TIDMBSE 
 
AIM and Media Release 
 
15 October 2020 
 
BASE RESOURCES LIMITED 
Quarterly Activities Report - September 2020 
 
Key Points 
 
  * Kwale Operations has maintained operational consistency throughout the 
    quarter with health and safety protocols in place to minimise the risk of 
    COVID-19 to personnel and surrounding communities. 
  * Ongoing demand from customers in the quarter supported a steady price 
    environment for all products. 
  * Additional prospecting licence applications lodged in the Kuranze region of 
    Kwale county. 
  * Discussions with the Government of Madagascar on fiscal terms progressed, 
    including submission of the formal application for LGIM certification (the 
    large-scale mining fiscal and legal stability regime). 
  * Lender technical due diligence for the Toliara Project largely complete. 
  * Activities to support vulnerable local communities affected by COVID-19 in 
    Kenya and Madagascar continued. 
  * Maiden dividend of AUD 3.5 cents per share determined, unfranked, following 
    a strong financial performance in FY20. 
  * With greater clarity on the risks and impacts of the COVID-19 pandemic, 
    US$50.0 million was repaid from the US$75.0 million revolving credit 
    facility drawn earlier in 2020. 
 
African mineral sands producer, Base Resources Limited (ASX & AIM: BSE) (Base 
Resources or the Company) is pleased to provide a quarterly operational, 
development and corporate update. 
 
COVID-19 UPDATE 
 
Base Resources continues to closely monitor the COVID-19 pandemic and its 
impacts on the Company's business, people and other stakeholders.  Kwale 
Operations continues 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.  The Company is also assisting governments and communities in both 
Kenya and Madagascar with several initiatives, primarily involving the 
construction of hygiene facilities, distribution of food and provision of 
medical supplies and equipment. 
 
KWALE OPERATIONS 
 
Production & Sales    Sept 2019     Dec 2019     Mar 2020    June 2020    Sept 2020 
                       Quarter      Quarter      Quarter      Quarter      Quarter 
 
Production (tonnes) 
 
        Ilmenite        73,808       91,406      105,035       84,843       65,863 
 
        Rutile          16,390       19,812       23,683       19,035       15,513 
 
        Zircon          6,980        7,923        9,163        7,590        6,000 
 
        Zircon low       466          546          780          578          426 
grade 
 
Sales (tonnes) 
 
        Ilmenite        60,109      106,544       87,819      102,364       75,502 
 
        Rutile          14,018       13,078       25,280       27,268       11,651 
 
        Zircon          6,713        7,090        7,377        9,086        7,336 
 
        Zircon low       839          616           -          1,516         505 
grade1 
 
[Note (1):  Reported as tonnes of zircon concentrate, it typically realises 
between 30% to 50% of the value of the equivalent volume of standard grade 
zircon, due to rutile credits.] 
 
Mining operations continued according to plan on the South Dune orebody with 
mined tonnage of 3.9Mt at a grade of 3.16% heavy mineral (HM).  Mined tonnage 
was lower than previous quarters due to a planned eight-day stoppage in July to 
move the mining collection hopper further south, which also required the 
installation of a third slurry booster pump.  As outlined in our 2021 financial 
year (FY21) production guidance (refer below), ore grade is forecast to be 
lower during FY21, averaging 3.24% HM (FY20: 3.63%) with the first half of FY21 
expected to see the lowest grades before improving in the second half. 
 
Mining & WCP         Sept 2019     Dec 2019     Mar 2020    June 2020    Sept 2020 
Performance           Quarter      Quarter      Quarter      Quarter      Quarter 
 
Ore mined (tonnes)    4,909,999   4,579,386    4,295,645    4,271,811    3,938,494 
 
HM %                    2.66         4.22         3.86         3.87         3.16 
 
HMC produced          114,149      189,952      153,754      148,699      103,730 
(tonnes) 
 
Wet concentrator plant (WCP) production of heavy mineral concentrate (HMC) was 
lower at 104kt (last quarter: 149kt) due to a combination of lower mined tonnes 
and HM grades.  HMC stocks were reduced to 5kt at quarter end (last quarter: 
16kt).  Sand tails continued to be deposited into the mined-out Central Dune 
area and significant progress was made with rehabilitation work on mined-out 
areas of the South Dune, with 50 hectares shaped and revegetated during the 
quarter. 
 
