AIM
and Media Release
24 November 2023
Base
Resources Limited
2023
AGM – Chair’s Address and Management
Presentation
Friday,
24 November 2023, 11.00am (AWST)
African
mineral sands producer, Base
Resources Limited (ASX &
AIM: BSE) (Base
Resources or
the Company)
advises that the following address was delivered by Base Resources’
Chair at the Company’s Annual General Meeting held today at
11.00am (Perth time) in Perth, Western
Australia and online via the Lumi software
platform.
Management
also delivered a presentation at the Annual General
Meeting.
A copy of
that presentation is attached to this release and available from
the Company's website:
www.baseresources.com.au.
Chair’s
AGM Address
Good
morning shareholders, Base Resources staff and
guests.
Welcome to
the 2023 Annual General Meeting of Base Resources.
The 2023
financial year has been another operationally and financially
successful one, in which the company has continued to deliver
robust results at our Kwale Operations in Kenya, even as we made the transition to the
more challenging and lower grade ore sources that will characterise
the remainder of the operation. Tight
control of costs and a supportive pricing environment contributed
to an operating result that was only marginally behind the previous
year’s record.
Notwithstanding
the complexity and intensity of the year, I’m pleased to report
that the Kwale team continued to maintain its focus on health,
safety and wellbeing with no lost time injuries in the year.
In
the 36.4 million hours worked since commencing production at Kwale
Operations, there have only been two lost time injuries.
The robust
pricing environment more than offset lower production following the
introduction of the North Dune orebody, with the group generating
an underlying EBITDA of US$158.6
million. Despite
this, a net loss of US$4.8 million
was recorded, as profitability was impacted by a non-cash
impairment of US$88.9
million.
This
impairment followed a reassessment of the carrying value of Kwale
Operations and reflects 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 closure.
Strong
underlying cashflow enabled the company to end the year with
US$92.9 million net cash, with the
Board determining a final dividend of AUD 4.0 cents per share, unfranked. Together with the
AUD 2.0 cents per share paid in
March, this brings the total distributions to shareholders
determined in respect of the 2023 financial year to AUD
6.0 cents per share, unfranked,
totalling US$45.6 million.
Kwale
Operations has been the foundation on which we have built Base
Resources.
However,
after extensively exploring all avenues, we have been unsuccessful
in identifying additional deposits of sufficient grade or scale to
support further extension.
Consequently,
mining is expected to end in December
2024 and the company’s focus at Kwale now necessarily turns
to detailed closure planning and transition to post mining land
use.
Just as we
have done over the past 10 years of mining at Kwale, we intend to
close with the clear objective of cementing our reputation for
excellence in the full life cycle of mining.
With Kwale
Operations now coming to an end, the next phase of shareholder
value creation will come from progression of the world-class
Toliara Project to development and realising both its mineral sands
and rare earth potential.
This
project continues to represent a transformational growth
opportunity for the company.
Building
on the updated Definitive Feasibility Study released in FY2022,
which significantly increased both the scale and economic value of
the mineral sands project, a concept study assessing the commercial
potential of the Toliara Project's monazite content, a source of
valuable rare earth elements, has been completed.
This
study confirmed substantial economic potential and further
reinforced our belief that the Toliara Project is the best
undeveloped mineral sands asset in the world. We
look forward to sharing more about this opportunity (likely to be
in the coming weeks) once we have completed a pre-feasibility study
for the addition of a monazite concentrator.
After
making sound progress in our discussions with the Government of
Madagascar in relation to the
fiscal terms applicable to the project and, with that, the expected
lifting of the on-ground suspension, engagement slowed due to the
Government's focus on an overhaul of the Malagasy Mining Code and
preparations for the Presidential elections.
The first
round of the elections was held on 16 November and the new Mining
Code has now come into effect, however engagement is expected to
continue to be limited until the new Government has been formed and
the full suite of Mining Code reform is completed. Tim will provide
more colour on this in his presentation.
With the
delay in advancing the Toliara Project, substantial effort is being
applied to identification of attractive business development
opportunities to provide broader funding options for Toliara
Project development and to secure optionality in pursuit of our
longer-term Vision 2031 objective of multiple concurrent
operations.
We are
also accelerating our wider Kenyan exploration efforts with the
recent lifting of the licensing moratorium.
Sustainability
has always been central to our business model – it’s been embedded
across every phase of our approach to developing mineral sands
mines from exploration, through mining and then post mine land
use.
While we
are proud of the impacts of our actions, the recognition of our
peers, following the release of the company’s inaugural
sustainability report in October
2022, through two sustainability awards at the 2023 Mining
Indaba conference, is particularly pleasing and hopefully an
indication that we are encouraging others on a similar
path.
While we
are cognisant of the challenges before us, we are confident that we
have the team, approach, reputation and support to successfully
navigate them. As
part of our approach to both renewal and ensuring the right mix of
skills for the coming years’ challenges, the Board was bolstered by
the addition of Sheila Khama as a Non-Executive Director earlier
this year. As
well as a deep personal connection to Africa, Ms Khama brings a wealth of valuable
experience and expertise in managing relations and working
collaboratively with host governments and in the sustainable
development of natural resources, all of which are critical to Base
Resources’ future growth and success.
Non-Executive
Director, Malcolm Macpherson, will
also retire at the conclusion of today’s
meeting.
On behalf
of the Board, I would like to thank Malcolm for his commitment and
outstanding contribution to the Board during his
tenure.
Everyone
at Base Resources has benefited considerably from Malcolm’s
guidance, insights and deep mineral sands
experience.
Malcolm
leaves us well-positioned to execute on the next phase of
shareholder value creation that will come from progression of the
world-class Toliara Project.
Finally,
on behalf of shareholders, and on behalf of the Board, I’d like to
extend my sincere thanks and appreciation to the management and all
staff of the Base Resources Group, both for “living the Base Way”
and for another highly commendable year of achievement.
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
|
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 / George
Grainger
Phone: +44
20 7523 8000
JOINT
BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44
20 3207 7800