Tim Carstens

It will be an enduring comfort to all those at Base Resources, its CEO included, if China continues to support prices for mineral sands as well as it has, especially postCovid-19. Strong ilmenite demand helped shares in Base Resources to a three-year high by end-2020. Whilst share prices rise and fall, it’s some indication that 2020 worked out pretty well for the company. It well might not have. Key in this regard was the successful ramp up of South Dune, the newest section of Base’s Kwale mine in Kenya. A pre-feasibility study on a North Dune extension is due in the first quarter.

Securing new production at Kwale is very necessary considering that the firm’s transformative $596m Toliara Sands project in Madagascar is trapped in a kind of political amber. The project was suspended in late 2019 after the Malagasy government asked for new fiscal terms. The onset of Covid-19 travel-related bans did little to speed up the process of negotiation. The outcome for Carstens has been a frustrating delay that won’t see the project get an investment decision until the second half of this year. Base Resources unveiled a maiden dividend at its year-end results in mid-2020 on the back of a $39.6m taxed profit. It didn’t need to sit on the cash; especially as some $50m of the $75 fully drawn down revolving credit facility accessed in the teeth of the Covid-19 would be repaid.

So no small comfort for shareholders whilst the firm waits on development and fiscal permits at Toliara. There’s a bit of tension with the Kenyan treasury: VAT refunds totalling $17.2m as of end-September are waiting payment - not an unheard of phenomena among developing economies.<\p>