Base Resources Limited FY21 half-year results announcement and dividen

 
TIDMBSE 
 
AIM and Media Release 
 
22 February 2021 
 
BASE RESOURCES LIMITED 
Financial result and disciplined capital management drives half-year dividend 
 
Base Resources Limited (ASX & AIM: BSE) (Base Resources or the Company) is 
pleased to provide the operational and financial highlights from the Company's 
half-year results for the six-month period ended 31 December 2020 (half-year or 
reporting period), which include announcement of a half-year dividend of AUD 3 
cents per share, unfranked, and the following extracts from the Half-Year 
Financial Report for the Company and its controlled entities (Group) for the 
same period. 
 
 1. Review of Operations 
 2. Market Developments and Outlook 
 3. Kwale Operations Extensional Opportunities 
 4. Toliara Project 
 5. Review of Financial Performance 
 6. After Balance Date Events 
 7. Consolidated Condensed Statement of Profit or Loss and Other Comprehensive 
    Income 
 8. Consolidated Condensed Statement of Financial Position 
 9. Consolidated Condensed Statement of Changes in Equity 
10. Consolidated Condensed Statement of Cash Flows 
 
The extracts from the Half-Year Financial Report should be read in conjunction 
with the notes contained in the full version of that report, a copy of which is 
available from the Company's website:  www.baseresources.com.au.  The full 
version of the Half-Year Financial Report also contains the auditor's 
independence declaration, the directors' declaration and the auditor's review 
report. 
 
The Company has also released a presentation to accompany its Half-Year 
Financial Report.  The presentation contains, among other things, further 
details about the Company's half-year results and details about the Company's 
expected capital expenditure and settlements for the six-month period ending 30 
June 2021.  A copy of the presentation is available from the Company's website: 
  www.baseresources.com.au. 
 
All references to currency ($ or US$) is United States Dollars, unless 
otherwise stated. 
 
Highlights 
 
Kwale Operations maintained operational continuity in the period, adapting 
successfully for the ongoing COVID-19 challenge, and is on track to achieve 
FY21 production guidance.  Firm demand from pigment producers supported ongoing 
price improvement for ilmenite during the half-year.  While zircon and rutile 
prices moderated in the reporting period, there are positive signs of a price 
recovery in early 2021. 
 
The Toliara Project progressed with practical completion of lender technical 
due diligence and submission by the Company's wholly owned subsidiary, Base 
Toliara SARL, of a Large Mining Investment Law application, which, if approved, 
will provide fiscal and legal stability.  Discussions with the Government of 
Madagascar on fiscal terms re-commenced in the period and are ongoing. 
 
Financial highlights for H1 FY21 
 
  * Revenue of US$72.8 million, . 
  * EBITDA of US$33.9 million. 
  * Net loss after tax of US$6.3 million, impacted by Kenyan dividend 
    withholding tax of US$4.5 million incurred on repatriation of surplus cash 
    from operations to the Company. 
  * Debt reduced by US$50.0 million as COVID-19 uncertainties subside, with the 
    remaining US$25.0 million scheduled for repayment in March 2021. 
  * Payment of the Company's maiden dividend in October of AUD 3.5 cents per 
    share totalling US$29.8 million. 
  * Free cashflow of US$18.3 million (Operating cashflows of US$31.1 million 
    less investing cashflows of US$12.8 million). 
  * Net cash position of US$74.6 million as at 31 December 2020. 
 
Half-year dividend of AUD 3 cents per share determined 
 
The Company's capital management policy is that cash not required to meet the 
Company's near-term growth and development requirements, or to maintain 
requisite balance sheet strength in light of prevailing circumstances, could be 
expected to be returned to shareholders.  With net cash of US$74.6 million at 
the end of the period and the timing of the Toliara Project final investment 
decision (FID) still uncertain, the Board has determined a half-year dividend 
of AUD 3 cents per share, unfranked, which will be paid wholly from Conduit 
Foreign Income.  This will bring total dividends to AUD 6.5 cents per share in 
12 months.  The record date for the half-year dividend is 15 March 2021 and the 
payment date is 31 March 2021. 
 
