Former FTSE 250 miner Kenmare Resources (KMR) delivered record production of ilmenite in 2016 and expects to produce even more in 2017.
Kenmare produces ilmenite, which is used in paint and sunscreen, at a mineral sands mine at Moma, Mozambique. Production in 2016 increased 18% from 763,500 tonnes to 903,300 tonnes.
Management guidance for production in 2017 was hiked further from 950,000 to 1,050,000 tonnes in 2017.
The news prompted a 6% rally in Kenmare's share price to 281p and marks another step in the company's turnaround since almost running out of money in 2016.
FALL FROM GRACE
The miner slipped from the FTSE 250 amid price declines in ilmenite during a wider commodity price rout which began in 2012.
Unfortunately, this was not the only issue Kenmare faced as it also struggled with overbearing debt.
Last year the company raised $275m (£227m) in equity to reduce borrowing in a deal which proved heavily dilutive to existing shareholders. Net debt declined from $353.5m to $44.9m as of 31 December 2016.
RETURN TO GROWTH
Now with an improved balance sheet, Kenmare is beginning to see an improvement in its end markets.
Better mining conditions - Kenmare struggled with patchy power supply in the past - as well as higher pigment demand as global economic growth picks up, have both contributed.
As well as better-than-forecast ilmenite production, Kenmare's zircon output increased 32% from 51,800 tonnes to 68,200 tonnes.
Zircon is used by chemical companies to create corrosion resistance material coverings, among other applications.
Shares previously flagged the risk of Kenmare's debt mountain and operational risks prior to its refinancing and 200:1 share split which effectively diluted former shareholders out of the current business.
