kenmare and Moma are important to Nampula, the problems in which we're set we're important to Mozambique. We make a meaningful contribution to each. And that's not just from the taxes and royalties that derive from our production, but also from the social investments that we make to increase capability and capacity in and around the mine. And look, we're pleased that's been recognized by having us included in the FTSE4Good Index for the second year in a row. So, in country, you also need a good framework of agreements, and we have been negotiating the renewal of our implementation agreement with the Mozambican government for quite some time, and I'll run through that a little later.

But just to recap, we produce titanium minerals, ilmenite, rutile, they're key raw materials in the manufacture of paints, pigments, paper, plastic, titanium metal. We're a good chunk of global supply, about 6% and pretty much the same with Mozambican exports. So while we're a comparatively small company, we're important within the industry in which we sit and the country within which we sit. And of course, titanium, like many other in recent years, has been put on critical minerals list for Europe, the U.K. and the U.S. So there's lots of attention on the mineral and the metal, and we believe that will stay that way for a number of -- for the foreseeable future.

I touched a little bit on the investments that we have made in -- throughout Moma's life. Our net book value at the end of 2025 was just under $900 million. And we've invested not far off $300 million in the last two, three years on an upgrade of our biggest plant, WCP A, to move to our biggest ore body in Nataka, and Ben will talk a little bit about that later on. We're substantially through that CapEx at this stage.

If we can move on, Katharine. So from the general intro to Kenmare to the quarter and indeed the half year, those of you who've heard our calls before will remember that while in many other years, our priority would be production and tonnes produced. for 2026, our key -- our highest priority is shipments. We entered the year with a substantial level of finished goods inventory. We want to sell that inventory down along with our existing production. We want to obviously use that to generate cash flow to maintain our financial flexibility at a time when market pricing has progressively weakened over the last number of years. Hopefully, we're at or near the bottom of that. But certainly, we have been paying close attention to our liquidity, close attention to our production in 2026, and we expect that to continue.

Certainly, in the first half, we've performed well in that regard. Our first half shipments of 556,000 tonnes, just ahead of the run rate of our annual shipments guidance. And there were some notable pieces of information in there. I mean, our concentrates production for the full year was materially exceeded in H1. And that's arose principally from a new product called ZrTi, which was previously a waste stream. So something where we didn't fully recover all the valuable minerals to our main products. And effectively, this would have historically been discarded. But it's certainly become clear to us that there's market interest in this material, and it will be part of our sales for many years to come, albeit not at the levels of 2026 because in '26, we're exploiting a historic ore body -- excuse me, historic stockpile that we had and meeting demand via that.

ZrTi aside, I think our ilmenite production, which is our main product, was impacted by the WCP A investment and in particular, the elongated commissioning process of that. And we expect our 2026 production to be just at the level of our guidance of 800,000 tonnes. And I think Ben will run through the work we've been doing ourselves to improve performance, and it has improved over recent months and what we expect to do over the remainder of the year to complete that project.

The other point I'd make is we do expect to see a stronger H2, both in terms of heavy mineral concentrate and the grade. So there's certainly some tailwinds or some positive influences on the second half of the year.

Looking at our market, I touched already on the markets in which we operate and the fact that over the last number of years, they've weakened progressively. Quite a few movements in the first half of this year. The ilmenite market, we expect it to be a little weaker in Q2, and we've seen that. But the market, as Cillian will perhaps run through, is actually getting quite distinct in different geographies with the Chinese market differing materially from Western markets. And even within China, markets for chloride pigment and the ilmenite inputs to it versus sulfate pigment very different. Some things driven by what's happening in the U.S.-Iran conflict, which is increased freight costs and also sulfuric acid costs, but also influenced by just the evolution of the market and different pigment technologies.

Our other main product is zircon. And zircon has been a much more positive story in the first half of this year. The market has strengthened materially. We're getting higher prices on all zircon products. We expect that to continue. And look, I think this is very much a function of the measures producers have taken to manage supply, an unfortunate fire at one of our peers, Grande Cote and Senegal, which has taken supply out of the market. It hasn't really been growth in demand. But certainly, we could sell all of the zircon we can produce and perhaps more, and we're seeing that reflected in price.

More Kenmare specific. I've touched on liquidity. I've talked about its importance. At a time of elevated net debt, it's always important to have your lender support, and we were pleased to get that in the first half. We increased our revolving credit facility by $30 million to $230 million, although we don't really expect to use that extra capacity, it's always good to have it. And we amended the covenants to give us more flexibility and to reflect the fact that while pricing is weak, our balance sheet, our current assets, current liabilities and our total investment in the asset is positive. And so we were pleased that all our lenders recognize that. We were pleased that they supported us. And I think that these lenders have been with us for a number of years yet, and they realize this is a cyclical industry. Like us, they're hoping for recovery, but it's always important to have financial flexibility as you travel towards it.

We had net debt of $176 million at 30th of June, although we got $14 million of receipts in the first week of July, which would have had us pretty much flat since year-end. I think that's quite a creditable performance because we spent $23 million of development CapEx. So predevelopment CapEx, the business was cash flow positive in the first half of the year at pretty much the trough of the market. And that CapEx is rolling off quickly. I mean the WCP A project is substantially complete. We've had $7 million in the second half. So that investment burden or investment obligation is rapidly receding.

And finally, I touched on the implementation agreement with the Mozambican Government. This has been going on for quite some time. The agreement itself nominally expired at the end of 2024, but we've been operating under the legacy terms since then. And over the six months, we've had good constructive engagement with the authorities in Mozambique, a lot of back and forth on phasing of some of the investments that we commit to, we committed to a $200 million investment in the asset over the 20-year renewal period. What will it be? When will it be? What will it be with the first five years? Similarly, with our social investments, we would be committing to a $50 million investment over the 20-year renewal period. How will it build on what we've done in the past? What will the focus be? How will it be split between years? And I think really what this is, is the technical term team in Mozambique trying to prepare themselves for whatever questions or challenges or queries they may get from the Council of Ministers or President as they move towards the renewal.

I should stress there's no formal timetable for the renewal. But certainly, from our perspective, we've given them all that we've been asked for. They're comfortable with what we've provided. And we'd be very hopeful that there will be some move ahead before too long. But as in any government, they have many other priorities in country. And hopefully, they will get to it before too long.

So, look, we're very focused on a negotiated agreement here. It's our definite preference despite the fact this has gone on a long time. We've been flexible. We've made a proposal that's far better than what is -- than the previous terms, reflecting the government's need to have a better return from Moma, and we think the proposal we've made is fair. Though we would prefer not to go to arbitration and that arbitration would be in Washington, if necessary, we would be prepared to if the government were to make further demands that were unacceptable to us or that were unaffordable by us. So I think we're -- we have made progress in the first half. Hopefully, we can maintain it.

So look, that's the overview from my perspective of the first half. We'll just do a slightly deeper dive with my colleagues on some of the themes that I pulled out there, and then we move to Q&A at the end. Thanks.

Good afternoon, everyone. It's Ben Baxter speaking. First of all, I'm going to walk through the production and the WCP A project. First of all, the half -- the first half of the year was a safe half with no lost time injuries recorded, and that's a significant win for the business. On the production side, I guess these numbers are the one that jumps out and stands out is the ZrTi contribution and really increasing our concentrates production. But looking through all of the numbers, heavy mineral concentrate was down 37%. And that came off the back of reduced ore grades, which were expected during the -- relative to year-on-year last year's numbers. As we enter the end of the Namalope mining for WCP A, the grades are expected to fall, and that has happened. But we also saw a 6% reduction in the excavated ore, and that comes from the fact that we were we didn't get the ramp-up as expected from the WCP A upgrade. And I'll talk a bit more about that on the next slide.

We also saw that in Q2, we stopped the dry mining contribution to the WCP B operation and that brought down the amount of mining that took place. And this was done both to manage costs and liquidity, but also to give us a better product mix for products that we're selling during the first half of the year.

We do expect production to strengthen going forward into the second half. This is coming principally from WCP B, which is expected to have a strong performance in the second half. And also, we have -- we've restarted the dry mining now to help contribute towards that. We've forecast steady improvements in WCP A through the second half. And so that will also bring increased excavated ore contribution. And we also have the start-up of a second selective mining operation taking place in Q4 that will bring some additional capacity to the business.

On the final or finished products, ilmenite production was down 40%, slightly worse off than the HMC side of things. That came about because the ilmenite grade in the HMC was slightly lower. That was offset, I guess, by -- on the zircon and rutile side, which experienced the opposite of higher grades in the HMC. And so you can see that their numbers were slightly better off than the HMC production number. We were also able to reprocess some of the intermediate stocks that we had during the quarter, and that improved the zircon and the rutile production as well.

As I mentioned at the head, concentrates were significantly up, 770% year-on-year. And this was just -- this was due to the new product that Tom was discussing at the head of the meeting. We converted a historical stockpile of tailings into production. now that we have confidence in the sale of that material with clear routes to sale through the rest of 2026 and into 2027. And in fact, that conversion meant that our concentrates guidance for the year is now being met.

As Tom said, shipments are our primary goal of the year, and they were up 53% year-on-year. This was due to -- with stock drawdown taking place on site, but we also took back into stock some 17,000 tonnes of ilmenite that have now still to be sold following a previous sale falling through.

We remain on track for the main guidance number of more than 1.1 million tonnes for the year. We did tweak our guidance around ilmenite production rather than -- and we're saying that we will approximately meet the 800,000 tonne level rather than exceed it. And this is reflected from the expectations that we have for WCP A for the rest of the year and the ramp-up being slower than we previously had expected. Also the dry mining stoppage, which I referenced that took place in Q2 and the later start-up of the selective mining operation, the second selective mining operation than had previously been expected.

On the next slide, please. I'll just walk through the WCP A performance. So -- nearly all the major construction and installation work is complete. We -- the operation -- the plant is in operation now. It's not a project. And that's reflected in the capital expenditure, which has really now gone down to a very low level. We guided that we'd spend $30 million this year, $23 million of that million has already been spent, and there's a remaining $7 million for the rest of the year, and that's associated to the development as we move forward with the mine and moving towards Nataka.

The dredge performance is the issue that we've -- that's been holding us back through Q2. We had expected improvements faster than we've experienced, and this came about because we had further repeated problems with swing winch brakes and getting through the stock of spares that we had, and that brought about some downtime whilst we waited for new spares to be delivered. We also saw with the increasing production that we were getting that some premature wear was taking part in various parts of the dredge and that also caused us some downtime and longer waiting times for spares.

The downtime, as I mentioned, we've -- the swing winch brakes have probably been the largest component. But happily, we have agreed a permanent solution under design warranty with the manufacturer. And so that part, we will, in the second half of this year now, move to an alternative design, and that will take that problem away.

The pumping system, there are still some components of that, which are under investigation, and we remain in good communication with the manufacturer on how to resolve those issues. We have to partly mitigate that changed some of the operating methods that we use to help improve the production, and that started -- we've started to see some benefits from that.

Elsewhere in the plant, we said that in Q2, we would debottleneck the downstream feed preparation desliming area, and that was successfully delivered. And so moving forward, we expect this sort of continued improvement of production to take place as we further debottleneck areas, bring the -- resolve the premature wear components and get ourselves slowly but surely through these teething problems that we've been having. And so we have built into our forecasts further progressive improvements for the rest of the year and that's how we expect to proceed.

I'll pass on to the next slide and Cillian.

Yes. Good afternoon, everyone. So just to touch on our markets and what we saw in the second quarter. Really, we saw solid demand across our product suite in the second quarter of the year. And that's what really supported the stronger shipments we saw in the second quarter and read through the first half.

Starting on ilmenite. I think we saw that demand was pretty stable on the pigment side and continues to be strong on the metal side. But as Tom touched on, there's probably different dynamics in different regions in the pigment side, particularly at the moment. And for us, we've seen the impact of the war in the Middle East affecting what type of pigment is being made in China. And -- the war has caused high sulfuric acid prices, high sulfur and sulfuric acid prices. And in China, what we've seen is that, that is giving a competitive advantage to chloride pigment. And we've seen chloride pigment grow to record levels and continue to gain market share in China. And that's where most of our ilmenite that goes into China is consumed. It's almost entirely consumed in titanium metal and in the chloride pigment after beneficiation. So that was a real demand pull in terms of volumes for us in the second quarter.

However, as Tom said, the second quarter pricing was lower as we expected it to be, and that's on the back of the supply picture where we continue to see strong levels of Mozambican -- or not Mozambican, but African concentrates going into China as well as Chinese domestic ilmenite production increasing as well. So while we see strong demand for our type of ilmenite, I think overall, we saw some pressure on ilmenite pricing as a result of continued growth in supply. The curtailments in production elsewhere has tightened the market a bit in -- outside of China.

On the zircon side, a bit of a better story. There's less zircon contained, particularly in Mozambican concentrates, but also not with the domestic ilmenite. So on the supply side, not seeing the same level of growth from those areas, while we are seeing curtailment in suspensions of production, and that has really taken away any overhang and caused some shortages in places. And as a result, we've seen really across the board in all regions, prices start to increase in the second quarter, and that's continuing into the third quarter. And Kenmare gets value from zircon across five of its products now. And we've seen price increases for the zircon contained in all of those products in Q2 and moving into Q3.

And that's one of the things that's supporting the strong ZrTi demand that we're seeing and the strong shipments we've seen. Zircon is one of the key components along with monazite and ilmenite. So the contained zircon is getting more value in the ZrTi and as well as that, I think the type of ilmenite that is in the ZrTi, there's a limited amount of in the world, and we're seeing strong demand for that type of ilmenite, which is why we're seeing the level of demand, which gives us confidence to say we're expecting the strong sales into the second half and really we have demand going into the first half of next year as well.

And with that, I think I'll pass back to Tom.

Thanks very much, Cillian. Look, maybe just to recap, Kenmare operates Moma. Moma has been around for a long time. It's going to be around for a very long time, decades and decades to come. The WCP A investment and the move to Nataka, WCP A is first. All our other plants will follow, and they will all end up at Nataka. So that's the key to the future of the business. And we're investing and ready for that move. And obviously, a little bit still to do on WCP A, but as Ben said, working well with the contractor and hopefully have a clear path to getting that done before too long.

Moma, as Cillian outlined, is a preferred supplier to lots of our customers. Many of our customers have been with us for 10, 15 years plus. We've got good quality products. consistent availability and our products are suitable for a wide range of applications. And that helps us. It helps us get the best customers and stay with them for a long, long time. And that gives us good visibility, particularly on our sales into the next quarter and towards the end of the year.

We're investing so we can work -- live through cycles like the one that we're in at the moment. We -- before development CapEx, we generated operating cash flow in the first 6 months of this year, and that's at what we hope is pretty much the bottom of the cycle. We've done a lot of work with our team at site on operating cost improvements. And I think one of the things we highlighted in our earlier calls with shareholders today is that we're on track to achieve our operating cost guidance and despite the fact that, obviously, we are seeing slightly higher diesel prices. And reality that the diesel price impact has principally -- of the U.S. around conflict. It's principally been around freight costs and vessel availability and timing. Aside from that, it's been comparatively limited. We have seen an increase in cost of domestic diesel within Mozambique, but only since the start of May, and let's see how things go over the next few months.

And look, as I mentioned when I talked about our negotiations with the government, we've had a good partnership with the government. We hope to extend that for many years to come. We've invested already $25 million in the community around Moma, and we've committed to making further significant investments to increase the capacity, to improve livelihoods to diversify the economy to create infrastructure. This is an important part of the fact that we'll be there for decades to come. And we believe the government recognizes that. And hopefully, that will be reflected in a renewal of our implementation agreement for too long.

So with that, I'd like to thank you for joining. Happy to hand over for any questions people may have.

That's great. Thank you very much indeed for your presentation. [Operator Instructions] While the company take a few moments to read those questions submitted today I would like to remind you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed via investor dashboard.

And Katharine, at this point, if I may now hand over to you to chair the Q&A, and I'll pick up from Tom at the end. Thank you.

Thank you. So the first question is, when will the deal be done with the government? It's going on too long.

I agree with that. Look, there's no firm time line. And as I said, we continue to operate under the legacy terms after we had a little bit of challenge to the government earlier this year when they started to try to impose or the tax authorities started to try and impose some of the new terms, and we had to remind them that nothing was agreed until everything was agreed.

In all our engagements over the years, and I've met a number of different ministers and the President, each on multiple occasions plus the technical team with whom we operate. They're all sensible commercial people who really value the contribution that Kenmare has made to the country and who consistently say that they intend to renew this agreement that the principal issue at under discussion is the royalty that we pay. Historically, it was 1% and we've proposed that it would increase progressively from 2.5% at the start of the renewal period to 3.5% over the 20-year period, plus that we will pay withholding tax. And that's kind of a 4x, 4x improved return for the government on this agreement.

Our rights to renewal are clear. We have the right to renew on legacy terms. It's our choice and I suppose a recognition of the need that we invest on better terms for government. And -- but if government doesn't reach or propose an agreement that we can live with, we do have the right to go to arbitration, which we don't want to do. And in our engagement with shareholders consistently over the last year, 1.5 years, their counsel to us has been to keep seeking a negotiated solution. That's what we're doing, but we won't do that at any cost.

So I am hopeful, as you can probably tell that we're certainly near the end of the beginning of this. I am hopeful that we've given them everything that they need to make a considered assessment of it. And that before too long, we'll understand what the path forward is.

A bit of a follow-up question. Has the Mozambican Government attempt to impose new tax rules on Kenmare earlier this year been rescinded?

Yes. Yes. I mean that was one arm of government, the tax authority. And to be fair, they have been charged with increasing collections on behalf of government. But when we highlighted that they have provided assurances to us that we would continue to operate under the old terms, that was remedied pretty quickly, and they've confirmed that continues to be the case. So yes, we're operating as we always have, and it certainly isn't overhang the negotiations in any way.

