Buy
Sell
Share Name Share Symbol Market Type Share ISIN Share Description
Base Resources Limited LSE:BSE London Ordinary Share AU000000BSE5 ORD NPV (DI)
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  -0.50 -3.17% 15.25 15.00 15.50 15.75 15.25 15.75 25,000 12:44:00
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Mining 115.9 25.4 1.9 8.0 180

Base Resources Limited Updated Kwale South Resources and Reserves estimate

27/07/2020 7:00am

UK Regulatory (RNS & others)


 
TIDMBSE 
 
AIM and Media Release 
 
27 July 2020 
 
BASE RESOURCES LIMITED 
Updated Kwale South Dune Mineral Resources and Ore Reserves estimate 
 
Key Points 
 
  * Mineral Resources estimate updated to reflect a 5% reduction in material 
    bulk density following routine reconciliations undertaken between the 
    resource model estimates and run-of-mine operating data gained since mining 
    commenced on the South Dune in July 2019. 
  * Mineral Resources have also been updated to reflect a reduction in the size 
    of the prospecting licence and depletion due to mining. 
  * The Ore Reserves estimate has been updated for the new Mineral Resources 
    estimate. 
  * On the basis of current Ore Reserves, mining is scheduled on the Kwale 
    South Dune until October 2022. 
  * Mining tenure arrangements to extend the Kwale special mining lease are 
    progressing 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 which 
    are currently outside that mining lease. 
 
African mineral sands producer, Base Resources Limited (ASX / AIM: BSE) (Base 
Resources) announces an update to the Kwale South Dune Mineral Resources (2020 
Kwale South Dune Mineral Resources) and Ore Reserves (2020 Kwale South Dune Ore 
Reserves) estimates at its 100% owned and operated Kwale Operation in Kenya. 
Base Resources has a net attributable interest of 100% in the 2020 Kwale South 
Dune Mineral Resources and the 2020 Kwale South Dune Ore Reserves estimates. 
 
The 2020 Kwale South Dune Mineral Resources are estimated at 31 March 2020 to 
be 88 million tonnes (Mt) at an average heavy mineral (HM) grade of 3.1% for 
2.7Mt of contained HM, at a 1% HM cut-off grade.  The 2020 Kwale South Dune 
Mineral Resources estimate represents a decrease of 22% in contained HM tonnes 
over the previously reported 2017 Kwale South Dune Mineral Resources estimate. 
 
Figures (graphics) referenced in this announcement have been omitted with the 
exception of Figures 1 and 2.  A full PDF version of this announcement, 
including all figures (graphics), is available from Base Resources' website: 
https://baseresources.com.au/investors/announcements/. 
 
Table 1: 2020 Kwale South Dune Mineral Resources estimate compared with the 
2017 Kwale South Dune Mineral Resources estimate. 
 
                               2020                                         2017 
                       as at 31 March 2020                          as at 4 October 2017 
 
 
                                         HM Assemblage                                HM Assemblage 
          Tonnes    HM    HM   SL   OS                   Tonnes     HM   HM   SL   OS 
Category 
 
            (Mt)  (Mt)   (%)  (%)  (%)   ILM   RUT   ZIR   (Mt)   (Mt)  (%)  (%)  (%)  ILM  RUT  ZIR 
 
                                         (%)   (%)   (%)                               (%)  (%)  (%) 
 
                                 Kwale South Dune Mineral Resources 
 
Measured      63     2   3.2   25    1    58    14     6     81    2.6  3.2   25    1   59   14    6 
 
Indicated     25   0.7   2.8   26    7    52    12     6     33    0.8  2.5   26    7   52   12    6 
 
  Total       88   2.7   3.1   25    3    56    13     6    114    3.5  3.0   25    3   56   13    6 
 
Table subject to rounding differences, resources estimated at a 1% HM cut-off 
grade and are inclusive of the 2020 Kwale South Dune Ore Reserves estimate. 
 
This update is due to depletion due to mining, a 5% reduction in estimated 
material bulk density, a reduction in area of the prospecting license and minor 
sterilisation of sub-economic low-grade material (see Figure 3). 
 
The reduction in material bulk density is a result of routine reconciliations 
undertaken between the resource model predictions and run-of-mine operating 
data gained for ore mined since mining commenced on the South Dune in July 
2019.  This has demonstrated that the 2016 Kwale South Dune Mineral Resources 
estimate1 (the basis for the 2016 Kwale South Dune Ore Reserves estimate), and 
subsequently the updated 2017 Kwale South Dune Mineral Resources estimate2, 
were overstating the material bulk density by approximately 5%.  Consequently, 
the correction to material bulk density has resulted in the 2020 Kwale South 
Dune Mineral Resources estimate being reduced by 5.7Mt of material containing 
0.17Mt of heavy mineral. 
 
Prospecting licence 2018/0119 (PL119) was first granted in May 2018 for a 
three-year term, following conversion of the pre-existing prospecting tenure 
instrument Special Prospecting licence 173 (SPL173), in accordance with the 
provisions of the Mining Act 2016.  The area of PL119 is half that of SPL173, 
which was granted under the previous Mining Act.  Consequently, the 2018 grant 
of PL119 resulted in 2.2Mt of low-grade material being excluded from the 2020 
Kwale South Dune Mineral Resources estimate containing 0.03Mt of heavy 
mineral.  This material was not considered to be economic.  The licence can be 
renewed for two further three-year terms, subject to the requirement to 
relinquish not less than 50% of the area upon each renewal, unless otherwise 
agreed by the Cabinet Secretary of the Ministry of Petroleum and Mining. 
 
The 2020 Kwale South Dune Mineral Resources estimate also includes mining 
depletion of 14.2Mt of material and 0.51Mt of contained heavy mineral to 31 
March 2020, when compared with the 2017 Kwale South Dune Mineral Resources 
estimate. 
 
Mining sterilisation of 3.6Mt of material and 0.06 Mt of contained heavy 
minerals comprises Mineral Resources material that was not mined as it was not 
considered economic to do so. 
 
A summary of all sources of change between the 2017 and 2020 Kwale South Dune 
Mineral Resources estimates is shown in Figure 1. 
 
Figure 1: Source and quantum of change between the 2017 and 2020 Kwale South 
Dune Mineral Resource estimates contained heavy mineral tonnes. 
 
Kwale South Dune Mineral Resources - Change in contained heavy mineral (Mt) 
 
Amount (Mt)     3.5       (0.17)      (0.03)      (0.51)       (0.06)         2.7 
 
Source         2017        Bulk         SPL       Mining       Mining        2020 
              Mineral     density    reduction   depletion  sterilisation   Mineral 
             Resources                                                     Resources 
 
Contained within the 2020 Kwale South Dune Mineral Resources estimate are the 
2020 Kwale South Dune Ore Reserves, estimated at 31 March 2020 to be 44Mt at an 
average HM grade of 3.5% for 1.5Mt of contained heavy mineral.  The 2020 Kwale 
South Dune Ore Reserves represents a decrease of 35% in contained HM tonnes to 
the previously reported 2016 Kwale South Dune Ore Reserves estimate, due to the 
5% lower material bulk density, mining depletion and changes to the underlying 
resource model discussed below. 
 
Table 2: 2020 Kwale South Dune Ore Reserves estimate compared with the 2016 
Kwale South Dune Ore Reserves estimate. 
 
                              2020                                        2016 
                      as at 31 March 2020                         as at 11 October 2016 
 
 
                                        HM Assemblage                              HM Assemblage 
         Tonnes    HM    HM   SL   OS                   Tonnes   HM   HM   SL   OS 
Category 
 
           (Mt)  (Mt)   (%)  (%)  (%)   ILM   RUT   ZIR   (Mt) (Mt)  (%)  (%)  (%)  ILM  RUT  ZIR 
 
                                        (%)   (%)   (%)                             (%)  (%)  (%) 
 
                                  Kwale South Dune Ore Reserves 
 
 Proved      38   1.4   3.6   26    1    58    14     6     39  1.6  4.0   27    1   59   14    6 
 
Probable      6   0.2   2.9   27    8    51    12     5     23  0.8  3.3   26    5   53   13    6 
 
 Total       44   1.5   3.5   26    2    57    13     6     62  2.3  3.8   27    3   57   13    6 
 
Table subject to rounding differences. 
 
The basis for the previously reported 2016 Kwale South Dune Ore Reserves 
estimate was the 2016 Kwale Mineral Resources estimate.  Subsequent to this, 
the 2017 Kwale South Dune Mineral Resources estimate was completed.  The 
significant change between 2016 and 2017 Kwale South Dune Mineral Resources 
estimates was the inclusion of additional drilling and updated mineralogy into 
the underlying resource model.  The impact of these changes, when incorporated 
to the 2020 Kwale South Dune Ore Reserves estimate, is a significant increase 
in the confidence of that estimate, with 87% of material tonnes and 89% of HM 
tonnes now classified as Proved Ore Reserves and a reduction of 0.2Mt of 
contained HM (refer figure 2).  A summary of all sources of change between the 
2016 and 2020 Kwale South Dune Ore Reserves estimates is shown in Figure 2 
below.  The areas of change are shown in Figures 4 and 5 below. 
 
Figure 2: Source and quantum of change between the 2016 and 2020 Kwale South 
Dune Ore Reserves estimates contained heavy mineral tonnes. 
 
Kwale South Dune Ore Reserves - Change in contained heavy mineral (Mt) 
 
Amount (Mt)     2.3        (0.2)       (0.1)       (0.5)        1.5 
 
Source       2016 Ore    Resource      Bulk       Mining     2020 Ore 
             Reserves      Model      Density    depletion   Reserves 
 
The 2020 Kwale South Dune Mineral Resources estimate has approximately twice 
the material, and 180% of  the contained HM tonnes, compared to the 2020 Kwale 
South Dune Ore Reserves estimate because the Ore Reserves are constrained 
within Special Mining Lease No. 23 (SML23) whereas the Mineral Resources are 
constrained within the much larger PL119.  Mining tenure arrangements are being 
progressed with the Kenyan Ministry of Petroleum and Mining to extend the SML23 
boundary to incorporate some of these additional Mineral Resources as a 
precursor to an anticipated updated Ore Reserves estimate (see Figure 6). 
 
[Notes: 
 
(1) Refer to Base Resources' market announcement "2016 Mineral Resources and 
Ore Reserves Update for Kwale" released on 11 October 2016, which is available 
at https://baseresources.com.au/investors/announcements/]/ . 
 
(2) Refer to Base Resources' market announcement "Mineral Resources Increase 
for Kwale South Dune" released on 4 October 2017, which is available at https:/ 
/baseresources.com.au/investors/announcements/ .] 
 
Further information about the 2020 Kwale South Dune Mineral Resources estimate 
 
The 2020 Kwale South Dune Mineral Resources estimate is reported in accordance 
with the JORC Code.  The information set out below is a summary of the 
information material to understanding the 2020 Kwale South Dune Mineral 
Resources estimate.  This information should be read in conjunction with the 
information provided for the purposes of Sections 1 to 3 of Table 1 of the JORC 
Code, included as Appendix 1 to this announcement. 
 
The Kwale Operation is located on SML23, which lies within PL119 which has an 
area of 88.7 km2, and is located approximately 50 kilometres south of Mombasa 
and approximately 10 kilometres inland from the Kenyan coast (Figure 7). 
 
The Kwale Project comprised three areas that contain concentrations of heavy 
minerals.  These are the South Dune, Central Dune (now totally depleted by 
mining and currently the repository for tailings from the South Dune) and the 
North Dune (currently the subject of preliminary feasibility study) deposits 
(Figure 8). 
 
