Shares in Kenmare Resources surged yesterday after the exploration group substantially raised its target for the amount of metal resources contained in its Moma titanium mine in Mozambique, adding a potential $2.6 billion (€2.2 billion) to the value of the mine.
Dublin-based Kenmare said it now believes the mine contains 101 million tonnes of ilmenite, 40 per cent more than its original forecast of 72 million tonnes.
The revelation follows the discovery of extra resources at the Nataka zone, close to the group's mineral processing plant.
Ilmenite is used in the production of titanium dioxide pigment, the majority of which is used as whitener for paint, paper and plastic.
It trades at around $90 per tonne.
Analysts welcomed the announcement though they said the benefits would not be seen for a while.
Job Langbroek, an analyst at company broker Davy, said the discovery made the Moma site one of the biggest reserves of the titanium mineral in the world.
"It guarantees a longer life for the mine," he said, adding that shareholders should be pleased with the announcement.
The stock jumped in both Dublin and London, ending the day up almost 16 per cent, or 10 cent, at 73 cent in Dublin and more than 12 per cent, at 49.75 pence in London.
Kenmare financial director Tony McCluskey said yesterday that the project is now 81 per cent complete and is on track to start extracting titanium at the end of this year as scheduled.
While the target of 700,000 tonnes of ilmenite a year for 20 years from the site is unchanged following yesterday's announcement, the potential for upside is vast, he said.
"We are very pleased with the progress of the mine and the potential of the new findings," said Mr McCluskey.
Kenmare yesterday also announced the appointment of several highly experienced mining individuals to manage the operations, a move that was welcomed by Mr Langbroek.
Wayne Knott, previously operations manager for Iluka Resources, was named as general manager, while Kenmare also appointed a mining manager, a resident geologist, a mine planning manager and an engineering manager.
