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| 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 | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 12.00 | 12.00 | 13.00 | 12.75 | 12.00 | 12.00 | 1,690,118 | 16:35:06 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| Iron Ores | 271.43M | -4.84M | -0.0041 | -60.98 | 295M |
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AIM and Media Release
27 September 2021
BASE RESOURCES LIMITED
Updated Ranobe Mineral Resources and Ore Reserves Estimates
Key Points
* Ranobe Mineral Resources estimate updated to incorporate available 2018/19
drilling program results.
* Estimated Ranobe Mineral Resources have almost doubled to 2,580Mt at an
average heavy mineral grade of 4.3%.
* Ranobe Ore Reserves estimate has increased to 904Mt at an average heavy
mineral grade of 6.1% - a 45% increase in contained heavy mineral.
* The 2018/19 drill program revealed further significant additional
mineralisation at depth in the lower sandy unit, however, the mineralogy
work required to include this geological domain in a Mineral Resources
estimate has not yet been completed due to the suspension of on-ground
activities.
African mineral sands producer, Base Resources Limited (ASX / AIM: BSE) (Base
Resources) announces an update to the estimated Ranobe Mineral Resources (2021
Ranobe Mineral Resources) and Ore Reserves (2021 Ranobe Ore Reserves) at its
100% owned Toliara Project in Madagascar.
Base Resources' wholly-owned subsidiary, Base Toliara, is the operator of the
Toliara Project and has a net attributable interest of 100% in the 2021 Ranobe
Mineral Resources and Ore Reserves.
Table 1: 2021 Ranobe Mineral Resources estimate compared with the 2019 Ranobe
Mineral Resources estimate.
Mineral Assemblage as % of HM
Category Tonnes HM HM SL OS ILM RUT LEUC ZIR MON GARN
(Mt) (Mt) (%) (%) (%) (%) (%) (%) (%) (%) (%)
2021 Ranobe Mineral Resources
(as at 27 September 2021)
Measured 597 36 6.1 4.3 0.2 74 1.0 1.0 5.9 1.9 2.2
Indicated 793 35 4.4 7.1 0.5 71 1.0 1.0 5.9 2.0 3.6
Inferred 1,190 39 3.3 9.7 0.6 69 1.0 1.0 5.8 2.0 4.3
Total 2,580 111 4.3 7.7 0.4 71 1.0 1.0 5.9 2.0 3.4
2019 Ranobe Mineral Resources*
(as at 23 January 2019)
Measured 419 28 6.6 4 0 75 2 - 6 - -
Indicated 375 18 4.9 8 1 72 2 - 6 - -
Inferred 499 20 3.9 7 1 70 2 - 5 - -
Total 1,293 66 5.1 6 0 72 2 - 6 - -
Table subject to rounding differences. Mineral Resources are reported
inclusive of Ore Reserves. *Rutile reported is rutile + leucoxene mineral
species.
The Ranobe Mineral Resources estimate has been updated to incorporate results
from the 29,753m aircore drilling program completed over 2018 and 2019 which
focused on defining the western and vertical extents of mineralisation for the
Ranobe deposit, as well as high definition infill drilling for detailed mining
planning over the first four years of mining (see Figure 1). Approximately 70%
of drill samples from the 2018/19 drilling program have been assayed and
results incorporated into the 2021 Ranobe Mineral Resources estimate. The
remaining 30% of drill samples are awaiting dispatch in Toliara and will be
assayed following the lifting of the on-the-ground suspension of activities by
the Government of Madagascar. Significant mineralisation was discovered at
depth in the lower sandy unit (LSU) (see Figure 2), however, the mineralogy
required to include this geological domain in a Ranobe Mineral Resources
estimate has not yet been completed due to the on-the-ground suspension.1
The 2021 Ranobe Mineral Resources are estimated to be 2,580 million tonnes (Mt)
at an average heavy mineral (HM) grade of 4.3% for 111Mt of contained HM. The
2021 Ranobe Mineral Resources estimate represents an increase of 1,287Mt and
45Mt (or 68%) of contained HM compared with the previously announced Ranobe
Mineral Resources estimate as at 23 January 2019 (2019 Ranobe Mineral Resources
).
The 2021 Ranobe Mineral Resources estimated heavy mineral contains 2.0%
monazite, which, given the grade and size of the deposit, represents a
significant potential source of Rare Earth Oxides (REO) that will be
investigated in future studies. Analysis of monazite produced from a bulk
sample collected in 2018 indicated that 55% of the monazite comprised REO of
which approximately 73% was cerium oxide (CeO2) and lanthanum oxide (La2O3),
24% was neodymium oxide (Nd2O3) and praseodymium oxide (Pr6O11), 0.1% was
dysprosium oxide (Dy2O3) and 0.02% was terbium oxide (Tb4O7).
Table 2: 2021 Ranobe Ore Reserves estimate compared with the 2019 Ranobe Ore
Reserves estimate.
Mineral Assemblage as % of HM
Category Tonnes HM HM SL OS ILM RUT LEUC^ ZIR
(Mt) (Mt) (%) (%) (%) (%) (%) (%) (%)
2021 Ranobe Ore Reserves
(as at 27 September 2021)
Proved 433 30 6.9 3.8 0.1 75 1.0 1.0 6.0
Probable 472 25 5.3 3.9 0.2 72 1.0 1.0 5.8
Total 904 55 6.1 3.8 0.1 73 1.0 1.0 5.9
2019 Ranobe Ore Reserves
(as at 27 November 2019)
Proved 347 24 7.0 3.8 0.1 75 1.0 1.0 5.9
Probable 239 14 5.8 4.2 0.2 73 1.3 0.8 5.7
Total 586 38 6.5 3.9 0.1 74 1.1 0.9 5.9
Table subject to rounding differences. ^Recovered Leucoxene will be split
between Rutile and Chloride Ilmenite depending on product specification
requirements.
The 2021 Ranobe Ore Reserves are estimated to be 904Mt at an average HM grade
of 6.1% for 55Mt of contained HM. The 2021 Ranobe Ore Reserves estimate
represents an increase of 318Mt of ore and 17Mt (or 45%) of contained HM tonnes
compared with the previously reported Ranobe Ore Reserves estimate as at 27
November 2019. No estimated monazite or garnet is incorporated in the 2021
Ranobe Ore Reserves because the existing mining tenure (Permis D'Exploitation
37242) (PDE 37242) does not currently provide the right to exploit them. For
the term of PDE 37242, only the holder of that tenure, Base Resources'
wholly-owned subsidiary, Base Toliara, can be granted the right to exploit
these products, subject to satisfying all applicable criteria.
