Base Ilmenite Production Increased by 3.56% in the First Quarter

Mining operations at the South Dunes ore body continued as planned 4-day mining tonnage was lower than the previous quarter's mine relocation and 5-day power outage due to the failure of one of the two pressure pipes used to recover surface water from the tailings pond facility (TSF). During the power outage, mining was suspended to prevent further deposition of fine tails at the Wet Concentration Plant (WCP) to implement necessary remedial measures. After the outage, mining returns to normal throughput. Mined heavy minerals (HM) grades were slightly higher this quarter at 3.84% (previous quarter: 3.82%). WCP Heavy Mineral Concentrate (HMC) production was lower at 133kt (previous quarter: 153kt) due to lower production. Inventories fell to 10kt (23kt in the previous quarter) due to lower HMC production. Sand tails continue to be deposited over the mined central dune area capped with a 2-meter thick mud/sand layer to help retain moisture and follow-up restoration and land use. Restoration of Central Dune Slopes and Plateau Continues Planning and Post-mining Land Use Agricultural Experiments Continued Restoration of South Dune Gobs is on schedule, but little rainfall hinders economic growth.

Bulk loading operations at Kwaleoperations' Likoni export facility continued to run smoothly, with a total quarter of 95kt of bulk ilmenite and rutile shipped (previous quarter: 138kt). The shipment of rutile and zircon in containers through the port of Mombasa is also on schedule.

Total cash operating costs were $16.9 million, down from the previous quarter ($18.1 million last quarter), with lower production operating costs resulting in lower unit operating costs to $149 per ton (rutile, ferrotitanium) as final production stabilized. ore, zircon, low-grade zircon and low-grade rutile) ($161 per tonne last quarter).

Cost of goods sold rose to $227 per ton (operating costs, adjusted for inventory changes and royalties.

KwaleOperations' production guidance for fiscal 2022 remains: rutile - 73,000 to 83,000 tons; ilmenite - 310,000 to 340,000 tons; zircon - 24,000 to 28,000 tons.