AIM
and Media Release
28 August 2023
Base
Resources Limited
FY23
results - Kwale continues to deliver strong financial
performance
African
mineral sands producer and developer, Base
Resources Limited (ASX &
AIM: BSE) (Base
Resources or
the Company)
is pleased to present its results for the year ended 30 June 2023 (FY23),
with higher prices across all products delivering an EBITDA of
US$158.6 million and generating cash
flows from operations of US$117.4
million.
The
disciplined application of the Company’s capital management policy
has supported the determination of a FY23 final dividend of AUD
4 cents per share
(unfranked).
Despite
Kwale Operations’ robust operational performance, a net loss of
US$4.8 million was recorded, with
profitability impacted by a non-cash impairment of US$88.9 million following a reassessment of the
carrying value of Kwale Operations, reflecting the increased
operating costs of mining the North Dune, the softening outlook for
mineral sands product prices over the remaining mine life and an
improved understanding of the ultimate costs of
closure1.
The
Toliara Project in Madagascar
remains a significant growth opportunity for the
Company.
Despite
making sound progress in discussions with the Government of
Madagascar on the fiscal terms
applicable to the project and the lifting of the on-ground
suspension, recent engagement has slowed whilst the Government
focuses on finalising its overhaul of the Malagasy Mining Code and
preparations for the upcoming presidential
election.
The
Company remains committed to developing the world class project and
is ready to progress.
However,
until the Mining Code reform is finalised, and the elections
scheduled for late 2023 have concluded, the Company does not expect
to achieve material progress in securing fiscal terms or lifting of
the project’s on-ground suspension.
In
parallel, substantial effort is being applied to identification and
progression of attractive business development opportunities to
secure optionality in the project portfolio as well as broader
funding options for ultimate Toliara Project
development.
Operational
and development highlights for FY23
-
Production
of 68,814 tonnes of rutile, 297,861 tonnes of ilmenite, 25,954
tonnes of zircon and a combined 18,330 tonnes of low-grade rutile
and zircon products from Kwale Operations.
-
Increase
in average achieved prices of 18% for rutile, 3% for ilmenite and
3% for zircon compared to the prior year.
-
Bumamani
Project implementation completed and mining of the North Dune
orebody commenced, extending the mine life of Kwale Operations to
December 2024.
-
Toliara
Project Rare Earths Concept Study completed, confirming the
substantial economic potential of the Toliara monazite content and
advancing to a Pre-Feasibility Study, which remains on track for
completion in the March quarter of 2024.
Financial
highlights for FY23
-
Revenue of
US$271.4 million, with an 8% increase
in average realised unit sales price partially offsetting lower
production and sales volumes when compared to the prior
year.
-
EBITDA of
US$158.6 million and underlying NPAT
of US$84.0 million (before the
US$88.9 million impairment
charge).
-
Free
cashflow of US$79.2 million
(operating cashflows of US$117.4
million less US$38.2 million
invested to extend Kwale Operations mine life and progress the
Toliara Project).
-
Net cash
position of US$92.9 million at
30 June 2023.
Final
dividend of AUD 4 cents per share
determined
Consistent
with its growth strategy, the Company seeks to provide returns to
shareholders through both long-term growth in the Company’s share
price and appropriate cash distributions.
Cash not
required for the Company’s growth and development, or to maintain
requisite balance sheet strength in light of prevailing
circumstances, can be expected to be returned to
shareholders.
In the
disciplined application of this capital management approach in the
context of anticipated future cashflows from Kwale Operations and
the approaching closure of the mine, the strategic opportunities
being pursued and a net cash position of US$92.9 million at the end of the period, the
Board has determined a final dividend of AUD 4.0 cents per share (unfranked), totalling
A$47.1 million in aggregate
(approximately US$31.3
million).
Upon
payment of the final dividend, dividends distributed to
shareholders since October 2020 will
total AUD 22.5 cents per share, equal
to A$265 million in aggregate
(approximately US$187
million).
The
dividend will be paid wholly from conduit foreign income and have
record and payment dates of 11 September
2023 and 28 September 2023,
respectively – for further information, refer to Base Resources’
accompanying announcement “FY23 Final Dividend – Key dates and
information”.
Managing
Director of Base Resources, Tim
Carstens, said:
“The 2023
financial year has been another operationally and financially
successful one.
Strong
operational performance, coupled with the continuation of buoyant
mineral sands markets, has delivered a record EBITDA for Kwale
Operations, even with the transition to the more challenging and
lower grade ore sources that will characterise the final years of
the operation.
We
continue to actively pursue additional mine life extension
opportunities in the Kwale East sector, with a second phase aircore
drill program currently underway.
Given the
inherent uncertainty associated with exploration, significant
effort is also going into planning for the ultimate closure of
Kwale Operations and the transition to post-mining land use, with
the clear objective of cementing a reputation for excellence in the
full life cycle of mining.
