Base Resources Limited Chairman's Address to Annual General Meeting

 
TIDMBSE 
 
AIM and Media Release 
 
22 November 2017 
 
BASE RESOURCES LIMITED 
Chairman's Address to Annual General Meeting 
 
Wednesday, 22 November 2017, 10.30am (Perth Time) 
 
Base Resources Limited (ASX & AIM: BSE) ("Base Resources") advises that the 
following address was delivered by Base Resources' Chairman at the company's 
Annual General Meeting held today at 10.30am (Perth time) at West Perth, 
Western Australia. 
 
A PDF copy of the Chairman's address, and the presentation given by the 
Managing Director at the Annual General Meeting, are available from the 
company's website:  www.baseresources.com.au. 
 
Chairman's AGM Address 
 
Ladies and Gentlemen 
 
During the year we have achieved profitability, reduced net debt significantly, 
initiated exploration in support of mine-life extension and have begun 
construction of the Kwale Phase 2 project.  Our company is in a robust position 
and is well-placed to take advantage of an improving commodity market with 
sound long-term fundamentals. 
 
Shareholders will be only too aware that since commencing production three 
years ago, we have been selling our products into a depressed international 
pricing environment.  Fortunately, our Kwale Operation in Kenya has been able 
to weather this difficult period, on the back of its quality ore body, low 
cost-base and excellent operational track record, to emerge in the right shape 
to benefit from the strong recovery in the ilmenite price we have experienced 
over the past 12 months. 
 
It is against this backdrop that I am very pleased to highlight that for the 
2017 financial year, Base Resources achieved a maiden net profit after tax of 
A$21 million and a record EBITDA of A$110m.  The strong cashflows have enabled 
the reduction in net debt by A$76 million to A$128 million (US$98 million) at 
year end, the repayment in full of the Taurus facility in August and an 
improving financial flexibility. 
 
Our increased revenues and profitability are reflective of not just rising 
realised prices but also of our continued sharp focus on maximised production, 
operational consistency, innovation and cost management.  The year saw record 
production for all products with over 625,000 tonnes of primary products 
exported.  After three years of relentlessly improving our cost structures, we 
have locked in these gains and now have a low, tight and predictable operating 
cost base.  The successful introduction of the hydro-mining method, which has 
proved to be more efficient and flexible than the current dozer trap mining 
method, particularly when mining the lower grade, peripheral ore blocks, has 
paved the way for its progressive adoption as the exclusive mining method over 
the coming year. 
 
Most importantly, these operational and financial results continue to be 
achieved with an uncompromising focus on the safety of our people and the 
operation itself.  There were no lost time injuries during the past year and 
only two medical treatment injuries in the course of 3.1 million hours worked 
by our employees and contractors.  The Kwale Operation has not had a lost time 
injury since February 2014 and our employees and contractors have now worked 
almost 10 million man-hours LTI free. 
 
With the Kwale Operation performing to a high standard, a significant focus has 
shifted to adding value to the assets through optimisation of the remaining 
life of the mine and the extension of that life.  In May, the Board were 
pleased to approve the Kwale Phase 2 project ("KP2") following completion of a 
compelling, definitive feasibility study.  The KP2 project, the majority of 
which will be implemented over the course of the 2018 financial year at a 
capital cost of approximately A$31m, will facilitate the maintaining of 
production volumes at around the levels currently achieved over the remaining 
life of the mine through faster mining and processing of Ore Reserves, 
significantly enhancing asset economics.  The introduction of multiple 
hydro-mining units and a 69% increase in the number of spiral starts in the wet 
concentrator plant lie at the core of the project, making it a low risk 
enhancement project. 
 
The KP2 enhancements increase the importance of, and the value leverage from 
mine life extensions emerging from the exploration program that is underway. 
An expanded exploration tenure was secured a little over a year ago and the 
first drilling campaign was completed around the South Dune during the 2017 
financial year.  The next phase of drilling, which is planned to commence in 
early 2018, will be focused to the north-east of the Central Dune.  We are 
optimistic that further mine life extension will result. 
 
These operational and developmental achievements of the 2017 year are made 
possible by a highly capable, settled and engaged team throughout our 
organisation.  Building on our early success in establishing a strongly Kenyan 
workforce at the Kwale Operation of around 97%, our structured training and 
skills development program is seeing pleasing progression in the quality of 
jobs, with a further Kenyan appointment to the management team this year. 
 