MSP Performance      Sept 2019     Dec 2019     Mar 2020     June 2020     Sept 2020 
                      Quarter      Quarter      Quarter       Quarter       Quarter 
 
MSP Feed (tonnes of   121,600      155,217      186,197       145,550       114,873 
HMC) 
 
MSP feed rate (tph)      67           86           90           78            61 
 
MSP recovery % 
 
        Ilmenite        103          100           99           99            100 
 
        Rutile          103          102           99           100           102 
 
        Zircon           86           88           87           85            86 
 
Total mineral separation plant (MSP) feed tonnage was lower than the prior 
quarter, constrained by available HMC, while recoveries were slightly higher. 
Consequently, production of all final products decreased compared to the prior 
quarter. 
 
Bulk loading operations at the Company's Likoni Port facility continued to run 
smoothly, dispatching more than 85kt of bulk ilmenite and rutile during the 
quarter (last quarter: 125kt).  Containerised shipments of rutile and zircon 
through the Mombasa Port proceeded according to plan. 
 
Summary of unit costs        Sept 2019   Dec 2019    Mar 2020    June 2020   Sept 2020 
& Revenue per tonne (US$)     Quarter     Quarter     Quarter     Quarter     Quarter 
 
Unit operating costs per       $173        $140        $128        $153        $189 
tonne produced 
 
Unit cost of goods sold per    $213        $141        $175        $189        $192 
tonne sold 
 
Unit revenue per tonne of      $469        $355        $476        $479        $413 
product sold 
 
Revenue: Cost of goods sold     2.2         2.5         2.7         2.5         2.1 
ratio 
 
Total operating costs of US$16.6 million were marginally lower (last quarter: 
US$17.2 million) due to lower processing, port and rehabilitation provision 
charges.  Despite the lower total operating costs, the reduced production 
levels resulted in higher unit operating costs of US$189 per tonne produced 
(rutile, ilmenite, zircon, and low-grade zircon) (last quarter: US$153 per 
tonne). 
 
Unit cost of goods sold is influenced by both the underlying operating costs 
and product sales mix.  Operating costs are allocated to each product based on 
revenue contribution, which sees the higher value rutile and zircon products 
attracting a higher cost per tonne than the lower value ilmenite.  Therefore, 
the greater the sales volume of rutile and zircon relative to ilmenite in a 
quarter, the higher both unit revenue per tonne and unit cost of goods sold 
will be. 
 
Ilmenite, and most of the rutile, is sold in bulk, with typical shipment sizes 
of 50-54kt for ilmenite and 10-12kt for rutile, which means any given quarter 
will usually contain either one or two bulk rutile and ilmenite sales.  Zircon 
is sold in smaller parcels and sales generally align with production volume. 
Product sales mix will therefore vary depending on the number of bulk shipments 
of ilmenite and rutile in each quarter. 
 
Cost of goods sold of US$192 per tonne sold (operating costs, adjusted for 
stockpile movements, and royalties) increased marginally due to higher unit 
operating costs, offset in part by the higher proportion of ilmenite in the 
sales mix compared to rutile in the quarter (last quarter: US$189 per tonne). 
For the same reason average unit revenue decreased to US$413 per tonne (prior 
quarter: US$479 per tonne).  From the combination of these factors, the revenue 
to cost of goods sold ratio for the quarter decreased to 2.1 (last quarter: 
2.5). 
 
FY21 PRODUCTION GUIDANCE 
 
Base Resources' prevailing production guidance for FY21 remains unchanged. 
 However, due to the ongoing inherent uncertainties associated with the 
COVID-19 pandemic, a halt to, or curtailment of, operations at some point in 
the future remains possible.  In such an event, the Company may update or 
withdraw its FY21 production guidance, as appropriate in the circumstances. 
 