Operational highlights for H1 FY21 
 
  * A COVID-19 response that continues to be effective in maintaining the 
    health and wellbeing of employees, whilst delivering operational 
    performance. 
  * Production of 33,684 tonnes of rutile, 144,363 tonnes of ilmenite and 
    12,677 tonnes of zircon from Kwale Operations. 
  * Continued strengthening of demand for ilmenite with current prices the 
    highest ever achieved by the Company. 
  * Kwale Operations mine life extension opportunities progressed, with the 
    North Dune pre-feasibility study due for release early in the June quarter 
    and exploration drilling commencing in the North Vanga region. 
  * Lost Time Injury Frequency Rate of zero across the group, with there being 
    no lost time due to injury since 2014. 
  * US$1.8 million invested in community and environmental programs, with an 
    additional US$1.0 million contribution to support vulnerable communities in 
    Kenya and Madagascar in navigating the impacts of the COVID-19 pandemic. 
 
Managing Director of Base Resources, Tim Carstens, said: 
 
"Kwale Operations performance has been consistently strong throughout the half 
year and is on schedule to meet our FY21 production guidance.  Outcomes for the 
remainder of FY21 are expected to be stronger again with firm market demand 
supporting price increases for all our products.  Progress towards Kwale mine 
life extension remains a priority with the North Dune pre-feasibility study 
nearing completion and the recent resumption of our near-mine exploration 
program." 
 
"On-the-ground activity at the Toliara Project remains suspended as we engage 
with the Government of Madagascar in relation to the fiscal terms applicable to 
the project.  This, together with international travel restrictions and broader 
COVID-19 measures and impacts both in Madagascar and globally, has led to the 
final investment decision to proceed with development of the Toliara Project 
being delayed.  Once fiscal terms are agreed and the suspension is lifted, 
there will be approximately 11 months' work to complete prior to FID." 
 
"At a Group level, we are delighted to be once again delivering meaningful 
returns to shareholders via dividends whilst remaining committed to the 
sensible progression of the Toliara Project, and the value generation 
opportunity this represents for shareholders, as uncertainty resolves." 
 
Investor and shareholder webcast 
 
Base Resources' Managing Director, Tim Carstens, Chief Financial Officer, Kevin 
Balloch and General Manager - Marketing, Stephen Hay, will host an investor and 
shareholder webcast today to discuss Base Resources' FY21 half year results 
with shareholders and investors.  They will also be available to answer 
questions following a presentation of the Company's results. 
 
Details for the webcast are below.  Participants will be able to ask questions 
via the messaging function on the webcast platform or via the teleconference 
line.  Participants 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 on the day without needing to speak 
with an operator. 
 
Conference call 
 
  * Date: Monday, 22 February 2021 
  * Time: 5.00pm AWST / 9.00am GMT 
  * Webcast URL: https://edge.media-server.com/mmc/p/b4aedq7m 
  * Teleconference registration URL: https://s1.c-conf.com/diamondpass/ 
    10012568-p82r45.html 
 
Extracts from Half-Year Financial Report 
 
1.    Review of Operations 
 
Base Resources operates the 100% owned Kwale Operations in Kenya, which 
commenced production in late 2013.  Kwale Operations is located 50 kilometres 
south of Mombasa, the principal port facility for East Africa.  Mining 
operations continued according to plan on the South Dune orebody with 
approximately 8.5 million tonnes mined, lower than the comparative period due 
to lower face heights requiring more frequent relocation of mining units and a 
planned eight-day stoppage in July to move the mining collection hopper further 
south. 
 
Mining and Wet Concentrator Plant (WCP) Performance      Six months to    Six months to 
                                                              Dec 2020         Dec 2019 
 
Ore mined (tonnes)                                           8,538,666        9,489,385 
 
Heavy mineral (HM) %                                            3.10%*            3.41% 
 
Valuable heavy mineral (VHM) %                                   2.59%            2.60% 
 
Heavy mineral concentrate produced (tonnes)                    246,039          304,100 
 
*ore grade estimated pending a measurement review process. 
 
Due to the reduced ore mined and lower ore grade, production of heavy mineral 
concentrate (HMC) decreased by 19% to 246,039 tonnes.  HMC stocks closed the 
reporting period at 13,596 tonnes (16,450 tonnes as at 30 June 2020). 
 