The project was initially owned by Tiomin Resources Inc. (Tiomin) which 
conducted drilling in 1997 and then by Base Titanium Limited (a wholly owned 
subsidiary of Base Resources) which purchased the project late in 2010 and 
commenced confirmatory drilling of the Central, South and North Dune deposits 
within PL119. 
 
Mineral Resources estimation work previously carried out on the Kwale deposits 
is as follows: 
 
  * 2006 by Tiomin; 
  * 2010 by Base Resources via a consulting company, Creative Mined Pty Ltd, 
    and under the direction of Base Resources Competent Person, Scott 
    Carruthers; 
  * 2014 by GNJ Consulting, and under the direction of the Competent Person, 
    Greg Jones; 
  * 2016 by Base Resources Competent Person, Scott Carruthers; and 
  * 2017 by Base Resources Competent Person, Richard Stockwell. 
 
The rocks of the area are of sedimentary origin and range in age from Upper 
Carboniferous to Recent.  Three divisions are recognised: the Cainozoic rocks, 
the Upper Mesozoic rocks (not exposed on the area) and the Duruma Sandstone 
Series giving rise to the dominant topographical feature of the area: the 
Shimba Hills.  The Shimba grits and Mazeras sandstone are of Upper Triassic age 
and form the Upper Duruma Sandstone. 
 
The Margarini sands form a belt of low hills running parallel to the coast. 
They rest with slight unconformity on the Shimba grits and Mazeras sandstone. 
This formation was deposited during Pliocene times and consists of 
unconsolidated fluviatile sediments derived from the Duruma Sandstone Series. 
 
The Kwale deposits are an aeolian subset of the Margarini sands and are 
generally poorly stratified and contain a fraction of silt/clay of around 25 
per cent.  Heavy minerals, mainly ilmenite, rutile and zircon, are locally 
concentrated and are abundant in some places, giving rise to deposits such as 
the Central, South and North Dunes. 
 
The geological interpretations for each deposit considered the data in the 
drill logs, HM assay results, microscopic logging of HM sinks, detailed 
mineralogy, knowledge gained from mining the Central Dune deposit and the 
results of pilot plant-scale test work conducted on trial mining pits at the 
South Dune deposit.  Two mineralised geological domains have been identified at 
the South Dune deposit.  These were used and honoured during the geological 
modelling.  Mining at the South Dune has not altered the geological 
interpretation. 
 
The right to mine the Kwale South Dune deposit was granted to the previous 
owner of the Kwale Operations by the Government of Kenya under SML23 on 6 July 
2004.  SML23 was assigned to Base Titanium Limited (a wholly owned subsidiary 
of Base Resources) (Base Titanium) in July 2010, with consent from the 
Commissioner of Mines and Geology of the Government of Kenya. 
 
SML23 has a term of 21 years from 6 July 2004 and provides the right to carry 
out mining operations for the production of ilmenite, rutile and zircon.  Prior 
to expiry of SML23, Base Titanium may apply for a new mining lease on a 
priority basis pursuant to the Mining Act 2016.  The original prospecting 
licence, SPL173, which was granted under the previous Mining Act, was 
re-granted as PL119 on 26 May 2018 under the 2016 Mining Act, for a three-year 
term.  It may be renewed for two further three-year terms, with a requirement 
to relinquish 50% of the area on each renewal, although this requirement may be 
relaxed with the consent of the Cabinet Secretary of the Ministry of Petroleum 
and Mining. 
 
The environment and land use in Kwale County is defined as humid and intensive 
subsistence agriculture/mixed farming/forestry.  The approximate population for 
Kwale County is 860,000 persons. 
 
Tiomin conducted drilling in 1997 at Kwale using an open-hole, rotary mud 
drilling technique.  Subsequent resource drilling by Base Titanium was 
completed using the reverse circulation air core (RCAC) method.  Aircore 
drilling has been conducted in three campaigns: October to November 2010, 
January to February 2013 and November 2016 to March 2017 (Figure 9).  Drilling 
within SML23 comprises predominantly pre 2016 holes at, generally, 100 x 100 
metre spacing.  Drilling from 2016 onwards is spaced at 100 x 50 metre 
spacing. 
 
Predominantly 3m sample intervals in previous RCAC drilling was replaced by 
sampling at 1.5m intervals from November 2016 to provide greater control on 
geological boundaries.  Sample size averages close to 3kg at this sample 
interval when collecting 25% of the rotary splitter cycle.  Samples are dried, 
weighed, and screened for material less than 45 micrometres (slimes) and +1mm 
(oversize). 
 
Approximately 100 grams of the screened sample is subjected to a HM float/sink 
technique using the heavy liquid, Lithium polytungstate (LST with an SG of 
2.85gcm-3).  The resulting HM concentrate is dried and weighed as are the other 
separated constituent size fractions (the minus 45 micrometre material being 
calculated by difference). 
 
Mineral assemblage analyses were conducted by Base Titanium in order to 
characterise the mineralogical and chemical characteristics of specific mineral 
species and magnetic fractions.  These mineral assemblage samples were 
subjected to magnetic separation using a Mineral Technologies, Reading, 
induced-roll magnetic separator, which captures magnetic (mag), middling (mid) 
and non-magnetic (non-mag) fractions.  The mid and mag fractions are combined 
and, with the non-mag fraction, are subjected to XRF analysis using a Bruker, 
S8 Tiger XRF.  Data from the mag and non-mag XRF analyses are processed through 
an algorithm (Minmod) that runs approximately 100,000 iterations in assigning 
key chemical species to a calculated mineralogy determination. 
 
Drill hole collar and geology data is captured by industry-specific, field 
logging software with on-board validation.  Field and assay data are managed in 
an MS Access database and subsequently migrated to a more secure, SQL 
database.  Population of the SQL database was completed in July 2017 and was 
the final stage of data validation for the 2020 Kwale South Dune Mineral 
Resource estimate. 
 
Standard samples were generated and certified for use in the field and 
laboratory.  Accuracy of HM and slimes (SL) analysis was verified by standards 
and monitored using control charts.  Standard error greater than three standard 
deviations from the mean prompted batch re-assay.  A standard precision 
analysis was conducted on the key assay fields: HM, SL and Oversize (OS) for 
both laboratory and field duplicate samples.  Normal scatter and QQ plots were 
prepared for HM, SL and OS for laboratory and field duplicates. 
 
A twin drilling program was introduced to quantify short-range variability in 
geological character and grade intersections.  A water injection versus dry 
drilling assessment was included in the twin drilling analysis.  Field and 
laboratory duplicate, standard and twin drilling analysis show adequate level 
of accuracy and precision to support resource classifications as stated. 
Analysis of the twin drilling, length of geological zones and grade 
distributions led to the decision to exclude the Tiomin data from the Mineral 
Resource estimate. 
 
A topographic DTM was prepared by Base Resources in Geovia (Surpac) software 
format which was based on a LIDAR survey. 
 
Construction of the geological grade model was based on coding model cells 
below open wireframe surfaces, comprising topography, geology (Ore Zones 1 & 4) 
and basement (Figure 10).  Model cell dimensions of 50m x 50m x 1.5m in the XYZ 
orientations was applied to the 2020 Kwale South Dune Mineral Resources 
estimate. 
 
Interpolation was undertaken using various sized search ellipses to populate 
the model with primary grade fields (HM, SL, OS, and mineralogy), and index 
fields (hardness, Induration percent, Composite ID).  Inverse distance 
weighting to a power of three was used for primary assay fields whilst nearest 
neighbour was used to interpolate index fields. 
 
The bulk density applied to the Kwale South Dune model is a component-based 
algorithm, validated by Troxler density measurements taken in the active Kwale 
Central Dune mine.  The character of the Kwale South Dune is sufficiently 
similar to that of the Kwale Central Dune to validate this approach.  However, 
monthly mine reconciliations over the nine-month period since mining commenced 
until 31 March 2020 have shown that at Kwale South Dune the bulk density 
derived from the algorithm overstates the bulk density by approximately 5%. 
Reconciliations consistent with industry practice use measured production and 
quality information to estimate grade and tonnes of ore mined which showed this 
bias when compared to the tonnes predicted by the resource model.  Several 
possible alternative sources of the bias were investigated and eliminated, 
leaving ore bulk density as the only remaining logical source of error. 
 
The criteria used for classification was primarily the drill spacing and sample 
interval, with consideration also given to the continuity of mineral assemblage 
information and confidence in post-depositional modification of mineralisation 
(e.g. induration in Ore Zone 4).  Generally, 100 x 100 was considered 
sufficient for Measured Resources and 200 x 100 for Indicated for Indicated 
Resources.  A reduced level of confidence was applied to the Ore Zone 4 
material at Kwale South Dune due to the unpredictable ironstone induration and 
lower density of mineralogical information. 
 
Modifying factors were considered during the Ore Reserves estimation process; 
they were not considered during the Mineral Resources estimation process.  The 
mining method is hydraulic mining. 
 
The 2020 Kwale South Dune Mineral Resources estimate is reported using a 1% HM 
bottom cut as that is close to the economic cut-off and to allow for comparison 
to the previous resource figure. 
 
Further information about the 2020 Kwale South Dune Ore Reserves estimate 
 
The 2020 Kwale South Dune Ore Reserves estimate is reported in accordance with 
the JORC Code.  The information set out below is a summary of the information 
material to understanding the 2020 Kwale South Dune Ore Reserves estimate. 
This information should be read in conjunction with the information provided 
for the purposes of Sections 1 to 4 of Table 1 of the JORC Code, included as 
Appendix 1 to this announcement. 
 
The feasibility study that led to the final investment decision for the Kwale 
Project was completed in 2011 and is no longer relevant given production 
commenced in late 2013.  Accordingly, data derived from actual production 
statistics and financial reports were used to form the assumptions underpinning 
the 2020 Kwale South Dune Ore Reserves estimate.  The operating cost, recovery 
and other material assumptions are detailed in Tables 3 to 6 below and were 
used to create a value model to determine economic pit limits.  Then a 
two-stage pit limit selection process was followed to determine the optimum raw 
pit shell. This was then subject to detailed mine planning and scheduling, with 
the outputs used to perform detailed financial analysis to demonstrate the 
technical and economic viability of the extraction of the Ore Reserves. 
 
The reference point for the 2020 Kwale South Dune Ore Reserve estimate was 31 
March 2020. 
 