Representing some 60% of the Kenyan mining industry, our impact reaches well 
beyond simple employment and Government revenue.  Our model of operations is 
yielding benefits to Kenya in the areas of supply chain development, safety and 
industrial training approaches, environmental and community engagement 
benchmarks, agricultural sector development and mining sector investment 
promotion, amongst many others.  It is in recognition of this broad-based 
impact and leadership role that in July this year the Kwale Operations were 
formally granted "flagship project" status within Kenya's Vision 2030 
framework.  In doing so, Kenya is explicitly seeking to build on the success of 
the Kwale Operation as it goes about realising its bold aspirations for what 
has been a nascent mining industry. 
 
Looking ahead, the 2018 financial year has a positive outlook.  Product markets 
for rutile, ilmenite and zircon have returned to balance with conditions 
conducive to a continuation of the recent price improvements.  Demand is such 
that we are carrying no inventory from shipment to shipment.  On the back of 
these continuing market conditions we look forward to further substantial 
inroads on our net debt position. 
 
I believe our company is soundly positioned with the ingredients in place to 
drive significant gains in shareholder value.  We have an outstanding operating 
asset in the Kwale Operations with strong cash generation and extensional 
potential, an outstanding team with a recognised and growing reputation for 
successful mineral development, an improving commodity price outlook and 
opportunities for growth emerging.  We are firmly of the view our cash 
generation and longer-term value proposition have yet to be appropriately 
appreciated by equity markets.  We are working hard to see this change in the 
year ahead. 
 
I'd like to thank the Board, our people, suppliers, local communities and host 
governments for the steadfast support and commitment you consistently display. 
I'd like to particularly thank Michael Anderson who left the Board in August, 
having made a considerable contribution since joining in 2011 in guiding the 
company through a transformational period. 
 
Finally, thank you to you our shareholders for your confidence and ongoing 
support as we drive into what I am confident is an increasingly bright future 
for Base Resources. 
 
ENDS 
 
CORPORATE PROFILE 
 
Directors 
Keith Spence (Non-Executive Chairman) 
Tim Carstens (Managing Director) 
Colin Bwye (Executive Director) 
Sam Willis (Non-Executive Director) 
Michael Stirzaker (Non-Executive Director) 
Malcolm Macpherson (Non-Executive Director) 
 
Company Secretary 
Chadwick Poletti 
 
NOMINATED ADVISOR & BROKERS 
RFC Ambrian Limited 
As Nominated Adviser: 
Andrew Thomson / Stephen Allen 
Phone: [phone] 
As Joint Broker: 
Jonathan Williams 
Phone: [phone] 
 
Numis Securities Limited 
As Joint Broker: 
John Prior / James Black / Paul Gillam 
Phone:  [phone] 
 
SHARE REGISTRY:  ASX 
Computershare Investor Services Pty Limited 
Level 11, 172 St Georges Terrace 
PERTH WA 6000 
Enquiries: 1300 850 505 / [phone] 
www.computershare.com.au 
 
SHARE REGISTRY:  AIM 
Computershare Investor Services PLC 
The Pavilions 
Bridgwater Road 
BRISTOL BS99 6ZZ 
Enquiries: [phone] 
www.computershare.co.uk 
 
AUSTRALIAN MEDIA RELATIONS 
Cannings Purple 
Annette Ellis / Andrew Rowell 
Email: [e-mail] / 
[e-mail] 
Phone: [phone] 
 
UK MEDIA RELATIONS 
Tavistock Communications 
Jos Simson / Emily Fenton 
Phone: [phone] 
 
KENYA MEDIA RELATIONS 
Africapractice (East Africa) 
Evelyn Njoroge / Joan Kimani 
Phone: [phone] 
Email: [e-mail] 
 
PRINCIPAL & REGISTERED OFFICE 
Level 1, 50 Kings Park Road 
West Perth, Western Australia, 6005 
Email:  [e-mail] 
Phone: [phone] 
Fax: [phone] 
 
 
 
END 
 

(END) Dow Jones Newswires

November 22, 2017 02:00 ET (07:00 GMT)