The 2021 Ranobe Mineral Resources and Ore Reserves estimates are reported in
accordance with the JORC Code. Further information about both estimates is set
out in the sections below and includes the information prescribed by the ASX
Listing Rules. For both the 2021 Ranobe Mineral Resources and Ore Reserves
estimates, the information provided should be read in conjunction with the
explanatory information provided for the purposes of Sections 1 to 3 of Table 1
of the JORC Code, included as Appendix 1 to this announcement. For the 2021
Ranobe Ore Reserves estimate, the information provided should also be read in
conjunction with the explanatory information provided for the purposes of
Section 4 of Table 1 of the JORC Code.
A glossary of key terms used in this announcement is set out at the end of this
announcement. Figures (graphics) referenced in this announcement have been
omitted. A full PDF version of this announcement, including all figures
(graphics), is available from Base Resources' website: https://
baseresources.com.au/investors/announcements/.
[Note (1): For further details about the results of the drill samples from the
2018/19 drilling program that have been assayed, refer to Base Resources'
market announcement "Toliara Project drill assays reveal significant high-grade
mineralisation" released on 21 January 2020, which is available at https://
baseresources.com.au/investors/announcements/.]
Further information about the 2021 Ranobe Mineral Resources estimate
The Toliara Project is located on the 125.4 km2 Mining Lease (Permis
D'Exploitation) 37242, approximately 40 kilometres north of the regional town
of Toliara in south-west Madagascar and approximately 15 kilometres inland from
the coast (see Figure 3). The Toliara Project comprises a single continuous
body of mineralisation known as the Ranobe deposit.
Drilling programs were conducted on the Ranobe deposit in 2001, 2003, 2005 and
2012 by the previous owners and in 2018 and 2019 by Base Resources (see
Figure 1).
Mineral Resources estimation work previously carried out on the Ranobe deposit
is as follows:
* 2004 by Ticor Pty Ltd;
* 2006 by Exxaro Resources Ltd;
* 2010 by Geocraft Consulting for Madagascar Resources NL;
* 2012 by McDonald Speijers and Associates for World Titanium Resources
Limited;
* 2016 by World Titanium Resources Limited (WTR) Competent Person, Ian
Ransome;
* 2017 by Base Resources Competent Person, Scott Carruthers; and
* 2019 by IHC Robbins for Base Resources.
The unconsolidated aeolian Quaternary sediments comprising the deposit overlie
Eocene age limestone which in turn overlie Mesozoic limestone, marl and
sandstone. The Ranobe deposit comprises three primary mineralised units; the
upper sand unit (USU), intermediate clay sand unit (ICSU) and the LSU. Two
secondary mineralised units which are subsets of the USU, the surficial silt
unit (SSU) and the upper silty sand unit (USSU), are also present in limited
parts of the deposit (see Figure 2 for stylised cross sections).
The USU is a well sorted fine-grained unconsolidated aeolian sediment
containing approximately 4% slime or clay (SL) and approximately 5% HM, mainly
ilmenite, zircon and rutile, and low oversize (OS), which on average is less
than 1%. The ICSU is a thin unit primarily consisting of high slime content
with a dark red to orange brown sandy clay and clayey sand material and
typically averages 3% HM and 25% SL. It is interpreted to have been deposited
in a low energy lagoonal environment. The LSU is orange brown to yellow brown
medium grained quartz sand with variable mineralisation and moderately low
slimes content. The LSU onlaps the limestone (LST) basement and, much like the
USU unit, its thickness increases to the west with the 2018/2019 drilling
proving this notion. The base of the LSU unit has the facies indicators of a
shallow marine strand facies depositional environment, although this has not
been tested extensively.
The geological interpretation for the Ranobe deposit considered the data in the
drill logs, assay results, and the results of pilot plant-scale test work
conducted on trial mining pits. Six geological domains have been identified -
the five mineralised units (SSU, USU, USSU, ICSU, LSU) and the LST.
Geostatistical contact analysis shows clear step changes in grade distributions
across the interpreted geological contacts, giving confidence in the geological
interpretation.
The right to mine the Ranobe deposit was granted to the prior owners under PDE
37242, which was reissued on 23 October 2017. PDE 37242 has a term of 40 years
from 21 March 2012 (the date of the original grant of PDE 37242) and provides
the right to carry out mining operations for the production of ilmenite,
rutile, leucoxene and zircon and is renewable in units of 20 years.
Accordingly, PDE 37242 does not presently provide the right to produce a
monazite or REO.
The environment and land use are described as semi-arid with subsistence
agriculture (seasonal farming and grazing) and forestry (including charcoal
production).
A total of 1,581 drill holes were used for the 2021 Ranobe Mineral Resources
estimate. The estimate has a more robust geological interpretation than the
2019 Ranobe Mineral Resources estimate as a result of additional drilling data
and completion of wireframing, giving rise to improved boundary and block
resolution and geological contact control. Consistency and quality of the
mineral assemblage data has improved due to the increased density of Minmod
composite sample coverage that now encompasses the entire resource, refer
Figure 4.
In brief, Minmod is tailored to specific deposits and relies on a development
stage where detailed assessment by QEMSCAN, XRF, XRD, wet chemistry and SEM of
samples representative of the deposit spatially and of the range of HM grades
present has been carried out so that a database of the deposit's heavy minerals
and their chemistry may be developed. Once developed, composite samples from
the deposit are fractionated magnetically, the fractions assayed by XRF and
mineralogy derived from an error minimisation algorithm that varies the amount
of minerals in the database and compares theoretical oxide levels to those from
the assays. Composites were generated on roughly a 400 x 400m square grid, and
from nominal 6m intervals downhole.
Drill hole collars were surveyed using DGPS for 2003, 2005, 2012, 2018 and 2019
drilling to establish horizontal and vertical control to UTM zone 38S, WGS 84.
The 2001 and some of the later 2019 drill collars were surveyed by GPS. All
collars were levelled to the LIDAR digital terrain surface to ensure
consistency. All collar positions were deemed satisfactory and fit for purpose
for the geological interpretation and interpolation processes.
Drilling was completed by the reverse circulation, air core (RCAC) method for
all five drilling programs conducted to date, all carried out by Wallis
Drilling. RCAC drilling was used to obtain 1 to 3m samples from which
approximately 10 - 30kg was collected. Samples were dried, riffle split and
submitted for assay. Three laboratories were used, and all followed the same
assay procedure which conformed to AS4350.2-1999. All labs produced three
assays: HM% (via sink float using tetrabromoethane), SL% (screened at 63
micrometres) and OS% (screened at 1mm). This is described in the relevant
section of Table 1 of the JORC Code included as Appendix 1 to this
announcement.
Sampling and assaying were subjected to quality control processes by WTR and
further by Base Resources with the submission of blind field duplicates and
standards. The Base Resources QA/QC data for drilling undertaken in 2018 and
2019 was assessed and the HM, SL and OS duplicates/replicates were all
subjected to log scatter plot, cumulative probability plot and general
statistical investigation. The rate of submission for field duplicates was 1
in 32, for lab duplicates it was 1 in 19 and for standards it was 1 in 48.