Table 3: Assumed mineral recoveries 
 
Description                                   Units                   Value 
 
Concentrate grade                               %                       90 
 
HM recovery - wet concentrator                  %                      83.5 
plant 
 
Ilmenite recovery - wet                         %                       94 
concentrator plant 
 
Rutile recovery - wet concentrator              %                       90 
plant 
 
Zircon recovery - wet concentrator              %                      94.5 
plant 
 
Ilmenite recovery - mineral                     %                      100 
separation plant 
 
Rutile recovery - mineral                       %                       99 
separation plant 
 
Zircon recovery - mineral                       %                       77 
separation plant 
 
Table 4: Assumed operating costs 
 
Description                                     Units                  Value 
 
Waste mining                               USD / T (Waste)              2.7 
 
Ore mining - fuel                           USD / T (Ore)              0.102 
 
Ore mining - pumping power                   USD / kWhr                 0.14 
 
Slime - flocculant                         USD / T (Slime)              0.36 
 
HMC dryer - fuel                            USD / T (HMC)               4.46 
 
Rutile circuit reheater - fuel       USD / T (HMC - Ilmenite T)         1.77 
 
Zircon circuit dryer - fuel          USD / T (HMC - Ilmenite T -       0.892 
                                              Rutile T) 
 
Process plant - power                       kWhr / HMC T                 14 
 
Ilmenite product haulage and port    USD / T (Ilmenite Product)         6.85 
costs 
 
Rutile product haulage and port       USD / T (Rutile Product)          9.87 
costs 
 
Zircon product haulage and port       USD / T (Zircon Product)         31.05 
costs 
 
Fixed - power                           kWhr / Operating Hour          9,662 
 
Fixed - other                                USD / Annum             37,989,651 
 
Table 5: Process throughput rates (used to limit assumed feed rate during 
optimisation) 
 
Description                                   Units                    Rate 
 
Maximum HMU throughput                      T/Hr (Ore)                2,400 
 
Maximum process rougher feed                T/Hr (RHF)                1,850 
throughput 
 
Maximum process tails throughput           T/Hr (Tails)               1,706 
 
Maximum process thickener                 T/Hr (Slimes)                774 
throughput 
 
Maximum process HMC throughput              T/Hr (HMC)                 120 
 
Availability                                    %                       90 
 
Table 6: Product prices (FOB) 
 
Description                                  Units                  Price* 
 
Ilmenite revenue                            USD / T                   180 
 
Rutile revenue                              USD / T                  1,100 
 
Zircon revenue                              USD / T                  1,800 
 
*Assumed average prices over the life of Ore Reserve at time of optimisation. 
 
The criteria used for classification of the Ore Reserves followed that used for 
the Mineral Resources classification, so Proven Ore Reserves comprise Measured 
Resources and Probable Ore Reserves comprise Indicated Resources. 
 
The mining method is hydraulic mining, which Base Titanium has used 
successfully since 2017.  It is non-selective, with hydraulic mining units (HMU 
) using high pressure water jets to sluice the entire ore face, which flows as 
a slurry to a sump and is then pumped, ultimately, to the concentration plant. 
 
Due to the geometry of the deposit and the non-selective mining method, there 
is no ore/waste discrimination (other than topsoil stripping) and it is not 
considered appropriate to add additional dilution factors.  A 0.2 m allowance 
for topsoil has been incorporated into the model and this material is excluded 
from Ore Reserves reporting as non-recoverable. 
 
The wet concentrator plant is typical of a mineral sand operation, using 
screens, spirals and cyclones to separate the heavy minerals from the quartz 
sand and clay. 
 
Heavy mineral concentrate is fed to a mineral separation plant which uses 
magnetic and electrostatic separators, classifiers, spirals and wet tables to 
produce ilmenite, rutile and zircon products.  Recovery factors are reported in 
Table 3. 
 
Pit optimisation was undertaken using CAE NPV Scheduler software (NPVS).  A 
Value model was first prepared in DATAMINE Studio 5DP Mine Planning software 
and revenue and cost adjustment attributes subsequently imported into NPVS for 
Lerch-Grossman optimisation.  Because a value model was used to determine the 
pit limits, cut-off grades were not used. 
 
The estimation methodology comprised developing nested pit limits (as described 
above) by reducing the revenue in 1 percentage decrements, selection of the 
most appropriate pit shell by comparison of several factors (including NPV, 
life of mine, revenue to cost ratios, incremental cash flow etc.), mine 
planning and scheduling of the selected pit shell and finally confirmation of 
positive economics by feeding the scheduled tonnes into the project financial 
model. 
 
The material modifying factors impacting the deposit economics are disclosed in 
the tables above.  As an operating mine, the other modifying factors, tenure 
status, infrastructure (power, water, roads etc.), regulatory approvals, social 
considerations etc. are all in place. 
 
There is potential to significantly add to the Ore Reserves by expanding the 
area of SML23 to include parts of the Mineral Resources that lie outside the 
present SML23 boundary.  Base Resources is engaging with the Government of 
Kenya to expand SML23 into the areas shown in Figure 6. 
 
Competent Persons' Statements 
 
2020 Kwale South Dune Mineral Resources 
 
The information in this announcement that relates to the 2020 Kwale South Dune 
Mineral Resources is based on, and fairly represents, information and 
supporting documentation prepared by Mr. Scott Carruthers.  Mr. Carruthers is a 
Member of The Australasian Institute of Mining and Metallurgy.  Mr. Carruthers 
is employed by Base Resources, he holds equity securities in Base Resources, 
and is entitled to participate in Base Resources' long-term incentive plan and 
receive equity securities under that plan.  Details about that plan are 
included in Base Resources' 2019 Annual Report.  Mr. Carruthers has sufficient 
experience that is relevant to the style of mineralisation and type of deposits 
under consideration and to the activity which he is undertaking to qualify as a 
Competent Person as defined in the JORC Code and is considered a Qualified 
Person for the purposes of the AIM Rules for Companies.  Mr. Carruthers has 
reviewed this announcement and consents to the inclusion in this announcement 
of the 2020 Kwale South Dune Mineral Resources and supporting information in 
the form and context in which the relevant information appears. 
 
2020 Kwale South Dune Ore Reserves 
 
The information in this announcement that relates to the 2020 Kwale South Dune 
Ore Reserves is based on, and fairly represents, information and supporting 
documentation prepared by Mr. Per Scrimshaw and Mr. Scott Carruthers.  Mr. 
Scrimshaw and Mr. Carruthers are Members of The Australasian Institute of 
Mining and Metallurgy.  Mr. Scrimshaw is employed by Entech, a mining 
consultancy engaged by Base Resources.  Mr. Carruthers is employed by Base 
Resources, he holds equity securities in Base Resources, and is entitled to 
participate in Base Resources' long-term incentive plan and receive equity 
securities under that plan.  Details about that plan are included in Base 
Resources' 2019 Annual Report.  Mr. Scrimshaw and Mr. Carruthers have 
sufficient experience that is relevant to the style of mineralisation and type 
of deposits under consideration and to the activity which they are each 
undertaking to qualify as Competent Persons as defined in the JORC Code and 
both are considered a Qualified Person for the purposes of the AIM Rules for 
Companies.  Mr. Scrimshaw and Mr. Carruthers have each reviewed this 
announcement and consent to the inclusion in this announcement of the 2020 
Kwale South Dune Ore Reserves and supporting information in the form and 
context in which the relevant information appears. 
 
Forward looking statements 
 
Certain statements in or in connection with this announcement contain or 
comprise forward looking statements. 
 
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 the date of this announcement or to reflect the occurrence 
of unanticipated events. 
 
No representation or warranty, express or implied, is made as to the fairness, 
accuracy or completeness of the information contained in this announcement (or 
any associated presentation, information or matters).  To the maximum extent 
permitted by law, Base Resources and its related bodies corporate and 
affiliates, and their respective directors, officers, employees, agents and 
advisers, disclaim any liability (including, without limitation, any liability 
arising from fault, negligence or negligent misstatement) for any direct or 
indirect loss or damage arising from any use or reliance on this announcement 
or its contents, including any error or omission from, or otherwise in 
connection with, it. 
 
Nothing in this report constitutes investment, legal or other advice.  You must 
not act on the basis of any matter contained in this announcement but must make 
your own independent investigation and assessment of Base Resources and obtain 
any professional advice you require before making any investment decision based 
on your investment objectives and financial circumstances.  This document does 
not constitute an offer, invitation, solicitation, advice or recommendation 
with respect to the issue, purchase or sale of any security in any 
jurisdiction. 
 
Appendix 1 
 
JORC Code, 2012 Edition 
 
Section 1 Sampling Techniques and Data 
 
(Criteria in this section apply to all succeeding sections.) 
 
  Criteria                    Explanation                                                    Comment 
 
Sampling     Nature and quality of sampling (e.g. cut       The 2020 Kwale South Dune Mineral Resources drill data were collected 
techniques   channels, random chips, or specific            using the RCAC method. 
             specialised industry standard measurement 
             tools appropriate to the minerals under        Duplicate field and laboratory samples were taken at accepted industry 
             investigation, such as down hole gamma sondes, standard ratios of approximately 1 in 20 to 1 in 40.  Field and 
             or handheld XRF instruments, etc). These       laboratory standard samples were inserted every 40 samples.  Twin 
             examples should not be taken as limiting the   drilling analysis was completed during the 2016-17 Kwale drill program at 
             broad meaning of sampling.                     the South Dune, which included a wet vs. dry drilling analysis. 
 
             Include reference to measures taken to ensure  RCAC drilling was used to obtain 1 to 3 m samples from which 
             sample representivity and the appropriate      approximately 1.2-2.5 kg was collected using a rotary splitter, mounted 
             calibration of any measurement tools or        beneath a cyclone.  Drilling completed in the 2016-17 Kwale drill program 
             systems used.                                  was sampled at a 1.5m interval, which produced an average 3kg sample from 
                                                            a 25% split of the rotary splitter cycle. 
             Aspects of the determination of mineralisation 
             that are Material to the Public Report. In     The sample is dried, de-slimed (material less than 45µm removed) and then 
             cases where 'industry standard' work has been  oversize (material +1mm) is removed. 
             done this would be relatively simple (e.g. 
             'reverse circulation drilling was used to      Approximately 100g of the resultant sample was then subjected to a HM 
             obtain 1m samples from which 3kg was           float/sink technique using tetra-bromo-ethane (TBE: SG=2.92-2.96 g/cm3). 
             pulverised to produce a 30g charge for fire     Assay of the 2016-17 Kwale drill program samples was completed at Kwale 
             assay'). In other cases more explanation may   site using lithium polytungstate (LST) with an SG of 2.85g/cm3. 
             be required, such as where there is coarse 
             gold that has inherent sampling problems.      The resulting HM concentrate is then dried and weighed. 
             Unusual commodities or mineralisation types 
             (e.g. submarine nodules) may warrant 
             disclosure of detailed information. 
 
Drilling     Drill type (e.g. core, reverse circulation,    RCAC drilling utilising 71 mm diameter air-core tooling accounts for all 
techniques   open-hole hammer, rotary air blast, auger,     drill sample data applied to the 2020 Kwale South Dune Mineral Resources 
             Bangka, sonic, etc) and details (e.g. core     estimate. All holes are drilled vertically with no downhole surveying to 
             diameter, triple or standard tube, depth of    confirm hole direction. 
             diamond tails, face-sampling bit or other 
             type, whether core is oriented and if so, by   All Tiomin, open-hole drill data were excluded from the 2020 Kwale South 
             what method, etc).                             Dune Mineral Resources estimate. 
 
Drill sample Method of recording and assessing core and     Ground conditions vary and, as such, Base Resources log sample quality/ 
recovery     chip sample recoveries and results assessed.   condition at the rig as either good, moderate or poor, with 'good' 
                                                            meaning not contaminated and of an appropriate sample size (recovery), 
             Measures taken to maximise sample recovery and 'moderate' meaning not contaminated, but sample over or undersized, and 
             ensure representative nature of the samples.   'poor' meaning contaminated or grossly over/undersized. 
 
             Whether a relationship exists between sample   For the 2016-17 Kwale drill program, the use of water injection was also 
             recovery and grade and whether sample bias may logged in the sample quality field for every sample interval (dry, moist, 
             have occurred due to preferential loss/gain of injected or wet). Minor sample loss was observed, and the splitter 
             fine/coarse material.                          rectified during the first week of drilling.  No further sample loss has 
                                                            been recorded. The configuration of drilling and nature of sediments 
                                                            encountered results in negligible loss. 
 