Are the tax and regulatory conditions in Mozambique currently stable enough to invest with confidence for the long term?

Look, Mozambique has been a great partner for us for 20 years plus. And we're one of the first renewal processes for agreements of this nature that has come up. And I think the government is trying to get to grips with social expectations, the evolving natural resources environment, the fact that they have abundant natural resources, most notably LNG offshore and trying to make sure that the nation gets a fair return from them.

For us, we certainly had good conditions in the past. Hopefully, we can reach an agreement that's fair on this occasion. And look, I think, obviously, we've invested heavily in our assets over the last number of years for the long term. We can't move the ore body. So we are going to be in Mozambique for a long time. But certainly, how we allocate capital in the future because this is hopefully the last big capital investment we have to do, how we allocate capital in the future, whether we diversify the business, whether we change the kind of mix of debt that we have versus what we return to shareholders in the way of dividends and buybacks.

All of these are questions that we will need to address. But for 2026, our objective is to keep balance sheet flexibility to, as Ben said, to progressively increase our tonnes and to get through this more difficult period in the market.

Is there a risk that ZrTi could become subject to the new mining law that imposes a raw or export ban?

Well, when Cillian spoke about other operators in Mozambique, the other operators in Mozambique are exporting heavy mineral concentrate, which is effectively an unprocessed raw material. Kenmare is the only operator that is separating the heavy mineral concentrate into ilmenite, zircon, rutile concentrates. ZrTi is just another element of that. It does attract a special tax because of elements of radioactivity in it and it attracts a tax of $30 per tonne. I don't believe that it would be subject to a ban any more than any other product and certainly, there's been no suggestion that it would be.

Demand for your new ZrTi product has exceeded expectations. How large could this product become within the overall portfolio over the next few years?

Well, look, ZrTi has historically been a waste stream. We prefer not to have it at all, and we prefer to recover more ilmenite, zircon and rutile, but you don't recover 100% of everything through your processing activities. And although we do have a stockpile that we're working our way through, I think -- and Ben can correct me here, but I think we're thinking it would be 30,000 to 40,000 tonnes per annum going forward. And obviously, if we can recover more to our primary products less than that, but that's certainly our planning assumption.

When is the transition to Nataka? And are the grades of the product better in this new location?

Ben, do you want to take that?

Yes, I can take that. So, clearly, we've been mining at WCP A a bit slower than we'd originally expected. But we do -- still expect to enter the transition channel that moves us towards Nataka, what we call Nataka proper. That will still happen this year. The transition channel, it takes about 18 months or so to get through. And then when we get into Nataka proper, we see that the grades move up to on and around 3% heavy mineral grade. And so you'll start to see the benefits of those higher grades end of 2027, early into 2028. That's what we currently expect.

Can you give us any indication of when you expect WCP A to hit design throughput rates at the target asset uptime levels? Should we expect Q3 and Q4 ilmenite output to be equal or higher output in Q4 from higher volumes of ore mined by A?

Yes. So we've planned for progressive improvements, which is sort of what we're seeing. And we are -- but we have not planned that we would now get up to full nameplate at operating rates before the end of the year. And that doesn't mean that we're not trying to do that. That's -- our goal is certainly to do that. But from a planning perspective, we've taken a slightly more conservative approach.

The goal -- the reason why we're not able to put a specific date on that is that not all of the remedies are directly in Kenmare's control. And some things have taken longer than we had expected and hence, why we gave what turned out to be an untrue capability to get to nameplate by the end of the first half of this year. So we're working very closely with the manufacturers. We've got consultants as well involved in this to try and help us move forward as fast as possible. But the actual achievement of those levels is still a little way off at the moment.

That's the final question. Handing back to you, Tom.

Okay. Thank you very much all of you for taking the time to join us today. Our next scheduled communication will be our half year results, I think, Katharine, the 19th of August...

Yes.

And we'll have a further call on those results at that time. And with that, I'd like to close the call, and thanks for your time.

Fantastic. Thank you all for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations.

On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon.

Good afternoon, and welcome to the Kenmare Resources plc Q1 2026 Production Update. [Operator Instructions] Before we begin, I would like to submit the following poll. And I would now like to hand you over to Managing Director, Tom Hickey. Good afternoon to you.

Thanks very much, and thanks, everybody, for joining us today for our Q1 2026 production update. I'm joined by my colleagues, Cillian Murphy, who's Head of Marketing; Ben Baxter, COO, who's coming to us from Moma; Katherine Sutton, who's Head Investor Relations; and off camera, I've got James McCullough, CFO as well. And while we may have spoken to you all comparatively recently following our full year results at the end of March, I think we do have some interesting and useful updates today, and we felt that it will be useful to just skip over them and take any questions people might have.

So we finished Q1 2026 a number of weeks ago. We've had some -- a good solid quarter in terms of shipments. And I think shipments is our big objective for 2026. It's a priority in terms of how we want to run the business. It's a priority in terms of managing our cash flow through what is, as we hear later and you may have heard already quite a difficult period in the market. And it reflects the fact that we do have had at the end of 2026, quite high inventory levels.

So 2026 from an operational perspective, very strong in shipments, well on track for our 1.1 million target. A little bit softer from a production perspective. As we'll hear from Ben, the completion and debottlenecking of our WCP A upgrade project, which was a huge focus last year, took up quite a bit of time in Q1, but I think we're nearly there now.

And Ben will update you on where we are with our dredges, where we are with our feed prep unit and the punch list of tasks and issues that we were addressing during Q1 and how that leaves us set for the remainder of the year. But I think on balance, we're very comfortable where we are. While Q1 was a little slower from a production perspective and by consequence, a little slower from an ilmenite production perspective, and we're still on track for our annual guidance.

Moving on to markets, which I think have been an important focus for us over the last while, following highs and highs and pricing of -- Slide 4, sorry, highs and highs in pricing in '21, '22, '23. We have seen weaker markets, and we did comment over the course of last year on oversupply in the market for most of the feedstocks that we produce. Certainly, we've seen maybe a few interesting evolutions in that area.

The ilmenite market did continue to be weak, and ilmenite, you may recall, is about 70% of our revenue. Pricing was softer as we expected, but we're certainly seeing the responses that people put in place to the current weaker market and oversupply, limiting production, managing production and indeed, some unplanned production disruptions start to take effect, start to tighten the market, not quite seeing it in price yet, but there are some interesting emerging themes, which Cillian will touch on.

The market is not just about price. It's also about transportation and logistics. And as you can imagine, we are seeing an impact on freight rates, in particular, from the war in Iran, but limited so far. And we are seeing some impact on shipping schedules, challenges in logistics, people without access to their normal ports. Nothing as you can see, that impacted our trajectory in Q1 in terms of shipping, but certainly something that we do need to keep an eye on, and we try to -- need to support specific customers on.

I mentioned that the feedstock market has seen some interesting developments in Q1. I think towards the back of 2025, we commented that zircon, which is our second biggest revenue contributor at about 20%, 25%. Zircon prices began to stable in Q4 2025. And following on from that, we've actually started to book higher prices for zircon products in the second quarter of 2026. And the industry commentators are certainly somewhat more optimistic about the trajectory for zircon prices over the remainder of '26 into '27 and beyond.

And finally, on the marketing side, you may have recall us speaking about a customer who was in financial distress in Q3 2025, couldn't take some volumes and hadn't paid us. Those were shipments to 2 plants. One of those plants has now been sold, and we've recovered $4.6 million of the $9.3 million that was outstanding. The second plant is very well advanced in the sale process. We're engaged with the potential new acquirers, and we'd be very hopeful for strong recovery there. So while there has been a delay on receipts, we're comfortable that we'll recover a significant proportion of those outstandings.

And finally, I think the biggest focus certainly from shareholders over recent months has been on the progress of our Implementation Agreement renegotiations in Mozambique. The Implementation Agreement, you may recall, is the agreement that covers our processing and export activities, doesn't impact on our mining at all. We had a really useful meeting in late February with the Minister for Mineral Resources and Energy, the Minister for Economy, the Head of the Tax Department and some presidential advisers. And I think that really reenergized the process following a period of less activity over year-end on the holiday period in Mozambique.

At that meeting, we vow to each other to do everything we could to get the agreement renewal agreed by towards the end of March. I think while we all recognize that will be a challenge, the objective was really to inject momentum proceedings. I think we succeeded in doing that. Both sides have been engaged. The engagements are constructive, and we are making progress, and we'd be hopeful that we'll see that progress realized in a near-term outcome before too long.

Now I should stress, there's no mandated time line here. We're still operating under our legacy terms while we negotiate. But certainly, there seems to be energy for this. And hopefully, we can capitalize on that to conclude the negotiations before too long.

So that's just -- there are the highlights. Maybe I'll just hand over to my colleagues now to dive a little bit deeper on some of the things that I've touched on, and I'll hand over to Ben Baxter to talk through operations.

Good afternoon, everybody. So maybe I'll just first of all start with safety and recall that we had a really good quarter. We had no lost time injuries during the quarter, and that was a good response to the end of 2024 -- 2025 when we had 2 injuries. So that we've set the year off on the right note on that front.

On mining, we were behind on the production of heavy mineral concentrate, down by 30%. And this was on the back of the lower volumes from the debottlenecking processes that took place through the quarter at WCP A. And I'll talk more about the WCP A project on the next slide.

We also saw grades starting to fall, and those grades are expected to fall as we finish the life in Namalope for WCP A and also start -- we'll be preparing ourselves into the transition to Nataka. The other element of that was that we had reduced dry mining in Q1 this year compared to Q1 last year. We are expecting to see throughputs -- sorry, grades improving and also throughputs through the rest of this quarter, and that's coming as we continue to do the debottlenecking of WCP A.

The effect of that into finished products was clear. All of the finished products of ilmenite, zircon and rutile were down relative to the HMC production as well though. And those additional reductions came as a result of some inefficiencies in the mineral separation plant. We incurred lower recoveries, and that was on the back of the fact that we had up and down feed into the plant as a result of the WCP A debottlenecking, but also we took the decision during the quarter to reprocess a former tailings stockpile. That tailings stockpile contains historical amounts of valuable heavy minerals and -- but we don't have a clear and full knowledge of the grades that enter the plant on any time.

And so hence, the plant setup was quite difficult when grades on the feed were fluctuating from day to day. The impact of all of that was more spillage. Thankfully, we were able to retain that spillage. It hasn't gone to tailings, and we will be retreating some of that spillage through the second quarter and catching up on some of those losses.

On the concentrate side, you see a significant improvement in concentrate production, up 400%, and that's because of the introduction of our new product called ZrTi. This is a product that's been introduced in the latter half of last year and we were able to make appreciable amounts during the quarter. The idea of that is that we also can improve our shipping through the rest of this year.

In addition to the reprocessing of those previous stockpiles, we were also able to dry some of the ilmenite -- sorry, some of the ZrTi, and that increases the shipping rates as well so that the material flows easily onto the conveyor and on to the ship -- through the ship loader and onto the customer vessels. That was very useful to help with the shipping rates, and that's supporting our main KPI of the year, which is to ship more than 1.1 million tonnes.

That -- and that drying process helped with one of the last shipments during the year. It's important to note that the ZrTi production that we did make was more than in the whole of last year. So this has become a meaningful part of the operating routine and will do for the rest of this year.

On shipments themselves, we were 10% down year-on-year. This is due to the balancing effect of demand and also for all of our finished product -- for particularly the ilmenite finished products, but also that the loading of ZrTi certainly at the beginning of the year was slower relative to our other products.

Nevertheless, we were successful to debottleneck -- to draw down the stocks of our finished products by about 99,000 tonnes, and that's in line with the value over volume approach where we are looking at making the right products, we're looking at converting intermediate stocks and making sure that we operate with maximum efficiency. So after all of that, we finished the end of the quarter on track to achieve the production guidance and the sales guidance or shipments guidance, should I call it, for the year.

On the next slide, we -- I'm going to just talk through the progress that we've been making on WCP A, and it's an encouraging quarter. We have all the major works complete. And the project is now essentially complete. It has transitioned to becoming an operation. And it's -- we don't have large project teams on the plant anymore. We are now fully running it with our operating crews.

The bulk of the spend is done, and we are on track to reach the nameplate capacity. We have, though, had some rectifications required along the way. However, thankfully and usefully, there are no fatal flaws in any of the process that we've been through. So we're comfortable that we are on the right journey to get to the nameplate capacity. It's just been taking a bit longer to get consistency. Those consistencies, though, are improving, and we've made some good progress through the quarter.

Firstly, improving utilizations through the solutions around dredge winch breaks that we altered the software, and we implemented cooling features to those brakes, and that's been successful and the winch breaks are no longer impacting on the utilization of the equipment. We also had an improved capacity brought to the plant by improving the tailings pump gearboxes that we now get greater throughputs out of the tailings, out of the back of the plant, and that means that that's no longer a bottleneck.

Through the -- some of you may recall that during Q4, we struggled with the outside densification of the slimes that gets produced by the plant. And this is now -- and we've had a stable quarter on that front. So we are comfortable around the densification paddock and the Tailings Storage Facility. And so that has had a good successful time.

And then lastly, during the quarter, we had a walkway turnover due to instability from the additional mass of material traveling over that walkway. And that -- those -- effects of that were rectified and those walkways are now -- have a long-term stability rectification in place. All of that's good progress, but we've been achieving more through into Q2 as well. And the dredge feed delivery has been improved on one of the dredges. And that is now in the process of being rectified on the second dredge as well. That should be completed during this month.

And then we've also been looking at how to debottleneck the amount of flow that passes from the dredge to the feed preparation part and desliming part of the new plant. This has been -- involves us building some additional equipment on the plant. It's low cost and as we've said before, is covered in the contingency of the project. And that is currently near complete at the moment. And so over the coming weeks, we expect that the debottlenecking of the plant will have been completed, and we'll be able to achieve our nameplate capacity.

And so I'm going to pass over now to Cillian to talk through the market.

Thanks, Ben. So I'm going to start with Q1, and Q1 was a bit softer for the titanium feedstock market again, really as the inventory overhang in the market continued to weigh on ilmenite pricing. As Tom mentioned earlier, this was exacerbated a bit for Kenmare as some customers were, affected by conflict in the Middle East and we saw some cancellations and postponements and that resulted in us being forced into the spot market at late notice, which probably harmed prices further. Outside of that, plus I suppose the higher freight, we haven't seen an impact from the conflict in the Middle East on underlying demand yet.

And on the other hand, what we have seen is that higher sulfur and sulfuric acid prices as a result of the war in the Middle East is supporting chloride pigment. And we've seen record chloride pigment production in China in Q1 and that alongside record titanium metal production in China in Q1, showing a recovery of demand for our products.

That, coupled with the supply curtailments that we saw in the second half of last year and unplanned ones into the first half of this year, really means that we're starting to work through the inventory overhang in the industry and seeing a tighter market. And that's flowing through to our order book for Q2. We're seeing a strong order book for our online sales and supported by both demand in the West and in China. And we're seeing that continue into Q3 at the moment with the sales that we can see.

Zircon, similar story, but a bit brighter. I think the supply curtailments have been a bit heavier on the zircon side. So while demand has been relatively steady, the reduction of supply is supporting the market. We saw it stabilize in the second half of last year towards quarter 4. And now we're seeing prices start to increase in the second quarter. And we have achieved price increases on some products. So we expect when we go to the market for all our zircon products that we'll see good traction there.

Finally, I think our new product, ZrTi was mentioned. We saw a big increase in sales in ZrTi in the first quarter, which was really encouraging to see for a new product. And that's continuing through really Q2 and through the rest of the year where we see that there is a new and really robust demand for that product. And with that, I'll probably pass back to you, Tom.

Thanks, Cillian. And look, I think this is a bit of a quick counter through what was a very interesting and active quarter for us and continues on many of the themes you've heard us speak about over recent months. But I suppose as we draw back from that, it's important to think about why we're doing what we're doing and the particular characteristics of Moma. Like Moma is a world-class asset. It's going to be around for decades and decades to come through a number of cycles. And our job is to make sure that we're positioned to navigate through those cycles with a favorable cost profile with good operational practices, and we can adapt to the ups and downs that come over that sort of period of time.

And certainly, the investment in WCP A and how it positions us for moving to Nataka is something that we're very excited about and very comfortable with. And as Ben said, the CapEx is behind us. The plant is operational. The punch list of items that we need to work through to get it up to consistently nameplate capacity is pretty much done. And I think that will see the plant well set for years and years to come.

And that will enable us to continue to generate operating cash flow to -- I suppose on those themes, some of the initiatives we spoke about in terms of reducing CapEx and managing our OpEx, I mean, we're very much on track with those initiatives in Q1 2026. We have and I see it coming through in some of the questions. We have, again, while addressing short-term issues, we have a decent position in terms of diesel stocks. We have about 90 days, albeit we are exposed to higher pricing, but we certainly have access.

And we're constantly reviewing what needs to change, what could change and how we can serve our customers better through this period of geopolitical uncertainty. But our customers are loyal. Our customers are continuing to work with us. Many of the customers we had 15 years ago are still the same customers. And even when plants change hands as they did with the customer who went into administration in Q3, even when plants change hands, we continue to work with the new owners, and we expect we will continue to work with the new owners of both those plants that have recently changed hands.

And so look, I think that's a very important characteristic of Kenmare, the stability that our contractual relationships give us and the stability that our customer relationships give us because of our long life, because of our quality. And look, I suppose while a very good partnership with our customers, we also have had for the last 20 years, a good partnership with the Mozambican government and with the population in and around the mine at Moma.

