Base, DuPont Sign Kenyan Titanium Off-take Sales Agreement

Australia's Base Resources Ltd. (BSE.AU) said Thursday it has signed an off-take sales agreement with DuPont Titanium Technologies for its Kenyan titanium mining project at Kwale.

The agreement will see DuPont, a unit of E.I. DuPont de Nemours & Co. (DD), purchase a minimum average of approximately 72% of annual rutile production from Kwale for six years from commencement of production, Base Resources said in a statement.

"In addition, Base has the option of selling up to a further 25,000 tons per annum of rutile over the six year period," it said.

In the last four years of the agreement, DuPont has the right to reduce the off-take volume proportional to any reduction in DuPont's overall high-grade titanium dioxide feedstock requirements, the statement said.

Production is expected to commence in 2013, Base said in a statement Wednesday after it secured the required funding for the project.

"The off-take agreement...underpins approximately 35% of the annual revenue for the Kwale project...or up to 47% of annual revenue if the additional optional volume is supplied," Base Resources' Managing Director Tim Carstens is quoted as saying. "Base is making good progress in assembling a portfolio of off-take arrangements for the production from Kwale. Further announcements in this respect are expected in the coming months as several agreements currently under negotiation are finalized."

Base Resources expects the project's annual production of titanium ore to include 330,000 tons of ilmenite, or about 10% of world supply, and 80,000 tons of rutile, or 14% of global output. It also expects 40,000 tons of zircon.

-By George Mwangi, contributing to Dow Jones Newswires; [phone]; [e-mail]