Kwale Operations FY21 production guidance remains at: 
 
  * Rutile - 70,000 to 80,000 tonnes. 
  * Ilmenite - 270,000 to 300,000 tonnes. 
  * Zircon - 23,000 to 27,000 tonnes. 
 
The above FY21 production guidance is based on the following assumptions: 
 
  * Mining of 17.2Mtat an average HM grade of 3.24%, with all FY21 volume 
    coming from Ore Reserves2. 
  * Average MSP feed rate of 66tph. 
  * Average MSP product recoveries of 100.5% for rutile, 100% for ilmenite and 
    84% for zircon. 
 
[Note (2):  The Ore Reserves estimate underpinning the above production 
guidance was prepared by Competent Persons in accordance with the JORC Code 
(2012 edition).  For further information regarding the Ore Reserves estimate 
refer to Base Resources' announcement on 27 July 2020 "Updated Kwale South Dune 
Mineral Resources and Ore Reserves estimate" available at https:// 
baseresources.com.au/investors/announcements/.  The above production guidance 
is the result of detailed studies based on the actual performance of the Kwale 
mine and processing plant.  These studies include the assessment of mining, 
metallurgical, ore processing, environmental and economic factors.] 
 
MARKETING 
 
Global pigment producers have indicated that pigment demand improved 
progressively throughout the quarter.  Overall, the COVID-19 related decline in 
global pigment demand appears to have been softer than previously anticipated - 
likely due to some pigment sectors (e.g. plastics, DIY paint and other 
coatings) performing better than expected.  Recent commentary from a major 
global paint producer indicates that the recovery in paint demand through the 
second half of 2020 could more than offset the decline in demand seen in the 
first half of the year.  This is a positive indicator for a potential recovery 
in pigment production and feedstock demand over the coming months. 
 
The significant drop in pigment demand experienced by western pigment producers 
through the June quarter led to a number of these producers reducing their 
production rates from June onwards.  However, large Chinese pigment producers 
have maintained production at high levels as their pigment exports were 
sustained and domestic pigment demand recovered from the middle of the June 
quarter.  As a result, Chinese pigment production between January and August 
2020 was approximately 8% higher than the same period in 2019. 
 
Chinese pigment producers (the Company's main ilmenite customers) again 
confirmed their demand for ilmenite and their intention to proceed with planned 
shipments over the remainder of calendar year 2020.  Recovery of ilmenite 
production in China and India, following COVID-19 related shutdowns through the 
March and June quarters, is being offset by lower production of ilmenite from 
other major sources.  This is resulting in an ongoing tight ilmenite market, 
providing good support for ilmenite prices. 
 
While contractual positions underpinned rutile sales and prices in the quarter, 
the decrease in demand for rutile from western pigment producers due to lower 
operating rates, and erosion of demand from the other minor end use sectors, is 
placing downward pressure on rutile prices into the December quarter. 
 
Demand for zircon remained subdued through the quarter, however, the Company 
was fully sold on zircon production in the quarter.  A reduction in supply from 
some major zircon producers to meet market conditions, maintained a relatively 
balanced market and zircon prices were stable through the quarter.  Sales 
contracts are in place for all zircon production in the December quarter, but 
the subdued demand and seasonal factors, combined with cautious buying 
behaviour, have resulted in zircon prices moving marginally lower. 
 
SAFETY 
 
There were no lost time injuries during the quarter or in the past year, at 
Kwale Operations or the Toliara Project, resulting in a lost time injury 
frequency rate (LTIFR) for the group of zero.  Compared to the Western 
Australian All Mines 2018/2019 LTIFR of 2.2, this is an exceptional performance 
reflective of the ongoing focus and importance placed on safety by management. 
Base Resources' employees and contractors have now worked 21.9 million hours 
lost time injury (LTI) free, with the last LTI recorded in early 2014.  No 
medical treatment injuries were recorded during the quarter.  With one medical 
treatment injury recorded in the last 12 months, Base Resources' total 
recordable injury frequency rate (TRIFR) is 0.24 per million hours worked. 
 