Mineral Separation Plant (MSP) Performance               Six months to    Six months to 
                                                              Dec 2020         Dec 2019 
 
MSP feed (tonnes of heavy mineral concentrate)                 248,892          276,816 
 
MSP feed rate (tph)                                                 63               77 
 
MSP recovery % 
 
        Ilmenite                                                  101%             102% 
 
        Rutile                                                    102%             102% 
 
        Zircon                                                     85%              85% 
 
Production (tonnes) 
 

        Ilmenite                                               144,363          165,214 
 
        Rutile                                                  33,684           36,201 
 
        Zircon                                                  12,677           14,904 
 
        Zircon low grade                                           942            1,012 
 
As a consequence of MSP operations being constrained by available HMC, plant 
utilisation and feed rates were lower in the reporting period.  As a result, 
production of all products was lower than the comparative period. 
 
There were no workplace lost time injuries (LTI) during the reporting period 
and, as a result, the lost time injury frequency rate remained at zero.  Base 
Resources' employees and contractors have now worked more than 22.9 million 
man-hours LTI free as at 31 December 2020, with the last LTI recorded in early 
2014.  No medical treatment injuries were recorded during the reporting period. 
 With one medical treatment injury recorded in the past 12 months, Base 
Resources' total recordable injury frequency rate is 0.25 per million hours 
worked. 
 
Marketing and sales                                      Six months to    Six months to 
                                                              Dec 2020         Dec 2019 
 
Sales (tonnes) 
 
        Ilmenite                                               129,300          166,653 
 
        Rutile                                                  23,668           27,096 
 
        Zircon                                                  13,735           13,803 
 
        Zircon low grade                                           505            1,455 
 
Across each of its three main products, Base Resources maintains a balance of 
multi-year offtake agreements with long term customers providing for the sale 
of a fixed or minimum annual quantity of product over the relevant agreement's 
term.  A small proportion of Base Resources' product sales also occur pursuant 
to quarterly, multi-sale offtake agreements and ongoing single sale agreements. 
 These agreements, in place with some of the world's largest consumers of 
titanium dioxide feedstocks and zircon products, provide certainty for the 
Kwale Operations by securing minimum offtake quantities.  Sales prices in these 
agreements are derived from prevailing market prices, based on agreed price 
indices or periodic price negotiations. 
 
Ilmenite, and the majority of rutile, is sold in bulk, with typical shipment 
sizes of 50-54kt for ilmenite and 10-12kt for rutile, which frequently results 
in sales volumes of these products being out of step with production volumes, 
which was the case in the reporting period.  Zircon is sold in smaller parcels 
and, in the absence of any market constraints, sales generally align with 
production volume.  Bulk shipments of both ilmenite and rutile took place in 
early 2021. 
 
2.    Market Developments and Outlook 
 
Titanium Dioxide 
 
Ilmenite and rutile are primarily used as feedstock for the production of 
titanium dioxide (TiO2) pigment, with a small percentage also used in the 
production of titanium metal and fluxes for welding rods and wire.  TiO2 is the 
most widely used white pigment because of its non-toxicity, brightness and very 
high refractive index.  It is an essential component of consumer products such 
as paint, plastics and paper.  Pigment demand is therefore the major driver of 
ilmenite and rutile pricing. 
 
Major western pigment producers typically use high grade TiO2 feedstocks (which 
includes rutile) while Chinese pigment producers typically rely on sulphate 
ilmenite as their main feedstock. 
 
Inventories of TiO2 pigment between western pigment producers and their 
customers built up through the latter part of the 2020 financial year as demand 
for pigment was significantly impacted by the economic effects of 
COVID-19-related shutdowns in many regions.  This resulted in western pigment 
producers winding back their production rates through the early part of the 
reporting period - reducing demand for high-grade TiO2 feedstock and leading to 
a build-up in feedstocks inventories. 
 
Pigment demand rebounded strongly across all end use sectors in most regions 
throughout the reporting period as economies emerged from lockdowns.  Western 
pigment plants began ramping up their output through the later part of the 
reporting period to keep pace with the growing pigment demand which, in turn, 
resulted in the absorption of high grade TiO2 feedstock inventories and an 
improvement in demand for feedstock. 
 
The reduced demand for rutile through the early part of the reporting period 
resulted in modest price reductions, however, as inventories were run down and 
demand for rutile lifted, prices stabilised.  Demand for rutile continued to 
improve through the early part of calendar year 2021 and prices are again on an 
upward trend. 
 