And while the Implementation Agreement has taken quite some time to get concluded, we've been reassured throughout that process that the partnership that we have is valued by the Mozambicans as well. They regard Kenmare and the President said this to me directly, Kenmare as a case study in how international investors and governments can work together in a beneficial manner. And we'd be hopeful that, that sentiment, which is easy to say, but that sentiment will be followed through on with the continued progress on the Implementation Agreement.

I think we recognize that the future has to be different to the past for Mozambique. We've made what we regard as a very fair and favorable offer. And along with that comes significant investment in the asset and in the community, which we really are anxious to embark on. So hopefully, we can get to a point where that's behind us before too long.

Happy to take any questions that people might have. And thanks for taking the time to listen to us today.

Fantastic. [Operator Instructions] I would like to remind you that recording of this presentation along with a copy of the slides and the published Q&A can be accessed by investor dashboard. And Katherine, at this point, if I may now hand over to you to chair the Q&A, and I'll pick up from Tom at the end. Thank you.

Thanks. So first question, the ongoing war is putting pressure on sulfate pigment producers' margins. How is this impacting Kenmare's pricing and volumes? And there's actually a second part to the same question, which is, chloride pigment producers seem to be relatively less affected. How is Kenmare adjusting the sales strategy in response?

Cillian, do you want to take that?

Yes, I can take that. So maybe I brushed over with that in the presentation, but it's correct in the question. The high sulfur, sulfuric acid prices are really harming sulfate pigment producers, particularly in China, but all over. And we are seeing a reaction to that. At the moment, that reaction is increasing pigment prices in China and for export. So rather than they can still get the volumes of sulfur, sulfuric acid, but they are increasing price.

And how does that affect Kenmare? Kenmare for years has been targeting the chloride pigment market more so. Our Kenmare ilmenite is very good for beneficiation, so chloride slag and synthetic rutile, which is a key feedstock into the chloride pigment market. So that is a positive for us. I think that's one of the reasons we saw record chloride pigment production in China in quarter 1. We expect that to continue. So it is boosting the demand for our products. But I think while there still is an inventory overhang, we haven't seen it come through in pricing yet.

Next question. How are you managing diesel reserves in the current environment? And there's 3 sub-questions to that. One, do you have any long-term fuel supply agreements in place? Would it be feasible to directly import diesel in collaboration with the Omani government? And is there room for a further increase in electricity usage in the MSP?

Ben, do you want to take that?

Yes. Thanks. So on the supply agreements, what we -- we do have a long-term agreement with the state fuel provider, Petromoc, and it's the situation that in Mozambique, all fuel imports come through Petromoc. On site, we operate with 2 large vessels in our fuel farm, and that's got about -- they have about 3 months of supply currently at this time.

We also operate with another 3 months of supply reserved for us in Nacala port. So that's the main way in which we are managing the fuel and how that will go forward. I'm not really aware that we have the opportunity to collaborate with the Omani government to take fuel or do an agreement with them. So I think that's something that we would take away and have a think about unless my colleagues have got a view on that.

But then maybe to answer the third part around the electricity usage in the mineral separation plant. So we have done feasibility studies for the preheating of air into our dryers, which are diesel driven, but the preheating of air to be done using electricity. So that is a project that has a decarbonization benefit for the business and would reduce diesel consumption. However, at this point in time, it has been noneconomic to deliver that project at this point.

So hasn't been pursued and is not likely to be pursued in the current quarter based on conservation of liquidity. But if the price of diesel was to increase, that business case would obviously change. So it's certainly something that is on our radar and something that we are closely watching.

Next question. Chinese artisanal miners appear to be more exposed under the current conditions. Is there any evidence of accelerated supply rationalization so far?

Maybe I'll start that, and Cillian, you can jump in. Look, I suppose the challenge with the artisanal miners that are around us in Mozambique and other territories is they're not under single ownership. They're independent entities with their own licenses and their own operating plans. I think it is fair to say, though, as the question implies that they typically don't use [Main's] electricity in the way that we do, which is renewable. They typically use diesel as their principal energy source and by consequence, will be exposed to all the movements in the diesel price over the next short while.

And I suppose the other point to emphasize is that while we export finished materials to world markets, they typically export heavy mineral concentrate that has lower levels of valuable materials plus waste matters. So effectively, per tonne of material transported, they have less value. So certainly, there are challenges here. We haven't immediately seen any impacts. But equally, these challenges from a geopolitical perspective and diesel perspective, in particular, are very recent vintage. So I think it would take a while to work through.

I mean I think in a wider sense, it's our view that at current prices, 20%, 25% of the industry cost curve is underwater, that there are a number of producers of all types not making money. And that is what's provoking some of the supply responses that Cillian spoke about. So I think pains us to say it and it's a little bit of a cliche, but the best cure for low prices is low prices.

Cillian, anything I missed there in relation to the artisanal miners?

No, I think that mostly covers it. I think it is an advantage that we are less -- use less diesel per tonne of product at the moment. And we do see that anecdotally in China. We've heard of rooftop prices, which mostly comes from Sierra Leone or concentrates containing rutile trying to push prices up. We believe that's on the back of the higher diesel costs they're incurring. So we are hearing anecdotally of that coming through, but it's nothinegative meaningful yet on the pricing.

What's roughly the anticipated impact of higher oil prices on the cash cost of production?

I can talk to that one. Hi, everyone. Look, so last year, we consumed around 18 million liters of diesel at a price of probably just short of $1 per liter. This year, with less dry mining, as Ben mentioned, we'll probably consume a bit less, so maybe around 15 million liters, thereabouts. And so look, last year, that would have made up somewhere between 7% and 8% of our operating cost base in cash terms.

And look, we would expect that diesel prices will rise. It's unclear yet to what extent that will be. But hopefully, those numbers give you something to work with in terms of what the impact might be on our overall cost base.

Next question. A few fuel distributors in Mozambique have reportedly been unable to secure inventory due to U.S. dollar liquidity constraints. Does Kenmare have alternative procurement channels to secure fuel without going through the domestic Mozambican market?

I think we've broadly covered that, I suppose, just to say that the U.S. dollar constraints don't impact on us in this particular regard in the same way as they do on others and that our relationship is directly with the state distributor. So I think we're comfortable for now with our positioning.

The question of engaging with our shareholders or others in Oman, look, I think that's -- we don't buy directly from refineries. We don't have the relevant licensing or permissions to do that. And I suspect it would take quite some time to put ourselves in a position to do that. So we'll continue to work through the channels that we're currently working through and have been for many years. And as James said, try and economize wherever we can on our usage of diesel in any event from a cost perspective.

Next question. Where can I follow live or daily prices of ilmenite and rutile? What's the best source and price link to your products?

Do you want to touch on this one, Cillian? It's a difficult question to answer.

Yes. I think, look, it's an issue with the market that is very opaque. So no one source is really that accurate in looking at Kenmare or any others. They're trying to find averages or picking a particular product at any time. But there are sources like Asian metals, which look at products into China, ferroalloy again into China less frequently, but more of a global look, people [indiscernible]. So we would be forced to use a combination of all because no one is really focusing on any singular product that's trying to take averages or trying to take one product going into a certain region. So it needs to be with an overall look at those 3 being the best.

That was the final question. Back to you, Tom.

Okay. Thank you, everybody, for taking the time to listen to us today. Hopefully, we've managed to answer your questions. If not, please feel free to get in touch. You can see the contact details there on the back slide of the presentation. Our next formal update will likely be our AGM in early May, which is normally just an update presentation plus obviously the reservations. And so thank you for taking the time, and have a good afternoon.

That's great. Thank you, Tom, and the rest of the team for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we'd like to thank you for attending today's presentation, and good afternoon to...

Good morning, ladies and gentlemen, and welcome to the Kenmare Resources plc Investor Presentation. [Operator Instructions] Before we begin, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful.

And I'd now like to hand you over to the executive management team from Kenmare Resources plc. Tom, good morning, sir.

Thank you very much, Jake, and thank you all for taking the time to join us today. I'm joined by James McCullough, CFO; Ben Baxter, our COO; Cillian Murphy, our General Manager of Marketing and Katharine Sutton, our Head of IR. So hopefully, we can cover all your questions and requests today. Look, we put out our final results today. I mean, I think it's clear that from the results and the commentary that these are uncertain and volatile times in our markets and geopolitically, we're seeing some of the impacts of that.

They're reflected in the numbers and the commentary. And I suppose against that background, it is important to control what we can, and we have a very strong focus over the course of this year on our liquidity and our balance sheet. And I suppose that's because we operate in a very -- we're operating a very long-term project. The Moma mine is a world-class asset. It's got 100 years of mineral resources. While our business can be cyclical, we need to think about the long term. We think about that in terms of our investments, such as the WCP A investment that took up a lot of our attention and time in 2025, and we continue to work on in '26.

Our partnerships, such as those with our communities and the government in Mozambique, and I'll talk about our agreement with the government in Mozambique shortly and our customers and serving our customers as we move through the ups and downs of the market is very important to us. Many of our customers have been with us for 20 years plus. So all of those circumstances mean that we're important to Mozambique. We're important to our customers. We try and do business properly. We were happy to join the FTSE4Good Index in June 2025. We believe that we're an important player in the titanium minerals market.

And while -- the market for ilmenite has been weak over recent years or falling over recent years. The market for Zircon, while it fell in '25, we are seeing some signs of stabilization, and Cillian will talk a little bit about that later. And indeed, one of the industry commentators, [indiscernible] commented last week that because of some of the curtailments and management efforts that companies are putting in, there should be a supply deficit for ilmenite this year, albeit it will be met by inventories. We're 6% of global supply. We're an important player. And just a reminder that titanium is on the critical minerals list for Europe, the U.K. and the U.S. Looking back at '25, we had a very significant investment in our WCP A project, and that's reflected in our CapEx. It's reflected in our elevated net debt.

And Ben will give us an overview on recent progress on WCPA when we speak shortly. If we can move to the next slide. I talked about our position in the market. And look, I think our position in the market and our importance to Mozambique is built on a number of foundations. A good relationship with the community, which served us very well in late '24 and early '25 when there was significant disturbance in Mozambique, and it really supported our license to operate. We've invested over $25 million into the community, into health, into small business, into education, into infrastructure. And you can see that those of you who've been to Moma can see those signs on the ground. We also aim to operate safely. We had our lowest ever all injury frequency rate in 2025.

We conducted a development project over nearly 5 years without a single lost time injury, and that was a phenomenal achievement by that team, which at one point numbered over 500 people. And we're focused and the investments we're making are to ensure we can operate consistently and at a low cost for the next decades to come, and that's why we take such a long-term focus. Having said that, in the short term, day-to-day, week-to-week, year-to-year, we need to allocate our capital efficiently. And I think as you've heard us say over the course of the last number of discussions and calls, over 2025, our net debt elevated significantly following our -- due to our capital program, ilmenite pricing was a shade weaker. And as a consequence, we're very focused on managing our costs, managing our cash, managing our balance sheet.

Regrettably, we undertook a retrenchment of 15% of our colleagues at site. We highlighted in our guidance our efforts to manage our OpEx and reduce our OpEx in 2026. We're deferring where safe to do so, nonessential CapEx. Our CapEx in '26 will be 70% lower than it was in 2025. And unfortunately, it also means that we've had to pause our dividend. We regret this. We appreciate it's important for our shareholders, both institutional and retail. It's a key focus for us to restore it as soon as possible. But our first priority is to the business, to the balance sheet to stability and to try to navigate the current challenging circumstances that our markets and the wider world finds itself in.

And I think that's what caused us to make that call. And as we go through the presentation, you'll hear quite a bit about our value over volume strategy. It's already in action. We've already started selling down some of the stocks we held at year-end. We've already shipped more of our ZrTi product in the first 3 months than we did in all of last year. So we're taking the necessary self-help measures that we can to protect our business and ensure we're well positioned for any recovery. If we move to the next slide. Just to talk a little bit about the implementation agreement.

Many of you will have joined us last week when we put out an announcement about the status of the implementation agreement and in particular, a move by the tax authorities to impose a 2.5% royalty on us, prematurely in our view because we hadn't completed negotiations around the full agreement. It's worth recalling, however, that, that 2.5% is consistent with a proposal that Kenmare made last year. So this wasn't an additional cost to us, and it is accrued in our financial statements. It was more the consequences of what additional or further implementation might impose that cause us the announcement. I should say that there's been no other moves towards implementation. Discussions with the government are ongoing.

The President, indeed, both on the 2 occasions I met him last year and when he was in Brussels last week with the EU spoke positively about Kenmare, positively about our contribution to the country, positively about their intention to renew the license. And indeed, while with the EU and while facing quite direct questioning on this issue, commented that he expected the issues to be resolved soon without reference to arbitration. That would certainly be our hope, too. We've made progress since our meeting in February. We've made progress over recent weeks.

We believe both sides are still focused on a negotiated outcome. And obviously, the -- as we go through those discussions, there are some adjustments and amendments to proposals that are as are normal in an ongoing negotiation. And while we have energy and focus on it, we very much would like to conclude it because obviously, this has been going on for quite some time. And that in itself creates concern, creates uncertainty and creates challenges for all our stakeholders, whether they be shareholders, lenders or government themselves.

Look, we've talked quite a bit about what our remedies are should we not reach an agreement. Arbitration is still on the table if we can't reach agreement, but we're very much focused on avoiding that, very much focused on harnessing the energy that we've generated over the last couple of weeks and hopefully getting to an agreement, but we're still not there.

So with that, I'll hand over to James, who will run through the financial performance of '25 and some of the wider themes that will have been reflected in the numbers overnight.

Thanks, Tom, and good morning, everyone. Thanks very much for joining. Look, starting off just looking at pricing. So you'll see the sort of the downward trend in pricing of recent years continued into 2025, ilmenite pricing was down 6% on average and Zircon pricing down 15% on average, which led to a 6% reduction in our average price received was a slight improvement in product mix. We sold a little bit more Zircon last year than the year before. As that translates through to revenue, our sales volumes declined by 13% go through some of the rationale for that shortly, but that was mainly in the ilmenite space.

So we were down 17% on ilmenite volumes. Zircon, the higher-value product was roughly flat year-on-year. But the combination of those lower ilmenite sales and lower prices contributed to a 20% drop in revenue versus 2024. That feeds through then to EBITDA. And look, our unit costs increased by 11% during the year, and there was also some other sort of noncash items, provision for sales to a customer who didn't -- who was in financial distress last year and some other noncash items. And that contributed to EBITDA of $58 million in the year versus $157 million the year before. Looking and then ultimately resulting in a loss after tax of $24 million.

Looking through on CapEx, a big year for Kenmare on CapEx. So the $205 million was split between development CapEx around $156 million and sustaining at $49 million. $156 million was on the WCP A project. And the $49 million sustaining was a relatively high year for sustaining capital. That included around $8 million on dry dock of one of our transshipment vessels as well as costs related to the SMO, the selected mining operation and some electrical installations. So a reasonably big year for sustaining capital. Look, the impairment charge for the year, $301 million, just over the $300 million that we had guided back in January. This is majorly market-driven and driven by sort of weakening price outlook as we shared at the time. There's also been some adjustments to costs.

And Tom referenced some of the sort of anticipated changes in the IA terms that are reflected in that number as well. But the vast majority of that number is really related to weakening pricing expectations versus where we were last year. Net debt, look, that CapEx peak and the weak market contributes to net debt of $159 million. There was around $49 million of cash that offset around $206 million or $205 million of total debt, including accrued interest. We expect net debt probably to stay around these sorts of levels for the year, given the weak pricing outlook. we did, as disclosed previously, secure a waiver with the lender for our covenant levels, so from 2x to 3x. So we're comfortably within that level for 2025.

And as discussed in the -- or as disclosed in the statement this morning, we're in ongoing discussions with the lender group around appropriate covenant levels for 2026. I'll touch on that again shortly. As Tom mentioned, we've made the tough call to pause the dividend for 2026 or 2025 full year rather. Next slide, please. Just looking briefly at the income statement, and you can see the drop in revenue as discussed and cost of sales broadly flat. Net finance costs, I suppose, and tax are probably the key things to touch on here. The finance costs are obviously higher given the higher debt that we're carrying. And look, the tax in the income statement relates to tax that we pay at our mining company, [ KMML ] where our profits are based on a cost-plus basis. So notwithstanding the loss at the company level, there's still a tax charge at the sub level. And just the chart on the right gives some indication there of the product mix change, 2025 versus the prior year.

So you can see a slight increase in Zircon content and a decrease in ilmenite and that's what's given a little bit of support from a mix perspective. So, just a little bit deeper dive on some of the individual line items. So on the revenue side, shipments were down 13% in 2025 versus '24. The main contributors to that were the dry dock for one of our transshipment vessels, which took one of those out of action in the middle of the year. That was anticipated and weather was worse than anticipated, particularly in H1. And then we had a customer who wasn't able to take its volumes in Q4. So that all contributed to a 13% drop in shipments. As I said, that was really in the ilmenite space that we felt that. That's contributed to higher inventories. So I'll touch on that when we get to the balance sheet, but we are actively working those inventories down at the moment.

And then pricing, as I mentioned, ilmenite pricing average of $276 per tonne, so that's down 6% year-on-year and Zircon down to $1,173, down 15%. But with that slightly higher Zircon content, the average price was down 6% to $338 per tonne. Looking at the cost side. So cost of sales broadly flat, a little bit down at the top of the chart. Administration expenses were up. There's a couple of things just to note in there. One is that the charge this year for 2025 includes that provision for sales to the company that went into financial distress as well as some other noncash items. And the comparator year, the [ $6.2 million ] there was reduced by the proceeds of an insurance claim of around $3.3 million. So adjusting for those things, kind of it was broadly flat year-on-year.

