Kenmare Resources, the Dublin-based mineral exploration company, expects its losses to be halved by the end of the year. Speaking at the company's a.g.m.

yesterday, Mr Michael Carvill, managing director, said expected returns from the company's Ancuabe mine and the potential present for gold exploration in the former Yugoslavia would increase Kenmare's cash flow.

In 1996, the company reported losses before tax of £2.2 million and a loss per share of 1.52p. There was also a large increase in operating expenses, from £653,560 to £1.65 million. The company's main interests are the Congolone mineral sands project, the Ancuabe graphite mine and Niassa

Gold field, all in Mozambique.

The most recent development in the company was the signing of joint ventures for gold exploration in the former Yugoslavia.

In the Niassa field, about a quarter of the drilling of the S1 structure is done. At this stage, according to Mr Carvill, the mine is "uneconomical", but he insists the complete drilling programme needs to be finished before any real assessment can be reached.

He said the Niassa field is too large to be drilled by Kenmare alone, so the company was holding discussions with "several major players", interested in buying into the 320-square-kilometre field.

Mr Carvill said the Ancuabe graphite mine was possibly the main contributor to losses in the last year. He said that an almost completed "capacity upgrade"

would see the mine produce about 800 tonnes of graphite a month, helping to produce "a positive cash flow".

He said the Congolone mineral sands project was the "most exciting development". The project is a joint venture with BHP.

Kenmare is the first international mining company to enter the former

Yugoslavia. Mr Carvill said it was not possible to quantify the gold reserves in the mines at Mijin Kladinac and Aldinac, but joint venture agreements with

Gemini IMS and Geoinstitut were "very successful".