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Base Resources to expand mining in East Africa

Monday January 22 2018
base titanium

A worker at Base Titanium’s Kwale mineral sands project. The company is eyeing the Kwale Phase two project to counter declining ore grade. PHOTO FILE | NATION

By GEORGE KAMAU

Base Resources plans to increase its exploration and mining activities in the region, after winning five licences from the Tanzania government to search for mineral sands.

The Australian miner, already producing mineral sands from Kwale in Kenya, has also applied for a licence for more acreage from Nairobi, and is set to complete the $75 million acquisition of Toliara sand mines in Madagascar.

“The acquisition of the initial 85 per cent interest in the wholly- owned Mauritian subsidiaries of World Titane Holdings Ltd, which between them hold a 100 per cent interest in the Toliara Sands Project in Madagascar, is scheduled to complete in the week beginning 22 January 2018,” said the company in a statement.

Base Resources will acquire the remaining 15 per cent interest, with a further $17 million payable on achievement of key milestones, as the project advances to mine development.

Licences

In Tanzania it has secured exploration tenure over 475 square kilometre area after the licences were approved.

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The company said it would spend $32.6 million on phase two of its titanium mining business in Kenya which will start production in June. The company is eyeing the Kwale phase two project to counter declining ore grade, with 10,210 tonnes of low grade zircon produced in the year ended June.

In Kenya it has applied for an additional special prospecting licence covering an area of 136 square kilometres. Its current licence covers an area of 177 square kilometres.

Base Resources posted a profit of $21 million last year, up from a loss of $20 million the previous year.

Reduced debt load

Last year the company reduced its debt load from $204 million to $128 million in June, and further to $65.6 million in December, giving it headroom to take new investments.

Improving mineral prices plus higher demand and production levels are indicators of the company posting higher returns in the current financial year.

Over the past six months, the rutile prices have gone up by up to 10 per cent with ilmenite and zircon also holding up.

In the full year ended June, the company produced 467,359 tonnes of ilmenite, 90,625 tonnes of rutile and 34,228 tonnes of zircon. Its revenue jumped 28 per cent to $215.5 million, with the average price of it product being $255 per tonne against a cost of $105 per tonne.

Base Resources hopes to lower the cost per tonne of its minerals after it adopted a new mining method, called hydro-mining.

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