Kenmare Resources : 2016 Half-Yearly Results

Chatham House, Chatham St, Dublin 2, Ireland. Tel: +353 1 671 0411 Fax: +353 1 671 0810

Rua de Chuindi No.67, Maputo, Mozambique. Tel: +258 21 499 701 Fax: +258 21 499 731 Website: www.kenmareresources.com Email: info@kenmareresources.com

24 August 2016

Kenmare Resources plc (LSE:KMR, ISE:KMR), one of the leading global producers of titanium minerals and zircon, which operates the Moma Titanium Minerals Mine (the "Mine" or "Moma") in northern Mozambique, today announces its half year results for the six month period ended 30 June 2016 ("H1 2016").

• Ilmenite production in H1 2016 increased 24% to 402,900 tonnes compared to H1 2015, zircon production in H1 increased 20% to 28,500 tonnes

• Total shipments of finished products in H1 2016 increased 7% to 441,700 tonnes, a new half yearly record

• Revenues of US$56.2 million (H1 2015: US$73.9 million), as a result of lower average prices due to pricing and subsequent contracts being at the bottom of the cycle in late 2015, and a reduced value sales mix during the period

• The ilmenite market has shown signs of recovery in recent months with prices increasing

• Cash operating costs per tonne of finished product declined 22% in H1 2016 to US$153 per tonne (H1 2015: US$197 per tonne), a result of continued cost savings and increased production

• EBITDA of negative US$10.7 million remains stable year on year (H1 2015: negative US$10.6 million), despite commodity prices reaching lowest point in H1

• Operating loss reduced to US$24.9 million (H1 2015: US$27.2 million)

On 28 July 2016, the Group completed a capital restructuring to reduce debt to US$100 million (from US$392.4 million using agreed exchange rates) and to provide an additional US$75 million of cash for working capital and to meet fees and expenses of the capital restructuring

"The Company has made significant progress in reducing unit operating costs by 22% during the period, through cost savings and increased production. Further reductions are expected in the second half of the year as higher production is generated from increased grade levels, volumes of ore mined, recoveries and operating time. Prices received for our products in H1 2016 are a reflection of the weak market conditions experienced at the end of 2015, when prices for the majority of H1 2016 shipments were struck.

I am pleased with the recent improvement in ilmenite prices from their low point, following four years of decline, and expect higher prices to flow through our revenues in H2 2016 and thereafter. The conclusion of the capital restructuring has provided the Company with a robust balance sheet, reduced interest payments and enhanced liquidity and will position the business to take advantage of what we believe will be a sustained recovery in the market."

A conference call for analysts will be held at 09:30am BST on Wednesday, 24 August 2016. A presentation to accompany the conference call is available on the Company website, www.kenmareresources.com. Participant dial-in numbers are as follows:

UK: 0808 237 0030

Ireland: 1800 936 842

Rest of the world: +44 (0) 203 139 4830

Participant ID# 69337500#

The Half Yearly Financial Report for the period ended 30 June 2016 is available on the Company website, www.kenmareresources.com

For further information, please contact:

Michael Carvill, Managing Director Tel: +353 1 671 0411

Mob: + 353 87 674 0110

Tony McCluskey, Financial Director Tel: +353 1 671 0411

Mob: + 353 87 674 0346

Jeremy Dibb, Corporate Development and Investor Relations Manager Tel: +353 1 671 0411

Mob: + 353 87 943 0367

Joe Heron / Aimee Beale Tel: +353 1 498 0300

Mob: +353 87 690 9735

Bobby Morse

Tel: +44 207 466 5000

This announcement contains some forward-looking statements that represent Kenmare's expectations for its business, based on current expectations about future events, which by their nature involve risks and uncertainties. Kenmare believes that its expectations and assumptions with respect to these forward-looking statements are reasonable. However, because they involve risk and uncertainty, which are in some cases beyond Kenmare's control, actual results or performance may differ materially from those expressed or implied by such forward-looking information.

On 28 July 2016, the Group completed a capital restructuring to reduce debt to US$100 million (from US$392.4 million using agreed exchange rates) and to provide an additional US$75 million of cash for working capital and to meet fees and expenses of the capital restructuring. This was achieved by the raising of new equity from new and existing shareholders, the conversion of certain debt to equity in the Company, and certain debt write-offs agreed by Lenders. The capital restructuring also provided for a reduction in the interest rates on outstanding debt, an extension to the term of that debt, and a principal repayment holiday until February 2018.

In H1 2016, production volumes of Heavy Mineral Concentrate ("HMC") and finished products (ilmenite, zircon and rutile) increased by 33% and 24%, respectively, compared to H1 2015, primarily due to the improvements in power supply and reliability, as well as improved mining techniques and recovery rates at the Mineral Separation Plant ("MSP").

*Additional information in relation to these Alternative Performance Measures ("APMs") is disclosed in the glossary

Revenue of US$56.2 million decreased by 24% or US$17.7 million compared to H1 2015 despite a 7% increase in shipments. H1 2016 ilmenite prices were mainly agreed at the bottom of the market in December 2015. The drop in revenue was principally a result of the average ilmenite prices received during the period declining by 31% on a Free On Board ("FOB") basis, a sharper decline than the underlying commodity market due to a change in sales mix as finished product inventories were reduced, resulting in a higher proportion of lower quality ilmenite sales.

Total operating costs of US$81.1 million decreased by US$20.0 million from H1 2015. Total cash operating costs declined by 4% to US$66.6 million as a result of the full effect of the 2015 cost control measures delivering savings and foreign exchange gains in the period. Management continues to pursue further sustainable cost reductions.

Kenmare recorded an operating loss for the first half of 2016 of US$24.9 million (H1 2015: US$27.2 million) and negative EBITDA of US$10.7 million (H1 2015: negative US$10.6 million). Cash flow generated by operating activity increased by US$9.8 million over the prior period, from negative US$3.2 million in H1 2015 to positive US$6.6 million in H1 2016, benefitting from management's focus on disciplined management of working capital.

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