As reported in the Company's December 2019 quarterly3, in January 2020, an 
incident with Kwale Operations haulage contractor tragically resulted in a 
fatal injury to another road user on a public road.  The safety of Base 
Resources' activities for its people and the communities in which it operates 
is a fundamental commitment for the Company and the incident was addressed at 
the highest level.  Consistent with the findings of the internal investigation 
into this incident, a number of changes have been implemented to further 
improve oversight of maintenance and safety practices across all contractors. 
 
[Note (3):  Refer to Base Resources' market announcement "Quarterly Activities 
Report - December 2019" released on 23 January 2020, which is available at 
https://baseresources.com.au/investors/announcements/.] 
 
COMMUNITY AND ENVIRONMENT 
 
Kwale Operations 
 
Base Resources has continued to assist the Kwale community through the COVID-19 
pandemic, including collaborating with county and national health authorities 
to train community health workers on COVID-19 awareness programs and providing 
additional community-based handwashing equipment to help improve sanitation. 
Food support programs were extended to cater for the economic impact on tourism 
and unemployment in the Kwale region.  The Company was recognised in the 
quarter by the Kwale County Governor for the efforts made in addressing food 
security in the County in response to challenges brought about by COVID-19. 
 
Agricultural livelihood programs at Kwale continued to progress following 
seasonal rains with good harvests for maize, sorghum and green grams, while 
other crops such as cotton will mature later in the year.  The farmers' 
cooperative, PAVI, received direct support from the national government towards 
completion of the Business Park development with an agreement to assist in 
establishment of a nearby ginnery for processing cotton lint. 
 
With the relaxation of some of Kenya's COVID-19 restrictions, construction of 
social infrastructure resumed with commencement of the Mwalewa Girls Secondary 
School in Lunga Lunga and completion of the Mathare water supply scheme 
providing clean water to several villages just north of the mine site. 
 
Rehabilitation activities on the mined-out areas of the South Dune increased 
significantly in the quarter with community groups supplying indigenous 
legumes, grass seed and manure, and youth groups from local villages employed 
to assist with slope stabilisation and planting. 
 
Toliara Project 
 
All community training programs and social infrastructure construction remained 
on hold with the Government's suspension of on-the-ground activities on the 
Toliara Project.  The 24 Malagasy apprentices training in Kenya at Kwale 
Operations have remained on site and continue to progress through their 
two-year apprenticeship programs. 
 
Base Resources continues to work with local authorities to assist in the 
response to the pandemic in the Toliara region by providing support for food 
distribution through the regional government's COVID-19 response committee. 
The Company's face mask production project continued, in conjunction with a 
leading local women's group, with over 48,000 masks now produced and donated to 
the community. 
 
BUSINESS DEVELOPMENT 
 
Toliara Project development - Madagascar 
 
In November 2019, the Government of Madagascar required the Company to 
temporarily suspend on-the-ground activity on the Toliara Project while 
discussions on fiscal terms applying to the project were progressed4.  Activity 
remains suspended as Base Resources continues to engage the Government in 
relation to the country's Large Mining Investment Law (LGIM) regime, fiscal 
terms applicable to the Toliara Project and the lifting of the on-the-ground 
suspension with encouraging progress made, including the lodgement of  the 
formal application for LGIM certification (the large scale mining fiscal and 
legal stability regime). 
 
As noted in the Company's FY20 Full Year Results announcement5, with the 
suspension of activity, international travel restrictions and broader COVID-19 
measures and impacts both in Madagascar and globally, the final investment 
decision (FID) to proceed with development of the Toliara Project has been 
delayed with FID now unlikely to occur before September 2021.  Further guidance 
on a revised FID date will be provided when the suspension of activity has been 
lifted and there is greater clarity on the trajectory of global economic 
activity, the resumption of international travel and financial market 
conditions. 
 