                                                            Drill penetration is halted at the end of each sample interval to allow 
                                                            time for the sample to return to surface and be collected.  Drilling 
                                                            proceeds once sample delivery ceases. 
 
                                                            Sampling on the drill rig is observed to ensure that rotary splitter 
                                                            remains clean.  Water flush and manual cleaning of the cyclone occurs at 
                                                            regular intervals to ensure contamination is minimised. 
 
                                                            No relationship is believed to exist between grade and sample recovery. 
                                                            The high percentage of clay and low hydraulic inflow of groundwater 
                                                            results in a sample size that is well within the expected size range. 
 
                                                            Negligible fines losses were identified during twin drilling analysis of 
                                                            the 2016-17 Kwale drill program. 
 
Logging      Whether core and chip samples have been        Base Resources collects detailed qualitative logging of geological 
             geologically and geotechnically logged to a    characteristics to allow a comprehensive geological interpretation to be 
             level of detail to support appropriate Mineral carried out. 
             Resource estimation, mining studies and 
             metallurgical studies.                         Logging of HM sinks with a microscope also is used to inform the 
                                                            geological interpretation. 
             Whether logging is qualitative or quantitative 
             in nature. Core (or costean, channel, etc)     Logging of RCAC samples recorded sample condition, estimated slimes, 
             photography.                                   washability, colour, lithology, dominant grainsize, coarsest grainsize, 
                                                            sorting, induration type, hardness, estimated rock and estimated HM. 
             The total length and percentage of the 
             relevant intersections logged.                 All drill holes are logged in full and all samples with observed HM (and 
                                                            designated for assay) are assayed. All drill holes were logged in full 
                                                            and all samples were assayed and used in the resource estimation 
                                                            exercise. 
 
Sub-sampling If core, whether cut or sawn and whether       All samples are unconsolidated and comprise sand, silt, clay and rock 
techniques   quarter, half or all core taken.               fragments. 
and sample 
preparation  If non-core, whether riffled, tube sampled,    Base Resources rotary split the samples on the drill rig as they are 
             rotary split, etc and whether sampled wet or   delivered from drilling (wet, moist, injected or dry). Low groundwater 
             dry.                                           pressure and rotary splitting delivers a representative sample for 
                                                            logging. The 25% split delivered approximately 3kg of sample for analysis 
             For all sample types, the nature, quality and  during the 2016-17 Kwale drill program. 
             appropriateness of the sample preparation 
             technique.                                     Drill samples are dried then riffle split to produce a 300g sample for 
                                                            de-sliming and oversize removal.  The resultant sand fraction is then 
             Quality control procedures adopted for all     delivered to the laboratory for heavy liquid (LST) separation. 
             sub-sampling stages to maximise representivity 
             of samples.                                    Sample preparation is consistent with industry best practice.  For the 
                                                            2016-17 Kwale drill program, a formal procedure and flow sheet was 
             Measures taken to ensure that the sampling is  developed with detailed QA/QC protocols applied. 
             representative of the in-situ material 
             collected, including for instance results for  QA/QC in the form of laboratory and rig duplicates were used to monitor 
             field duplicate/second-half sampling.          laboratory performance. Laboratory and rig duplicates were submitted at 
                                                            the rate of approximately 1 in 20 each for a combined submission rate of 
             Whether sample sizes are appropriate to the    one in 10. 
             grain size of the material being sampled. 
                                                            Two standard samples were created for the commencement of the 2016-17 
                                                            Kwale drill program.  Bulk samples of Kwale Central Dune ore were mixed, 
                                                            rotary split and sent for certification analysis.  Standards were 
                                                            inserted at a rate of 1 in 40 in the field and another prior to HM assay 
                                                            to test sample preparation and assay accuracy. 
 
                                                            Twin drilling analysis was introduced for the 2016-17 Kwale drill 
                                                            program, which included water injected vs. dry drilling analysis. 
 
                                                            Analysis of sample duplicates and twin drilling data were undertaken by 
                                                            standard geostatistical methodologies to test for bias and to ensure that 
                                                            sample splitting was representative. 
 
                                                            Given that the grain size of the material being sampled is sand and 
                                                            approximately 70 to 300 µm, an average sample size of 1.2 - 3 kg is more 
                                                            than adequate. 
 
Quality of   The nature, quality and appropriateness of the The Base Resources laboratory flow sheet comprises a sample preparation 
assay data   assaying and laboratory procedures used and    stage (completed by Base personnel) and an HM assay stage completed by 
and          whether the technique is considered partial or contracted laboratories.  Assay was completed by Western Geolabs (Perth) 
laboratory   total.                                         for previous resource drilling using a TBE heavy liquid separation. The 
tests                                                       Kwale site lab, managed by SGS, was used for the 2016-17 Kwale drill 
             For geophysical tools, spectrometers, handheld program samples. A LST heavy liquid separation medium is used by SGS. 
             XRF instruments, etc., the parameters used in 
             determining the analysis including instrument  The sample analysis process produced the following assays: 
             make and model, reading times, calibrations 
             factors applied and their derivation, etc.       * HM > 45 micrometres, < 1 mm, > 2.85 SG 
                                                              * slime (SL) < 45 micrometres 
             Nature of quality control procedures adopted     * oversize (OS) > 1 mm 
             (e.g. standards, blanks, duplicates, external 
             laboratory checks) and whether acceptable      Sample preparation involves de-sliming the sample prior to oven drying to 
             levels of accuracy (i.e. lack of bias) and     prevent clay minerals being baked onto the HM grains. A separate sample 
             precision have been established.               is split and dried to determine moisture content, which is then back 
                                                            calculated to correct the assayed grades. 
 
                                                            Quality control protocols include two duplicate assaying procedures. A 
                                                            duplicate sample is generated at the drill rig and another at the sample 
                                                            preparation stage.  Both duplicates are included at a 1:20 ratio and are 
                                                            subjected to the remainder of the sample preparation and assay process. 
 
                                                            A field and a laboratory standard were introduced for the 2016-17 Kwale 
                                                            drill program.  One was inserted in the field and the other, prior to HM 
                                                            assay at a 1:40 ratio. 
 
                                                            Mineralogical analysis is performed by back-calculation of XRF results to 
                                                            an in-ground mineral assemblage, verified by quantitative analysis 
                                                            (SEM-EDX and QEMSCAN).  Both individual sample interval XRF and composite 
                                                            sample XRF data are included in resource estimates. 
 
                                                            Assay technique and quality assurance protocols are considered industry 
                                                            best practice. 
 
                                                            No geophysical, portable XRF etc. instruments were used. 
 
                                                            Field duplicates, sample preparation duplicates and laboratory replicates 
                                                            are submitted for precision and bias analysis. Excepting significant 
                                                            sample size bias as a result of poor splitter gate construction on the 
                                                            RCAC drill rig observed in recent drilling, assay results show acceptable 
                                                            correlation and no bias. 
 
                                                            Audit samples were sent to alternative laboratories (Diamantina and 
                                                            Independent Diamond Laboratories) to verify results from Western Geolabs 
                                                            for previous resource drill samples. No blanks or standards were 
                                                            submitted by Base Resources during this period.  Results returned within 
                                                            acceptable limits. 
 
                                                            Standard samples were introduced for the 2016-17 Kwale drill program. 
                                                            Standards were monitored by control charts and re-assay completed when 
                                                            results fell outside control chart limits (mean + 3SD).  Re-assay was 
                                                            completed for standards failures and all data are now corrected. 
 
Verification The verification of significant intersections  The deposit type and consistency of mineralization leaves little room for 
of sampling  by either independent or alternative company   unexplained variance.  Verification of intersections was limited to 
and assaying personnel.                                     checking for variance between logged estimates of grade and the assayed 
                                                            grades. Where there was unexplained variance, samples were re-submitted 
             The use of twinned holes.                      for assay. 
 
             Documentation of primary data, data entry      Twinned holes were completed during the 2016-17 Kwale drill program. 
             procedures, data verification, data storage    These were used for statistical analysis of short-range geological and 
             (physical and electronic) protocols.           assay field variability for the resource estimation.  Assay fields showed 
             Discuss any adjustment to assay data.          acceptable correlation and an absence of bias. 
 
                                                            A comparison of dry vs. water injection was included in the twin drilling 
                                                            analysis.  Negligible Slimes losses were established by the practice of 
                                                            dry drilling for the 2016-17 Kwale drill program. 
 
                                                            Data collected by Base Resources is entered digitally in the field and 
                                                            uploaded to Microsoft Access prior to being migrated to a more secure SQL 
                                                            database, hosted on the Kwale site server.  The SQL database is subject 
                                                            to regular back-up and access is limited to the Exploration 
                                                            Superintendent and business applications administrator. 
 
                                                            Assay data adjustments are made to convert laboratory collected weights 
                                                            to assay field percentages and to account for moisture. 
 
Location of  Accuracy and quality of surveys used to locate Base Resources used a real time kinematic global positioning system (RTK 
data points  drill holes (collar and down-hole surveys),    GPS) to survey drill sites. 
             trenches, mine workings and other locations 
             used in Mineral Resources estimation.          The grid system used is the Arc1960 (zone 37 South). Modelling was 
                                                            conducted in a rotated local mine grid. 
             Specification of the grid system used. 
                                                            LIDAR surveys flown in 2013 and 2015 were joined to cover the resource 
             Quality and adequacy of topographic control.   areas.  Drill holes were projected to this surface prior to resource 
                                                            estimation.  Stated accuracy of the LIDAR survey is 0.015m. 
 
Data spacing Data spacing for reporting of Exploration      The drill data spacing is nominally 100m North, 50m East, and 1.5m down 
and          Results.                                       hole for the 2016-17 Kwale drill program.  Previous drilling is nominally 
distribution                                                spaced at 200m North, 100m East and has a 3m down-hole sample interval. 
             Whether the data spacing and distribution is   Variations occur when lower-density drilling is applied to exploration 
             sufficient to establish the degree of          areas or from line-clearing difficulties prior to drilling and drill site 
             geological and grade continuity appropriate    survey. 
             for the Mineral Resources and Ore Reserves 
             estimation procedure(s) and classifications    Based on the experience of the competent person, the data spacing and 
             applied.                                       distribution through the drill hole programs Is considered adequate for 
                                                            the assigned Mineral Resources classifications. HM grade continuity was 
             Whether sample compositing has been applied.   verified using variography of the discrete geological domains. 
 
                                                            No sample compositing or de-compositing has been applied to previous 
                                                            resource estimates. The majority of previous sampling was taken on 3 m 
                                                            intervals with some 1 m intervals drilled for geological boundary 
                                                            definition on a vertical basis. Sample length weighting was used during 
                                                            the interpolation process. 
 
                                                            For the 2020 Kwale South Dune Mineral Resource, all historic 3m sample 
                                                            intervals are de-composited to 1.5m for the interpolation.  Samples for 
                                                            mineralogical analysis were composited, generally on-section, on a 
                                                            like-for-like basis with reference to HM sink logs and conforming to the 
                                                            geological interpretation. 
 
