Base says talks to lift Toliara suspension to resume

Madagascar's President Andry Rajoelina makes a national statement during day three of COP26 at SECC on November 2, 2021 in Glasgow.

BASE Resources said finalising its Toliara project had become a priority for the Madagascar government following elections in the African island nation.

Commenting in its December report the company said talks had resumed over new fiscal terms for the proposed project which was suspended by the government in 2018.

In November Madagascar re-elected president Andry Rajoelina for a second term. Rajoelina has reappointed the country’s mines minister.

During the project hiatus, Base has reassessed Toliara in the context of new demand for battery minerals. Following a study, the company said it woud be feasible to produce monazite, a rare earth, from the site at an additional capital expenditure of about $71m.

Adding a monazite revenue stream would inflate the total capital cost of Toliara in its first phase development to $591m, the company said.

Monazite production would increase the net present value and free cash flow of Toliara 100% to $10.6bn over its life, the company said. “Put simply the outcomes from our monazite PFS reinforce our belief that Toliara is the best undeveloped mineral sands project in the world,” said Tim Carstens, MD and CEO of Base Resources in November.

Base, which is scheduled to report its half year numbers on February 26, expects to close its Kwale mine in Kenya by year-end. This was after failing to find viably economic extensions to the asset.

As of December 31, Base had cash of $78.9m and no debt.

Shares in the company gained about 6.6% on the Australian Securities Exchange following the news today. On a 12 month basis, however the stock is 27% lower.