Kenmare Resources plc

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: [email protected]

Kenmare Resources plc ("Kenmare" or "the Company")

2 August 2016

Q2 & H1 2016 Production Report

Overview

• Total shipments of finished products in Q2 2016 up 133% to 309,000 tonnes (Q2 2015: 132,700 tonnes), a new quarterly product shipment record

• Ilmenite production increased 18% to 217,900 tonnes (Q2 2015: 185,000 tonnes)

• Zircon production increased 46% to 16,900 tonnes (Q2 2015: 11,600 tonnes)

• Ore mined in Q2 2016 increased 5% to 7,386,200 tonnes (Q2 2015: 7,061,000 tonnes)

• Heavy Mineral Concentrate ("HMC") production in Q2 2016 increased 21% to 331,300 tonnes (Q2 2015: 274,800 tonnes), product of higher tonnes mined and increased grade, as expected

• Production guidance of 950,000 tonnes of ilmenite production in 2016 (+/- 10%) maintained

• Production in H2 2016 expected to increase from H1 as a result of increases in dry mining, grade and operating time

• Power stability has remained consistent through Q2 2016

• Capital restructuring and material deleveraging completed at end of July, resulting in gross debt reduced 74% to US$100 million and US$75 million of additional cash for working capital purposes and fees and expenses

Statement from Michael Carvill, Managing Director:

"The strengthening of the balance sheet, allied with falling cash costs and consistent productivity gains at Moma, positions Kenmare to benefit from the improvement in the titanium feedstock market we are currently experiencing as higher ilmenite prices are reflected in revenues for the second half of 2016."

Production

Production from the Moma Mine for Q2 2016 and H1 2016 was as follows:

* Excavated Ore and grade are prior to any floor losses.

During Q2 2016, Kenmare mined 7,386,200 tonnes of ore at an average grade of 4.91% and produced 331,300 tonnes of HMC. Finished product volumes for the period included 217,900 tonnes of ilmenite and 16,900 tonnes of zircon (including 6,000 tonnes of a lower grade secondary zircon product).

The tonnage of ore excavated increased 5% in comparison to Q2 2015 as mining conditions improved, while grade increased by 14% in Q2 2016 compared with Q2 2015, resulting in an overall 21% increase in HMC production. As noted in the Q1 2016 operations report, grade was expected to rise from the end of Q2 2016 and is expected to rise through the second half of the year. Dry mining restarted towards the end of Q1 2016 for Wet Concentrator Plant ("WCP") A and is currently being commissioned for WCP B, both of which should contribute to higher volumes of ore being mined in the second half of 2016.

Increased volumes of ore mined, grade levels, recoveries and operating time should all contribute to higher production levels in H2 2016, in order for the Company to achieve production forecasts for 2016. The expected drawdown of intermediate magnetic concentrate will also contribute to ilmenite production in H2 2016.

Ilmenite production for the quarter was 217,900 tonnes, up 18% compared to 185,000 tonnes in Q2 2015. Total zircon production for the period increased 46% over Q2 2015 to 16,900 tonnes. This was primarily a result of increased non-magnetic recoveries, which are forecast to continue increasing through the second half of 2016. Secondary zircon production in particular saw a pronounced improvement as a result of revenue maximisation projects being implemented through circuit changes to deliver additional zircon.

Shipments of total finished products in Q2 2016 amounted to 309,020 tonnes, comprised of 291,628 tonnes of ilmenite, 15,682 tonnes of zircon (including 5,375 tonnes of secondary grade zircon) and 1,709 tonnes of rutile. The late arrival of a vessel and inclement weather at the end of March delayed the shipment of two large ilmenite parcels into April. These delayed shipments, in combination with strong underlying market demand for ilmenite, contributed to a record volume of shipments in Q2 2016.

Closing stock of HMC at the end of Q2 2016 was 35,753 tonnes, compared with 14,809 tonnes at the start of the year. Closing stock of intermediate magnetic concentrate at the end of the period was 54,289 tonnes. Closing stock of finished products at the end of H1 2016 was 230,052 tonnes, of which 103,883 tonnes were being held for customers under bill and hold arrangements.

Power

The Moma mine has continued to experience stability in power quality and reliability as a result of the additional transmission capacity commissioned by Electricidade de Mocambique ("EdM") in December 2015. Electricity generation capacity in northern Mozambique has also been increased by EdM, with a ship-based 100MW mobile power generation plant positioned nearby at Nacala since April 2016. The plant is currently operating and provides significant additional capacity in the stabilisation of the network. Power should no longer be a fundamental constraint on Moma's ability to produce. However, the diesel-powered generators remain available on standby should the need arise.

Market

Kenmare saw improvement in the sulphate ilmenite market in Q2 as supply/demand conditions continued to tighten. Chinese domestic ilmenite prices have been steadily increasing since the beginning of the year and Kenmare has implemented price increases on spot sales during Q2 to be shipped in the early part of Q3.

This is due to a combination of improved offtake from the pigment sector, as price increases for pigment gather momentum on the back of improving global demand conditions, and continued decline of ilmenite supply from a number of regions, most notably Chinese domestic ilmenite production from Sichuan province. Ilmenite production in Sichuan is a by-product of iron ore mining, which is now in decline due to oversupply in the iron ore market as cheaper, better quality imported iron ore continues to displace higher cost, lower quality production in Sichuan.

Ilmenite supply reductions have also been seen in Russia and Australia, due to mine closure and depletion, while reductions in other regions are also evident, principally due to poor mining economics. Meanwhile excess ilmenite inventories, which ensured the market was adequately supplied in 2015 despite the reduction in primary production, appear to have declined significantly and Kenmare's market intelligence points to low inventory levels at other ilmenite producers. China port inventories by the end of Q2 2016 were the lowest

levels seen in the past three years, down by circa 50% from peak levels in March 2015. Kenmare sells the majority of ilmenite production on long-term contracts with annual or six monthly price renegotiations. Therefore, the increase in ilmenite pricing that we have seen in the first half of 2016 will be largely reflected in revenues for the second half of the year.

In the zircon market there was further price weakness in Q2 due to competitive positioning for sales amongst producers. It is anticipated that a recent price increase announcement by a major zircon producer will reverse the downward price trend seen in recent months and help to provide some stability to the market. Kenmare continues to be well supported by its customer base.

Finance

At 30 June 2016, cash and cash equivalents were US$12.3 million, compared with US$14.4 million at 31 December 2015. The Company's half-yearly results in respect of the six months ended 30 June 2016 will be issued on 24 August 2016.

For further information, please contact:

Kenmare Resources plc

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

Murray Consultants

Joe Heron

Tel: +353 1 498 0300

Mob: +353 87 690 9735

Buchanan

Bobby Morse

Tel: +44 207 466 5000

Forward Looking Statements

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.