Base Resources: Quarterly Activities Report March 2021

29th April 2021 | Base Resources

African mineral sands producer, Base Resources Limited (ASX & AIM: BSE) has provided a quarterly operational, development and corporate update.

Key Points

  • Kwale Operations maintained operational consistency through the quarter with health and safety protocols in place to minimise the risk of COVID-19 to personnel and surrounding communities.
  • Kwale Operations FY21 production guidance increased for both ilmenite and zircon.
  • Ilmenite and rutile prices trended upwards in the quarter, with higher zircon prices secured for the June quarter.
  • Kwale North Dune PFS completed, with a focused study on mining higher grade subsets of the North Dune and Bumamani deposits underway and due in mid-2021.
  • Discussions with the Government of Madagascar on Toliara Project fiscal terms continue to progress.
  • Half-year dividend of AUD3.0 cents per share paid.
  • Outstanding US$25 million balance of the revolving credit facility repaid, and facility retired early.


Base Resources continues to closely monitor the COVID-19 pandemic and its impacts on the Company’s business, people and wider stakeholders. The Company’s Kwale Operations in Kenya continue to operate under a suite of mitigations aimed at protecting the health and safety of our employees and neighbouring communities, including modified workplace practices and a focus on hygiene and social distancing. As the number of COVID-19 cases in Kenya and Madagascar have increased significantly in recent weeks, the Company has also re-introduced work-from-home protocols for non-operational staff. The Company is also assisting governments and communities in both Kenya and Madagascar with several initiatives, primarily involving the construction of hygiene facilities, and the donation and distribution of food and medical supplies and equipment.

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Todays Announcement

Base Resources Limited (ASX & AIM: BSE) (Base Resources or the Company) is pleased to provide the operational and financial highlights from the Company’s half-year results for the six-month period ended 31 December 2020 (half-year or reporting period), which include announcement of a half-year dividend of AUS$ 3 cents per share, unfranked, and the following extracts from the Half-Year Financial Report for the Company and its controlled entities (Group) for the same period.


Kwale Operations maintained operational continuity in the period, adapting successfully for the ongoing COVID-19 challenge, and is on track to achieve FY21 production guidance. Firm demand from pigment producers supported ongoing price improvement for ilmenite during the half-year. While zircon and rutile prices moderated in the reporting period, there are positive signs of a price recovery in early 2021.

The Toliara Project progressed with practical completion of lender technical due diligence and submission by the Company’s wholly owned subsidiary, Base Toliara SARL, of a Large Mining Investment Law application, which, if approved, will provide fiscal and legal stability. Discussions with the Government of Madagascar on fiscal terms re-commenced in the period and are ongoing.

Financial highlights for H1 FY21

  • Revenue of US$72.8 million;
  • EBITDA of US$33.9 million;
  • Net loss after tax of US$6.3 million, impacted by Kenyan dividend withholding tax of US$4.5 million incurred on repatriation of surplus cash from operations to the Company;
  • Debt reduced by US$50.0 million as COVID-19 uncertainties subside, with the remaining US$25.0 million scheduled for repayment in March 2021;
  • Payment of the Company’s maiden dividend in October of AUD 3.5 cents per share totalling US$29.8 million;
  • Free cashflow of US$18.3 million (Operating cashflows of US$31.1 million less investing cashflows of US$12.8 million);
  • Net cash position of US$74.6 million as at 31 December 2020;

Half-year dividend of AUS$ 3 cents per share determined.

The Company’s capital management policy is that cash not required to meet the Company’s near-term growth and development requirements, or to maintain requisite balance sheet strength in light of prevailing circumstances, could be expected to be returned to shareholders. With net cash of US$74.6 million at the end of the period and the timing of the Toliara Project final investment decision (FID) still uncertain, the Board has determined a half-year dividend of AUD 3 cents per share, unfranked, which will be paid wholly from Conduit Foreign Income. This will bring total dividends to AUD 6.5 cents per share in 12 months. The record date for the half-year dividend is 15 March 2021 and the payment date is 31 March 2021.

Operational highlights for H1 FY21

  • A COVID-19 response that continues to be effective in maintaining the health and wellbeing of employees, whilst delivering operational performance;
  • Production of 33,684 tonnes of rutile, 144,363 tonnes of ilmenite and 12,677 tonnes of zircon from Kwale Operations.;
  • Continued strengthening of demand for ilmenite with current prices the highest ever achieved by the Company;
  • Kwale Operations mine life extension opportunities progressed, with the North Dune pre-feasibility study due for release early in the June quarter and exploration drilling commencing in the North Vanga region;
  • Lost Time Injury Frequency Rate of zero across the group, with there being no lost time due to injury since 2014;
  • US$1.8 million invested in community and environmental programs, with an additional US$1.0 million contribution to support vulnerable communities in Kenya and Madagascar in navigating the impacts of the COVID-19 pandemic.

Managing Director of Base Resources, Tim Carstens, said:

“Kwale Operations performance has been consistently strong throughout the half year and is on schedule to meet our FY21 production guidance. Outcomes for the remainder of FY21 are expected to be stronger again with firm market demand supporting price increases for all our products. Progress towards Kwale mine life extension remains a priority with the North Dune pre-feasibility study nearing completion and the recent resumption of our near-mine exploration program.”

“On-the-ground activity at the Toliara Project remains suspended as we engage with the Government of Madagascar in relation to the fiscal terms applicable to the project. This, together with international travel restrictions and broader COVID-19 measures and impacts both in Madagascar and globally, has led to the final investment decision to proceed with development of the Toliara Project being delayed. Once fiscal terms are agreed and the suspension is lifted, there will be approximately 11 months’ work to complete prior to FID.”

“At a Group level, we are delighted to be once again delivering meaningful returns to shareholders via dividends whilst remaining committed to the sensible progression of the Toliara Project, and the value generation opportunity this represents for shareholders, as uncertainty resolves.”

The extracts from the Half-Year Financial Report should be read in conjunction with the notes contained in the full version of that report, a copy of which is available from the Company’s website: The full version of the Half-Year Financial Report also contains the auditor’s independence declaration, the directors’ declaration and the auditor’s review report.

The Company has also released a presentation to accompany its Half-Year Financial Report. The presentation contains, among other things, further details about the Company’s half-year results and details about the Company’s expected capital expenditure and settlements for the six-month period ending 30 June 2021. A copy of the presentation is available from the Company’s website:

All references to currency ($ or US$) is United States Dollars, unless otherwise stated.

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