Analysis of the duplicate assays shows very high reproducibility for HM, giving
confidence that the sampling process is producing highly representative
samples.
Standard samples were prepared and submitted in 2018 and early 2019 for the
generation of Certified Reference Material (CRM) with known mean and standard
deviation for internal QA/QC. Unfortunately, the standard deviation generated
from the CRM analyses was not considered tight enough to use as a QA/QC
control; and a commercially available CRM was purchased and utilised for the
later 2019 sample analysis.
Analysis of the drill sample variography for HM indicates for the USU a strike
direction of NNW/SSE with strong grade relationships to 2,000m along strike and
600m across strike. The downhole relationship extends beyond 10m. The
dominant drill spacing is 200m along strike and 100m across, with a dominant
sampling interval of 1.5m. The drill spacing and sample interval are
significantly closer than the variogram ranges and are therefore appropriate
for resource estimation purposes.
Drill hole, collar and assay data are captured digitally and managed in a
Microsoft Access database. Sufficient quality control has been undertaken to
satisfy the Competent Person that the assay data is sound and may be used for
resource estimation.
The topographic digital elevation model was initially captured by South Mapping
Corporation in 2007 and then extended in 2019 and the survey data merged. The
LIDAR data points were captured using an aircraft mounted 70 kHz laser which
classified the data points into ground and non-ground points. The relative
accuracy of this survey method is 15cm RMS in the vertical and 30cm RMS
horizontal. The drill holes take their level from the LIDAR surface DEM. The
coordinate system used is UTM zone 38 south (WGS 84).
Model cell dimensions of 50m x 100m x 1.5m in the XYZ orientations were used,
in accordance with standard practice of taking half the distance between holes
of the dominant drill hole spacing of 200m north-south and 100m east-west.
Interpolation was undertaken using various sized search ellipses to populate
the model with primary grade fields (HM, SL and OS). Ordinary Kriging was used
for primary assay fields. Mineralogy was interpolated by nearest neighbour.
The bulk density (BD) applied to the 2021 Ranobe Mineral Resources model was a
component-based algorithm: BD = 1.61 + (0.01 x HM). Given the generally low
slime levels and based on the experience of the Competent Person, this was
considered appropriate.
The model was validated visually (by displaying wireframes, drill holes and
model cells simultaneously and stepping through the model), statistically (by
plotting distributions of model and drill hole grades together) and graphically
(by preparing swathe plots or plots of drill hole and model grades by
northing). Generally, the grade interpolation performed well for each of the
domains and each of the primary assay grades.
The Mineral Resource classifications under the JORC Code for the Ranobe deposit
have taken into consideration the drill hole spacing in plan view, as well the
sample support within domains, the size, weighting and distribution of the
mineral assemblage composites and the variography.
The Ranobe deposit has been assigned Mineral Resource classifications of
Measured, Indicated and Inferred under the JORC Code. The criteria used to
support those classifications were:
* regular drill hole spacing that defined the geology and HM mineralisation
distribution and trends;
* domain controlled variography for HM that supported the drill spacing for
each of the classifications; and
* the distribution of mineral assemblage composites having adequately
identified the various mineralogical domains as well as the variability
within those domains.
The drill pattern is not regular, but in general, Measured category material
has a drill spacing of 100 x 200m and has Minmod mineral assemblage. Material
in the Indicated category typically has hole spacing at 200 x 400m and Minmod
mineralogy. Where line spacing is greater than 400m, but less than 1,600m, and
/or limited mineralogical information is available, material is classified as
Inferred. The drilling pattern and resource classification for the USU is
shown in Figure 1.
The 2021 Ranobe Mineral Resources estimate is reported above a cut-off grade of
1.5% HM on the basis of likely economic cut-off grade.
Given the unconsolidated nature of the sediments, the low water table and Base
Resource's dry mining expertise, the proposed mining method is dry mining by
dozer. Processing could be achieved via standard mineral sands methods: spiral
concentration, and magnetic and electrostatic separation. The physical
properties of the heavy minerals at the Ranobe deposit are, from metallurgical
test work, similar to other deposits being mined today.
Further information about the 2021 Ranobe Ore Reserves estimate
The 2021 Ranobe Ore Reserves estimate was restricted to the Measured and
Indicated Resource categories of the SSU and USU from the 2021 Ranobe Mineral
Resources estimate.
The Modifying Factors applied to the 2021 Ranobe Mineral Resources estimate for
the 2021 Ranobe Ore Reserves estimate were derived from the Toliara Project
Definitive Feasibility Study completed in 2019 (2019 DFS), the outcomes of the
which were released on 12 December 2019. These material Modifying Factors
(summarised in Tables 3-6 below) were operating costs, product recoveries and
yields, product prices and throughput constraints. The source of data for the
Modifying Factors was the project's financial model as it existed at the time
of optimisation, which incorporated relevant developments since the 2019 DFS,
such as updated product prices (compared to the 2019 DFS) reflecting the
improved outlook at the time. Year 2 operating costs (FY2024) were selected as
they were considered most representative of the forecast operating costs in the
early years of operations, and allowed detailed Stage 1 mine scheduling (which
occurs later in the process) to be completed to a high level of accuracy. The
year 2 operating costs assume a 2% royalty is payable to the Government of
Madagascar on product sales, being the royalty payable under the current Mining
Code. This is less than the 4% royalty assumed for the purposes of the updated
Toliara Project Definitive Feasibility Study (DFS2), the outcomes of which were
released today, which reflects the royalty rate proposed in a recent draft
revision to the Mining Code. However, application of a 4% royalty does not
result in any portion of the 2021 Ranobe Ore Reserves estimate not being
economically mineable.
The mean operating year 4-6 product prices (FY2026-FY2028) were assumed for the
purposes of the 2021 Ranobe Ore Reserves estimate and were Base Resources' own
internal price forecasts for each product for those years at the time of
optimisation. Base Resources' internal price forecast is derived from its
internal supply and demand analysis. In relation to forecast demand for each
product, TZMI's five-year forecast demand outlook is utilised, before
transitioning to a steady annual growth rate, generally consistent with global
GDP growth forecasts, but adjusted for product specific considerations, where
applicable. In relation to forecast supply, over the short term, Base
Resources' supply forecast is generally aligned with TZMI's five-year outlook
for existing producers, but Base Resources forms its own view on the
anticipated timing of new brownfield and greenfield projects coming into
production. Base Resources' medium to long term supply forecast is based on
the Company's internal view of future production from existing operations, as
well as new brownfield and greenfield projects. The product prices selected
were considered more representative of long-term forecasts than those forecast
for operating year 2.
The reference point for the 2021 Ranobe Ore Reserves estimate is the ore
delivered to the static grizzly of the DMU (refer Figure 9).