With only a brief COVID-19-related production interruption in early 2020, 
Chinese pigment producers operated at maximum capacity throughout 2020.  The 
rebound of the Chinese economy resulted in domestic pigment demand returning to 
normal levels by mid-2020.  This, combined with a focus on increased exports, 
allowed Chinese pigment inventory levels to return to normal early in the 
reporting period.  The ongoing strength of the Chinese economy together with a 
recovery in other major markets resulted in very strong demand for sulphate 
ilmenite throughout the reporting period.  Combined with ongoing ilmenite 
production constraints in India and Vietnam and reduced ilmenite output from 
other major producers, the ilmenite market tightened through the reporting 
period and prices increased significantly. 
 
Tightening of the ilmenite market is continuing in the early part of calendar 
year 2021 and further prices gains have been secured for upcoming bulk ilmenite 
shipments. 
 
Zircon 
 
Zircon has a range of end-uses, the predominant of which is in the production 
of ceramic tiles, accounting for more than 50% of global zircon consumption. 
 Milled zircon enables ceramic tile manufacturers to achieve brilliant opacity, 
whiteness and brightness in their products.  Zircon's unique properties include 
heat and wear resistance, stability, opacity, hardness and strength, making it 
sought after for other applications such as refractories, foundries and 
specialty chemicals. 
 
Demand growth for zircon is closely linked to growth in global construction and 
increasing urbanisation in the developing world. 
 
Prior to the COVID-19 pandemic, in early 2020, the zircon market was already 
subdued.  Sentiment in China, which represents over 50% of global zircon 
demand, was poor owing to trade disputes with the US and a sluggish ceramics 
sector.  The pandemic resulted in a further impact to demand and zircon prices 
came under increased pressure.  As China emerged from lockdown demand for 
zircon began a gradual recovery.  However, economies in many other major zircon 
markets were then subject to lockdowns - further impacting overall global 
demand. 
 
As all major markets emerged from lockdown, demand for zircon began to 
improve.  By the middle of the reporting period, European ceramics plants and 
millers were operating at capacity levels and inventories of zircon in the 
supply chain were being rapidly absorbed.  The Chinese zircon market continued 
to improve through the reporting period, but at a slower pace than the other 
major zircon markets.  On the back of the improving demand and management of 
supply of zircon by major producers, prices stabilised through the latter part 
of the reporting period and into the early part of calendar year 2021. 
 
3.    Kwale Operations Extensional Opportunities 
 
Mining tenure arrangements continued to progress with the Kenyan Ministry of 
Petroleum and Mining as a precursor to an anticipated updated Ore Reserves 
estimate to incorporate additional Mineral Resources defined within the Kwale 
Prospecting Licence, but outside the current footprint of the Kwale Special 
Mining Lease No. 23 (SML23).1 
 
The pre-feasibility study for mining the North Dune Mineral Resources continues 
on schedule for completion in the second half of the 2021 financial year.2 
 
After reaching agreement with local land owners, auger drilling of a section of 
the northern Vanga Prospecting Licence commenced and will continue during the 
2021 financial year.  Completion of the remaining drilling program in the 
North-East Sector remains on hold pending community access being secured. 
 
Prospecting licence applications lodged in the 2020 financial year for an area 
in the Kuranze region of Kwale county, approximately 70 km west of Kwale 
Operations, as well as an area south of Lamu, are progressing through the 
granting process.  A government moratorium placed on the issuance of 
prospecting licences in November 2019 has affected the progress of all licence 
applications, albeit assessment of applications has recently recommenced which 
is seen as a precursor to the lifting of the moratorium. 
 
[Notes: 
 
(1):  For further information about the Kwale South Mineral Resources and Ore 
Reserves, refer to Base Resources' market announcement on 27 July 2020 "Updated 
Kwale South Dune Mineral Resources and Ore Reserves estimate", which is 
available at https://baseresources.com.au/investors/announcements/. 
 
(2):  For further information about the Kwale North Mineral Resources, refer to 
Base Resources' announcement on 19 February 2021 "Updated Kwale North Dune and 
maiden Bumamani Mineral Resources estimates", which is available at https:// 
baseresources.com.au/investors/announcments/.] 
 
4.    Toliara Project 
 
In November 2019, the Government of Madagascar required Base Resources to 
suspend on-the-ground activity on the Toliara Project while discussions on 
fiscal terms applying to the project were progressed3.  Activity remains 
suspended as Base Resources continues to engage the Government in relation to 
the country's Large Mining Investment Law (LGIM) regime, fiscal terms 

applicable to the Toliara Project and the lifting of the on-the-ground 
suspension, with encouraging progress made during the reporting period. 
 