Looking at the total cash operating cost line, again, pretty flat year-on-year. In terms of direct costs, we saw an increase in labor costs of around $6 million a year, driven by -- part of that was the retrenchment program that Tom mentioned, but also higher wage rates and some other factors feeding through there. That was offset largely by lower fuel costs, so lower consumption of fuel and lower fuel prices. And there were some minor adjustments in -- or minor changes year-on-year in the other areas, but broadly sort of flat in terms of direct costs. Indirect costs were up slightly. The IFZ royalty that we've been paying. So historically, that's been at 1% in 2024 rather it was at 1%. We've been accruing at 2.5% as we disclosed previously, in light of our expectation that, that is the royalty that will be applied when the IA agreement is finalized.

And that contributed around $4.9 million to indirect costs. There were some other areas of indirect costs where we managed to make some savings to keep indirect costs up around $3 million. And looking at that at a unit level, obviously, the lower production volumes, 10% lower production volumes year-on-year notwithstanding the flat cost at an absolute level led to an 11% increase at the unit cost level. And then adjusting for co-product revenue and looking at it just on an ilmenite unit cost basis, there was a larger increase, up 32%, and that's really driven by both the lower co-product pricing, but also the lower ilmenite production. So look, at the total level, we have at least addressed the rising trend of costs over recent years.

I think we've started to see some of the actions that we're taking on costs coming through, and we've guided for 2026 an approximate 10% reduction in costs. We look just at the cash bridge, really sort of seeing capital -- CapEx and dividends being funded by operating cash flow plus working capital and obviously, the debt facility that we have. And CapEx really is the main feature here, $205 million last year. Our guidance for this year in total is $60 million. So expect to see that orange bar shrinking very rapidly. That $60 million is split between kind of -- or rather development CapEx of $30 million and sustaining capital of $30 million, and that development CapEx is very much sort of front-end weighted. We've made sort of good inroads in that through Q1.

So kind of obviously continuing to focus on sustaining capital and where we can optimize that as well. End of the year, as I said earlier, with a net debt position of $159 million. If we move just on to the balance sheet. You'll see the reduction in PP&E, property, plant and equipment. That reflects the impairment, obviously, CapEx spend as well. So the CapEx additions, less depreciation, less impairment ultimately reducing or resulting in that reduction to $877 million. Inventory is very flat and inventory volumes were actually up about 20% year-on-year in terms of finished product, but the value of those tonnes was down about 20%. And so overall, a flat inventory line. Trade and receivables down considerably from last year. Again, there's kind of a portion of that that's related to price. Volumes in terms of sales included in receivables dropped from around 205,000 tonnes down to 109,000 tonnes.

So part of that is related just to lower volumes overall. And then the value of each of those tonnes dropped from sort of $455 a tonne down to $399, so resulting in that outflow from receivables. And then in the creditors and provision line, look, the increase there from 2024 is mainly related to CapEx accruals and payables. So closing cash balance of around $49 million. The net current assets piece in there is quite important, net current asset position when you take account of the receivables and the inventory, we're in a strong position from that perspective. So more than $150 million of net current assets. The covenant levels touched on that earlier. So we secured with the lender group a covenant reset for net debt to EBITDA from 2x to 3x for 2025.

And look, we're in discussions with lenders at the moment on what appropriate levels for 2026 will be. As we've said previously, we are very closely engaged with our lenders. They have been very constructive and supportive to date, and we have no reason to think that's going to change. But with the uncertainties that Tom referenced in terms of what's happening with the IA as well as what's happening in the market, it does lead to some uncertainties in terms of the financial projections for the business over the course of the next 12 months. We don't know yet to what extent the terms of the internal resolution will be imposed. And depending on whether there is any further imposition of that, that could have an impact on our financial position during the year. That's reflected in our going concern statement, which is included in the release, the prelims released today.

The going concern statement reflects that through a statement of material uncertainty, which is really recognizing what we, as management has disclosed and the auditor understanding that to say that subject to the outcome of those discussions on the IA, as well as other general risks around market and geopolitics, et cetera, that we're facing and other companies are facing, subject to successful outcomes on these things and the going concern statement is signed off. Moving on just to the final slide in that pack. The -- look, Tom has already referenced the pause in the dividend, a very sort of tough decision to cut the dividend, not taken lightly. Obviously, in the context of the levers that we have to manage liquidity, this is one. We pulled many, and we pulled this one reluctantly. We do have confidence in the long-term cash-generating capability of the business. And as Tom says, we'll look to resume that as and when we can do so.

I'll pass back over to Ben.

Good morning, everybody. I'm going to take us through the operations update, and I'll start off with explaining some of the meaningful achievements that we had during the year around sustainability. Firstly, on health and safety, it was a very good year. Overall, we've reduced our lost time injury frequency rate by 30% over the past 3 years. And in fact, in 2025, this was our best ever year around all injury frequency rates. And as Tom referenced, that is remarkable, particularly in light of the fact that we had a development project with more than 500 contractor workers on site at one point, and that whole project was delivered without any lost time injuries.

On communities, we have now 80% completed the development of a hospital, a regional hospital to support the clinics, which we have 3 clinics that we have in and around the mining areas. And we're also now seeing the benefits of the Titan -- the Topuito Technical College, which is now delivering graduates that are available for recruitment into the business. On the environment side, a major initiative for the year was to focus on recycling and composting and more than 60% of the waste that we generate at the mine was recycled. This is expected to continue to improve through 2026. And that's giving us a lot of advantages, not only from an environmental perspective, but also the capital profile means that we don't -- we will not need to extend our landfills in the years to come.

Organic waste is being successfully taken through to the rehabilitation process as well. We remain a trusted business in Mozambique. We have, again, remained the most transparent extractive industry in Mozambique and also we entered the FTSE4Good Index in June of last year. Moving on to the production side. 2025 was largely impacted by the WCP A upgrade, and that meant that HMC production was 15% down year-on-year due to the lower mining rates. The good side of the mining side was that we introduced the selective mining operation, and that was commissioned through the first half of the year and delivered very well in the second half of the year and met its 50,000 tonne heavy mineral concentrate [ call ]. And we see that positively and developing SMOs this year for the future as well.

On to finished products. The ilmenite and Rutile were impacted particularly by the heavy mineral concentrate production being down, and we achieved a revised guidance level on those products. However, on Zircon, we were able to maintain our original guidance level, and this came because of very good recoveries in the mineral separation plant as well as the drawdown of some intermediate stocks. And then particularly on good news around guidance was that we materially exceeded the guidance on concentrates after we successfully introduced a new product called ZrTi into our sales mix.

And this material has been well received by the market, and I'll talk some more about that in a few moments. The ability to draw more from the HMC that we had and the stockpiles meant that whilst the HMC process was 16% down, the actual finished products was only 10% down year-on-year. If we look at shipments, as James mentioned, we were 13% down year-on-year due to poor weather conditions in the first half of the year. And then our Peg transshipment vessel was required to go for its 5-yearly classification recertification process in the dry dock, and that took place between June and September.

This meant that we had finished product stocks rising in the second half of the year, and that means that we start this year with a guidance level of exceeding more than 1.1 million tonnes of shipping, which was a 15% increase expected this year compared to last. Maybe to discuss a little bit of the year-to-date 2026 performance and our value over volume strategy is being prioritized. The first area of that is the destocking of the finished products that we have. And year-to-date, our shipping is consistent with that run rate of 1.1 million tonnes. And so we are unlocking the value of those finished product stockpiles. Some customers, though, are struggling to coordinate both their shipments due to the market or to the geopolitical volatility that we're experiencing.

And this is where the flexibility of ZrTi is helping us we're able to sell more of that material and offset the effect of the -- of that volatility. And in fact, as Tom mentioned, our ZrTi sales so far this year are in excess of all of what we did last year in 2025. The other aspect of value over volume is around focusing on the product mix to extract the higher-value products. And with production being lower due to the WCP A commissioning process and at a time when ilmenite markets are weak, we've been focusing on getting the most zircon products out that we can. This is helping us to offset that weaker ilmenite pricing environment. And so during the year -- so far this year, we've been reprocessing former tailings and intermediate stocks to increase the high-value, high-margin Zircon products.

On the ilmenite side of the business, we have spare capacity. And so we've been using that time in the ilmenite circuits to dry ZrTi. This means -- this allows us to ship more of it because the loading rates traditionally so far with ZrTi have been slower than on other products because the material is stored outside and is moist. By drying it, we can get the efficiencies up and get more ZrTi transhipped. And that means that overall, we're on track to achieve our 2026 guidance on all of the metrics. I'll move now on to the capital projects update, and that's on Slide 20. And really, the year has been -- was about WCP A upgrade. And right now, we're focused on consistent delivery at WCP A. You'll recall that the majority of the plant at WCP A has been replaced. And so we have new high-capacity dredges, a new feed preparation unit, including desliming and the tail storage facility that's fully in place.

And all the major construction and installation work is now complete and is fully handed over to the operations team. This means that now what's happened over the -- since that commissioning started in Q4 last year, we have experienced some commissioning challenges, and that took place last year, and we've had some that rolled off into the first quarter of this year. However, what we can say now is that WCP A is regularly operating at the nameplate of 3,500 tonnes an hour. There have been a set of low-cost rectifications completed using the budget, the existing budget for the project and the contingencies therein.

And we now expect to see consistency in the short term. Things that have been taking place are around Winch brakes. We've had software changes, cooling improvements. We've done pumping improvements, both in the desliming circuit, which will be taking effect at the next planned maintenance in April. And on the tailings side, pump upgrades of gearboxes, particularly to increase the capacity of removing the tails to the tail storage facilities and of course, tail features. On the outside, the densification challenges that we had previously discussed have been resolved, and we've had a stable outside slimes management situation throughout Q1 with no impact on production.

We did have a walkway event during the first quarter of this year, where we lost some production time due to the turning of one of the walkways. This -- this work, we decided to do some long-term fixes on that rather than a temporary fix. And so we did lose some production time, but the stability of those ways has now been rectified and that sets us up well for the future. On to Slide 21 and to look at the project costings. The project is materially derisked now. And yes, we spent more than 80% of the project capital during 2025. The budget remains $341 million, and we're inside of that with unallocated contingency.

And as I said, all of the rectification measures that have been undertaken through this commissioning process have been captured within that capital cost estimate. By the end of the year 2025, we'd spent $270 million cash with $12 million incurred. And that $12 million is included in the $30 million that we expect to spend in 2026. The tail of the project is in total is $70 million. So $30 million of that this year, $40 million of it thereafter. And it's quite a tail because it reflects the fact that we will only purchase the infrastructure requirements for Nataka ore body at the time when we need them down the track. And so this tail is quite long.

As I said before, though, the project is fully -- the project team is fully demobilized -- all the further works will be handled internally by our in-house projects team. And so the main project is essentially now being closed and it's being closed on budget. The effect overall on CapEx, as you see, as we come off that large spend of last year, it was $205 million all in, including sustaining CapEx last year. So $205 million is being reduced to $60 million this year. And so you'll see that the intensity of our capital spend is significantly rolling off.

And with that, I'm going to pass over to Cillian, who's going to give us the market update.

Thanks, Ben. Good morning, everyone. So I'll start on Slide 23. And look, what you can see clearly is that 2025 was a challenging year in our product markets. While demand for Kenmare's products and our volumes remain relatively robust, the overall market did weaken really for a combination of reasons. On the demand side, we saw slow markets -- slow housing markets in really major economies and no recovery there. And on the supply side, we saw the continued growth of concentrates and supply in China domestic material, which led to an oversupply, particularly on ilmenite, but across all the markets.

This flowed through to a 6% decrease in our average price received that you can see in the graph on the top left. Through 2025 and really in the second half of 2025, we started to see a supply response, and this has had an initial impact on zircon. So towards the end of the year, we did see zircon prices stabling and I'll talk more towards what we're seeing in early '26 on that one. I think James touched on one of our customers entering financial distress. So I think on a positive note, we have seen good progress towards recovering some of the value. We had 2 shipments outstanding, but the shipments hadn't been touched and we retained title.

So we've now, I think, received payment for one of those shipments, which for a value of $4.6 million, and we're in the process of arranging to retake control of the second stockpile, which again has not been touched. Move to Slide 20 -- Slide 24, please. So just going a bit more into the detail of what we saw in 2025, particularly in the ilmenite market. It was a continuation of the shift we see towards China in our markets, both on the supply and on the demand side. So on the supply side, we're seeing it in 2 places. We're seeing concentrates produced in Africa, Australia shipped into China for -- to produce finished products there. And we're also seeing ilmenite produced out of iron ore mines in China, both growing and both remaining mostly captive in China, but impacting the global market. So we're seeing strong growth there. I think on a positive side, we have seen a response from the Western producers. I mentioned on the Zircon, but all of those mines carry with it ilmenite as well and Kenmare is doing similar, too.

And then we've seen unplanned curtailments to as a result of a couple of disruptions to operations, and that is having an impact on the market. On the demand side, I suppose the structural shifts, really, you can see it in the graph on the bottom right. pigment growth in China is the pigment production growth in China is the green columns, and it's growing significantly faster or it's growing and the orange is depleting. So we're seeing that shift towards China. And when we look at where the new capacity is still being built, it's still in China at the moment. So we expect that to continue. But that's not necessarily a negative thing because chloride is taking larger market share there and that domestic ilmenite can't be used there. So it's a big market for Kenmare and chloride is taking a bigger market share, which is a positive for Kenmare.

Finally, if we look to '25 and an outlook for the year 2026. I think the market has started the year on a soft footing, and we expect, I think, prices in '26 to be lower than '25, particularly on the ilmenite side. And we've seen that in Q1, a significant decrease compared to what we saw in the second half of last year. That's partially a result of cancellations or postponements to shipments that we saw in the first quarter, which resulted in us having to go to the spot market with late notice and therefore, didn't achieve the same prices we were expecting.

Despite that, we did find markets for that. We continue to see strong demand for our products. And I think the 2 graphs show why chloride pigment continues to grow. Last year was a record, and we've seen more capacity being added already this year. And titanium metals continues to be a strong part where we actually grew our sales there on a percentage basis despite slight pullback in overall demand there last year, and we see that continuing this year, too. On the Zircon, I think we are starting to see the impact of, I think, controlled responses from producers and outages as a result of production issues. We have seen the prices stabilize since the second half of last year, particularly Q4.

And now we are seeing price increases announced in Q2 for our Zircon products. We've already agreed a price increase on one of our products for Q2. So that's a more positive outlook there. Finally, to touch on ZrTi, I think Ben mentioned it, we are seeing a strong market for that. In Q1, we sold more than we sold full year last year, and we are seeing strong inquiries for Q2 already. This is linked to the high TiO2 ilmenite that's contained in it, but also the rare earths that are contained in that product as well. So that's leading to, I think an encouraging outlook for that product. With that, I'll pass it back to you, Tom Hick.

Thanks very much, Cillian. And maybe just to summarize quickly, I mean, obviously, we've gone through quite a lot of detail today and kind of highlighted the actions we're taking to address where the market is now and position ourselves for the future. Our guidance reflects that, too. As James Cillian said, we're on track from -- in our shipments in the first quarter to achieve the guidance level. We're working hard to control our operating costs and manage our day-to-day exposures and optimize our balance sheet.

We're seeing some positive developments around ZrTi demand, which I think we kind of anticipated last year, and we're already seeing it in Q1 this year. And Cillian just touched on where the zircon market is early days, but certainly some green shoots there, too. If we move to the next slide. I mean, I probably talked to this at the outset, but it bears repeating. Like many in the industry, Kenmare is taking all the self-help measures that it can to ensure that it retains financial flexibility that it retains a strong balance sheet, that it achieves its objectives to sell down inventory, that it keeps positive customer demand. and relationships and that it can adjust to whatever the recent volatility throws at us.

For example, we have one customer in the Middle East who has challenges accessing their port at the moment. We'd like to make sure we can supply them, and we'll try and be flexible to ensure we do that. But there probably will be 1 or 2 surprises arising from the current geopolitical uncertainty, and we're trying to position ourselves to adapt to that. Reducing operating costs. We're managing our CapEx. We regrettably undertook a retrenchment and equally regrettably have had to suspend the dividend, albeit hopefully not for too long. We're working very hard to make sure that we can operate -- that we're operating in a stable manner, in an orderly fashion and making the best use of the resources that we have. And I suppose why are we doing that? If we go to the next slide, because we've got a world-class asset. We've got something that's going to be here producing into the global TiO2 market for decades to come.

And our investments are intended to support Kenmare to do that. Our investments are intended to support Kenmare to do it in a cost-effective manner. And while the best cure for low prices is low prices, we are seeing -- starting to see some producer stress. We are seeing some curtailments, some voluntary, some unfortunately involuntary. And hopefully, we'll start to see the effects of all that pain reflected in a more stable market before too long. Gratifyingly, our customer base has stayed stable.

The demand for our product is strong because of the quality and diversity of them. And Cillian and his team are working hard to make sure that we're taking advantage of all the shipping opportunities that are available to sell down our stocks. We're working hard with our local community to maintain our license to operate, and I think that's been one of the things that distinguishes Kenmare. And as we have been for quite some time, we're working with the government to try and ensure a positive and negotiated outcome to the implementation agreement. Just to stress that while we have had some announcements on that in recent weeks, and we are making some progress, there is no firm time line for that. So we can't give a specific time line, but we do hope like the President that we can do it quite soon.

So with that, we will turn over to Q&A. Katharine will run us through the Q&A, and thanks for your time and attention.

[Operator Instructions]

I just like to remind you that a recording of this presentation, along with a copy of the slides and published Q&A can be accessed via your investor do. As you can see, guys, we have received a number of questions throughout your presentation, and thank you to all of those on the call for taking the time to submit their questions. But Katharine, at this stage, if I may just hand over to you to chair the Q&A with the team. And if I pick up from you at the end, that would be great. Thank you.