The estimation methodology for the 2021 Ranobe Ore Reserves estimate used an
economic derived cut-off. MaxiPit (a Datamine product which performs
Lerch-Grossman pit optimisations) was used to do this. It determines, on a
model cell by model cell basis, whether material is ore or waste. The output
of this process is a set of nested potential pit shells at 1% decrements of
revenue from 100% that are incrementally smaller and higher grade. These were
assessed at a high level and a subset was selected for high level scheduling to
allow comparison of financial and production metrics to select the most optimum
pit shell for detailed scheduling. The 74% of revenue pit shell was selected
to form the basis of the 2021 Ranobe Ore Reserves estimate on the basis of
maximising NPV and balancing other strategic objectives.
The 2021 Ranobe Ore Reserve estimate tonnes have formed the basis of DFS2.
DFS2 factored in, among other things, an increased mining and processing rate
from the commencement of Stage 2 in operating year 4.25, when a second dry
mining unit (DMU) and Wet Concentration Plant (WCP) are planned to be
commissioned. Whilst the outcomes of both the 2019 DFS and DFS2 demonstrate
that the Toliara Project is financially robust, the outcomes of DFS2, were
superior to the 2019 DFS. The Competent Persons have reviewed the DFS2
financial outputs to satisfy themselves that the 2021 Ranobe Ore Reserve
estimate is economically mineable and that any differences between the
Modifying Factors used (in the pit optimisation process) and the assumptions
ultimately used in the DFS2 have no adverse impact on the estimate.
The mining activity cycle commences with scrub clearing, followed by the
removal of topsoil. Topsoil is either directly placed onto rehabilitation
areas or stockpiled for later rehabilitation, with the aim to preserve seed
viability by minimising time in stockpile. Mining is based on conventional
DMU, using Caterpillar D11T dozers operating in approximately 100m by 200m
rectangular blocks to feed ore to the DMU where it is slurried and screened.
It is non-selective and there is no ore/waste discrimination. However,
sub-economic material that cannot be selectively left in the void is included
as planned dilution in the ore feed for Stage 1. Due to an insignificant
volume of dilution and mining losses in Stage 1, no global dilution factor has
been applied for Stage 2 where detailed design has not yet been undertaken.
Mining recovery of 100% was assumed after consideration of mining shape design,
planning and scheduling. The entire mining cycle is expected to take three to
four years from initial clearing to final rehabilitation. The mine site layout
at commencement of operations is shown in Figure 5. The mine path derived from
the 2021 Ranobe Ore Reserves estimate is shown in Figure 6.
Ore is pumped from the DMU to the WCP where it is processed via a desliming
circuit and spirals, typical of many mineral sands operations, to produce a
heavy mineral concentrate (HMC). Course tailings (quartz sand) separated by
the WCP is pumped initially to an out of pit storage facility and later to the
mining pit void where a moveable tails stacker de-waters the slurry.
Flocculated clay tailings (fine tailings) from the WCP thickener are pumped to
the evaporation ponds, formed during the deposition of the course tailings, to
a depth of approximately 1.5 metres where they dry to form a clay layer
approximately 0.4m thick. The desiccated fine tails are then worked by dozer
into the coarse tails to make a nominal two metres thick water retention
surface layer, graded into final landform and topsoil replaced ready for
rehabilitation. The course and fine tailings schedules from the Ranobe Ore
Reserves are shown in Figures 7 and 8. The DMU process flow is depicted in
Figure 9.
The HMC is further processed in the Mineral Separation Plant (MSP), primarily
using magnetic and electrostatic separators, with secondary gravity separation
to produce ilmenite, rutile and zircon.
In early 2018, three bulk samples from the Ranobe deposit were excavated (low
grade - 4.8% HM, medium grade - 8.2% HM and high grade - 10.5% HM) to represent
a range of ore grades on which to base the WCP design. Base Resources'
resource mineralogy methodology, MinMod, was adapted for the Ranobe deposit and
used to estimate WCP performance during the test work to ensure consistency
between Resource definition and process design selection. The selected three
stage spiral wet gravity circuit was tested on the three bulk samples by
Mineral Technologies in Brisbane. The test work results were modelled using
industry proven programs to determine the flowsheet design, mass balance and
resultant performance metrics. HMC samples were produced from these bulk
samples for further confirmatory MSP test work and market sample generation.
Pilot tests on oversize removal, fines removal and fines thickening were also
undertaken to verify design. The three stage WCP flowsheet is shown in Figure
10.
In 2013, previous owners, WTR, generated bulk HMC samples from two test pits
which were used for the 2019 DFS and DFS2 MSP design test work and to estimate
recoveries. A comprehensive and iterative series of tests were completed to
establish flowsheets for each MSP stage consistent with the design intent:
* Feed preparation - removal of coarse and fine quartz using wet gravity.
* Ilmenite circuit - produce three ilmenite products and generate a
non-magnetic stream through magnetic and electrostatic separation.
* Wet non-magnetic circuit - remove residual quartz to enable efficient
rutile separation via wet gravity separation.
* Rutile circuit - produce a rutile product and a non-conductor zircon stream
using electrostatic separation.
* Wet zircon circuit - remove alumina silicates with wet gravity separation.
* Dry zircon circuit - remove iron and titanium contaminants to produce a
standard zircon product through a combination of electrostatic and magnetic
separation.
The MSP flowsheet is shown in Figure 11.
Processing recoveries are summarised in Table 3.
Due to the high level of confidence in the Modifying Factors, the
classification of Ore Reserves into Proved and Probable generally followed the
Mineral Resources estimate classification, i.e. Measured Mineral Resources
convert to Proved Ore Reserves and Indicated Mineral Resources convert to
Probable Ore Reserves. The only exception to this is for material found in the
lowest 1.5 metres of blocks scheduled for mining in Stage 2 where detailed
design has not yet been undertaken to provide confidence in the level of the
pit floor. As a result, this material has been classified as Probable Ore
Reserves notwithstanding its Mineral Resources estimate classification of
Measured. Inferred Mineral Resources are excluded from the Ranobe Ore Reserves
estimate.
The right to mine the Ranobe deposit is provided by PDE 37242, a mining lease
under Malagasy law. PDE 37242 was granted on 23 October 2017 and is valid for
a period of 40 years from 21 March 2012 (the date of grant of the original
PDE 37242) and may be renewed in 20-year increments thereafter. On-ground
activities at the Toliara Project are currently suspended by the Government of
Madagascar, pending fiscal terms for the Toliara Project being agreed.
Discussions are ongoing with the Government of Madagascar about fiscal terms.
In addition, before construction of the Toliara Project and subsequent mining
operations can commence, surface rights need to be secured, which requires
completion of the land acquisition process.
The Company holds a valid Permis Environnemental (Environment Permit No 55-15/
MEEMF/ONE/DG/PE) and approved Plan de Gestion Environnementale (PGE)
(Environmental Management Plan). More detailed environmental management plans
and specific work instructions addressing construction, operational and
decommissioning matters are required to be prepared and submitted three months
prior to the commencement of each stage.
