MD: Base Resources
‘Discussions with the Government of Madagascar on the fiscal terms applicable to the project are now at an advanced stage, with a clear pathway for agreement to be reached, and the suspension of on-ground activities lifted’
SHARES in Base Resources, a mineral sands mining firm, sank to their lowest in two and a half years in December, reflecting, perhaps, some of Tim Carstens’ frustration in 2022. Chief among these was Base’s failure to agree new fiscal terms with the Government of Madagascar that would finally pave the way for the development of Toliara Sands, a potentially transformational project for Base, and help it lessen its reliance on Kwale in Kenya, its sole means of revenue.
Carstens has said all the groundwork is in place, so maybe this year is when Toliara gets lift-off. But we said that last year. There has been frustration too in attempts to build additional resource options in Kenya. A suspension on new mining permit awards has been in place in Kenya for two years, preventing it from exploring Kuranze, a mineral sands project on the border with Tanzania. The hope is that with the election of Kenya’s new president, William Ruto, there can be a lift in the bureaucratic freeze. Kwale has foreseeable production until 2024, so organic growth is the name of the game for Base.
The Kwale South Dune extension and Bumamani project will go some way to achieving that. Drilling has also started at Kwale East. It’s worth mentioning that despite these issues, Base is a pretty good business. The company ended its 2022 financial year (June 30) with net cash of $55.4m, enabling it to pay a $24.4.m (unfranked) dividend to shareholders. The market for minerals sands, used in the manufacture of paint pigments among other industrial uses, is pretty good although Carstens has warned of some headwinds in the coming year.
LIFE OF TIM
A chartered accountant by trade, Carstens has been the MD of Base Resources since formation in 2008. Previously, he circulated through a number of executive positions at Australian and offshore junior and midcap mining companies such as Perilya, North Ltd and Robe River Iron. Last year, he participated in the annual off-road 4x4 racing competition in Kenya known as the Rhino Charge. The race raises money for Rhino Ark Kenya, a nongovernmental organisation that works to conserve and protect Kenya’s mountain-range ecosystems. His car, called ‘Aussie Rules’, placed 31st of 50 entrants.