Key activities progressed during the quarter included: 
 
  * Lender's technical due diligence which is now largely complete, with 
    community and environmental due diligence continuing. 
  * Wrapping up processing plant FEED activities so that detailed design can 
    commence six months prior to FID. 
  * Awarding the design contract for the Company's dedicated haul road bridge 
    over the Fiherenana River to allow construction to commence soon after FID 
    to maintain the implementation schedule. 
  * Development of the Environmental and Social Management System. 
  * Development of the implementation readiness systems. 
 
Key activities planned for the coming quarter include: 
 
  * Further engagement with the Government, focused on agreeing fiscal terms 
    and the resumption of on-the-ground activity. 
  * Negotiations with preferred tenderers for the marine, piling and power 
    contract packages. 
  * Ongoing engagement with prospective lenders and joint venture partners. 
  * Continued development of the Environmental and Social Management System and 
    implementation readiness systems. 
 
Total expenditure on the Toliara Project for the quarter was US$3.5 million 
(last quarter: US$4.9 million). 
 
[Notes: 
 
(4):  Refer to Base Resources' market announcement "Toliara Project - 
Government of Madagascar statement" released on 7 November 2019, which is 
available at https://baseresources.com.au/investors/announcements/. 
 
(5):  Refer to Base Resources' market announcement "Base delivers strong 
financial results and maiden dividend" released on 24 August 2020, which is 
available at https://baseresources.com.au/investors/announcements/.] 
 
Extensional exploration - Kenya 
 
Mining tenure arrangements continued to progress with the Kenyan Ministry of 
Petroleum and Mining as a precursor to an anticipated updated Ore Reserves 
estimate to incorporate additional Mineral Resources defined within the Kwale 
Prospecting Licence (PL 2018/0119) but outside the current mining lease SML23. 
 However, progress remains slow as the Government focuses on combating the 
COVID-19 pandemic. 
 
The pre-feasibility study for mining the North Dune Mineral Resource continues 
on schedule for completion in early 2021. 
 
Completion of the remaining drilling program (4,200 metres) in the North-East 
Sector (Kwale East) of PL 2018/0119 remains on hold pending community access 
being secured.  Further drilling of the northern sections of the Vanga 
Prospecting License (PL/2015/0042) remains on hold pending resolution of 
community access issues.  A north eastern extension of the Vanga Prospecting 
Licence is under application (App No/1753) to cover further prospective ground 
which has since become available. 
 
Prospecting licence applications lodged for an area south of Lamu (PL/2019 
0263, 0265, 0266), together with an area in the Kuranze region of Kwale county 
about 70 km west of Kwale Operations (PLA/2019/0260) remain in progress through 
the granting process.  Two additional license applications (Apps No/2510 and 
2512), also in the Kuranze area, were lodged during the quarter.  A Government 
moratorium placed on the issuance of Prospecting Licenses in November 2019 has 
affected the progress of all licence applications, albeit assessment of 
applications has recently recommenced which is seen as a precursor to the 
lifting of the moratorium. 
 
Expenditure on exploration activities in Kenya during the quarter was US$0.2 
million (last quarter: US$0.2 million). 
 
CORPORATE 
 
Maiden dividend 
 
Following the Company's strong FY20 financial performance and position, and 
reflecting our determination to deliver concrete returns to shareholders, the 
Board determined a maiden dividend of AUD 3.5 cent per share, unfranked, in the 
quarter.  With a record date of 21 September 2020, the maiden dividend was paid 
to shareholders on 7 October 2020. 
 
Consistent with Base Resources' growth strategy, the Company seeks to provide 
returns to shareholders through both long-term growth in the Company's share 
price and appropriate cash distributions.  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. 
 