As previously announced, due to the suspension of on-the-ground activities, 
international travel restrictions and broader COVID-19 measures and impacts, 
both in Madagascar and globally, the final investment decision (FID) to proceed 
with the development of the Toliara Project has been delayed.  Once fiscal 
terms are agreed and the suspension is lifted, there will be approximately 
11 months' work to complete prior to FID.  This work includes finalising 
financing, completing the land acquisition process and concluding major 
construction contracts.  The resumption of international travel will also be 
required to complete a significant portion of this work. 
 
[Note (3):  Refer to Base Resources' market announcement "Toliara Project - 
Government of Madagascar statement" released on 7 November 2019 for further 
information, which is available at https://baseresources.com.au/investors/ 
announcements/.] 
 
5.    Review of Financial Performance 
 
Base Resources achieved a loss after tax of US$6.3 million for the six-month 
reporting period, a decrease compared with a profit of US$9.1 million in the 
comparative period, primarily due to lower sales revenues. 
 
                       Six months to 31 December 2020       Six months to 31 December 2019 
 
                          Kwale Toliara   Other    Total       Kwale Toliara   Other    Total 
                     Operations Project                   Operations Project 
 
                        US$000s US$000s US$000s  US$000s     US$000s US$000s US$000s  US$000s 
 
Sales Revenue            72,763       -       -   72,763      83,463       -       -   83,463 
 
Cost of goods sold excluding depreciation & amortisation: 
 
Operating costs        (33,376)       -       - (33,376)    (33,647)       -       - (33,647) 
 
Inventory movement        9,455       -       -    9,455       7,417       -       -    7,417 
 
Royalties expense       (5,069)       -       -  (5,069)     (5,861)       -       -  (5,861) 
 
Total cost of goods    (28,990)       -       - (28,990)    (32,091)       -       - (32,091) 
sold (i) 
 
Corporate &             (1,854)    (38) (3,698)  (5,590)     (2,533)    (45) (2,706)  (5,284) 
external affairs 
 
Community               (2,071)       -       -  (2,071)     (1,798)       -       -  (1,798) 
development 
 
Selling &                 (881)       -       -    (881)     (1,147)       -       -  (1,147) 
distribution costs 
 
COVID-19 response         (975)       -       -    (975)           -       -       -        - 
costs 
 
Other income /             (28)       -   (310)    (338)         630       1   (310)      321 
(expenses) 
 
EBITDA (i)               37,964    (38) (4,008)   33,918      46,524    (44) (3,016)   43,464 
 
Depreciation &         (29,224)   (101)   (161) (29,486)    (27,919)    (51)   (129) (28,099) 
amortisation 
 
EBIT (i)                  8,740   (139) (4,169)    4,432      18,605    (95) (3,145)   15,365 
 
Net financing           (3,320)       -   (105)  (3,425)     (2,047)       -   (358)  (2,405) 
expenses 
 
Income tax expense      (2,845)       - (4,500)  (7,345)     (3,817)       -       -  (3,817) 
 
NPAT (i)                  2,575   (139) (8,774)  (6,338)      12,741    (95) (3,503)    9,143 
 
(i) Base Resources' financial results are reported under International 
Financial Reporting Standards (IFRS). These Financial Statements include 
certain non-IFRS measures including EBITDA, EBIT and NPAT. These measures are 
presented to enable understanding of the underlying performance of the Group 
and have not been audited/reviewed. 
 
Sales revenue decreased to US$72.8 million for the reporting period 
(comparative period: US$83.5 million) due to lower sales volumes, however, the 
average price of product sold increased to US$435 per tonne (comparative 
period: US$399 per tonne), with higher ilmenite prices only partially offset by 
lower prices for rutile and zircon. 
 
Total operating costs of US$33.4 million for the reporting period were 1% lower 
than the comparative period, however due to a 12% reduction in production of 
finished goods, the operating costs per tonne produced was 12% higher at US$174 
per tonne (comparative period:  US$155 per tonne). 
 
Unit cost of goods sold is influenced by both the underlying operating costs 
and product sales mix.  Operating costs are allocated to each product based on 
revenue contribution, which sees the higher value rutile and zircon products 
attracting a higher cost per tonne than the lower value ilmenite.  Therefore, 
the greater the sales volume of rutile and zircon relative to ilmenite in a 
period, the higher both unit revenue per tonne and unit cost of goods sold will 
be. 
 
