BASE Resources, a company that operates Kenya’s largest mine, the Kwale mineral sands deposit, ended 2018 debt free following solid to strong pricing for the industrial mineral and higher tonnages which helped offset a decline in grade.
Production of the firm’s main mineral, Ilmenite, came in at just over 455,000 tonnes but the prospect of continued lower grades ahead of relocating mining to an adjacent section of the deposit has resulted in a downgrade for 2019 production.
Ilmenite production would be between 385,000 to 415,000 tonnes compared to previous guidance of 420,000 to 450,000 tonnes while output of rutile and zircon was also lowered to a maximum of 94,000 tonnes and 34,000 tonnes respectively.
Mining of the South Dune would start in June, a month earlier than planned, owing to quicker depletion of Central Dune where current operations are based.
Commenting on Toliara Sands, Base Resources’ Madagascar project, the company said it was on track to complete a prefeasibility study in March which would set up for completion of a definitive feasibility study by December. In the meantime, the company was working on the development of selected mining, process and infrastructure options as well as the distribution of the first product.
But the good news was undoubtedly the removal of all net debt. Some $24.8m had been removed in the final quarter of the year which leaves it with cash reserves of $49.2m and a Revolving Credit Facility drawn to $48.2m. “Future cash generation will now be available to contribute to the progression of the Toliara Project,” it said.
Base said it was continuing to discuss with Kenya’s national treasury the refund of $24.3m in VAT. No progress had been reported to date.