Thanks, Jake. So the first question comes from Colin Grant of Davy. What percentage of global ilmenite production has now come off stream following production cuts and other issues experienced by producers? And how do you expect this to evolve in 2026?

Think maybe, Cillian, if you want to talk to what you're seeing in the market in terms of reactions or behaviors to manage production, and we can take it from there.

Yes. Thanks, Colin. I think probably at the moment, it's somewhere in the 5% to 10% range. That has come off and we're towards the upper end of that. And look, I don't think we see any of that supply coming back on in the short term. So we don't think the full impact has come through yet. We don't think the market has fully accepted all of the recent issues either. So we do think that is going to really firm up the market because it's a lot of supply coming out, and we'll see that develop through 2026. And that's, I suppose, aligned with what we're seeing in Zircon.

Next question also from Colin Grant of Davy. What do you believe is the cash flow breakeven ilmenite price for the market in aggregate today? And how has this grown over the last several years given inflation?

James, do you want to chat through that? I mean it's obviously a movable feast, and it depends on the actions of others as much as ours, but it's probably worth just talking through what we've done.

Well, so I think the question specifically is around what's the breakeven price for the market. And North of here, I think Colin would be clear based on the amount of capacity that we're seeing coming out of the market. Look, I know TZMI is sort of the author of record in this space. I think their latest cost curve, which is based on 2024, which show the sort of the last 20% of that being up north of [ $250 ] per tonne certainly. And if I look at that cost curve, and again, this is based on old prices or old costs rather, which have probably gone up. Certainly, a good chunk of the market would be underwater at the moment. How has that gone over recent years? I think it's -- I think the cost curve has steepened a bit. And if I look back over historical versions of that, the right-hand, 20% of the cost curve probably still in that range of high 200s into low 300s. But more in the middle of the cost curve, probably increasing as well to get an overall steeper cost curve and reflecting, I suppose, just cost escalations.

We now have a few questions from Richard Hatch of Berenberg. First question, you could have paid a very modest dividend rather than fully halting dividends. Are you paying dividends under your debt covenants or other covenants?

Maybe it's a big step to pause the dividend. I think we do have distributable reserves. So technically, it would be possible for us to pay a dividend, but I think we're very conscious that with the level of uncertainty out there at the moment around market pricing, around the implementation agreement, albeit we're making progress and around what the impacts of the current geopolitical environment are and for how long we might be feeling them, we felt that it was necessary for us to be pulling every lever to preserve cash and to manage our liquidity.

And so the -- and look, to be frank, we're also, as James will run through, we're talking very regularly to our lenders about what the best path forward is. We got a covenant waiver for 2025. And certainly, their opinions are important to us for 2026 as well. What I'll say on before handing over to James is we do want to resume dividends as soon as possible. It has been something that we've been very committed to and very proud of in the last 5 or 6 years. So this is -- while we recognize it's a big decision, it is one we took with reluctance.

Yes. Thanks, Tom. Richard. Yes, I think Tom has covered most of it. Look, the very specific answer to your specific question is, yes, there are distribution covenants within the RCF that we have. And like all parts of an agreement, they're subject to discussion and subject to waivers and consents and that sort of thing. So it's not as black and white as just it's written down, so it can't happen. But I think in the context of where we are with already having had covenant relaxation into the year-end and all the other levers that Tom has talked about, I think it was prudent to take this approach.

Next question from Richard Hatch. I back out a concentrate price of around $230 a tonne. Is that a fair assumption to use for 2026?

Cillian, do you want to touch on that?

Not sure I fully understand the question. If that's a question towards what price you think the concentrate producers are shipping to China or...

Our concentrate revenues as a whole, I think it's less.

Okay. So when we talk about concentrate, so there are a few different things in there. ZrTi will become dominant just purely because of the volumes of it. So I think that would be in the right ballpark for ZrTi, but the other -- those 2 concentrate products we produce will be higher than that.

Next question from Richard Hatch. Can you comment on the scale of artisanal mining by Moma and how this is impacting the broader market?

Maybe I'll start that and Cillian, you can jump in because the impact of concentrate mining in Mozambique and elsewhere is something that we spent a lot of time looking at. Those of you who visited site in recent years or indeed in recent weeks will have just seen with your own eyes the many plants that are there. And we know that the aggregate concentrate production in Mozambique is equal to or potentially marginally even ahead of what Kenmare are doing. I think the point is more the trends of that production and what type of ore they can mine and by consequence, how long that production will stay on for. Cillian, anything else you want to add?

No, I think you're exactly right on scale. I think when we look at last year, Mozambique as a whole in terms of finished TM product, it was probably very similar to Kenmare and how it's impacting on the market. It's because there's no MSPs with their operations, it's all in China. It's all in the spot market and it's sitting there. So that's what I suppose is weighing particularly on price at the moment. So they do have an outweighted impact on the pricing in the market at the moment.

Next question from Richard Hatch. Slide 13 says $10 million of PP&E accruals for 2025. So is cash CapEx for 2026, $70 million, $60 million plus $10 million?

Again, Richard, No. So the guidance on debt CapEx of $30 million includes the rollover of actually $12 million from 2025. So the new spend to be incurred is closer to $20 million on the DevEx side. Sustaining capital of $30 million, so total cash capital guidance of $60 million for the year.

Can you guide us on the cost of your covenant amendment, i.e., the fee you have to pay to your lenders?

Yes. So look, we've had one covenant amendment so far, and there's been no fee. And the lenders, while we do get on well with them and are very constructive, they do take their pound of flesh. We pay them a not insignificant amount in terms of interest and other fees. But remains to be seen as we continue the discussions over the course of this year, what that might come out at. But to date, it's been immaterial.

Next question from Richard Hatch. Can you give a steer on year-to-date moves down in ilmenite prices and what kind of price increase you're expecting in Zircon in Q2?

Yes. So I don't think we can fully guide on the ilmenite price, but I think it's linked to the last question I answered on concentrate and the fact that we've had those cancellations and postponements of shipments has led us more into that spot market. That spot market is at lower price than -- I suppose that spot market in China is at lower prices than the Western market. So it's kind of the double effect there. But there would be a bigger move than we would have seen from H2 to H1 last year with some context. And then on Zircon, there's price increase announcements being put out in the range of 5% to 10%, but we see different in different markets, but closer to the 5% range.

Final question from Richard Hatch now. What is your understanding of global stock/inventories of ilmenite?

Yes [indiscernible] I think I talked exactly about that last week.

Yes. I think we don't think ilmenite inventories are high throughout the world as a whole, but they are -- there are stocks of either HMC or ilmenite in China, I think, would be where we could see some stocks. And when you look at the impact of the reductions in supply, whether intentional or not, we think that would -- like I suppose, [indiscernible] might talk to it and we would agree that it would take down the majority of those stocks through the year. So we don't see it with a lot of our customers, but where we do see it, we think it will come down significantly as a result of these stoppages this year.

Next question. What is the outlook for the pricing of ilmenite over the next 1 to 5 years?

Yes. I can start that and maybe Tom jump in when you add. But I think we said '26, we expect to be lower. I think maybe to the question James answered earlier about costs, we think a large portion, 25%, 30% of the market of the supply in the market is at or below cost at the moment, which we don't think is sustainable. So we don't see the current prices as sustainable. And as a result, we are seeing a supply response at the moment. I think that points really to that. So we would expect to see improvement in prices as a result of that.

And then on the demand side, I think we do expect to see a demand pull. We haven't seen growth from the major economies, major housing markets in 4, 5 years at this stage. We don't think that can continue for the next 1 to 5 years in that period. And India continues to be a strong growth market. Metal continues to be a really good market for Kenmare, but also for the market as a whole. It's growing very strongly. So we do see reasons for demand pull. We don't think supply can continue at these levels. So we would expect to see prices increase following, I think, a weaker '26.

Yes. Maybe the only thing I'd add to that, thank you, Cillian, is if prices are too low for existing producers, then they're certainly too low for new projects as well. I mean we're nowhere near incentive pricing for new projects. So the prospect of material incremental supply from non-Chinese projects is certainly likely lessened. And look at one point we perhaps didn't make earlier on the artisanal mining in response to Richard's question is, it's very clear from the nature of the equipment and the nature of the processes that they use that they can only mine the simplest, least complicated free flowing sands, which is not every ore body. And at some point, I don't think it will fall off a cliff, but I think at some point, that production will top out, start to stabilize and fall as those simple ore bodies are exhausted.

Next question. In the event that there is a need to go to arbitration, how long will that process take? And is the arbitration immediately binding? Or is there an appeal process? In essence, in a worst-case scenario, over what period of time could the uncertainty over the implementation agreement continue until the final resolution is reached?

Thanks. I'll take that. Look, if there is an ETO arbitration, as we said, we hope there isn't, but we have to be open to the possibility. The arbitration process itself could take up to 2 years. It would take a couple of months to constitute the arbitral panel. And at that point in time, we could apply for what's called interim measures, which effectively, if granted, would bring us back to the status quo of operating under the old terms, and that would be our application. And then you would go through the arbitral process in the normal course. And look, we think this will be a conventional commercial dispute. We certainly at no point in any of our discussions with the Mozambican authorities would have we discussed anything other than continuing to operate in the normal course.

So when we get to the arbitral outcome, the parties have agreed that arbitration is the route that they will use for dispute settlement that arbitration will be in Washington under ICSID rules and the outcomes will be binding. And so obviously, we believe because of what our agreement says that we have a very strong right to renewal on the same terms. We voluntarily offered significantly better terms. We believe the government is aware of that position, and we're hopeful that arbitration is a consideration, but no more than that. But that's likely what would happen if we do have to go that route.

Next question. You say ZrTi is higher value and you imply those concentrates contain REEs, rare earth elements. Is that true? And is that rare earth element monazite?

Cillian, do you want to touch on that?

Yes. So on the monazite, yes, it is true. So this product contains small amounts of monazite. It's a low concentration, but we get value for it. And monazite is about 60% rare earth elements contained within the monazite. So you separate out that monazite, leach it and then you get your rare earth concentrates effectively. So ZrTi is sold gaining value from those rare earths. But just to say, it's not higher value. It's not a higher-priced product just to correct that.

Yes. But maybe the thing to say is it's a value to us because previously, it was a waste stream, which we didn't sell at all generate revenue from and have to incur cost to dispose of. So that's probably what we talk about as high value. It's margin enhancement that we haven't previously pursued.

That was the final question. So handing back to you, Tom.

Thanks very much, everybody. Thanks for your time. We appreciate it's been quite a long call. If you have any follow-up questions, please feel free to contact the team. We will be doing our Q1 production update mid- to late April and look forward to seeing many of you over the coming days as part of our road show. If anybody would like a meeting, please reach out. But thank you, and good day to everyone.

Perfect, guys. That's great. And thank you for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback. On behalf of the management team of Kenmare Resources plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.

Good afternoon, ladies and gentlemen, and welcome to the Kenmare Resources plc Investor Presentation. [Operator Instructions] Before we begin, we would like to submit the following poll. If you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the executive management team from Kenmare Resources plc. Tom, good afternoon, sir.

Thank you very much, and thank you all for joining us today, taking time out from watching Donald Trump and Davos. I didn't think I'd be clashing with him, but I am glad to draw some sort of an audience at least. So hopefully, we can give you a good update on our Q4 performance and 2026 guidance that we released this morning.

Just as a quick reminder, and I'd encourage you to read the disclaimer that is included in the presentation. But just as a quick reminder of who Kenmare is and what we do, Kenmare is the owner and operator of the Moma Titanium Minerals Mine in Mozambique. We've been in Mozambique for nearly 40 years. We've been producing in Moma for just over 18 years. And Moma is a unique resource. We have close to 100 years of mineral resources at the current production rate.

So when we make investments, when we think about the business, we always think about it with the long term. And I suppose if you're thinking about the long term, you have to be thinking about the communities and stakeholders that are around your mine and make sure that they respect you as a good neighbor, a good corporate citizen and somebody who attempts to leave a better environment and a better economy than you discovered a number of years ago.

And certainly, Kenmare makes a very significant contribution to the local and national economy in Mozambique, and we're about 6% of Mozambique's GDP and the biggest employer in the Nampula province where we work.

And that plus our low carbon footprint and strong attention to sustainability means that we became a constituent of the FTSE4Good Index last year, which I think was very pleasing for us. And it's, I suppose, part of the foundation of our long-term tenure in Mozambique. And many of you may know that we've been working with the Mozambican government to extend one of our most important agreements, the Implementation Agreement over the course of 2025. And hopefully, we'll get that done in 2026.

From the Momo mine, we produce titanium minerals, ilmenite and rutile, which are key materials in the manufacture of paints, paper, plastic and titanium metal. We're the biggest vendor of ilmenite in the world into open markets, and we're about 6% of global supply. And I suppose as we hear a lot about rare earths critical minerals, titanium is on the critical minerals for Europe, the U.K. and the U.S. I think that is very good for us in the long term.

I think in the more recent short term, the market into which we sell our products has been a little weaker over recent years than it was post COVID in '21 and '22, and that creates challenges for us and other producers. And today's announcement is very much about how we're reacting to those challenges and adjusting our business to reflect a lower pricing environment.

Finally, with a long-term asset such as Moma, you need significant investment to operate it effectively and efficiently. And 2025 for us has been very much about a significant capital program to upgrade our largest producing plant, our largest operating plant WCP A to move to a new ore body called Nataka.

Ben will talk later about Nataka. It's over 70% of our reserves. In essence, it's the future of the company. So we're investing to make sure that we can operate efficiently and profitably there for many years to come.

We move on to the next slide now, please. So Kenmare's position in the market is based on a very clear strategy and a strategy that, first of all, makes responsible operation and a committed and capable workforce as a firm plank of it.

And keeping that workforce safe is very important to us. We've had one of our best years ever for safety. It's a big emphasis for us, not just in operations, but in the development project where we undertook most of our capital investment last year. 97% of our staff are Mozambican. And we only had 3 lost time injuries last year, of which 2 were comparatively minor.

Aside from our own staff, as I mentioned, the community is important to us, and we've invested north of $23 million into community -- excuse me, $25 million into community initiatives since 2004, economic development, health, sanitation, infrastructure. All of these elements are -- and the environment, of course, are all important to us to gaining the respect, trust and support of the local community for our work.

We're very much focused on maintaining a low-cost industry position, being successful in maintaining our operations profitably even in the down parts of the cycle for the products we produce. And of course, over almost 100-year life, we'll see a number of those cycles. So being effective and efficient and having the playbooks to work our way through those cycles is important for us.

And I think one of the things we talked about in today's release is how we're changing our approach a little bit in 2026, not so much focusing on just production as we would have in previous years and setting targets for production, but setting really targets for shipments, sales, revenue, cash, the things that will effectively maintain the business and allow us to maintain our investments.

And of course, making investments, making efficient investments, utilizing our cash flows always and providing returns to shareholders, that's really what we're about. Kenmare has returned nearly $300 million or over $300 million to shareholders since 2019. And over the next 5, 10 years, we expect to return a lot more. But of course, when prices are lower, dividends will naturally be lower, too. And we'll need to just pay careful attention to our tax -- our cash positions in 2026.

So with that, I'll move on to the next slide, if you don't mind. I've talked a little bit about our sustainability goals, I've talked a lot about how important our workforce is to us. We spent a lot of time over the last couple of years on an initiative called Trabalho Seguro, which came literally from the shop floor or the plant floor in Moma.

It's a greeting. It's a wish for safe work. It's a way to support your colleagues, and it's been very, very successful with our lowest ever all injury frequency rate in 2025. And with the 97% Mozambican population, we try and -- our Mozambican workforce, we try and recruit as many people as possible from the region or the nation, and that will continue.

KMAD, I touched on a little bit earlier. We consistently invest on in livelihoods, healthcare. Our most recent projects are a new district hospital, nearly 80% complete. And a lot of work goes into ensuring that the students coming out of the local schools and technical colleges will now or in later be suitable for employment by KMAD. So that's a big investment for us.

On a day-to-day basis, making sure that we manage our waste properly, that we respect the local environment, recycle as much as we can. A big source of success in '26 -- '25, we're now over 60% of waste recycling, a big uptick and means that the existing landfill we have will last much longer.

And being a trusted business in the community is very important to us. We consistently won for each of the last 5 years, the prize for most transparent company in Mozambique. When I met the President twice in 2025, he commended Kenmare on its social programs, its commitment to transparency and the quality of the jobs that it creates. And I think they are the foundations of what we do and hopefully will continue to do.

So with that, I'll now hand over to Ben, who will talk a little bit more through the day-to-day operations and capital projects that we undertook in '25.

Thanks, Tom. Let me first start by giving an introduction to the Kenmare's operations. We are a low-cost bulk mining operation, and we're mining up to [ 50 ] million tonnes per annum of materials. We've been operating, as Tom said, since 2007 and so far have made more than 15 million tonnes of final products.

The plants that we operate are dredge mining operations. And each of the 3 units that we have are 3 ponds that we have, have floating Wet Concentrator Plants. These are cost efficient because we literally put the processing operations right next to the mine as opposed to having to transport ore for long distances. We also have a Selective Mining Operation, which is a new unit that was commissioned in 2025 and successfully delivered its expected production during the year.

The concentrates that the mines produce are transported to a mineral separation plant, and that's a place where a factory environment where we separate ilmenite, rutile and zircon and a monazite concentrate. And that's all done with physical separation methods and no chemicals.

In terms of then those products, they are then transported. The mine is adjacent to the coast. So we have a short conveyor routing to our own jetty and then we transship on to customer vessels parked right off the coast line of the mine.

