Base Resources pays interim dividend despite first half loss on one-fifth offtake decline

Ilmenite is used in paint pigments

MINERAL sands miner, Base Resources, announced a three Australian cents per share interim dividend and said it would repay the last of its debt in March, totalling $25m. The company paid a maiden 3.5 Australian cent per share dividend in October.

The returns come against a background of highest ever ilmenite prices achieved by the company and a recovering price trajectory for zircon and rutile, other minerals produced by Base Resources from its Kwale deposit in Kenya.

In addition to Kwale, Base Resources intends to develop the Toliara deposit in Madagascar. However, that prospect is currently on hold as the company and government discuss a new fiscal dispensation. Tim Carstens, MD of Base Resources, said today a distribution of excess cash was the best course of action whilst Toliara was on hold.

“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,” he said.

Interim earnings before interest, tax, depreciation, and amortisation (EBITDA), a decline from $43.5m in the six months ended December in 2019. The company posted a net loss for the period of $6.3m which it said was the impact of a 15% Kenyan dividend withholding tax ($4.5m) incurred on the repatriation of $30m of surplus cash.

But the company also reported a one fifth decline in year-on-year sales volumes which hit the revenue line. Sales were weighted towards the second half of the financial year.

The company had $74.6m in net cash at the close of the six month period.