The Toliara Project requires significant infrastructure which does not
presently exist, primarily the product haulage road, bridge and the export
facility. These are within the scope of project development and the costs were
included in the capital expenditure estimates for the 2019 DFS and DFS2.
Table 3: Assumed mineral recoveries
Description Units Value
HM grade of HMC % 91.0
Ilmenite recovery in WCP % 94.9
Rutile recovery in WCP % 92.3
Leucoxene recovery in WCP % 75.0
Zircon recovery in WCP % 97.2
Ilmenite recovery in MSP % 94.4
Rutile recovery in MSP % 54.1
Leucoxene recovery in MSP % 23.3
Zircon recovery in MSP % 79.4
Other HM recovery in WCP % 79.0
Table 4: Assumed operating costs
Description Units Value
Surface costs
Clearing & topsoil removal USD/ha 4,976
Rehabilitation USD/ha 23,103
Mining costs
Overburden removal cost (if applicable) USD/BCM 0.98
Mining unit USD/t mined 1.00
Oversize handling USD/t o/s generated 0.58
WCP costs
Fine tails handling cost (HM%<5%) USD/t tails generated 1.10
Fine tails handling cost (HM%>5%, <9%) USD/t tails generated 0.44
Fine tails handling cost (HM%>9%) USD/t tails generated 0.29
WCP cost USD/t feed in 0.64
Tailings cost USD/t mined 0.08
Miscellaneous costs
Royalty - percentage of sales price % 2.00*
Overhead cost USD/t mined 1.71
MSP costs
Transport cost to MSP USD/t moved 0.13
MSP cost ilmenite USD/t feed in 13.38
MSP cost other HM USD/t feed in 18.04
Shipping and Storage
Transport cost to port facilities USD/t moved 3.45
Wharf cost all products USD/t moved 8.91
*Royalty rate used in the 2019 DFS.
Table 5: Process throughput rates (used to limit assumed feed rate during
optimisation)
Description Units Rate
Maximum DMU throughput tonnes per hour (Ore) 1,750
Maximum process rougher feed throughput tonnes per hour (RHF) Not constrained
Maximum process tails throughput tonnes per hour Not constrained
(Tails)
Maximum process thickener throughput tonnes per hour Not constrained
(Slimes)
Maximum process HMC throughput tonnes per hour (HMC) 150
Availability and Utilisation % 82.2%
Table 6: Assumed Product prices (FOB)
Description Units Price
Chloride Ilmenite revenue USD/t 257
Sulphate Ilmenite revenue USD/t 168
Slag Ilmenite revenue USD/t 177
Rutile revenue USD/t 1,250
Zircon revenue USD/t 1,200
Competent Persons' Statements
The information in this announcement that relates to Mineral Resources and Ore
Reserves is based on, and fairly represents, information and supporting
documentation prepared by the Competent Persons named in the table below. Each
Competent Person:
* is a Member of The Australasian Institute of Mining and Metallurgy or the
Australian Institute of Geoscientists;
* 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 as a qualified person for the purposes of the AIM Rules for Companies;
and
* consents to the inclusion in this statement of matters based on their
information in the form and context in which the relevant information
appears.
Mr. Scott Carruthers is employed by Base Resources, 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' 2021 Annual Report. Mr. Ian Reudavey
is employed by Base Toliara, a wholly-owned subsidiary of Base Resources, does
not presently hold equity securities in Base Resources and is not entitled to
participate in Base Resources' long-term incentive plan.
Name Estimate(s) Employer
Ian Reudavey Ranobe Mineral Resources Base Toliara, full-time employee
Scott Carruthers Ranobe Ore Reserves Base Resources, full-time employee
Chris Sykes Ranobe Ore Reserves IHC Robbins, consultant mining engineer
to Base Resources
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 Industry standard reverse circulation aircore drilling was used to obtain 1 to
techniques channels, random chips, or specific 3m samples from which 0.5 to 1.0kg was riffle split to produce a sub-sample for
specialised industry standard measurement HM analysis utilizing heavy liquid separation.
tools appropriate to the minerals under
investigation, such as down hole gamma All holes were drilled vertically.
sondes, or handheld XRF instruments, etc).
These examples should not be taken as All holes were sampled over a consistent 1 - 3m interval.
limiting the broad meaning of sampling.
All holes were drilled using a reverse circulation Wallis Drill setup to
Include reference to measures taken to ensure collect the complete sample with a basic cyclone separation of drill returns by
sample representivity and the appropriate means of a swivel outlet feeding buckets or sample bags.
calibration of any measurement tools or
systems used. No sample splitting was performed on the drill site for earlier drill programs,
however sample splitting was carried out for the 2018 and 2019 drilling
Aspects of the determination of program.
mineralisation that are Material to the
Public Report. In cases where 'industry Samples were analysed by industry standard techniques of screening, desliming
standard' work has been done this would be and TBE heavy liquid separation.
relatively simple (e.g. 'reverse circulation
drilling was used to obtain 1m samples from
which 3kg was pulverised to produce a 30g
charge for fire assay'). In other cases more
explanation may be required, such as where
there is coarse gold that has inherent
sampling problems. Unusual commodities or
mineralisation types (e.g. submarine nodules)
may warrant disclosure of detailed
information.
Drilling Drill type (e.g. core, reverse circulation, All holes were drilled vertically.
techniques open-hole hammer, rotary air blast, auger,
Bangka, sonic, etc) and details (e.g. core All drilling was undertaken using an air pressured reverse circulation air core
diameter, triple or standard tube, depth of Wallis Mantis drill.
diamond tails, face-sampling bit or other
type, whether core is oriented and if so, by Drill rod diameter is NQ (76mm outer diameter), with 3m rod lengths fitted with
what method, etc). a face discharge drill bit.
Drill sample Method of recording and assessing core and Sample size is monitored by the rig geologist and logged quantitatively.
recovery chip sample recoveries and results assessed. Samples are weighed as part of sample preparation process, with 92% of samples
reporting between 3 and 7kg mass Wallis Mantis drill rig uses face discharge
Measures taken to maximise sample recovery bits, at low air pressures (105 - 140kPa) and low rotation speeds (45-65RPM) to
and ensure representative nature of the maximize recovery.
samples.
There is no correlation between recovery and grade resulting in no sample bias.
Whether a relationship exists between sample
recovery and grade and whether sample bias
may have occurred due to preferential loss/
gain of fine/coarse material.
Logging Whether core and chip samples have been All samples were visually checked and logged on site by rig geologist and
geologically and geotechnically logged to a logged for lithotype, grain size, sorting, colour, competence, moisture
level of detail to support appropriate content.
Mineral Resource estimation, mining studies
and metallurgical studies. A small subsample was taken for each drill interval and manually panned for
estimation of HM and clay content.
Whether logging is qualitative or
quantitative in nature. Core (or costean,
channel, etc) photography.
The total length and percentage of the
relevant intersections logged.