In terms of our environmental impact, we have -- most of our electricity is coming from hydroelectricity from the Cahora Bassa Dam. And we operate -- because the mine is a moving mine, moving laterally, we're constantly rehabilitating the ground that has already been mined. And last year, planted more than 200,000 trees as part of that rehabilitation process. And as I said, there are no toxic chemicals used in the mining or processing of the minerals that we produce.

Moving to the next slide, maybe to talk a little bit more now about the 2025 production performance. The mine was impacted by the delivery of the WCP A upgrade, which Tom alluded to earlier on. This caused us to be 15% down year-on-year on our heavy mineral concentrate production.

And that was a conscious decision was made not to try and counter the shortfalls by mining using higher-cost supplementary mining operations. That meant that shortfall in heavy mineral concentrate rolled into a roughly equivalent shortfall in ilmenite production, although the ilmenite production, we did attain our revised guidance.

The good news I'd say about our production was that we saw a significant improvement in the zircon production, and we were able to achieve our original guidance level by the processing of some intermediate stockpiles and also materially better recoveries that were seen in the mineral separation plant during the year.

And then on the concentrate side of things, we particularly beat our original guidance very much significantly due to the fact that we were able to produce a new product called ZrTi. This is a product that is made up of previous stockpiles of material that were previously not valuable. We retained them available and have translated those into production. And we now have a new product that we are able to sell, and that will be continuing into 2026 and beyond.

In terms of shipments, we were down on shipments largely due to poor weather in the first half of the year. And then one of our transshipment vessels was on its 5-yearly compulsory dry docking during the second half of the year. That meant that we were down on overall shipping. That's a major focus for us going forward into 2026, and we're expecting to produce -- or to ship, should I say, more than 15% increase on 2025 in the current year, and that's largely because we have both the vessels available this year.

On to the next slide, please. So Tom discussed that we've been doing our WCP A upgrade project. And the idea of this project is to secure the long-term future of the business. Our largest plant, WCP A, has been pretty much renewed, and we're matching the largest plant with the largest ore body of the future.

This ore body represents more than 70% of the mineral resources that the mine has, and we expect that this new mine to operate for -- in excess of 20 years with this equipment that we've just -- we're in the process of implementing.

The cost of that project is $341 million. And by the end of the year, it was more than 80% spent and the project is now essentially derisked. We are now in the commissioning process. The new equipment comprises 2 new dredges, you can see in the photograph there. Also a new slimes handling facility, which is parked just behind the dredges there. And then on a future photograph in this presentation, you'll see the tailings storage facility, which is the way that we will manage our long-term slimes handling.

On to the next slide. Just to walk through the commissioning, the -- all of the major construction is now complete. The installation is done, and the plant is in use. We're going through the final stages of the commissioning and ramp-up, and the operation has been handed over to the operations team to run.

The progress has been positive. It has been slightly later. Some parts took longer than we anticipated to do. But the remedial measures that we discussed in announcements during Q4 have been working well, such as the tails handling facility and the new tail storage facility. That's now working according to expectations. And the dredge solutions that we've come up with are not impacting our ability to produce.

Additional debottlenecking is still required, however, and process optimizations are underway. We expect those to continue through Q1. We are busy implementing low-cost solutions to some of the things that we've found as we've put the -- each part of the new operation together. The integration of that has revealed that there are some improvements required, and we expect those improvements to be completed during the current quarter.

And so with that, I'm going to pass over and Tom is going to take the marketing presentation.

Thanks very much, Ben. So as you can see, a lot of work going on in Momo over 2025 and on into 2026 to prepare ourselves for our long-term future. And I suppose we've got a long-term future selling products that are in daily use worldwide and very correlated to global economic growth.

I touched earlier on our markets, which have been weaker in 2025 than in previous years. I'd like to draw quite a distinction between demand and supply. Certainly, from Kenmare's perspective and even globally, demand for all the products was stable. And we could certainly sell as much as we produce and maybe even more. We completely sold out indeed of zircon and rutile towards the end of the year, and I'll talk a little bit about those later on.

But what we've seen in recent years is that increasing supply of -- production of ilmenite in China and production of ilmenite derived from concentrates from other countries in China has been impacting supply and creating a period of oversupply and impacting prices as well.

And companies have to respond to this imbalance between supply and demand. Some are managing their supply or reducing their production or selling from stockpiles. And some of the measures that Kenmare announced today, focusing on shipments rather than production is a response to that and a way of managing our own costs during the period.

We are, however, seeing that the demand for the particular types of ilmenite that Kenmare produces, and we have 3 ilmenite products plus ZrTi, which contains ilmenite. We are seeing the demand for ilmenite suitable for beneficiation, which includes some of our product suite and is an area we focus keenly on, has continued to grow and is very strong. So we're well positioned in the stronger parts of the market. It's just that the overall market is oversupplied, and that is impacting on pricing.

We're hearing -- we're seeing similar factors in the zircon market, there is -- because mineral sands and mined typically will produce a range of ilmenite, zircon and rutile in different proportions. If ilmenite is oversupplied, then zircon will be slightly -- will have similar characteristics.

And the market was subdued, but what we have seen is that, that stabilized towards the end of the year. Producers and indeed, significant producers took measures to take supply out of the market and the market has reacted well to that. And we effectively sold our zircon inventories down to zero at the end of the year. And towards the end of the year, we started to see prices stabilize.

So overall, while pricing is weaker, we're still seeing demand for our products in the segments in which we target. We have a strong order book for the first quarter of 2026. We signed a number of new sales contracts last year, and we are seeing strong demand.

But we do need to be more cautious on what future pricing might look like. And our assumptions and our expectations of when the price might recover and what levels it might reach are probably more conservative than they have been in the past. And that impacts on our financial statements, it impacts on our accounts, and James will talk a little bit about that over the next number of slides. Thank you.

Thanks, Tom, and good afternoon, everyone. I might just point out at the outset that this is not a typical financial announcement or release, focuses on production. So there is limited financial information on this. And what we do share is unaudited at this stage. So our full year results, which will be published in March, we will have our final information.

And look, Ben touched a little bit already on the development CapEx. So look, we've -- to date on the project, $341 million total budget. We've incurred about $280 million of that so far, so over 80%. In 2025, about $168 million was incurred. $12 million of that will actually be spent in cash terms in 2026. So it's just the timing of payments into 2026. So the cash spend on the development project last year was around $156 million.

We expect about $30 million of development CapEx this year in 2026. That's including that $12 million rolled over. So that's a significant step down as we come to the end of the WCP A project in terms of our development CapEx.

And on sustaining CapEx, look, we don't publish our sustaining CapEx number for 2025 today. We're comfortable that it's within our guidance that was issued, which is around $50 million for 2025. And we're issuing guidance for 2026 of around $30 million of sustaining capital.

Looking at the financial outcomes that I can share with you today, we ended 2025 with around $48.5 million or $48.6 million in cash and net debt of just under $159 million. So clearly elevated from this time last year as a result of that significant capital spend.

We're not disclosing or sharing our full year EBITDA number today. As I said, that will be in March, but we did share in the announcement that we have agreed with our lender group for a revolving credit facility, a relaxation of the net debt-to-EBITDA covenant from 2x where it has been set at the outset to 3x. And we consider that to be a fairly safe level for us to be on site of at the end of 2025.

We'll stay in very close contact with our banks through this period of relatively elevated net debt and obviously keep them abreast of how things are looking and any expectations we might have around our future financial performances.

As we disclosed last year, we made a shipment to a customer in September. That customer subsequently went into administration. They had $9.3 million outstanding unpaid to us. That remains the case.

However, there has been some progress. We understand that there's 2 plants in question here. We understand that there are sales processes underway for both of those, one at an advanced stage. And we'll continue to stay in close contact both with the existing owners and once available with the potential purchasers to ensure that we can recover that.

In terms of impairment, so look, we took an impairment at the half year of $100 million. For the full year, that's going to increase to up to $300 million, so somewhere between $250 million and $300 million, we think. That's really driven by a weaker expectation for pricing mainly in the medium term, to a lesser extent in the long term.

And for us, this is a mechanical sort of event. We maintain a financial model that we look at, at the end of every reporting period, and we compare that to our asset carrying value, compare the value that the model suggests for our assets against our asset carrying value. And if the model is suggesting a lower value, we take an impairment charge accordingly.

So look, the pricing, as it has gone, indicates that we'll be looking at up to $300 million of impairment. That's a noncash charge. It doesn't impact our continuing operations. Obviously, the market value is quite distinct from the book value. It doesn't influence our ability to pay creditors and our debt covenants or anything around dividends.

And one other impact of that weaker pricing outlook is also around the carrying value of some of our ilmenite stocks. So typically, your -- well, always your inventory is carried at either the lesser of production cost or its net realizable value. We're now in a situation where, in some cases, our ilmenite net realizable value is below its cost of production, and we expect that to lead to an expense of around $15 million in our preliminary results.

If you go to the next slide, please. Just looking at the capital spend profile, so as indicated, the vast majority now of our capital spend on the WCP A project is behind us. In cash terms, around $270 million already spent with $70 million outstanding. And of that $70 million, about $30 million will be spent in 2026 and then the remaining $40 million over the 2027 to 2032 period. We expect to continue to fund this from our existing cash resources and operating cash flow and obviously, the existing debt facilities that we have in place.

So with that, I think probably handing back to Tom on that.

Yes. Thanks very much, James. And what I will do is just maybe begin to wrap up, firstly, by giving you a quick run through our 2026 guidance.

And look, we, as I said at the outset, probably changed the most important area of emphasis for our guidance this year away from production and just tonnes for the sake of tonnes. And we have high inventories of finished products, and it's far better for us, far more financially efficient to sell those down as much as we can and manage our production to help us achieve those objectives.

So rather than production ranges for tonnes, we're just saying basically that it will be more than 800,000 and as much more as it needs to be to achieve our shipment objectives. And those shipment objectives of 1.1 million tonnes of finished products are pretty much 15% ahead of what we did in 2025, albeit as Ben said, we had a dry dock in '25 and some maintenance on our transship vessels. So a big move, and that should allow us to make a big drawdown of our finished product inventory and effectively turn that historic investment in stock into cash.

As part of our adjustment to a period of lower pricing, we've looked hard at our operating costs. We've unfortunately had to undertake a retrenchment program at site for up to 15% of personnel, and that's not something we ever do likely, but many valued colleagues will be leaving the business or have already left the business. But it's necessary to react to and maintain competitive through these more difficult periods.

But we're seeing the positive effect of that in 2026 with the operating costs significantly lower between $215 million and $225 million at that 800,000 tonne level of production. And as James said, a lot less CapEx. I mean, we really have the back broken of the WCP A upgrade CapEx. 2026 CapEx will be less than 20% of last year's number, which was north of $150 million.

So we really have effectively finished that project, and now we're on to completion, as Ben said, of commissioning and infrastructure and other elements necessary as we move to Nataka when we work there. And we're also working hard to make sure that whatever we spend this year, we really need to spend this year. If anything can be postponed, if anything can be deferred, we'll certainly do so, but not at the cost of safety, not at the cost of our team.

If we move on to the next slide, please. So just in summary, moment is a really -- it's a world-class asset. We 20 years almost experience of producing there. We've learned a lot. We're moving to the biggest ore body. We'll be there for a long time, and we've invested to make sure that we operate well there.

The businesses over the last number of years and despite the challenges in 2025, has consistently generated operating cash flow, and that has enabled us to make the investments we've made. And the upgrade of WCP A has been designed and executed to ensure that remains the case.

I think, as James said, between our operating cash flows, our lenders who understand cycles and are supportive and the value of our inventories, we have multiple sources for funding our programs. But just recall, our capital expenditure this year is a fraction of last year's.

All of these investments plus the quality of Moma's ore body means that Kenmare is not just important to Mozambique, it's important to the worldwide titanium feedstocks market. We're nearly 6% of that. We have 25 customers operating in 15 countries. And when people start buying from us, they keep buying from us. They very, very rarely move away. And the customers we had on day 1 are still our customers today, and we've got a strong order book.

And all of those factors enable us to invest not just in our assets, but also in the community also to satisfy our obligations to the Mozambican government and commit to perhaps even increasing those obligations to increase royalties under our implementation agreement.

And as I said, I met the President twice last year. It was a very good meetings on both occasions. And we'd love to see that agreement move towards a conclusion this year, but I should stress, there's no formal timeline for that.

So as James and Ben said, we'll -- this is effectively a summary of '25 and '26 outlook ahead of our results, which will be published at the end of March. Thanks for taking the time to speak with us today. Very happy to take any questions that anybody may have on this, what we spoke about or indeed any other aspect of our business. Thank you.

Thanks, Tom. We've received a number of questions, so I'll now take you through them. The first question is, it's good to see reduced CapEx in 2026 compared to 2025, but do you have any other big projects on the horizon?

So maybe I'll take that one, and James, correct me if I'm wrong. But Kenmare has had quite a lot of CapEx in the last 5 years between the move of WCP B in 2020, '21 and the WCP A upgrade. But this is the last big nondiscretionary CapEx investment that Kenmare needs to undertake. The moves of WCP B and WCP C to Nataka will be significantly cheaper because neither of them require material upgrades.

And most of the money that we're putting into WCP A is new equipment, new dredges, new capability to mine, which the other plants don't need. So no, from now on, apart from sustaining CapEx and occasional minor projects, we have no multi-hundred million dollar obligatory investments. And cash flow generation or free cash flow generation should be stronger as the market recovers.

Next question is, how long will excess inventory in the global system take to work through, i.e., when might pricing start to recover?

God, if I knew that. Well, look, what we've seen is that this oversupply and the excess inventory has arisen over the last couple of years and probably in response to strong pricing in 2021 and 2022. And the greatest cure for weaker pricing is probably weaker pricing.

We do know people are suffering, we do know people are adjusting their production or indeed in some cases, ceasing production to adjust to save money and adjust to these new realities. And look, we're starting to see that be quite a widespread pattern. And generally, that's a precursor to recovery.

But the new sources of supply and in particular, the concentrates, which are going from a number of countries into China, are probably 10% to 15% of world supply. So they didn't arise overnight and they won't disappear overnight. But we have seen similar kind of patterns back in 2012, '13, '14 and that those sources of supply gradually decline. So we're hoping the same will be the case here.

So it's important to say that we are expecting and the independent forecasters are forecasting a recovery, but just the assumptions at the moment are that might be a little more delayed than we might have expected. I think previously, we would have expected it to be happening around now.

James, anything I wanted to -- you want to add to that?

No, not a lot. Look, it's very difficult to know exactly how fast things are coming out of the market. I just would note commentary from Rio Tinto this morning saying that they estimate around 5% of global supply came out of the market. And if you look at TZMI, the industry commentator, their latest cost curve, which looks back to sort of 2024, would indicate that at current pricing, probably somewhere in the region of 10% of the global feedstock supply that they monitor would be really struggling to make money just on a direct cash operating cost basis at these sort of price levels. So I think that's talking to the fact that there is supply coming out and that can only last for so long.

Next question is on a similar theme. Are current prices low enough to deter more production capacity increases globally?

Maybe I'll start that and my colleagues can jump in. Look, I think we -- they're certainly low enough to deter existing producers from expanding and to force or cause existing producers to adjust their plans and day-to-day activities in response.

And I think aside from those concentrate projects, which are reasonably widespread in a number of countries, albeit individually modest in scale, but aside from those, there's been no real new significant investments in mining capacity over the last number of years and maybe even some of the projects that we thought would come on stream haven't come on stream and even the ones that have been less successful in terms of their operating outputs than might have been anticipated.

So I think we are seeing certainly a slowdown in people's investment. We're certainly not at the price that it would incentivize significant investments in new mining capacity. So I think people are being rational in how they're adjusting to it. It's certainly not suggesting that meaningful sources of new supply are imminent.

Next question. Can you please set out why the parliamentary process is taking so long to progress the renewal of the Implementation Agreement? Is parliamentary business being taken up with matters? Or does the Prime Minister or cabinet disagree with the President on the renewal? Or is it something else entirely?

So look, the renewal needs to be ratified by the Council of Ministers. And we know that it was considered by the Council of Ministers over the course of last year. And their sentiment towards, it was very favorable, but they felt that the royalties proposed at that time needed to be a little higher.

And we've made a revised proposal, royalties of 2.5% to 3.5%, ascending over the next number of years, which against the previous 1%; plus a significant level of investment in our assets and indeed even in the community over the 20-year renewal period.

And so we haven't had a formal decision on that implemented by the Council of Ministers. It may have been discussed, but that's the organ that will need to approve it. And I suppose we've highlighted to the President when we've met them and indeed to his colleagues, the ministers whenever we've met them, which has been regularly. But firstly, under the agreement, Kenmare is entitled to renewal on the same terms. So it's entirely voluntary on our part to propose an increase, but it's entirely realistic because we got a good deal back in 2004.

We recognize that times are different now. We recognize that the state needs a better return on the project, and we're prepared to provide it. So in my meetings with the President, I think it was really good to get the second one. There's a lot to address another part of the question, there's a lot going on in Mozambique at the moment. Many of you may have seen some coverage of what have been quite severe floods in recent days and weeks.

And while they haven't impinged materially on Moma, they certainly have caused a lot of challenges elsewhere in the country and indeed, unfortunately, quite a number of deaths.

So between that and adjustments to the health budget caused by changing priorities of USAID, ongoing negotiations and preparations for the resumption of work on LNG projects in the north, where there's also been, as many of you may be aware, some Islamic insurgency, again, hundreds of kilometers from Kenmare, but still a consideration for the government; the government has had a lot to deal with.

And certainly, there are times when Kenmare's agreement is not at the forefront of their minds, but it's certainly not because we aren't reminded of it. So look, I think we have to be persistent, we have to be commercial, and we have to be available. And we bid all those things for our negotiations with the government. We received great support from the diplomatic community. And hopefully, 2026 is when we see it all come together.