Orientation  Whether the orientation of sampling achieves   Sample orientation is vertical and approximately perpendicular to the dip 
of data in   unbiased sampling of possible structures and   and strike of the mineralisation resulting in true thickness estimates. 
relation to  the extent to which this is known, considering Drilling and sampling are carried out on a regular rectangular grid that 
geological   the deposit type.                              is broadly aligned and in a ratio consistent with the anisotropy of the 
structure                                                   mineralisation. 
             If the relationship between the drilling 
             orientation and the orientation of key         There is no apparent bias arising from the orientation of the drill holes 
             mineralised structures is considered to have   with respect to the strike and dip of the deposit. 
             introduced a sampling bias, this should be 
             assessed and reported if material. 
 
Sample       The measures taken to ensure sample security.  All samples are numbered, with samples split and residues stored securely 
security                                                    at the Kwale site, along with HM sinks. 
 
Audits or    The results of any audits or reviews of        GNJ Consulting Pty Ltd and IHC Robbins conducted reviews of previous 
reviews      sampling techniques and data.                  Mineral Resources estimates completed by Base Resources. 
 
                                                            Hornet Drilling and Geological Services Pty Ltd conducted three site 
                                                            visits during preparation and data collection stages relating to the 
                                                            2016-17 Kwale drill program.   These were made to establish and review 
                                                            drilling, sample preparation and geological interpretation procedures and 
                                                            monitor adherence.  Minor recommended changes were made on each occasion. 
 
                                                            IHC Robbins was engaged to complete peer review of the 2020 Kwale South 
                                                            Dune Mineral Resource estimate. 
 
Section 2 Reporting of Exploration Results 
 
(Criteria listed in the preceding section also apply to this section.) 
 
   Criteria                     Explanation                                                    Comment 
 
Mineral        Type, reference name/number, location and      The resource lies within the granted Prospecting Licence 2018/0119. 
tenement and   ownership including agreements or material     Mining is currently taking place on the Kwale South Dune deposit within 
land tenure    issues with third parties such as joint        Special Mining Lease No.23. An ad valorem royalty of 2% is payable to the 
status         ventures, partnerships, overriding royalties,  previous owners, and a 2.5% royalty is currently payable to the Kenyan 
               native title interests, historical sites,      government. 
               wilderness or national park and environmental 
               settings.                                      There are no known impediments to the security of tenure for the Kwale 
                                                              Operations deposits. 
               The security of the tenure held at the time of 
               reporting along with any known impediments to 
               obtaining a licence to operate in the area. 
 
Exploration    Acknowledgment and appraisal of exploration by The previous owners of the project (Tiomin Kenya Ltd) undertook 
done by other  other parties.                                 exploration over the Kwale Project prior to purchase by Base Resources. 
parties                                                       Analysis of twinned holes, grade distributions and geological zone 
                                                              thickness has led to Tiomin's data being excluded from this Mineral 
                                                              Resource estimation. 
 
Geology        Deposit type, geological setting and style of  The Kwale South Dune deposit is an aeolian detrital heavy mineral sand 
               mineralisation.                                deposit. 
 
Drill hole     A summary of all information material to the   There are no particular drill hole results that are considered material 
Information    understanding of the exploration results       to the understanding of the exploration and resource drill out. 
               including a tabulation of the following        Identification of the wide and thick zone of mineralisation is made via 
               information for all Material drill holes:      multiple intersections of drill holes and to list them all would not give 
                                                              the reader any further clarification of the distribution of 
                 * easting and northing of the drill hole     mineralisation throughout the deposit. 
                   collar 
                 * elevation or RL (Reduced Level - elevation 
                   above sea level in metres) of the drill 
                   hole collar 
                 * dip and azimuth of the hole 
                 * down hole length and interception depth 
                 * hole length. 
 
               If the exclusion of this information is 
               justified on the basis that the information is 
               not Material and this exclusion does not 
               detract from the understanding of the report, 
               the Competent Person should clearly explain 
               why this is the case. 
 
Data           In reporting Exploration Results, weighting    No grade cutting was undertaken, nor compositing or aggregation of grades 
aggregation    averaging techniques, maximum and/or minimum   made prior or post the grade interpolation into the block model. 
methods        grade truncations (e.g. cutting of high        Selection of the bottom basal contacts of the mineralised domains were 
               grades) and cut-off grades are usually         made based on discrete logging and grade information collected and 
               Material and should be stated.                 assayed by Base Resources and Tiomin. 
 
               Where aggregate intercepts incorporate short   No data aggregation has been performed. 
               lengths of high-grade results and longer 
               lengths of low-grade results, the procedure    No metal equivalents were used for reporting of Mineral Resources. 
               used for such aggregation should be stated and 
               some typical examples of such aggregations 
               should be shown in detail. 
 
               The assumptions used for any reporting of 
               metal equivalent values should be clearly 
               stated. 
 
Relationship   These relationships are particularly important All drill holes are vertical and perpendicular to the dip and strike of 
between        in the reporting of Exploration Results.       mineralisation and therefore all interceptions are approximately true 
mineralisation                                                thickness. 
widths and     If the geometry of the mineralisation with 
intercept      respect to the drill hole angle is known, its 
lengths        nature should be reported. 
 
               If it is not known and only the down hole 
               lengths are reported, there should be a clear 
               statement to this effect (e.g. 'down hole 
               length, true width not known'). 
 
Diagrams       Appropriate maps and sections (with scales)    Refer to main body of this announcement. 
               and tabulations of intercepts should be 
               included for any significant discovery being 
               reported These should include, but not be 
               limited to a plan view of drill hole collar 
               locations and appropriate sectional views. 
 
Balanced       Where comprehensive reporting of all           Reporting of results is restricted to Mineral Resources and Ore Reserves 
reporting      Exploration Results is not practicable,        estimates generated from geological and grade block modelling. 
               representative reporting of both low and high 
               grades and/or widths should be practiced to 
               avoid misleading reporting of Exploration 
               Results. 
 
Other          Other exploration data, if meaningful and      Bulk density is derived from algorithm.  The reason for this Mineral 
substantive    material, should be reported including (but    Resource update is the decision to reduce the algorithm derived bulk 
exploration    not limited to): geological observations;      densities by 5%.  This is discussed in the main body of this announcement 
data           geophysical survey results; geochemical survey and below in Section 3. 
               results; bulk samples - size and method of 
               treatment; metallurgical test results; bulk 
               density, groundwater, geotechnical and rock 
               characteristics; potential deleterious or 
               contaminating substances. 
 
Further work   The nature and scale of planned further work   No further work is planned at this stage. 
               (e.g. tests for lateral extensions or depth 
               extensions or large-scale step-out drilling). 
               Diagrams clearly highlighting the areas of 
               possible extensions, including the main 
               geological interpretations and future drilling 
               areas, provided this information is not 
               commercially sensitive. 
 
Section 3 Estimation and Reporting of Mineral Resources 
 
(Criteria listed in section 1, and where relevant in section 2, also apply to 
this section.) 
 
   Criteria                     Explanation                                                    Comment 
 
Database       Measures taken to ensure that data has not     The surveying, logging and assay data were stored in a Microsoft Access 
integrity      been corrupted by, for example, transcription  database prior to being imported into a more secure SQL database format. 
               or keying errors, between its initial 
               collection and its use for Mineral Resources   The drill logs were recorded electronically at the rig for the Base 
               estimation purposes.                           Resources drilling program, and the hole locations recorded by hand-held 
                                                              GPS at the time of drilling. The hand-held GPS locations were used by the 
               Data validation procedures used.               RTK GPS operator to locate the holes. 
 
                                                              Each field of the drill log database was verified against allowable 
                                                              entries and any keying errors corrected. 
 
                                                              Heavy mineral sing logs were completed against a strict set of codes and 
                                                              captured digitally. 
 
                                                              Look-up tables are employed at data capture stage on industry-leading 
                                                              software equipped with on-board validation and quarantine capability. 
                                                              Cross-validation between related tables is also systematically performed 
                                                              by field logging software. Data are loaded into a secure SQL database 
                                                              where a second validation is performed. 
 
                                                              Visual comparison is undertaken in cross-section using Mapinfo software. 
                                                              Sanity checks of sample preparation fields were undertaken to ensure 
                                                              correct procedure was followed (e.g. sample weight pre v post-oven 
                                                              drying).  Calculation of assay fields were checked to ensure correct 
                                                              moisture adjustment and weight to percentage adjustment. 
 
                                                              Statistical, out-of-range, distribution, error and missing data 
                                                              validation is completed on data sets before being compiled for resource 
                                                              estimation. 
 
Site visits    Comment on any site visits undertaken by the   Richard Stockwell established industry-leading procedures for data 
               Competent Person and the outcome of those      capture and storage for the 2016-17 Kwale drill program.  Three site 
               visits.                                        visits were completed by Mr Stockwell during data capture stages and 
                                                              recommendations were made where improvements were required.  There were 
               If no site visits have been undertaken         no issues observed that might be considered material to the Mineral 
               indicate why this is the case.                 Resource under consideration. 
 
Geological     Confidence in (or conversely, the uncertainty  The geological interpretation is compiled from field geological 
interpretation of) the geological interpretation of the       observations during drill sample logging, microscope investigation of 
               mineral deposit.                               heavy mineral sinks and interpretation of sample assay data.  A strong 
                                                              correlation between these three sources of information was observed and a 
               Nature of the data used and of any assumptions high degree of confidence results. 
               made. 
                                                              The interpreted zones were used to control the wireframed zones in the 
               The effect, if any, of alternative             resource model.  Primary data generated by Base Titanium was used 
               interpretations on Mineral Resources           exclusively for the resource estimation.  No assumptions were made. 
               estimation. 
                                                              The weight of mutually supportive data weakens the case for alternate 
               The use of geology in guiding and controlling  geological interpretation. 
               Mineral Resources estimation. 
                                                              The Mineral Resources estimate was controlled by the geological / 
               The factors affecting continuity both of grade mineralised surfaces and beneath the topographic surface. 
               and geology. 
                                                              The Kwale Operation deposits sits on top of an erosional high which is 
                                                              dissected by streams.  The extent of geological and mineralised zones is 
                                                              constrained by the erosional surface surrounding the basement high. 
 
                                                              Heavy mineral grade and geology is consistent within mineralised 
                                                              horizons, typical of aeolian deposits.  Grade and geological continuity 
                                                              in the lower mineralised horizon (Ore Zone 4) is compromised by variable 
                                                              induration. 
 
Dimensions     The extent and variability of the Mineral      The Kwale South Dune deposit is approximately 6.5km long, 300-1,000m wide 
               Resources expressed as length (along strike or and approximately 12-20 m thick on average. Mineralisation is present 
               otherwise), plan width, and depth below        from surface over the majority of the deposit. 
               surface to the upper and lower limits of the 
               Mineral Resources. 
 