Sub-sampling If core, whether cut or sawn and whether The calico sample bags from site were air dried before sub-sampling. Any
techniques quarter, half or all core taken. material that was bound together by clay was manually attritioned prior to
and sample splitting so it would pass through the splitter.
preparation If non-core, whether riffled, tube sampled,
rotary split, etc and whether sampled wet or The material was split using a 25mm single tier riffle to produce a sample for
dry. submission of approximately 0.5 to 1.0kg in a small calico sample bag.
For all sample types, the nature, quality and For one sample in every 20, an additional two 1kg calico bagged samples were
appropriateness of the sample preparation taken for checking purposes. These are referred to as the B and C samples, the
technique. primary sample being designated as the A sample.
Quality control procedures adopted for all Results of field duplicates confirm the sampling process is generating
sub-sampling stages to maximise representative results.
representivity of samples. The sample preparation technique, sample size and riffle aperture used is
considered appropriate for mineral sands.
Measures taken to ensure that the sampling is
representative of the in-situ material
collected, including for instance results for
field duplicate/second-half sampling.
Whether sample sizes are appropriate to the
grain size of the material being sampled.
Quality of The nature, quality and appropriateness of 2001 drill samples were dispatched to Western Geochem Labs in Perth, Australia.
assay data the assaying and laboratory procedures used
and and whether the technique is considered The A samples were sent to IMP Laboratory in Boksburg, South Africa in 2003,
laboratory partial or total. ACT Laboratory in Pretoria, South Africa in 2005 and 2012, and to Bureau
tests Veritas, South Africa (BV) in 2018 and 2019.
For geophysical tools, spectrometers,
handheld XRF instruments, etc., the For all laboratories the separation of HM was by tetrabromoethane (TBE) at
parameters used in determining the analysis density 2.95g/cc.
including instrument make and model, reading
times, calibrations factors applied and their All samples were: (a) Dried, weighed, (b) Sample riffle split to produce 400g A
derivation, etc. sample, (c) Sample screened +1mm, oversize weighed, (d) Sample screened -63
micrometres, oversize weighed, (e) TBE for heavy media separation, (f) TBE
Nature of quality control procedures adopted Floats weighed, and (g) TBE Sinks weighed
(e.g. standards, blanks, duplicates, external
laboratory checks) and whether acceptable The BV analytical procedure conforms to AS4350.2-1999; Australian Standards
levels of accuracy (i.e. lack of bias) and Heavy mineral sand concentrates - Physical testing using TBE.
precision have been established.
Quality control procedures: (a) Regular checks of analyses as received, (b)
Check against estimates from field logging, (c) Submission of B and C samples
to a second laboratory, (d) Submission of randomly inserted control samples at
a rate on about 1 in 50, (e) Replicate sample analyses, and (f) Extra samples
taken irregularly in high grade areas
Verification The verification of significant intersections Assay data was compared with geology logs of panned HM grades for out of range
of sampling by either independent or alternative company assay produced by site geologist.
and assaying personnel.
Replicate assaying undertaken 2003 and 2005 drilling and sample assaying
The use of twinned holes. undertaken independently by Ticor/Kumba Resources.
Documentation of primary data, data entry 2012 drilling, logging and sampling undertaken by independent site geologist.
procedures, data verification, data storage
(physical and electronic) protocols. 2018 and 2019 drilling, logging and sampling undertaken by Base Resources
company geologists under supervision of the competent person.
Discuss any adjustment to assay data.
Twinned holes completed in 2018 and 2019 by Base Resources.
Validation of the drill database was undertaken independently by IHC Robbins.
Location of Accuracy and quality of surveys used to 2003, 2005, 2012, 2018 and 2019 drill hole collars were surveyed using DGPS.
data points locate drill holes (collar and down-hole 2001 drill collars were surveyed by GPS.
surveys), trenches, mine workings and other
locations used in Mineral Resources Topographic data was derived from ground controlled LIDAR survey undertaken by
estimation. Southern Mapping SA in 2007 and 2019.
Specification of the grid system used. All drill holes are vertical, down hole surveys were deemed inappropriate.
Quality and adequacy of topographic control. Grid system used throughout the program UTM Grid, Zone 38S, WGS84.
All drill collars were adjusted to the LIDAR topographic surface using a
MapInfo routine to increase ensure consistency, accuracy and precision for
mineral resource or ore reserve estimation.
Data spacing Data spacing for reporting of Exploration Three basic drill patterns used: (a) 100mE spacing along line with 200mN
and Results. between lines with 50m hole offset, (b) 100mE spacing along line with 400mN
distribution between lines, and (c) 200mE spacing along line with 800mN between lines
Whether the data spacing and distribution is
sufficient to establish the degree of Variography demonstrates that drill spacing of 100mE x 200mN is sufficient to
geological and grade continuity appropriate classify as Measured Resource and 100mE x 400mN is sufficient to classify as
for the Mineral Resources and Ore Reserves Indicated Resource.
estimation procedure(s) and classifications
applied. No sample compositing has been applied.
Whether sample compositing has been applied.
Orientation Whether the orientation of sampling achieves All drill holes were drilled vertically and have essentially achieved unbiased
of data in unbiased sampling of possible structures and sampling of the sub-horizontal stratigraphy of the dunal deposit.
relation to the extent to which this is known,
geological considering the deposit type. Drill line were drilled north - south, east - west within 20 degrees of the
structure deposit anisotropy.
If the relationship between the drilling
orientation and the orientation of key No bias to drill grid sampling has been introduced.
mineralised structures is considered to have
introduced a sampling bias, this should be
assessed and reported if material.
Sample The measures taken to ensure sample security. All samples were placed in calico bags and grouped in rice bags by drill hole.
security
The samples bags were labelled by both marker and aluminium tags for drill hole
number and sample depth.
The samples were delivered to the laboratory sealed with cable ties and with a
shipment form.
Audits or The results of any audits or reviews of Audits and reviews or the sampling data and techniques have been carried out
reviews sampling techniques and data. by: (a) Ticor 2004, (b) Kumba Resources 2006, (c) Exxaro 2007, (d) McDonald
Speijers and Associates 2012, (e) World Titanium Resources 2016, and (f) IHC
Robbins 2018
All review and audits considered the sampling and analysis to be of good
quality and suitable for resource estimation.
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 Ranobe deposit is located wholly within Mining Lease PDE (Permis
tenement and ownership including agreements or D'Exploitation) 37242, which is held by Base Toliara, Base Resources' wholly
land tenure material issues with third parties such owned Malagasy subsidiary.
status as joint ventures, partnerships,
overriding royalties, native title In October 2017, Mining Lease PE 37242 merged with Mining Lease PE 39130 and
interests, historical sites, wilderness Exploration Licence PR 3315 to form a single tenure giving complete coverage of
or national park and environmental the deposit. Mining Lease PE 37242 presently provides Base Toliara with the
settings. right to exploit ilmenite, rutile, leucoxene and zircon, but not garnet,
monazite or REO.