Kenyan VAT receivable 
 
As previously announced, Base Resources has refund claims for VAT paid in 
Kenya, relating to both construction of the Kwale Project and the period since 
operations commenced, which totalled approximately US$17.2 million at 30 
September 2020.  These claims are proceeding through the Kenya Revenue 
Authority process with refunds totalling US$1.8 million received during the 
quarter (last quarter: US$2.6 million).  Base Resources is continuing to engage 
with the Kenyan Treasury and the Kenya Revenue Authority, seeking to expedite 
the refund claims. 
 
With greater clarity on the risks and impacts of the COVID-19 pandemic, the 
Company repaid US$50.0 million of the US$75.0 million revolving credit facility 
(RCF) drawn down earlier in 2020 to enhance liquidity and provide flexibility 
at the start of the pandemic. 
 
The Company's net cash position remained steady during the quarter due to lower 
product sales, timing of sales receipts, capital expenditure at Kwale (US$2.7 
million) and for progression of the Toliara Project and debt service costs. 
 
In summary, as at 30 September 2020: 
 
  * Net cash of US$87.8 million, consisting of: 
      + Cash and cash equivalents of US$112.8 million. 
      + Revolving Credit Facility debt of US$25.0 million. 
  * 1,178,011,850 fully paid ordinary shares on issue. 
  * 54,122,220 performance rights issued pursuant to the terms of the Base 
    Resources Long Term Incentive Plan, comprising: 
      + 6,498,832 vested performance rights, which remain subject to exercise6. 
      + 47,623,388 unvested performance rights subject to performance testing 
        in accordance with their terms of issue. 
 
[Note (6):  Vested performance rights have a nil cash exercise price.  Unless 
exercised beforehand, these rights expire five years after vesting.] 
 
Forward looking statements 
 
Certain statements in or in connection with this announcement contain or 
comprise forward looking statements.  Such statements may include, but are not 
limited to, statements with regard to capital cost, capacity, future production 
and grades, sales projections and financial performance and may be (but are not 
necessarily) identified by the use of phrases such as "will", "expect", 
"anticipate", "believe" and "envisage".  By their nature, forward looking 
statements involve risk and uncertainty because they relate to events and 
depend on circumstances that will occur in the future and may be outside Base 
Resources' control.  Accordingly, results could differ materially from those 
set out in the forward-looking statements as a result of, among other factors, 
changes in economic and market conditions, success of business and operating 
initiatives, changes in the regulatory environment and other government 
actions, fluctuations in product prices and exchange rates and business and 
operational risk management.  Subject to any continuing obligations under 
applicable law or relevant stock exchange listing rules, Base Resources 
undertakes no obligation to update publicly or release any revisions to these 
forward-looking statements to reflect events or circumstances after today's 
date or to reflect the occurrence of unanticipated events. 
 
ENDS. 
 
For further information contact: 
 
James Fuller, Manager Communications and Investor  UK Media Relations 
Relations 
 
Base Resources                                     Tavistock Communications 
 
Tel: +61 (8) 9413 7426                             Jos Simson and Barnaby Hayward 
 
Mobile: +61 (0) 488 093 763                        Tel: +44 (0) 207 920 3150 
 
Email: jfuller@baseresources.com.au 
 
This release has been authorised by the Board of Base Resources. 
 
About Base Resources 
 
Base Resources is an Australian based, African focused, mineral sands producer 
and developer with a track record of project delivery and operational 
performance.  The Company operates the established Kwale Operations in Kenya 
and is developing the Toliara Project in Madagascar.  Base Resources is an ASX 
and AIM listed company.  Further details about Base Resources are available at 
www.baseresources.com.au 
 
PRINCIPAL & REGISTERED OFFICE 
Level 1, 50 Kings Park Road 
West Perth, Western Australia, 6005 
Email:  info@baseresources.com.au 
Phone: +61 (0)8 9413 7400 
Fax: +61 (0)8 9322 8912 
 
NOMINATED ADVISOR 
RFC Ambrian Limited 
Stephen Allen 
Phone: +61 (0)8 9480 2500 
 
BROKER 
Berenberg 
Matthew Armitt / Detlir Elezi 
Phone: +44 20 3207 7800 
 
 
 
 
END 
 

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