Estimation and The nature and appropriateness of the          Geovia Surpac software was used to estimate the Mineral Resource. 
modelling      estimation technique(s) applied and key        Inverse distance weighting techniques were used to interpolate assay 
techniques     assumptions, including treatment of extreme    grades from drill hole samples into the block model and nearest neighbour 
               grade values, domaining, interpolation         techniques were used to interpolate index values into the block model. 
               parameters and maximum distance of             The regular dimensions of the drill grid and the anisotropy of the 
               extrapolation from data points. If a computer  drilling and sampling grid allowed for the use of inverse distance 
               assisted estimation method was chosen include  methodologies as no de-clustering of samples was required. 
               a description of computer software and 
               parameters used.                               Appropriate and industry standard search ellipses were used to search for 
                                                              data for the interpolation and suitable limitations on the number of 
               The availability of check estimates, previous  samples and the impact of those samples was maintained.  An inverse 
               estimates and/or mine production records and   distance weighting of three was used so as not to over smooth the grade 
               whether the Mineral Resources estimate takes   interpolations. 
               appropriate account of such data. 
                                                              Hard domain boundaries were used and these were defined by the geological 
               The assumptions made regarding recovery of     surfaces that were interpreted. 
               by-products. 
                                                              The resource estimate was checked against previous resource estimates and 
               Estimation of deleterious elements or other    these are detailed in the report.  The 2020 Kwale South Dune Mineral 
               non-grade variables of economic significance   Resource estimate accurately reflects additional resource discovery in 
               (e.g. sulphur for acid mine drainage           addition to the previously reported resource estimate. 
               characterisation). 
                                                              Reconciliation of current mining operations revealed that the algorithm 
               In the case of block model interpolation, the  derived bulk density was too great by about 5%. 
               block size in relation to the average sample 
               spacing and the search employed.               No assumptions were made during the resource estimation as to the 
                                                              recovery of by-products. 
               Any assumptions behind modelling of selective 
               mining units.                                  All potentially deleterious elements were included as part of the mineral 
                                                              composite analysis and were included in the modelling report.  There is 
               Any assumptions about correlation between      no significant sulphide mineralisation. 
               variables. 
                                                              The average parent cell size used for the 2020 Kwale South Dune Mineral 
               Description of how the geological              Resource estimate is approximately half that for the average drill hole 
               interpretation was used to control the         spacing over the bulk of the deposit (100m*100m) and equal to the 
               resource estimates.                            dominant sample spacing down-hole employed by the 2016-17 Kwale drill 
                                                              program (1.5m).  This resulted in a parent cell size of 50m*50m*1.5m for 
               Discussion of basis for using or not using     the volume model. 
               grade cutting or capping. 
                                                              No assumptions were made regarding the modelling of selective mining 
               The process of validation, the checking        units however hydraulic mining will be undertaken and the cell size and 
               process used, the comparison of model data to  the sub cell splitting will allow for an appropriate ore reserve to be 
               drill hole data, and use of reconciliation     prepared. 
               data if available. 
                                                              No assumptions were made about correlation between variables. 
 
                                                              Interpolation was constrained by hard boundaries (domains) that result 
                                                              from the geological interpretation. 
 
                                                              Grade cutting or capping was not used during the interpolation because of 
                                                              the regular nature of sample spacing and the fact that samples were not 
                                                              clustered nor wide spaced to an extent where elevated samples could have 
                                                              a deleterious impact on the resource estimation. 
 
                                                              Sample distributions were reviewed and no extreme outliers were 
                                                              identified either high or low that necessitated any grade cutting or 
                                                              capping. 
 
                                                              Validation of grade interpolations were done visually In Surpac by 
                                                              loading model and drill hole files and annotating and colouring and using 
                                                              filtering to check for the appropriateness of interpolations. Statistical 
                                                              distributions were prepared for model zones from both drill holes and the 
                                                              model to compare the effectiveness of the interpolation. Along strike 
                                                              distributions of section line averages (swath plots) for drill holes and 
                                                              models were also prepared for comparison purposes. 
 
Moisture       Whether the tonnages are estimated on a dry    Tonnages were estimated on a dry basis. This is based on test work 
               basis or with natural moisture, and the method carried out on the bulk density which was determined on a dry weight 
               of determination of the moisture content.      basis. 
 
Cut-off        The basis of the adopted cut-off grade(s) or   A 1% HM bottom cut has been applied to the Mineral Resources estimate. 
parameters     quality parameters applied.                    This cut-off is used on a sub-economic basis in consideration of the 
                                                              valuable heavy mineral content indicated by mineral assemblage analysis. 
 
Mining factors Assumptions made regarding possible mining     The mining method is assumed to be high pressure hydraulic mining, which 
or assumptions methods, minimum mining dimensions and         blends the ore from top of the face to the bottom. 
               internal (or, if applicable, external) mining 
               dilution. It is always necessary as part of    Hydraulic mining is not selective, which suits the generally thick and 
               the process of determining reasonable          homogenous depositional style of the mineralisation. 
               prospects for eventual economic extraction to 
               consider potential mining methods, but the     Given the thickness of the Kwale South deposit and proposed mining 
               assumptions made regarding mining methods and  method, dilution is not considered to be an issue. 
               parameters when estimating Mineral Resources 
               may not always be rigorous. Where this is the 
               case, this should be reported with an 
               explanation of the basis of the mining 
               assumptions made. 
 
Metallurgical  The basis for assumptions or predictions       The metallurgical recovery and separability factors are similar to other 
factors or     regarding metallurgical amenability. It is     mineral sand operations.  There are no fine grained lower shoreface 
assumptions    always necessary as part of the process of     sediments.  The level of kyanite is greater than at other deposits, and 
               determining reasonable prospects for eventual  the mineral separation plant has been designed to cater for this. 
               economic extraction to consider potential 
               metallurgical methods, but the assumptions     Metallurgical recoveries have not been considered at the Mineral Resource 
               regarding metallurgical treatment processes    estimation stage, and reported tonnes and grade are therefore in situ. 
               and parameters made when reporting Mineral     Metallurgical recoveries were applied during the Ore Reserves estimation 
               Resources may not always be rigorous. Where    process. 
               this is the case, this should be reported with 
               an explanation of the basis of the                                                                                                     metallurgical assumptions made. 
 
Environmental  Assumptions made regarding possible waste and  Thickened clay tailings are being disposed inside a tailing storage 
factors or     process residue disposal options. It is always facility that was constructed from sand tailings.  The construction of 
assumptions    necessary as part of the process of            the facility was completed in 2018.  Since then sand tailing has taken 
               determining reasonable prospects for eventual  place in the Kwale Central mined void.  Mineral separation plant tailing 
               economic extraction to consider the potential  is disposed with the sand tails. 
               environmental impacts of the mining and 
               processing operation. While at this stage the 
               determination of potential environmental 
               impacts, particularly for a greenfields 
               project, may not always be well advanced, the 
               status of early consideration of these 
               potential environmental impacts should be 
               reported. Where these aspects have not been 
               considered this should be reported with an 
               explanation of the environmental assumptions 
               made. 
 
Bulk density   Whether assumed or determined. If assumed, the An extensive program of test work was designed by GNJ Consulting and 
               basis for the assumptions. If determined, the  implemented by Base Resources utilising a procedure to collect Troxler 
               method used, whether wet or dry, the frequency nuclear density meter measurements and HM and SL assays. These were used 
               of the measurements, the nature, size and      in the development of an algorithm to estimate the bulk density of in 
               representativeness of the samples.             situ material within the deposit based on variable HM and clay (SL). 
 
               The bulk density for bulk material must have   This sampling was undertaken within the mineralised ore zones of the 
               been measured by methods that adequately       Kwale Central Dune deposit during mining operations and representative 
               account for void spaces (vugs, porosity,       sampling was undertaken for those domains. 
               etc.), moisture and differences between rock 
               and alteration zones within the deposit.       The style of mining has since changed from bulldozers to hydraulic 
                                                              mining, making it impossible to collect similar troxler data from the 
               Discuss assumptions for bulk density estimates floor of the pit.  It was considered appropriate to utilise the new bulk 
               used in the evaluation process of the          density algorithm for the Kwale South Dune deposit given that the 
               different materials.                           geological units are closely related and part of the same sequence (given 
                                                              the close local proximity this was also a reasonable assumption). 
 
                                                              Assumptions were made regarding packing factor of sand, bulk density of 
                                                              HM, sand and clay in the development of the bulk density algorithm.  The 
                                                              algorithm was refined using nuclear density meter measurement of the soil 
                                                              profile being sampled. 
 
                                                              The use of a bulk density algorithm is considered industry standard 
                                                              practice for the estimation of mineral sands Mineral Resources.  However, 
                                                              the algorithm derived for Kwale Central has been found by monthly mine 
                                                              reconciliations to be exaggerating the bulk density by approximately 5%. 
                                                              Therefore, the decision was made to cut the algorithm derived bulk 
                                                              densities by 5% and re-estimate the resource, which is the subject of 
                                                              this report. 
 
Classification The basis for the classification of the        The classification for the 2020 Kwale South Dune Mineral Resources 
               Mineral Resources into varying confidence      estimate was based on the following criteria: drill hole spacing; 
               categories.                                    experimental semi-variograms; the quality of QA/QC processes; 
                                                              post-depositional modification and the distribution of mineral assemblage 
               Whether appropriate account has been taken of  samples. 
               all relevant factors (i.e. relative confidence 
               in tonnage/grade estimations, reliability of   The classification of the Measured and Indicated Mineral Resources for 
               input data, confidence in continuity of        the 2020 Kwale South Dune Mineral Resources estimate were supported by 
               geology and metal values, quality, quantity    all of the criteria as noted above. 
               and distribution of the data). 
                                                              The Competent Person considers that the result appropriately reflects a 
               Whether the result appropriately reflects the  reasonable view of the deposit categorisation. 
               Competent Person's view of the deposit. 
 
Audits or      The results of any audits or reviews of        SRK undertook an audit of the resource estimate and found it to be 
reviews.       Mineral Resources estimate.                    suitable for reserve optimisation. 
 
Discussion of  Where appropriate a statement of the relative  Variography was completed for the 2020 Kwale South Dune Mineral Resource 
relative       accuracy and confidence level in the Mineral   estimate.  Results of variography, qualitative assessment of the Mineral 
accuracy/      Resources estimate using an approach or        Resource estimate and comparison with previous resource estimates 
confidence     procedure deemed appropriate by the Competent  indicates the robustness of this particular resource estimation exercise. 
               Person. For example, the application of 
               statistical or geostatistical procedures to    The estimates are global. 
               quantify the relative accuracy of the resource 
               within stated confidence limits, or, if such   Trial mining and pilot plant-scale mineral processing of Kwale South Dune 
               an approach is not deemed appropriate, a       ore has shown it to be similar to the Kwale Central Dune Ore Zone 1 
               qualitative discussion of the factors that     material currently being mined and fed to the MSP.  No alteration to the 
               could affect the relative accuracy and         MSP is recommended for treatment of the South Dune ore. 
               confidence of the estimate. 
 
               The statement should specify whether it 
               relates to global or local estimates, and, if 
               local, state the relevant tonnages, which 
               should be relevant to technical and economic 
               evaluation. Documentation should include 
               assumptions made and the procedures used. 
 
               These statements of relative accuracy and 
               confidence of the estimate should be compared 
               with production data, where available. 
 
Section 4 Estimation and Reporting of Ore Reserves 
 
   Criteria                     Explanation                                                    Comment 
 
Mineral        Description of the Mineral Resource estimate   The 2020 Kwale South Dune Mineral Resources estimate by Base Resources, 
Resource       used as a basis for the conversion to an Ore   reported at 31 March 2020, was used as the basis for this Ore Reserve. 
estimate for   Reserve. 
conversion to                                                 This Mineral Resource estimate was based on that disclosed to the market 
Ore Reserves   Clear statement as to whether the Mineral      on 4 October 2017 but with adjustment to bulk density, adjustments for 
               Resources are reported additional to, or       boundary change to the Prospecting Licence 2018/0119 and adjustments for 
               inclusive of, the Ore Reserves.                mining to the period ended 31 March 2020 (depletion and sterilisation). 
 
                                                              Mineral Resources are reported inclusive of the Ore Reserves. 
 
Site visits    Comment on any site visits undertaken by the   One of the competent persons works on site and visits frequently during 
               Competent Person and the outcome of those      the operational phase. 
               visits. 
 