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 1999 - 2002 Discovered during reconnaissance exploration by Madagascar
done by other exploration by other parties. Resources NL. 120 RC aircore holes for 3,068m demonstrated both grade and scale
parties potential for economic development.
2003 - 2009 Ticor/Kumba Resources (Exxaro) joint venture. 689 RC aircore holes
for 15,559m and Pre-Feasibility Study completed which confirmed the economic
potential of the deposit.
2012 - 2016 WTR. 361 RC aircore holes for 8,088m and Feasibility Study
completed which developed a plan for construction, mining and mineral export.
Geology Deposit type, geological setting and The heavy mineral sand deposit is located on the southwest coast of Madagascar
style of mineralisation. within the Mesozoic Morondava Basin along the eastern margin of a coastal plain
juxtaposed to an Eocene limestone scarp. The coastal plain is underlain by
limestone and overlain by a sequence of progressively shallowing beach and
lagoon unconsolidated clastic sediments and subaerial dunes which successively
overstep and on-lap the basement limestone scarp in the east.
The deposit is hosted within a stabilized mega-dune system which is arrested
along the basement scarp slope and extends for approximately 20 km north
northwest south southeast. The entire dune unit is mineralized by an
assemblage of ilmenite, zircon, rutile and monazite concentrated within the
unit by aeolian winnowing. The unit generally thickens westwards away from the
scarp slope from 3m to 60m. The deposit anisotropy parallels the scarp slope,
with higher HM grades concentrated along the mega-dune crest line.
Drill hole A summary of all information material to Madagascar Resource NL drilled: (a) 2001 - 121 RC aircore holes for 3,074
Information the understanding of the exploration metres
results including a tabulation of the
following information for all Material Ticor/Kumba Resources (Exxaro) drilled: (a) 2003 - 400 RC aircore holes for
drill holes: (a) easting and northing of 9,424 metres and (b) 2005 - 288 RC aircore holes for 6,135 metres
the drill hole collar, (b) elevation or
RL (Reduced Level - elevation above sea WTR drilled: (a) 2012 - 363 RC aircore holes for 8,087 metres
level in metres) of the drill hole
collar, (c) dip and azimuth of the hole, Base Resources has drilled: (a) 2018 - 78 RC aircore holes for 3,617 metres and
(d) down hole length and interception (b) 2019 - 692 RC aircore holes for 26,136 metres.
depth and (e) hole length.
All holes were drilled vertically.
If the exclusion of this information is
justified on the basis that the RC holes average 29 metres deep for the project.
information is not Material and this
exclusion does not detract from the Base Resources drilling has an average depth of 39 metres as the programs
understanding of the report, the looked to also target deeper mineralisation in the Lower Sand Unit.
Competent Person should clearly explain
why this is the case. See drill hole location plan in Figure 1.
Exploration Results are not being reported at this time.
Data In reporting Exploration Results, Exploration results are not being reported at this time.
aggregation weighting averaging techniques, maximum
methods and/or minimum grade truncations (e.g. No metal equivalent values were used.
cutting of high grades) and cut-off
grades are usually Material and should be No aggregation of short length samples was used as samples were consistently
stated. sampled at 1 - 3m intervals.
Where aggregate intercepts incorporate
short lengths of high grade results and
longer lengths of low grade results, the
procedure 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 The deposit is flat lying and intersected by vertical holes, hence the
between important in the reporting of Exploration intercept length is equivalent to the mineralisation thickness.
mineralisation Results.
widths and
intercept If the geometry of the mineralisation
lengths with respect to the drill hole angle is
known, its 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 For a plan of the 2021 Ranobe Mineral Resources estimate - see Figure 1 and
scales) and tabulations of intercepts Figure 4.
should be included for any significant
discovery being reported These should For stylised sections - see Figure 2.
include, but not be limited to a plan
view of drill hole collar locations and
appropriate sectional views.
Balanced Where comprehensive reporting of all Exploration results are not being reported at this time.
reporting Exploration Results is not practicable,
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 Exploration results are not being reported at this time.
substantive material, should be reported including
exploration (but not limited to): geological
data observations; geophysical survey results;
geochemical survey 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 Future work will consist of extending the drilling to the western extents of
work (e.g. tests for lateral extensions the deposit to further determine the lateral extents of both the USU and LSU
or depth extensions or large-scale mineralisation.
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 been The original drill data derived by Madagascar Resources, Ticor/Kumba Resources
integrity corrupted by, for example, transcription or keying (Exxaro), WTR, and Base Resources drill data has been independently reviewed
errors, between its initial collection and its use for and validated by IHC Robbins. Data review included: (a) Checks of data by
Mineral Resource estimation purposes. visually inspecting on screen (to identify translation of samples), (b) Cross
checking of laboratory analysis certificates with from/to assay data, (c)
Data validation procedures used. Validation of reported assay data against field estimates, (d) Cross checking
lithology logging and geological interpretation with oversize, slimes and HM
content, and (e) Visual and statistical comparison was undertaken to check the
validity of results.
An Access database is updated and maintained by Base Resources, which has been
reviewed by IHC Robbins.
Validation checks of the drill database include: (a) Assay comparison for out
of range values, (b) Sample gaps, and (c) Overlapping sample intervals
Collar coordinate verification including collar elevations normalized to LIDAR
digital terrain model.
Site visits Comment on any site visits undertaken by the Competent Multiple site visits have been undertaken by Ian Reudavey, the Competent
Person and the outcome of those visits. Person, in his role as Geology Superintendent for Base Toliara.
If no site visits have been undertaken indicate why The planning and supervision of the Base Resources drilling program, and
this is the case. training and mentoring for the Malagasy geologists has been carried out by the
Competent Person in conjunction with other company personnel and independent
consultants.
Geological Confidence in (or conversely, the uncertainty of) the The previous geological interpretation for the Ranobe deposit was undertaken by
interpretation geological interpretation of the mineral deposit. WTR in 2012 and the data utilised by IHC Robbins in 2018, which also validated
the geological interpretation using all logging data, sampling data, and
Nature of the data used and of any assumptions made. observations from a site visit.
The effect, if any, of alternative interpretations on The current geological interpretation expanded on the previous work using new
Mineral Resource estimation. drill data and first-hand experience from drilling observations.
The use of geology in guiding and controlling Mineral Current data spacing and quality is sufficient to confirm or indicate
Resource estimation. geological and grade continuity.
The factors affecting continuity both of grade and Interpretation of modelling domains was restricted to the main mineralised
geology. zones using HM sinks, oversize material, slimes, and lithological logging
(including colour changes).
There is a high degree of confidence in the geological interpretation of the
SSU, USU, USSU and ICSU units (aeolian and shallow marine sediments).
The extent of the USU mineralisation was determined by a combination of LIDAR
and drill hole data, with no assumptions made.