The
Toliara Project in Madagascar
continues to represent a transformational growth opportunity for
the Company.
By
confirming the substantial commercial potential of its monazite
content, the Toliara Project Rare Earth concept study has enhanced
that opportunity and further reinforces our belief that the project
is the best undeveloped mineral sands asset in the
world.
We look
forward to sharing more as we complete the study phases and clear
regulatory hurdles.
While
engagement with the Government on the fiscal terms applicable to
the Toliara Project has slowed due to the Government's focus on its
new mining code and the presidential elections in late 2023, we are
clear that our patient approach is the right one to secure outcomes
that will support the realisation of optimum shareholder value and
we remain fully committed to the project’s development.
Having
finished the year with a significant cash balance, the Board has
determined an AUD 4 cents per share
dividend.
In the
context of Kwale Operations’ approaching end of mine life and
diminishing future cash generation potential, we believe this
strikes the right balance between delivering cash returns to
shareholders and retaining balance sheet strength to fund the
Company’s strategic growth initiatives in pursuant of our 2031
vision of multiple concurrent operations.”
Documents
attached and forming part of Base Resources’ FY23 results reporting
suite
For
further information in relation to Base Resources’ FY23 operating
and financial results, refer to the PDF copies of the Company’s
2023 Annual Report and FY23 results Investor Presentation attached
to this release and available from the Company’s website
at:
https://baseresources.com.au/investors/announcements/.
Also
attached to this release and available from the Company’s website
(link above), and forming part of Base Resources’ FY23 results
reporting suite, is the Company’s FY23 Corporate Governance
Statement.
Investor
webcasts
Investor
webcasts will be hosted by Tim
Carstens (Managing Director) and Kevin Balloch (Chief Financial Officer), who
will both be available to answer questions following a presentation
of the Company’s results.
Details
for the webcasts and teleconferences are below.
Participants
will only be able to ask questions via the teleconference
line.
Participants
that propose using the teleconference line will need to
pre-register their details using the teleconference registration
URL provided below.
Upon
registering, participants will receive an email with their unique
PIN and dial-in details so that they can join the call without
needing to speak to an operator.
Australia webcast and teleconference
-
Date:
Monday, 28 August 2023
-
Time:
8.30am AWST / 10.30am AEST
-
Webcast
URL:
https://webcast.openbriefing.com/bse-fyr-2023/
-
Teleconference
registration URL:
https://registrations.events/direct/OCP61319
UK webcast
and teleconference
-
Date:
Tuesday, 29 August 2023
-
Time:
4.30pm AWST / 9.30am BST
-
Webcast
URL:
https://webcast.openbriefing.com/bse-fyr-2023-uk/
-
Teleconference
registration URL:
https://registrations.events/direct/OCP60433
Forward
looking statements
Certain
statements in or in connection with this release contain or
comprise forward looking statements.
Such
statements may include, but are not limited to, statements with
regard to future production and grades, capital cost, capacity,
sales projections and financial performance and may be (but are not
necessarily) identified by the use of phrases such as “will”,
“expect”, “anticipate”, “believe” and
“envisage”.
By their
nature, forward looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will
occur in the future and may be outside Base Resources’
control.
Accordingly,
results could differ materially from those set out in the
forward-looking statements as a result of, among other factors,
changes in economic and market conditions, success of business and
operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in product prices and
exchange rates and business and operational risk
management.
Subject to
any continuing obligations under applicable law or relevant stock
exchange listing rules, Base Resources undertakes no obligation to
update publicly or release any revisions to these forward-looking
statements to reflect events or circumstances after today's date or
to reflect the occurrence of unanticipated events.
[Note
(1): Refer
to note 13 to the FY23 consolidated financial statements contained
in the 2023 Annual Report for further details about the
impairment.]
ENDS.
For
further information contact:
Australian
Media Relations
|
UK Media
Relations
|
Citadel
Magnus
|
Tavistock
Communications
|
Cameron
Gilenko and Michael Weir
|
Jos Simson
and Gareth Tredway
|
Tel: +61 8
6160 4900
|
Tel: +44
207 920 3150
|
This
release has been authorised by the Base Resources Disclosure
Committee.
About
Base Resources
Base
Resources is an Australian based, African focused, mineral sands
producer and developer with a track record of project delivery and
operational performance.
The
Company operates the established Kwale Operations in Kenya and is developing the Toliara Project in
Madagascar.
Base
Resources is an ASX and AIM listed company.
Further
details about Base Resources are available at
www.baseresources.com.au.
PRINCIPAL
& REGISTERED OFFICE
Level 3,
46 Colin Street
West Perth, Western
Australia, 6005
Email:
info@baseresources.com.au
Phone: +61
8 9413 7400
Fax: +61 8
9322 8912
NOMINATED
ADVISER & JOINT BROKER
Canaccord
Genuity Limited
James Asensio / Raj Khatri
Phone: +44
20 7523 8000
JOINT
BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44
20 3207 7800