I should stress, though, and indeed the President did stress this; that we've continued to operate under our old terms. I mean his words to me were, if we didn't want to renew this agreement, why do we keep letting you operate under your old terms? We are committed to Kenmare as committed as Kenmare is to the country. The words are great. We haven't seen the actions yet. Hopefully, in '26, we will.

Next question on a similar theme. Does the value of Kenmare go to zero if the IA is not renewed by the Mozambique government?

No, not at all. No, no. So a couple of things here. One, the implementation agreement doesn't cover our mining operations. It only covers our processing export operations.

Two, obviously, we've made significant investments in the business, and those investments are behind us now. So even in the event that fiscal terms were worse, and let's remember that we have a right to stable terms, even if they were, we still generate significant cash flow.

And three, there are terms that a new entrant would subscribe to if they were to come in now into mineral sands are a 6% royalty plus corporation tax plus some other regulations. But at the end of the 20-year renewal period, Kenmare's royalty payments won't be far off 5% anyway. So there's -- for sure, that will be worse than we currently have, but certainly wouldn't be ruinous.

Next question. You guide for net debt to remain elevated this year. Should we interpret that to mean that the nominal net debt will be flat year-on-year? Or do you hope for it to be lower by year-end compared to the start of the year?

James?

I can take that. So look, if I talk in net debt terms rather than the actual -- whatever the amount of debt that we have drawn on a particular day is. First thing I'd say is that given the lumpy nature of our shipments and the relatively high value of each of those shipments, I mean, you can have shipments that are worth $5 million, $10 million, sometimes even more.

The timing of those receipts obviously is a big sort of driver of what your cash position is on a given day, and therefore, your net debt position is. So it's a little bit of a noisy signal, I would say, just to begin with.

In terms of our expectations over the year, I think potential for it to come down a little bit. But I'd say the sort of level that we closed the year at, I'd expect it to trend relatively kind of flat with some of that noise with some ups and downs over the course of the year.

And another one for James. What's the rationale for the $300 million asset impairment?

Yes. So look, the primary driver there really is the pricing outlook. And as I said earlier, particularly sort of the next 2 to 3 years, more than the next kind of 5 years plus just as a result of that oversupply situation that Tom mentioned, and that's driving sort of downgrades in the pricing that we expect to achieve ourselves through our marketing department and the conversations that we're having and our insights into the market, but also the pricing expectations that independent commentators like TZMI and [ TMC ] have.

So certainly, that is the driver of the downwards move. That's offset to an extent by what we are doing on the cost side. So the cost savings, both in terms of operating cost and capital reductions and deferrals are actually sort of pulls back, if you like, or reduces the extent of the impairment and where we end up is that value of somewhere up to 300 million.

That's the final question. So handing back to you, Tom.

Thanks very much. Thank you, everybody, for your time and your interest in Kenmare. Thanks for the questions. I think I covered most of the important elements that we disclosed in the announcement today. Please, we'll have another private investor session following our results at the end of March. I think that have been released on the 26th of March. Is that right? And we look forward to speaking to you again then.

Obviously, if you have any questions in the intervening period at any time, please feel free to get in touch with us at [email protected]. We're always happy to hear from investors and always happy to address any questions or concerns you may have. Thank you very much, and have a good afternoon.

Perfect, guys. That's great. If I may just jump back in there. Thank you very much indeed for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This may take a few moments to complete, but I'm sure it'll be greatly valued by the company.

On behalf of management team of Kenmare Resources plc, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon

Good afternoon, and welcome to the Kenmare Resources Plc Q3 production update. [Operator Instructions]. Before we begin, I'd like to submit the following poll.

And I'd now like to hand you to the Managing Director, Tom Hickey. Good afternoon to you sir.

Thanks very much, Alexander. Thank you all for joining us today and taking the time to get an update on Kenmare Resources. We issued our Q3 production update yesterday, giving the market an update on our performance this year, and I suppose the key elements of our investment case as it is today.

And today, I'm joined James McCullough, our Chief Financial Officer; Ben Baxter, our Chief Operating Officer, who hopefully will help me guide you through the story. And together, we can address any questions you have. Just as an introduction to Kenmare, just moving to the next slide. Kenmare operates the Moma Titanium Minerals Mine in Mozambique. This is a pretty unique and world-class resource. We have -- we've been in Mozambique for over 40 years. We have over 100 years of mineral resources at our current production rate. And we've been in production for nearly 18 years.

So we're a really important part of the country, about 6% of GDP of the titanium minerals sector, we're about 6%, 7% of that and indeed one of the few significant independent businesses in that market. And a very important part of the locality. We're the biggest industrial employer in and around the Nampula province. We employ over 1,700 people.

And we work hard to make sure that we keep all those stakeholders balanced. We work hard to make sure that we're a good contributor to the local and national economy. And I think the investments we've made in the region and our general attitude to sustainability and being a good neighbor and also the fact that we use substantially only renewable energy sources in our activities has allowed us to be included in the FTSE4Good Index, which is, I suppose, a good indication of Kenmare's approach to its business and how we take a long-term view.

Within the titanium minerals market, we produce ilmenite and rutile and zircon is also a co-product. Ilmenite and rutile are principally used in the manufacture of paints, plastic and titanium metal. zircon is used in ceramics. These are all heavy mineral sands, and we extract them via dredge mining, process them and sell them to end markets to third-party customers, all from our own site.

Titanium and titanium minerals are on the critical minerals list for Europe, the U.K. and the U.S. So less impacted by tariffs than many other projects you may look at, at the moment. In fact, the only impact of tariffs on our business has been a beneficial one, whereby the EU has imposed tariffs on certain Chinese products, which has protected on some of our European customers.

And finally, Moma, having been around for many years, has had a significant capital investment, north of $1.5 billion, although obviously, that's significantly greater than our market cap today. And we're currently in the middle of a very significant capital investment that Ben will talk about. Our Wet Concentrator Plant A, which is our biggest mining plant is moving to Nataka, which is our biggest ore body. Nataka is 70% of our reserves. It's the future of the company, and we'd like to take you through what our plans to operate in it are today.

So just moving on to touch on the mineral sands. Mineral sands are, I suppose, what you would call a quality of life product. They're essential to modern life. They're all around you. Every paint, piece of paint, plastic, paper, even in food, clothing, anything that requires whiteness or opacity, you'll find ilmenite in particular, as part of it. It's nonrecyclable. So there's a constant renewed market for products.

And it has been historically very correlated with global economic growth. And you can see on the bottom right of that slide, a very stark difference between the consumption per capita in North America and Western Europe, more developed first world economies and the emerging markets of Central Europe, Asia Pacific, China, excluding China and Japan and the Middle East and Africa. And in reality, that increasing urbanization, progressive prosperity, these are opportunities for us, for our products in that as people become more prosperous, they use more of more pigment, they consume more titanium minerals. They paint their houses more often, and that creates that demand that we talk about.

Clearly, some of the global conflicts in recent years and indeed perhaps some of the challenges faced by the Chinese real estate industry have impacted demand in recent years, but they've also impacted investment in new projects. And we certainly, after a short interval, foresee a shortage of supply over the coming years, maybe not -- certainly not this year and maybe not next year, but certainly emerging because we're certainly nowhere near incentive prices for new projects to be built at the moment.

I've touched earlier on zircon, which is used in ceramics, same factors apply to it. And we also have a small degree of rare earth elements, including the mineral monazite, which is used in a lot of applications relevant to the energy transition, including magnets for wind turbines. So look, I think while you might hear much about titanium minerals or mineral sands, they are ubiquitous. You use them every day, you can't recycle them. And we see a significant and sustained growth opportunity in that market.

Next slide, please. I talked earlier about our sustainability. Our strategy has been very much to be a good neighbor. We have 97% Mozambicans in our workforce of 1,700. Our general manager is Mozambican, many of our senior leaders are Mozambican. And that gives us a very authentic presence in the region where we operate around Moma as does the investment that we've made in community initiatives in education, in sanitation, in small business, in infrastructure since 2004.

And these are the things that stand us in good stead with the community in the past and hopefully lot many years into the future. But in addition to that, we strive to operate safely. We've had an exceptional, touch wood, lost time injury frequency rate over the last 12 to 18 months, and that's the product of a relentless focus on safety at site and an initiative that we call Trabalho Seguro, which is Work Safe, which is central to what we do every day.

We are focused on obviously operating efficiently with a 30% EBITDA margin in the first half of 2025, a 40% EBITDA margin last year. This is a very cash-generative business, and that enables us to meet our reinvestment obligations and has enabled us to make significant shareholder returns in the last couple of years. We've paid out north of EUR 300 million in shareholder distributions between dividends and buybacks since 2019.

And I think that's something our shareholders place a high value on. And it helps us to attract and retain investors. Many of our biggest investors have been with us for many, many years. So -- and just finally, for my introduction, I've talked a little bit on the, next slide, please. I've talked a little bit about our sustainability efforts. And these extend to our workforce, to the community, to the environment and to the -- how we operate as the most significant business in and around Moma.

And I probably touched on all of these, but maybe one of the central planks of our approach is the Kenmare Moma Development Association, KMAD, that we established long before we earned any money from the project in 2004, which supports livelihoods, health care, education and access to clean water and sanitation. Interestingly enough, some of the children that we would have helped back in 2004 to 2010 with their education and indeed ultimately sponsorship to university are now coming back to us to work as employees.

And obviously, what that means is that the value that's generated by the mine stays near the mine. populations can increase, people can have better standards of living, and that supports the environment and supports Kenmare's activities on a day-to-day basis.

So with that, I'll hand over to James McCullough, our CFO, who will talk to some of the specifics of our financial performance, shareholder returns, and we'll move on from there to talk about our investments.

Great. Thanks, Tom, and good afternoon, good morning, everybody. Thank you very much for joining us. And look, this Q3 update is not a financial update. Our next financial update will be our full year results, which will go out in March next year. So really kind of just looking back and reviewing how we went in the first half of this year.

And if we look at the top line, our average price in the first half of this year was just a touch up on where it was last year. As Tom mentioned, we sell a number of different products, ilmenite, titanium dioxide product, as well as zircon are the 2 main ones. Zircon is higher value than ilmenite. What we're seeing is probably a downward trend in individual prices as we're sort of at that part of the market or rather at that stage in the cycle.

But actually, our average price received, we had more of that higher value zircon in than we had ilmenite, and that gave us a sort of a favorable product mix, which gave us a higher average price received and that played through into a slightly higher revenue in the first half this year versus first half of 2024. Our costs in the first half this year were a little bit higher than they were in the first half of 2024.

A couple of reasons for that. We had some natural cost inflation at the mine itself. And we have -- as I'm sure some of you will be aware, we're in discussions on the implementation agreement, which is one of the foundational agreements that we have with the government of Mozambique, and that is likely to result in a higher royalty payment that we will be making to Mozambique, and we've accrued for that through the first half of the year as well. So that contributed to higher costs there.

And finally, one of the other drivers of the cost increases were additional advisory fees associated with a takeover bid for the company earlier in the year. So that all sort of played through into higher costs, which meant that in spite of sort of fairly flat revenue, we had slightly lower profitability. Looking at some of the other highlights financially, we declared a $0.10 per share dividend. So that was -- in fact, that was paid out earlier this week.

The major capital project that Tom mentioned, the WCP A upgrade and that Ben will talk through shortly is still on budget of $341 million, and we're progressing through that well. So very, very happy that, that is still on budget, and we still have some contingency within that figure. And as we do progress through that, our net debt number has increased as one might expect.

So we've moved from $25 million net debt at the end of 2024, up to about $85 million at the end of the first half. So that's sort of a quick snapshot on the financials. And then if we just move through to the next slide, please. And just looking back historically, as Tom said, it is a very cash-generative business. I mean we had an EBITDA margin of, I think, 28% in the first half.

And Kenmare over the years since 2019 has distributed north of $300 million in total through dividends of around $190 million and buybacks of about $113 million. And that corresponds to somewhere in the region of GBP 2.30 or GBP 2.40 per share. So has been very positive from that perspective and the $0.10 per share that we paid out this week supports that.

Look, I think that's about it on the financials for now, but happy to pass over to Ben, maybe is it?

Good afternoon, everybody. I'm going to talk you through the operational side of the business. So on to the next slide. Thanks, Katharine. So as Tom mentioned in his intro, we're a globally significant titanium minerals mine. And we use a bulk mining method of dredging largely because it's a low-cost form of mining.

The operation has been established since 2007, and it has consistently been making more than 1 million tonnes per annum of ilmenite. This year, it's slightly down. We're guiding between 930 and 960 kilotonnes of ilmenite, and that's largely because of the project, which I'll come to talk to in a few moments. We operate with 3 dredging operations in their own mining ponds.

They feed a wet -- each of them feeds a wet concentrator to produce a product called heavy mineral concentrate. We then take that concentrate to a processing facility and separate the valuable heavy minerals from within the concentrate into their constituent parts of ilmenite, rutile, zircon and a monazite containing concentrate called MSC.

The -- those products are stored on site and then using our own dedicated port facility, which is about 2 kilometers away from the processing facility, we're able to easily transship to customer vessels, which more off the coast of where the mine is in Northern Mozambique. The mine itself is -- has a very low environmental footprint. Our electricity is largely coming from hydrogenerated power, the Cahora Bassa Dam in Mozambique.

And after the mining process has taken place, we progressively rehabilitate the land and hand it back to the local communities for subsistence agriculture and for forestry. The other notable part of our mining process is that it is only a physical process. There are no chemicals involved. And so our environmental footprint or potential for contamination of the environment is very, very low.

If I move on to the production and outcomes of the past quarter. The quarter was really impacted by 2 main features. Firstly, our production from the mine was down, and this was a knock-on effect of the fact that we are -- during this quarter, we were undertaking the partial closure of operations to allow the shutdown and the upgrade of the plants WCP A. And I'm going to talk a bit more about that on the next slides.

This meant that the heavy mineral concentrate production was down 16% year-on-year, and this had a knock-on effect into the final products. The second impact was that we have 2 transshipment vessels, which we use for transporting final product onto those customer vessels. And every 5 years, one of the -- each of those vessels needs to go for a dry dock to maintain its class certification.

And during the whole of Q3, 1 of the 2 vessels was out of service in a dry dock, getting that certification. And so that had a knock-on effect on our ability to make sales. And so shipments were down 25%. One of the things that's worth making note of in previous releases, we talked about using a third transshipment vessel, which would be rented in to help offset that loss of vessel, but also to take advantage of destocking some of our working capital.

And whilst that decision has been not made to proceed as of yet due to the reduced short-term demand that we've seen for ilmenite products. However, we will maintain that under consideration moving into next year. Maybe I can talk on to the next slide and give a bit more detail about the project that has been taking much of our time. So WCP A is our largest production plant. It delivers about 50% of the mining capacity. And yet it is coming to the end of its life in the current ore zone, which is now depleted.

And in order to move into a new area, we needed to upgrade this plant and prepare it for life in its next location. That location is called Nataka. It's a large ore body, representing 71% of the 9 billion tonnes of ore that Kenmare has. Now that 9 billion tonnes at current production rates represents about -- more than 100 years of resource base.

And so it's very good for us to be putting our largest plant into the largest ore body and securing the future of production at Moma into the long term. The upgrade is an upgrade of lots of new equipment, particularly focusing on managing the higher rate -- higher amounts of slimes in the ore body. The slimes is essentially clay-sized minerals, which historically have made it harder to recover heavy minerals and therefore -- and then also to get the mining rates that one would require.

And so what we have been doing is purchasing new dredges, which are currently going into commissioning, also a new plant for desliming and then methods of managing the slimes, which will be done with the tails storage facility. That -- the outcome of that is higher recoveries, higher feed rates and lower because with the dredges being high-capacity units, they can mine on a lower dollar per tonne rate, and that will also allow us to eliminate the dry mining, which we've been using over the past few years to supplement the capacity at that plant.

The project capital is $341 million on that project, and it's more than 80% complete by the end of this year. We are now just going through the process of the commissioning. And on the slide that's now in front of you, we give a sort of a time line of the progress we've made. Back in the end of -- in July, we had the delivery of the dredges arriving at Moma, and they were landed from the sea on to the beach and brought to the new mining plant area, and a staging pond.

And in the bottom photograph on the left, you can see those dredges are preparing already in a floated pond with a new desliming facility in place. We since used the old dredges to break through and mine and then connected that new equipment onto the older concentrator plant, which is the only part of that process that remains. We also have completed the tail storage facility in -- by September. And in the first part of October, have started heavy mineral concentrate production again, and we are currently in the ramp-up process as each of the component -- new pieces of component work are being commissioned.

And that commissioning process is expected to take place over the coming quarter. And by the end of this year, we expect to have ramped up production to the capacity levels of the new plant. On the next slide, thanks, Katharine. Just to look at the capital spend. By the end of the year, the project will be substantially derisked. We have currently -- or by the end of the year, 80% of the capital of this $341 million project will have been spent.

And already, in fact, we are seeing that the capital spend is now -- has peaked in the past and will fall from here on. The higher capacity dredges will also have a positive effect on our operating costs going forward since the dry mining will cease by the end of the year.

And in terms of the project funding, it's worth just reminding that we're funding this $341 million project through existing cash resources, our debt facility, which at the half year was -- still had $70 million undrawn. We have operating cash flow in the meantime and good shipments expected in the second half of this year and also operating factoring and trade facilities to manage those receivables as required.

With that, I shall pass on to Tom, who's going to give us an update on the market.

Thanks very much, Ben. And hopefully, gave you some good insight into what an exciting project we have at Nataka and how successfully we've been navigating our way through it. And what I'd like to do now is just give you an update on our markets.