Ilmenite, and the majority of rutile, is sold in bulk, with typical shipment 
sizes of 50-54kt for ilmenite and 10-12kt for rutile, which means any given 
half-year will usually contain either two or three bulk rutile and ilmenite 
sales.  Zircon is sold in smaller parcels and, in the absence of any market 
constraints, sales generally align with production volume.  Product sales mix 
will therefore vary depending on the number of bulk shipments of ilmenite and 
rutile in each period. 
 
Cost of goods sold (operating costs, adjusted for stockpile movements, and 
royalties), was US$199 per tonne of product sold, 18% higher than the 
comparative period (US$169 per tonne) due to the higher unit operating costs. 
 
With a margin of US$236 per tonne sold for the reporting period (comparative 
period: US$230 per tonne) and an achieved revenue to cost of sales ratio of 2.2 
in the reporting period (comparative period: 2.4), Base Resources remains well 
positioned amongst mineral sands producers. 
 
The reduced sales volume together with COVID-19 response costs have delivered a 
reduced Kwale Operations EBITDA for the reporting period of US$38.0 million 
(comparative period: US$46.5 million) and a Group EBITDA of US$33.9 million 
(comparative period: US$43.5 million). 
 
The majority of Kwale Operations assets are depreciated on a straight-line 
basis over the remaining mine life.  Depreciation and amortisation increased 5% 
in the reporting period to US$29.5 million (comparative period: US$28.1 
million) due to capital expenditure incurred at Kwale Operations being 
depreciated over the short remaining life of existing Ore Reserves. Mining 
tenure arrangements to expand SML23 are progressing with the Kenyan Ministry of 
Petroleum and Mining.  Should, as is expected, the expansion be granted, the 
South Dune Ore Reserves will extend mine life, thereby spreading future 
depreciation and amortisation charges over a longer period. 
 
A net profit after tax of US$2.6 million was recorded by Kwale Operations in 
the reporting period (comparative period: US$12.7 million).  During the 
reporting period, the Group's Kenyan subsidiary, Base Titanium Limited (Base 
Titanium), distributed US$30.0 million of surplus cash, via dividend, to the 
Group's ultimate parent entity, Base Resources Limited.  The dividend 
distribution by Base Titanium incurred 15% Kenyan dividend withholding tax of 
US$4.5 million, which has been recorded as an income tax expense, thus 
contributing to a loss after tax of US$6.3 million for the Group (comparative 
period: profit of US$9.1 million).  Previously, surplus cash distributions from 
Base Titanium occurred by way of redemption of preference shares, however these 
were exhausted during the reporting period.  Basic loss per share for the 
reporting period was USD 0.54 cents per share (comparative period: earnings of 
USD 0.78 cents per share). 
 
Cash flow from operations was US$31.1 million for the reporting period 
(comparative period: US$35.5 million), lower than Group EBITDA due to the 
payment of US$4.6 million in corporate income tax to the Kenya Revenue 
Authority during the reporting period.  Additionally, a US$12.7 million 
reduction in trade receivables during the reporting period was largely offset 
by US$9.5 million of costs incurred in producing increased stocks of finished 
goods (mainly rutile due to bulk shipment timing) and HMC.  Operating cashflows 
were used to fund capital expenditure at Kwale Operations, Toliara Project 
progression, as well as debt reduction and servicing. 
 
Total capital expenditure for the Group was US$13.0 million in the reporting 
period (comparative period: US$20.0 million) comprised of US$5.1 million at 
Kwale Operations (comparative period: US$5.1 million), primarily for a 
co-disposal mixing plant to be used for land rehabilitation, US$7.5 million on 
the progression of the Toliara Project (comparative period: US$14.6 million) 
and US$0.4 million on Kenyan exploration activities (comparative period: US$0.3 
million). 
 
In September 2020, the Group made a payment of US$50.0 million to reduce the 
outstanding Revolving Credit Facility (RCF) to US$25.0 million.  With a net 
cash position of US$74.6 million at 31 December 2020, consisting of cash 
reserves of US$99.6 million and the drawn RCF balance of US$25.0 million, the 
Group is in a robust financial position. 
 
Consistent with Base Resources' strategy, the Group seeks to provide returns to 
shareholders through both long-term growth in the Base Resources share price 
and appropriate cash distributions.  Cash not required to meet the Group's 
near-term growth and development requirements, or to maintain requisite balance 
sheet strength in light of prevailing circumstances could be expected to be 
returned to shareholders. 
 