               If no site visits have been undertaken 
               indicate why this is the case. 
 
Study status   The type and level of study undertaken to      The most recent study prior to operations commencing was a detailed 
               enable Mineral Resources to be converted to    feasibility study (DFS). 
               Ore Reserves. 
                                                              The project is now operational and study inputs are based on operational 
               The Code requires that a study to at least     costs, design, and mine plan. 
               Pre-Feasibility Study level has been 
               undertaken to convert Mineral Resources to Ore The mine has been operating as a solely HMU operation since July 2018. 
               Reserves. Such studies will have been carried 
               out and will have determined a mine plan that 
               is technically achievable and economically 
               viable, and that material Modifying Factors 
               have been considered. 
 
Cut-off        The basis of the cut-off grade(s) or quality   Cut-off is economic by maximum cash flow method. A value model is 
parameters     parameters applied.                            constructed that assigns costs and revenue after application of 
                                                              appropriate process recoveries. 
 
                                                              There is no ore/waste delineation within the pit design due to the mining 
                                                              method employed (non-selective) and dunal mineralization. 
 
Mining factors The method and assumptions used as reported in Mineral Resources are converted to Ore Reserves by pit optimization as a 
or assumptions the Pre-Feasibility or Feasibility Study to    guide for detailed design and scheduling.  Potential pit shells were 
               convert the Mineral Resource to an Ore Reserve created by decreasing the revenue by 1% decrements and scheduled at a 
               (i.e. either by application of appropriate     high level.  These were short listed by analysis of various factors 
               factors by optimisation or by preliminary or   including NPV, IRR, revenue:cost ratio, marginal cashflow, product output 
               detailed design).                              production rates etc.  The schedules for the short-listed shells were 
                                                              input to the project financial model and the ultimate shell for detailed 
               The choice, nature and appropriateness of the  mine planning and scheduling selected. 
               selected mining method(s) and other mining 
               parameters including associated design issues  Schedule physicals have then been incorporated into the Base operating 
               such as pre-strip, access, etc.                financial model and assessed against up to date inputs. 
 
               The assumptions made regarding geotechnical    Mining of the Kwale South dune is undertaken solely by HMU methods. The 
               parameters (e.g. pit slopes, stope sizes,      HMU mining method has achieved all design throughput rates since 
               etc.), grade control and pre-production        commencement of operations at Kwale South. 
               drilling. 
                                                              The Resource model used throughout the study mine planning work was 
               The major assumptions made and Mineral         kwsth_171001.mdl. 
               Resource model used for pit and stope 
               optimisation (if appropriate).                 The pit slopes are currently about 50 degrees in Ore 1 and Ore 4 at the 
                                                              South Dune. The study uses more conservative slope angles of 35 degrees 
               The mining dilution factors used.              for South Dune. 
 
               The mining recovery factors used.              The ore is scheduled to be mined in a radial extraction centered on 
                                                              proposed HMU sump locations. Sump locations have been estimated by 
               Any minimum mining widths used.                considering low points in the economic mineralization, constrained to 
                                                              larger mining blocks defined by watershed analysis of the lower ore 
               The manner in which Inferred Mineral Resources surface. These larger blocks vary in dimension due to the surface 
               are utilised in mining studies and the         undulation, however the smallest of those remaining to be mined is 31 Ha 
               sensitivity of the outcome to their inclusion. in plan area. The size of these blocks is not considered to represent any 
                                                              concerns with respect to minimum mining width and the proposed HMU method 
               The infrastructure requirements of the         demonstrates the selectivity required to mine to the pit extents even at 
               selected mining methods.                       the boundaries of the dune mineralization where the depth of pit is low. 
 
                                                              No inferred material is included in the study. 
 
                                                              There is no ore/waste discrimination and sub-economic material that 
                                                              cannot be selectively mined is included as planned dilution in the ore 
                                                              feed. 
 
                                                              Mining Recovery of Hardness > 2 material is largely discounted by raising 
                                                              pit floor to exclude from design. Small amounts of this material 
                                                              (representing less than 1% of the pit inventory) report fully inside the 
                                                              pit design on a localized basis, however these have been excluded from 
                                                              the process feed and Ore Reserve estimate as being unrecoverable using a 
                                                              HMU mining method. 
 
                                                              Mining Recovery makes provision for a 0.2 m topsoil profile which is 
                                                              excluded from reported ore material. 
 
                                                              All infrastructure is in place and operational. 
 
Metallurgical  The metallurgical process proposed and the     The ore is processed via screens, thickeners, and spirals, as in almost 
factors or     appropriateness of that process to the style   every other mineral sands operation to produce a concentrate.  This is 
assumptions    of mineralisation.                             processed using magnetic and conductor separators to produce ilmenite and 
                                                              rutile products.  The remaining material is further processed using 
               Whether the metallurgical process is           classifiers, wet tables and cleaned with conductor separators to produce 
               well-tested technology or novel in nature.     zircon and recover some more rutile.  This is not an unusual process for 
                                                              mineral sands but has been tailored to suit the higher than normal 
               The nature, amount and representativeness of   proportion of kyanite, which has similar physical properties to zircon. 
               metallurgical test work undertaken, the nature 
               of the metallurgical domaining applied and the The plant design was based on the results of metallurgical test work 
               corresponding metallurgical recovery factors   conducted as part of the definitive feasibility study.  Test work on site 
               applied.                                       is ongoing to find ways to improve zircon and rutile recovery. 
 
               Any assumptions or allowances made for         Wet Plant Recovery used is 94%, 90%, and 94.5% for Ilmenite, Rutile and 
               deleterious elements.                          Zircon respectively. 
 
               The existence of any bulk sample or pilot      Dry Plant Recovery used is 100%, 99%, and 77% for Ilmenite, Rutile and 
               scale test work and the degree to which such   Zircon respectively. 
               samples are considered representative of the 
               orebody as a whole.                            Plant recoveries used are supported by actual operating recoveries 
                                                              currently achieved by the operation, with wet plant recoveries discounted 
               For minerals that are defined by a             due to projected reduced feed HM grade associated with the lower grade 
               specification, has the ore reserve estimation  South Dune Resource. Actual MSP mineral recoveries are currently higher 
               been based on the appropriate mineralogy to    than the study inputs as separation efficiency has improved since feeding 
               meet the specifications?                       the Kwale South ore. 
 
Environmental  The status of studies of potential             All environmental approvals are in place and there is also a monitoring 
               environmental impacts of the mining and        and reporting process.  There is no waste material.  There are two 
               processing operation. Details of waste rock    tailings streams: sand and clay. The sand tails are clean sand having 
               characterisation and the consideration of      been washed in concentrator. The clay tails are flocculated and thickened 
               potential sites, status of design options      prior to pumping. There is an approved tailing storage facility, which is 
               considered and, where applicable, the status   a dam with walls constructed from sand tails to contain the clay tails. 
               of approvals for process residue storage and 
               waste dumps should be reported. 
 
Infrastructure The existence of appropriate infrastructure:   The plant has been constructed.  A 132 kV power line has been erected and 
               availability of land for plant development,    supplies electricity to the site.  An 8 km bitumen access road from the 
               power, water, transportation (particularly for highway has been constructed.  There is a camp that was built to house 
               bulk commodities), labour, accommodation; or   construction employees that is being used to house operational shift 
               the ease with which the infrastructure can be  workers.  The ship loading facility has loaded several ships thus far. 
               provided, or accessed.                         An 8 Gl dam on the Mukurumudzi River has been constructed that will 
                                                              supply most of the water for the project, supplemented by a bore field. 
 
Costs          The derivation of, or assumptions made,        Capital has been expended and is sunk. 
               regarding projected capital costs in the 
               study.                                         Operating costs were collated and supplied by the site from the latest 
                                                              operating budget. 
               The methodology used to estimate operating     Deleterious minerals kyanite and monazite are present.  A large section 
               costs.                                         of the plant is devoted to separating kyanite from zircon.  Monazite is 
                                                              present in small amounts and it is mixed with the slime tails and 
               Allowances made for the content of deleterious disposed of. 
               elements. 
                                                              All Revenue and Costs inputs are in USD. 
               The source of exchange rates used in the 
               study.                                         The cost of transportation from the plant to the port is in accordance 
                                                              with the transport contract. 
               Derivation of transportation charges. 
                                                              Royalties of 2.5% and 2% are payable to the Kenyan government and the 
               The basis for forecasting or source of         previous owners respectively, though for this study a more conservative 
               treatment and refining charges, penalties for  7.05% has been used (incorporating increased Kenyan government royalty 
               failure to meet specification, etc.            and custom duty). 
 
               The allowances made for royalties payable, 
               both Government and private. 
 
Revenue        The derivation of, or assumptions made         Product price forecasts are based on Base internal price deck assumptions 
factors        regarding revenue factors including head       over the period for which Kwale South is projected to be mined. 
               grade, metal or commodity price(s) exchange 
               rates, transportation and treatment charges,   Straight line product prices have been used for mine planning studies 
               penalties, net smelter returns, etc.           (optimization, value modelling) and a variable price deck used for final 
                                                              economic modelling. Both revenue models reconcile well in totality, 
               The derivation of assumptions made of metal or though there is a reduction in the Zircon pricing assumption between the 
               commodity price(s), for the principal metals,  initial and final value models due to easing market conditions in the 
               minerals and co-products.                      intervening period. 
 
Market         The demand, supply and stock situation for the Ilmenite and rutile are primarily used as feedstock to produce titanium 
assessment     particular commodity, consumption trends and   dioxide (TiO2) pigment, with a small percentage also used in the 
               factors likely to affect supply and demand     production of titanium metal and fluxes for welding rods and wire.  TiO2 
               into the future.                               is the most widely used white pigment because of its non-toxicity, 
                                                              brightness, and very high refractive index.  It is an essential component 
               A customer and competitor analysis along with  of consumer products such as paint, plastics, and paper.  Pigment demand 
               the identification of likely market windows    is therefore the major driver of ilmenite and rutile pricing. 
               for the product. 
                                                              Demand for mineral sands products has generally been closely linked to 
               Price and volume forecasts and the basis for   growth in global GDP.  Historically demand has grown on average at 3% per 
               these forecasts.                               annum.  This become more volatile in recent years due to very large 
                                                              swings in re-stocking and de-stocking events throughout the supply chains 
               For industrial minerals the customer           during and following the global financial crisis.  Demand had begun 
               specification, testing and acceptance          re-aligning with GDP in recent years but a short-term departure of the 
               requirements prior to a supply contract.       relationship with GDP is likely to re-occur to some extent during the 
                                                              economic volatility caused by Covid-19. 
 
                                                              Base Resources performs its own internal assessment of the market and 
                                                              also subscribes to the various market outlook and commentaries provided 
                                                              by TZMI and other independent sources. The latest consensus indicates 
                                                              prices for ilmenite, rutile and zircon being under pressure over the next 
                                                              12-18 months followed by a recovery from 2022. 
 
Economic       The inputs to the economic analysis to produce As an operating mine with sunk construction cost, optimisation inputs are 
               the net present value (NPV) in the study, the  based on actual operating costs, design and mine plan, together with Base 
               source and confidence of these economic inputs Resources' internal price forecasts. Economic analysis has been conducted 
               including estimated inflation, discount rate,  by incorporating these inputs into the Kwale Operations life of mine 
               etc.                                           financial model. 
 