I think Kenmare has had a couple of very good years between 2022 and '24. And I think we recognize that when prices are strong, you get new entrants into the market. I think we also, as I said at the outset, can have periods where demand is slightly weaker. While over the long term, demand will certainly correlate to economic growth. If you have interruptions as perhaps we've had with Chinese economic performance and indeed conflict in certain areas plus tariffs, that can lead to temporarily weaker demand.

And we are seeing a little bit of that at the moment. I mean, from Kenmare's perspective, we have very strong partnerships with our customers. Many of our customers have been with us since our first day of production. And indeed, we added new customers in the first half of this year. It's been our experience that we can sell everything we produce. If you think of somebody setting up a slag plant or a pigment plant, any sort of -- or a metal plant, any sort of major industrial facility. It's a complex operation.

They want certainty, consistency, availability and quality in the materials and inputs that go into that and Kenmare provides all those things. Having said all that, we can't avoid the ups and downs of a cyclical industry and particularly pricing, which will be weaker when there is an excess of supply, which we temporarily have at the moment.

And we're seeing China being a very important part of that market with the significant processing capacity that China has, utilizing a lot of raw materials as opposed to the finished products that Kenmare produces, and that is creating a degree of oversupply. We're seeing, of course, people respond to that, adjust their outputs, adjust their business plans and a couple of plants outside China have curtailed or suspended output in response to those conditions, including one of our customers.

And you may have seen in our Q3 update yesterday, one of our customers has indicated it won't be able to take its remaining volume for the remainder of this year. And indeed, at the point, they indicated that owed us just over $9 million. And this is an unusual experience for us. Kenmare has never had a bad debt. And we work well with our customers through challenges that they have had.

And I think we are continuing to engage with that customer to understand how and when we can recover the amounts owing and we still retain title to the materials until we're paid those amounts. And again, let's just remember, for a plant that is operating or that hopes to be sold, Kenmare's supply is a vital part of the business -- of the business plan. The wider titanium market, the metal market, it was relatively stable in Q3. This is an area that's grown very fast in recent years.

While it represents less than 10% of the global market for titanium minerals, for Kenmare, it's over 20% of our sales, again, for all the reasons that Kenmare's product and behaviors, quality and availability is valued by customers, none more so than in the metal space. So there the titanium minerals. Zircon is kind of similar. A lot of the uses of zircon are similarly driven to those for ilmenite and rutile. The market is a little bit subdued.

And we are seeing a little bit of substitution or some lower quality products come in. The demand for our high-grade product is stable, albeit pricing is a bit weaker. And we expect to end 2025 with very low inventories of zircon. We'll sell pretty much everything we produce. And that's important because zircon is a much higher value product than ilmenite circuit 4x as valuable on a per tonne basis.

So clearly, we're motivated to sell as much of that as possible, and we have the quality customers that enable us to do that. Next slide. I've touched on this point a little bit over the introduction and indeed in the last slide. But we are seeing Chinese domestic production and Chinese domestic participation in the market creating price pressure.

That price pressure coming out of the Chinese sulfate ilmenite market, which is not a market we actively target, but it is one we sell to occasionally, does impact wider pricing internationally. And around us in Mozambique, there are a number of Chinese producers who have entered production in the last couple of years.

Their operations are far less sophisticated from a capital or operating perspective than Kenmare's. And there's a benefit of that. Of course, it's low cost. The drawback of that is that they can't mine all the materials that we can mine. They can't mine more complex ore bodies like Nataka, as Ben mentioned. And thus, they're limited in their life. And we expect that as quickly as those producers arrive over a number of years, they may well disappear not immediately, but steadily over the next few years.

And indeed, we've seen that sort of pattern play out in previous cycles. So for an established producer like Kenmare, this is obviously a concern. It's something we need to be aware of. It's something we need to be focused on. But the best response is for us to do our own business as efficiently and in a low-cost manner as we can and recognize the fact that this also means that no new mines of any significant scale are being built and that in time will create a supply problem.

So look, I think we're seeing all the classic behaviors you would expect in a market where prices are challenged. We're seeing people continuing to produce, albeit very close to breakeven or indeed perhaps even below. We're seeing some people curtail production, indeed some of our peers are doing that. And Kenmare is -- we have strong relationships. We'll work our way through it, and we do expect to see recovery, if not within the next 6 months or maybe 12, certainly as we enter late next year and into 2027.

Next slide, please. So look, in summary, I think Kenmare is a very high-quality business with a world-class asset, but we're operating in a market which is currently slightly challenged, and that's reflected in our short-term performance and in our short-term pricing. We've successfully come most of the way through a very significant development project.

And I think it's a credit to the team led by Ben that we've done that safely. We've done it within the budget we indicated at the start of it. And to date, we've achieved substantially all the objectives that we had pretty much on time. And most of the risk of it is behind us, but obviously, commissioning is still something we need to go through between now and the end of the year.

We're still operating within our guidance for 2025, albeit towards the lower end of the ilmenite guidance, partly because of some of the slight delays in our -- the shut for the Nataka project, the WCP A upgrade project. But all in all, to date, 2025 has been a pretty good year, a pretty solid year in terms of operational delivery.

We have tasks in the fourth quarter, hopefully, to sell the material that will not now be taken by the customer that is in financial distress to maintain our focus on achieving our guidance and executing the commissioning phase of the WCP A project well and to continue to manage our financial position and our financial resources to give it the best outcome.

So to finalize -- in summary, look, I think Kenmare's purpose is to transform resources into opportunity for all. We've done that for nearly 20 years in Mozambique. We've done it with a very good partnership with the Mozambican community and the Mozambican government. We have an implementation agreement that we have been renegotiating with the government that hopefully will allow us to do that for many years to come.

But that negotiation has been elongated. It is taking time. It is a concern. We have made a proposal to government that we believe is fair and gives the Mozambican state a significantly greater return in the future, which I think they deserve. We got a good deal at the start. And we recognize that we have to make our contribution to the future of the nation because we'll be there for a long time. We've got a long-term production profile, over 100 years of mineral resources.

We've got a good position in the industry. We're competitive. We're working our Nataka upgrade project and transition project to remain competitive and to maintain our low-cost profile. And our market-leading position with our customers and as an independent participant, non-vertically integrated makes us pretty much unique.

So those combination of circumstances, the quality assets, the good relationships, the low-cost position and our commitment to operating properly in country and investing for the long term in the communities stand us in good stead. We have things to do over the remainder of this year related to the development relating to our own production, relating to our operations in the market and relating to finalizing our implementation agreement, and we're focused on achieving all those things.

So listen, thank you very much for taking the time to listen to us. Very happy to take any questions that anybody may have. And I'll hand back to Katharine, who I think has been gathering some of the questions.

Thank you very much, Tom. Yes, we've had a number of questions submitted, and I'll now read through them. So the first question is, with prices still soft, what is your view on ilmenite and zircon pricing into 2026? And how are margins being protected?

So maybe I've touched on that a little bit already. I mean I think that we have seen pricing trend down a little bit in 2025. We expect the remainder of the year to be no different. And however, prices have to a large degree, stabilized. So we hope and certainly from what we can see in our discussions with our customers, we may be close to the bottom of the cycle of pricing.

And we believe that there will be some recovery, but it may not be in the very, very short term, I suspect towards the back end of next year. Kenmare is doing lots of things. I mean, operating efficiently, managing our costs, making sure that our investments are value for money, but also improving our margins.

One of the things that we've done this year that actually has been greeted enthusiastically in the market is to sell a product that we call ZrTi, which was previously a tailings or waste product. There are a number of customers who are highly motivated to take that product because it still contains ilmenite zircon and rutile and our concentrates.

They have the cost base and the processing capacity to process it many times to recover those. And that enables us to turn what was previously a cost into hopefully a sustainable future revenue stream. So there's no single big answer to that, but there's lots of things that we're doing to make sure that we're competitive and that we're making the best margin.

Okay. The next question is, the implementation agreement is a key overhang on the stock. Can you speak about whether this issue is unique to Kenmare? Or is there a wider intervention as play by the government of Mozambique to assert more control or raise taxes on the entire resources sector in Mozambique?

Look, that's a good question. And while I touched on Park a bit earlier, I don't think I covered all of those points. Look, I think we -- not just in Mozambique, but I think if you look across Africa in general, governments are focused on a number of things. They're focused on the maximum local content. And I think Kenmare achieves that both with our 97% Mozambican workforce, but also with the north of $100 million that we spend with Mozambican suppliers.

They're focused on the best value-added or beneficiation. And again, Kenmare achieves that. We're the only mineral sands miner in Mozambique, refining or processing our materials to finished products sales and selling to third parties on world markets directly from Mozambique. And they're focused on increasing the return they get from projects through taxes, royalties and other means. And look, I think as I said at the outset, we had a good deal at start when we to get the project moving.

We do believe that Mozambique deserves a better share in the proceeds from Moma, and we've offered them a proposal that would bring them up to in time up to 4x on a percentage basis, what they've had for the last 20 years. So we believe that we're in a good position to satisfy -- help Mozambique satisfy all those objectives. But I think we are only one company, and I know that Mozambique has been -- is certainly considering how it deals with new entrants to the mining industry.

They're upgrading their mining code. We wouldn't be subject to it because of our own regulations, which were put in place many years ago. And they're very focused on securing investment in natural resources projects in the hydrocarbon space with ENI and with Total. And look, these investments and the international companies that make them will be central to Mozambique's recovery and increasing prosperity. So of course, they're a high priority.

Can you speak to the security situation in Cabo Delgado and whether there are any associated concerns for Kenmare's operations in the country?

Sure. Maybe I'll let Ben speak to that a little bit if he doesn't mind. It is -- we've been in Mozambique for nearly 40 years. So I think we're well placed to give a balanced view.

Yes. So the situation in Cabo Delgado is something that we obviously watch very closely and carefully. But I'm happy to say that it has not impacted Kenmare in any way. The distances of where the activities in Cabo Delgado take place are at least 500 to 800 kilometers away and that's a long way in the north of Mozambique, where roads are very poor and accesses takes a long time to get to.

So I'm happy to say that that's not -- we have not incurred issues around that. But probably more holistically, it's something that we watch very carefully. And also, we spend a lot of time talking to shareholders about it because it's got that macroeconomic concern.

Okay. Next question. How should we think about annual CapEx following the completion of the WCP A project?

Sounds like one for the CFO, James.

Happy to take it. Yes. So look, at the end of this year, we'll have probably in the region of $60 million left on the WCP A project. So look, substantially all behind us, but still quite a significant investment over the next few years. That actually spreads out all the way through to sort of 2031, 2032, though, as we move into Nataka and we build the sort of associated infrastructure that's required to sustain mining there.

There's no major development CapEx on the horizon. There will be some project CapEx, little bits and pieces here and there. If you think about sustaining and improvement CapEx, I think this year, we've guided at around $50 million. The improvement CapEx in that is what we call the SMOs, the selective mining operations, which are kind of small modular plants that are a little bit more nimble than the large dredge mining operations that we have and can go into pockets of high-grade resources.

And we're looking to expand that capacity over time. Probably this year, at $50 million, there's probably $30 million to $35 million of -- maybe a little bit more of sustaining and then some spend on the SMOs. And I think most years, if you think about sustaining capital and improving capital, it's going to be in that sort of range. It could be as low as $30 million if we don't have kind of improvement capital to spend.

If we have opportunities or if there are lumpy elements of sustaining capital, it could get up into the mid-40s or even a little higher again. So I think that's probably the right range to think about, highly opportunity dependent as we see opportunities for deploying more capacity like the SMOs, we'll take them. Equally, some of the sustaining capital work that we do is a little bit lumpy. And so some years will be lower, some years will be higher.

And a related question, post the completion of the WCP A project and the resulting step change in free cash flow, should shareholders expect a step up in distributions? Or would Kenmare consider using its financial strength to support M&A activity?

Look, happy to take that, Tom, unless...

I'll finish it, James, you can start it.

I think it will probably be a little bit of -- well, look, I don't know if it will be a bit of both. Certainly, in the first instance, obviously, after WCP A project, and we will have taken on quite a lot of debt. There'll be some emphasis on bringing the balance sheet back to a more neutral position.

So that will be a priority. The shareholder returns, as I said earlier, we've got a history of paying out good shareholder returns, and that will certainly still be on the agenda. M&A will be largely opportunistic where we see opportunities that are value enhancing, we're certainly not averse to them.

I think the Moma asset is a really unique asset in this industry and to be able to match that is quite challenging. But equally, there's appeals around building out a more diverse portfolio as well. So we'll sort of balance our activity in that space based on the opportunities that are presented.

Yes, I think that's fair. I mean, I think we recognize that as the question suggests, the future is different from the past in terms of obligatory CapEx and big multi-hundred million dollar investments. And so we have a lot more discretion as to how we manage our cash flow, and we need to give our shareholders and the investors some insight into how we think about that. I think we'll continue to pay normal dividends based on profitability.

We may occasionally do special dividends if pricing is strong, which hopefully will be in due course. And I suppose we always have to balance the opportunistic M&A that James spoke about there with the fact that our own shares represent a pretty good investment, too. And the biggest buyer of Kenmare shares in the last 5 years has been Kenmare. We bought back 15% of the register because we believe in the long-term value of the business.

And I think our shareholders are -- want to understand that we think about the business the way they do as well. So -- and look, I think James is absolutely right. Our first priority will be stabilization, de-gearing and proving that we can operate well and attack it. Then we lift our head, think about the one next.

Next question. It looks as if monazite concentrate production capacity has increased. Are there plans to increase it further?

Ben?

Certainly, the production of our monazite-rich product has improved. A lot of it is down to the way we've been processing elsewhere. So as we do better at making better zircon products and we're better able to separate away the monazite content. So we've done better over the last few years at improving that.

To make a more concentrated product is quite a costly affair. And as of now, we haven't got an export facility that's capable of taking it in a more concentrated form. So at this point, we're quite happy with the -- that we're sort of in the sweet spot for that product. But if markets change, we may down the line, improve that product further.

Kenmare was subject to a takeover bid earlier this year, but you terminated offer discussions. Can you tell us how the Board reached that decision?

Sure. Look, I think -- and James mentioned the costs and so on. I think the takeover approach is a very interesting period. I think it's certainly shown a value for the market and for shareholders on the fundamental value of Kenmare. -- and it certainly piqued the interest of nonholders in meeting us to understand what our plans are and to form their own view on that. The approach we had from my predecessor, Michael Carvill and Oryx Global Investors was a very credible one.

These are people who know mining, and Michael knows Moma like nobody else. So we had to take it seriously. And when they came at a price that was a significant premium to the price on the day before and indeed a significant premium to where we are today, our Board felt the obligation to grant them due diligence to give them the chance to get that price up a little bit and to get a price that we could recommend to shareholders based on our engagement with shareholders about what they expected.

And that diligence and indeed, their financing and other arrangements took a number of months, as you'd expect, because to be honest, the announcement was premature. It came pursuant to a media leak. And to be honest, they were a little bit unfortunate. During that time, you had Liberation Day. And during that time, the U.S. dollar depreciated significantly against sterling. Let's remember that Moma and Kenmare is a dollar business.

Our shares are quoted in sterling and any deal price would have to have been in sterling. And basically, the GBP 5.30 that they proposed got significantly more expensive during that time. And on a constant dollar basis, it was only worth GBP 4.90. So they weren't going to be in a position to sustain and they advised us of this, and we mentioned this to the market to sustain the initial price they'd approached us with. And they still had some diligence to do.

And I think the Board was of the view that even if they did come with a valuation that was significantly below GBP 5, so that wouldn't be attractive to shareholders. And on that basis, we terminated the discussions. It doesn't mean that they can't come back. It doesn't mean that the long-term value at moment is in any way diminished.

It doesn't mean that we don't -- we and the shareholders don't believe that in a couple of years' time when the CapEx has passed and hopefully, our implementation agreement is concluded and pricing is better, that an approach might not be made at a substantially better price. But it was a seemingly logical decision to make at the time. And I think we spoke to probably 70% of our share register in the days afterwards, and they all supported that decision without much debate.

And just a follow-up question. Do you think the consortium might come back with another offer or that any other players might make a bid?

Look, the consortium are welcome to come back. And while nominally, they have to walk away for 6 months, I think our Board is very clear, and we said to shareholders, if somebody knocks on the door and they've got a proposition for the company that we think shareholders would like to hear, we're very open to that. So I can't speak for Oryx or Michael, but I know that they recognize the value in the business.

As to other parties, you can never discount an opportunistic bid. But equally, I think there is some flux in the titanium minerals market at the moment with probably the biggest player, Rio Tinto, contemplating a strategic review of their own presence in the space. And I suspect that's something that people will be looking at. Your anybody who is interested in the sector will be looking at. So never say never, but I think it's probably not as obvious a time as people might expect for a further approach.

Thanks, Tom. That's all the questions we have for now. So if you'd like to make some closing remarks.

Cool. Thank you very much, everybody. Hopefully, this has given you a good insight into the company. You see our contact details, Katharine's contact details and the Investor Relations functions contact details there. We're always happy to hear from current or prospective investors to answer any questions and to engage on anything you want to know about the company.

And we obviously make regular announcements. I would also advise you or suggest that you keep an eye on our website where we have really outstanding updates on the WCP A project development progress, which shows you not quite on a daily, but certainly on a weekly basis, what's happening and it makes -- gives you a good perspective on the amount of work that we've done this year, how much less risky the future is than the past of that project and what our plans for the future are. So thank you very much, and I really appreciate you all spending the time with us today.

That's great. Well, thank you all for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This going to take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of Kenmare Resources Plc, we'd like to thank you for attending today's presentation, and good afternoon to you all.