Applying this strategy, the Board determined to pay a half-year dividend of AUD 
3 cents per share, unfranked with a record date of 15 March 2021 and payment 
date of 31 March 2021.  This follows the maiden dividend of AUD 3.5 cents per 
share paid to shareholders in October 2020, resulting in a cash payment of 
US$29.8 million in the reporting period. 
 
6.    After Balance Date Events 
 
Since the end of the reporting period, the Board determined to pay a half-year 

dividend of AUD 3 cents per share, unfranked, with a record date of 15 March 
2021 and payment date of 31 March 2021.  The financial impact of the dividend, 
estimated to be US$27.5 million (based on the prevailing AUD:USD exchange 
rate), has not been recognised in the Consolidated Half-Year Financial 
Statements for the reporting period. 
 
There have been no other significant events since the reporting period. 
 
7.    Consolidated Condensed Statement of Profit or Loss and Other 
Comprehensive Income 
 
                                                        6 months to          6 months to 
                                                   31 December 2020     31 December 2019 
 
                                           Note             US$000s              US$000s 
 
Sales revenue                               2                72,763               83,463 
 
Cost of sales                               3              (58,214)             (60,010) 
 
Profit from operations                                       14,549               23,453 
 
Corporate and external affairs                              (5,852)              (5,464) 
 
Community development costs                                 (2,071)              (1,798) 
 
Selling and distribution costs                                (881)              (1,147) 
 
COVID-19 response costs                                       (975)                    - 
 
Other (expenses) / income                                     (338)                  321 
 
Profit before financing costs and income                      4,432               15,365 
tax 
 
Financing costs                             4               (3,425)              (2,405) 
 
Profit before income tax                                      1,007               12,960 
 
Income tax expense                          5               (7,345)              (3,817) 
 
Net (loss) / profit after tax for the                       (6,338)                9,143 
period 
 
Other comprehensive income 
 
Items that may be reclassified subsequently to 
profit or loss: 
 
Foreign currency translation differences -                    5,671                  161 
foreign operations 
 
Total other comprehensive income for the                      5,671                  161 
period 
 
Total comprehensive income for the period                     (667)                9,304 
 
Net (loss) / earnings per share                               Cents                Cents 
 
Basic (loss) / earnings per share (US                        (0.54)                 0.78 
cents per share) 
 
Diluted (loss) / earnings per share (US                      (0.54)                 0.77 
cents per share) 
 
The notes contained in the full version of the Half-Year Financial Report form 
part of these consolidated financial statements, a copy of which is available 
from the Company's website: www.baseresources.com.au . 
 
8.    Consolidated Condensed Statement of Financial Position 
 
                                                    31 December 2020        30 June 2020 
 
                                           Note              US$000s             US$000s 
 
Current assets 
 
Cash and cash equivalents                                     99,602             162,559 
 
Trade and other receivables                 6                 32,850              46,620 
 
Inventories                                 7                 29,036              19,492 
 
Other current assets                                           7,093               7,313 
 
Total current assets                                         168,581             235,984 
 
Non-current assets 
 
Capitalised exploration and evaluation      8                150,710             139,633 
 
Property, plant and equipment               9                135,605             158,751 
 
Total non-current assets                                     286,315             298,384 
 
Total assets                                                 454,896             534,368 
 
Current liabilities 
 
Trade and other payables                                      42,259              39,617 
 
Borrowings                                  10                24,717              25,195 
 
Provisions                                                     5,981               5,908 
 
Income tax payable                                               227                 539 
 
Deferred consideration                                        17,000              17,000 
 
Total current liabilities                                     90,184              88,259 
 
Non-current liabilities 
 
Borrowings                                  10                     -              48,940 
 
Provisions                                                    24,859              25,408 
 
Deferred tax liability                                         7,567               9,027 
 
Total non-current liabilities                                 32,426              83,375 
 
Total liabilities                                            122,610             171,634 
 
Net assets                                                   332,286             362,734 
 
Equity 
 
Issued capital                              11               307,811             307,063 
 
Reserves                                                    (13,489)            (17,227) 
 
Retained earnings                                             37,964              72,898 
 
Total equity                                                 332,286             362,734 
 
The notes contained in the full version of the Half-Year Financial Report form 
part of these consolidated financial statements, a copy of which is available 
from the Company's website: www.baseresources.com.au. 
 