               NPV ranges and sensitivity to variations in    Economic analysis is based on discounted operating surplus (at 10% 
               the significant assumptions and inputs.        discount rate) and sensitivities +/- 30% have been conducted on 
                                                              individual product Revenues and operating costs. The project returns a 
                                                              positive operating NPV under the range of sensitivity factors assessed. 
 
                                                              A 'stressed' low product price deck has also been considered in the 
                                                              schedule model economic analysis (reflecting total revenue at 60% of 
                                                              study base case assumptions) and the project remains operationally cash 
                                                              positive under this model. 
 
Social         The status of agreements with key stakeholders Base Resources has all agreements in place to allow ongoing mining and 
               and matters leading to social licence to       processing.  The company operates a comprehensive Stakeholder Engagement 
               operate.                                       Plan in concert with a Community Development Plan. Close liaison with 
                                                              stakeholders is maintained through the operation of series of liaison 
                                                              committees representing those affected by the mine's presence. 
 
Other          To the extent relevant, the impact of the      The material legal agreements relating to the Kwale Operation are the 
               following on the project and/or on the         Special Mining Lease No.23 and Investment Agreement with the Government 
               estimation and classification of the Ore       of Kenya.  Both legal instruments remain valid, legally binding, and 
               Reserves:                                      enforceable as warranted by the Government most recently in September 
                                                              2012 in a direct agreement with Base Resources and its lenders. 
               Any identified material naturally occurring 
               risks.                                         A portion of the Mineral Resource will require an extension of the 
                                                              existing SML 23 boundary to the south of the current approved area in 
               The status of material legal agreements and    order to be extracted.  The process to obtain this boundary extension is 
               marketing arrangements.                        underway however at the date of this estimate that process is still 
                                                              ongoing and there remains an element of uncertainty that such approvals 
               The status of governmental agreements and      will be granted.  Due to this material uncertainty, Ore Reserve 
               approvals critical to the viability of the     estimation conducted for this update has been restricted to considering 
               project, such as mineral tenement status, and  only the Mineral Resource wholly contained within the existing SML 23 
               government and statutory approvals. There must Mining Lease boundary. 
               be reasonable grounds to expect that all 
               necessary Government approvals will be 
               received within the timeframes anticipated in 
               the Pre-Feasibility or Feasibility study. 
               Highlight and discuss the materiality of any 
               unresolved matter that is dependent on a third 
               party on which extraction of the reserve is 
               contingent. 
 
Classification The basis for the classification of the Ore    Based on the geological resource estimation categories: Measured = 
               Reserves into varying confidence categories.   Proved, Indicated = Probable, Inferred = excluded from Ore Reserve 
                                                              estimation. 
               Whether the result appropriately reflects the 
               Competent Person's view of the deposit.        The classification appropriately reflects the Competent Person's view of 
                                                              the deposit. 
               The proportion of Probable Ore Reserves that 
               have been derived from Measured Mineral        No Probable Ore Reserves have been derived from Measured Mineral 
               Resources (if any).                            Resources. 
 
Audits or      The results of any audits or reviews of Ore    No audit or review of this Ore Reserve estimate has been undertaken. 
reviews        Reserve estimates. 
 
Discussion of  Where appropriate a statement of the relative  There are no assumptions used in this Ore Reserve estimate that differ 
relative       accuracy and confidence level in the Ore       from current operating practice and hence subject to a greater degree of 
accuracy/      Reserve estimate using an approach or          uncertainty.  Considerable experience and confidence with the HMU mining 
confidence     procedure deemed appropriate by the Competent  method has been gained through the successful implementation and upgrade 
               Person. For example, the application of        of the first HMU on site at the Central Dune and subsequent increase to 
               statistical or geostatistical procedures to    2400 tph production rates used in this estimate at Kwale South. 
               quantify the relative accuracy of the reserve 
               within stated confidence limits, or, if such   The statement refers to global estimates. 
               an approach is not deemed appropriate, a 
               qualitative discussion of the factors which    There is a 110% rutile reconciliation factor that is the subject of 
               could affect the relative accuracy and         ongoing investigation.  All potential sources of error in estimation of 
               confidence of the estimate.                    the rutile grades found in the resource model are under scrutiny, from 
                                                              sample preparation bias through mineralogical data generation and grade 
               The statement should specify whether it        interpolation.  A large number of samples have been re-submitted for 
               relates to global or local estimates, and, if  assay, but results are not available yet.  Depending on the outcome of 
               local, state the relevant tonnages, which      the investigation, a further ASX announcement may be made. 
               should be relevant to technical and economic 
               evaluation. Documentation should include       Review of actual individual HMU feed rates has highlighted that target 
               assumptions made and the procedures used.      production rates can be negatively impacted whilst mining in areas of low 
                                                              face height, Despite this, in the three reporting quarters since 
               Accuracy and confidence discussions should     operations commenced at Kwale South, combined HMU production has averaged 
               extend to specific discussions of any applied  4.6Mt per quarter, achieving the target design combined feed rate of 2400 
               Modifying Factors that may have a material     tph as the operation has achieved runtimes exceeding budgeted targets. 
               impact on Ore Reserve viability, or for which  Future mining is anticipated to advance to areas of greater face height 
               there are remaining areas of uncertainty at    as mining progresses southwards and individual HMU feed rates are 
               the current study stage.                       expected to return to levels experienced in the first quarter of mining 
                                                              operations. 
               It is recognised that this may not be possible 
               or appropriate in all circumstances. These     For the current financial year to 31 March 2020 actual ore tonnes mined 
               statements of relative accuracy and confidence was 95.1% of the Ore Reserve model depleted ore tonnes and HM tonnes 
               of the estimate should be compared with        102.4% on the same basis. 
               production data, where available. 
 
Glossary 
 
Competent       The JORC Code requires that a Competent Person must be a Member or Fellow 
Person          of The Australasian Institute of Mining and Metallurgy, or of the 
                Australian Institute of Geoscientists, or of a 'Recognised Professional 
                Organisation'.  A Competent Person must have a minimum of five years' 
                experience working with the style of mineralisation or type of deposit 
                under consideration and relevant to the activity which that person is 
                undertaking. 
 
DTM             Digital Terrain Model. 
 
Indicated       An Indicated Mineral Resource is that part of a Mineral Resource for which 
Resource        quantity, grade (or quality), densities, shape and physical characteristics 
                are estimated with sufficient confidence to allow the application of 
                Modifying Factors in sufficient detail to support mine planning and 
                evaluation of the economic viability of the deposit. 
 
Inferred        An Inferred Mineral Resource is that part of a Mineral Resource for which 
Resource        quantity and grade (or quality) are estimated on the basis of limited 
                geological evidence and sampling. Geological evidence is sufficient to 
                imply but not verify geological and grade (or quality) continuity. It is 
                based on exploration, sampling and testing information gathered through 
                appropriate techniques from locations such as outcrops, trenches, pits, 
                workings and drill holes. 
 
Inverse         A statistical interpolation method whereby the influence of data points 
distance        within a defined neighbourhood around an interpolated point decreases as a 
weighting       function of distance. 
 
JORC            The Joint Ore Reserves Committee: The Australasian Code for Reporting of 
                Exploration Results, Mineral Resources and Ore Reserves ('the JORC Code'), 
                as published by the Joint Ore Reserves Committee of The Australasian 
                Institute of Mining and Metallurgy, Australian Institute of Geoscientists 
                and Minerals Council of Australia. 
 
LIDAR survey    LIDAR is a remote sensing technology that measures distance by illuminating 
                a target with a laser and analysing the reflected light to produce a DTM. 
 
Measured        A Measured Mineral Resource is that part of a Mineral Resource for which 
Resources       quantity, grade (or quality), densities, shape, and physical 
                characteristics are estimated with confidence sufficient to allow the 
                application of Modifying Factors to support detailed mine planning and 
                final evaluation of the economic viability of the deposit. 
 
Mineral         Mineral Resources are a concentration or occurrence of solid material of 
Resources       economic interest in or on the Earth's crust in such form, grade (or 
                quality), and quantity that there are reasonable prospects for eventual 
                economic extraction. The location, quantity, grade (or quality), continuity 
                and other geological characteristics of a Mineral Resource are known, 
                estimated or interpreted from specific geological evidence and knowledge, 
                including sampling.  Mineral Resources are sub-divided, in order of 
                increasing geological confidence, into Inferred, Indicated and Measured 
                categories. 
 
Mining          Material or Ore that is depleted from Mineral Resources or Ore Reserves, 
Sterilisation   but which was not mined.  This material still remains in ground but mining 
                has passed by and, in the competent person's opinion, it has no reasonable 
                prospects for eventual economic extraction. 
 
Minmod          A company developed mineralogy modelling technique, it comprises an XRF 
                analysis of the magnetic and non-magnetic fractions of each composite or 
                sample, the results from which are then back-calculated to determine 
                in-ground mineralogy. 
 
Ore Reserves    Ore Reserves are the economically mineable part of Measured and/or 
                Indicated Mineral Resources. 
 
QEMSCAN         Is an acronym for Quantitative Evaluation of Materials by Scanning Electron 
                Microscopy, an integrated automated mineralogy and petrography solution 
                providing quantitative analysis of minerals and rocks. 
 
QQ plot         Quantile quantile plot.  Used to graphically compare data distributions. 
 
RL              The term Reduced Level is denoted shortly by 'RL'. National survey 
                departments of each country determine RL's of significantly important 
                locations or points.  RL is used to describe the relative vertical position 
                of drill collars. 
 
RTK             Real time kinematic DGPS uses a base station GPS at a known point that 
                communicates via radio with a roving unit so that the random position error 
                introduced by the satellite owners may be corrected in real time. 
 
SEM, SEM EDX    A Scanning Electron Microscope is a type of electron microscope that 
                produces images of a sample or minerals by scanning the surface with a 
                focused beam of electrons.  EDX is short for energy dispersive X-ray and is 
                commonly used in conjunction with SEM. 
 
Variography     A geostatistical method that investigates the spatial variability and 
                dependence of grade within a deposit.  This may also include a directional 
                analysis. 
 
XRF analysis    A spectroscopic method used to determine the chemical composition of a 
                material through analysis of secondary X-ray emissions, generated by 
                excitation of a sample with primary X-rays that are characteristic of a 
                particular element. 
 
ENDS. 
 
For further information contact: 
 
James Fuller, Manager Communications and Investor  UK Media Relations 
Relations 
 
Base Resources                                     Tavistock Communications 
 
Tel: +61 (8) 9413 7426                             Jos Simson and Barnaby Hayward 
 
Mobile: +61 (0) 488 093 763                        Tel: +44 (0) 207 920 3150 
 
Email: jfuller@baseresources.com.au 
 
This release has been authorised by 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 1, 50 Kings Park Road 
West Perth, Western Australia, 6005 
Email:  info@baseresources.com.au 
Phone: +61 (0)8 9413 7400 
Fax: +61 (0)8 9322 8912 
 
NOMINATED ADVISOR 
RFC Ambrian Limited 
Stephen Allen 
Phone: +61 (0)8 9480 2500 
 
BROKER 
Berenberg 
Matthew Armitt / Detlir Elezi 
Phone: +44 20 3207 7800 
 
 
 
 
END 
 

(END) Dow Jones Newswires

July 27, 2020 02:00 ET (06:00 GMT)

1 Year Base Resources Chart

1 Year Base Resources Chart

1 Month Base Resources Chart

1 Month Base Resources Chart
ADVFN Advertorial
Your Recent History
LSE
BSE
Base Resou..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V:gb D:20200921 12:00:57