9.    Consolidated Condensed Statement of Changes in Equity 
 
                                          Retained    Share     Foreign  Treasury 
                               Issued   earnings /    based    currency    shares     Total 
                              capital (Accumulated  payment translation   reserve 
                                           losses)  reserve     reserve 
 
                              US$000s      US$000s  US$000s     US$000s   US$000s   US$000s 
 
Balance at 1 July 2019        306,512       33,310    3,399    (22,629)         -   320,592 
 
Profit for the period               -        9,143        -           -         -     9,143 
 
Other comprehensive loss            -            -        -         161         -       161 
 
Total comprehensive income          -        9,143        -         161         -     9,304 
for the period 
 
Transactions with owners, recognised directly in equity 
 
Share based payments              551            -      521           -         -     1,072 
 
Balance at 31 December 2019   307,063       42,453    3,920    (22,468)         -   330,968 
 
Balance at 1 July 2020        307,063       72,898    5,038    (22,265)         -   362,734 
 
Profit for the period               -      (6,338)        -           -         -   (6,338) 
 
Other comprehensive loss            -            -        -       5,671         -     5,671 
 
Total comprehensive income          -      (6,338)        -       5,671         -     (667) 
for the period 
 
Transactions with owners, recognised directly in equity 
 
Dividends                           -     (29,765)        -           -         -  (29,765) 
 
Share based payments              748        1,169  (1,238)           -     (695)      (16) 
 
Balance at 31 December 2020   307,811       37,964    3,800    (16,594)     (695)   332,286 
 
The notes contained in the full version of the Half-Year Financial Report form 
part of these consolidated financial statements, a copy of which is available 
from the Company's website: www.baseresources.com.au. 
 
10.       Consolidated Condensed Statement of Cash Flows 
 
                                                        6 months to          6 months to 
                                                   31 December 2020     31 December 2019 
 
                                                            US$000s              US$000s 
 
Cash flows from operating activities 
 
Receipts from customers                                      85,283               99,012 
 
Payments in the course of operations                       (49,542)             (42,786) 
 
Income tax paid                                             (4,644)             (20,696) 
 
Net cash from operating activities                           31,097               35,530 
 
Cash flows from investing activities 
 
Purchase of property, plant and equipment                   (5,145)              (5,235) 
 
Payments for exploration and evaluation                     (7,812)             (14,737) 
 
Other                                                           128                  136 
 
Net cash used in investing activities                      (12,829)             (19,836) 
 
Cash flows from financing activities 
 
Repayment of borrowings                                    (50,000)              (5,000) 
 
Dividends paid                                             (29,765)                    - 
 
Purchase of treasury shares                                 (1,143)                    - 
 
Payments for debt service costs                             (2,329)              (1,293) 
 
Net cash used in financing activities                      (83,237)              (6,293) 
 
Net increase in cash held                                  (64,969)                9,401 
 
Cash at beginning of period                                 162,559               39,242 
 
Effect of exchange fluctuations on cash                       2,012              (1,080) 
held 
 
Cash at end of period                                        99,602               47,563 
 
The notes contained in the full version of the Half-Year Financial Report form 
part of these consolidated financial statements, a copy of which is available 
from the Company's website: www.baseresources.com.au. 
 
Forward looking statements 
 

Certain statements in or in connection with this announcement contain or 
comprise forward looking statements.  Such statements may include, but are not 
limited to, statements with regard to capital cost, capacity, future production 
and grades, 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. 
 
ENDS. 
 
For further information contact: 
 
James Fuller, Manager Communications and Investor  UK Media Relations 
Relations 
 
Base Resources                                     Tavistock Communications 
 
Tel: [phone]                             Jos Simson and Gareth Tredway 
 
Mobile: [phone]                        Tel: [phone] 
 
Email: [e-mail] 
 
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 1, 50 Kings Park Road 
West Perth, Western Australia, 6005 
Email:  [e-mail] 
Phone: [phone] 
Fax: [phone] 
 
NOMINATED ADVISOR 
RFC Ambrian Limited 
Stephen Allen 
Phone: [phone] 
 
BROKER 
Berenberg 
Matthew Armitt / Detlir Elezi 
Phone: [phone] 
 
 
 
 
END 
 
 

(END) Dow Jones Newswires

February 22, 2021 02:00 ET (07:00 GMT)