The geological interpretation of the LSU along the western boundary of the
Ranobe deposit has a moderate degree of confidence, given that drill spacing is
broader and variations in mineral assemblage are apparent. The LSU has been
excluded from 2021 Ranobe Mineral Resources estimate and report at this point
in time on the basis of limited mineralogical data for this unit.
Only the aeolian USU (and its internal SSU and USSU subsets) and the shallow
marine / subaerial ICSU have been considered for 2021 Ranobe Mineral Resources
estimate and report.
The primary factor controlling grade and geology continuity is mega-dune
morphology. The limestone morphology also impacts sand deposition and
concentration and continuity of grade along the eastern extents of the Ranobe
deposit and in the central part of the deposit where numerous limestone
pinnacles occur.
Dune morphology and grade trends have been used with cross-sectional data to
define search ellipsoid orientation in populating the resource model.
Dimensions The extent and variability of the Mineral Resource The resource extends for 20km north - south and averages 3km wide east-west.
expressed as length (along strike or otherwise), plan
width, and depth below surface to the upper and lower The average depth of mineralization from the surface to the 1.5% HM cut-off is
limits of the Mineral Resource. 20m with a range of 2m to 36m.
Estimation and The nature and appropriateness of the estimation CAE mining software Datamine Studio RM was used to estimate the mineral
modelling technique(s) applied and key assumptions, including resources.
techniques treatment of extreme grade values, domaining,
interpolation parameters and maximum distance of A combination of ordinary kriging (OK), inverse distance weighting (IDW) and
extrapolation from data points. If a computer assisted nearest neighbour (NN) was used to interpolate grades and values into the block
estimation method was chosen include a description of model. Part of the rationale for using both IDW and OK to interpolate grade is
computer software and parameters used. to provide an effective interpolation method for both close spaced (in the
higher grade core of the deposit) and wide spaced drilling (in the lower grade
The availability of check estimates, previous margins of the deposit).
estimates and/or mine production records and whether
the Mineral Resource estimate takes appropriate NN techniques were used to interpolate index values and non-numeric sample
account of such data. identification into the block model.
The assumptions made regarding recovery of Appropriate and industry standard search ellipses were used to search for data
by-products. for the interpolation and suitable limitations on the number of samples and the
impact of those samples was maintained. An inverse distance weighting of three
Estimation of deleterious elements or other non-grade was used so as not to over smooth the grade interpolations.
variables of economic significance (e.g. sulphur for
acid mine drainage characterisation). Hard domain boundaries were used and these were defined by the geological
wireframes that were interpreted.
In the case of block model interpolation, the block
size in relation to the average sample spacing and the Topographic surface was created from LIDAR data.
search employed.
The 2021 Ranobe Mineral Resources estimate was modelled to key geological
Any assumptions behind modelling of selective mining boundaries and then reported at a cut-off grade of 1.5 HM (no minimum
units. thickness).
Any assumptions about correlation between variables.
The average parent cell size used for the interpolation was approximately half
Description of how the geological interpretation was the standard drill hole width and a half of the standard drill hole section
used to control the resource estimates. line spacing.
Discussion of basis for using or not using grade The average drill hole spacing for the Ranobe deposit was 100m east-west and
cutting or capping. 200m north-south and with a 1.5m samples and so the selected parent cell size
was 50 x 100 x 1.5m (where the Z or vertical direction of the cell was
The process of validation, the checking process used, nominated to be the same distance as the sample length).
the comparison of model data to drill hole data, and
use of reconciliation data if available. Six Mineral Resources estimates have been undertaken previously; Ticor 2004,
Exxaro 2006, Milne 2010, MacDonald Speijers and Associates 2012, WTR (Ransome)
2016, and IHC Robbins 2019. The current resource model has been reviewed
against these previous estimates.
No assumptions have been made regarding recovery of by-products.
No deleterious elements or non-grade variables are present.
All resource blocks are assumed to be mined from the surface with no
overburden.
Mineral assemblages show little statistical variation over the deposit, and
correlate well with HM content.
Drill hole declustering was not used during the interpolation because of the
regular nature of sample spacing.
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 CAE Studio RM
(Datamine) software 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 drill hole and
model files 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 basis or Tonnages were estimated on an assumed dry basis.
with natural moisture, and the method of determination
of the moisture content.
Cut-off The basis of the adopted cut-off grade(s) or quality The cut-off grade of 1.5% HM used for reporting the Mineral Resources estimates
parameters parameters applied. is based on parameters developed during feasibility studies for the deposit.
Mining factors Assumptions made regarding possible mining methods, A dry mining method using dozer traps and slurry pumping has been assumed for
or assumptions minimum mining dimensions and internal (or, if the deposit based on the results of the 2019 DFS.
applicable, external) mining dilution. It is always
necessary as part of the process of determining The deposit is planned to be mined from surface with no minimum dimensions.
reasonable prospects for eventual economic extraction
to consider potential mining methods, but the The mining parameters are well understood given the project has been subject to
assumptions made regarding mining methods and the 2019 DFS and DFS2.
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 regarding Test work completed by Ticor/Kumba Resource 2004 Pre-Feasibility Study.
factors or metallurgical amenability. It is always necessary as
assumptions part of the process of determining reasonable Test work undertaken by AML 2007 and 2009.
prospects for eventual economic extraction to consider
potential metallurgical methods, but the assumptions Test work completed by Exxaro 2009 Feasibility Study.
regarding metallurgical treatment processes and
parameters made when reporting Mineral Resources may Process design by TZMI 2012 Definitive Engineering Study.
not always be rigorous. Where this is the case, this
should be reported with an explanation of the basis of Test work at Mineral Technologies and IHC Robbins 2018, Base Resources
the metallurgical assumptions made. Pre-Feasibility Study.
Process design by IHC Robbins 2019, Base Resources 2019 DFS.
Environmental Assumptions made regarding possible waste and process Base Toliara holds a valid Permis Environnementale (Environment Permit No 55-15
factors or residue disposal options. It is always necessary as /MEEMF/ONE/DG/PE) and an approved Plan de Gestion Environnementale (PGE).
assumptions part of the process of determining reasonable
prospects for eventual economic extraction to consider The PGE (or Environmental Management Plan) was approved by Government of
the potential environmental impacts of the mining and Madagascar in June 2015. As required by the PGE, baseline monitoring programs
processing operation. While at this stage the have been established.
determination of potential environmental impacts,
particularly for a greenfield project, may not always Sand tailings will be initially placed in an off-path tailings storage
be well advanced, the status of early consideration of facility, and then progressively backfilled in the mining void as space becomes
these potential environmental impacts should be available.
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 basis The bulk density used for the Ranobe deposit is one that has been utilised by
for the assumptions. If determined, the method used, previous consultants and is based on a simple linear algorithm originally
whether wet or dry, the frequency of the measurements, developed by John Baxter (1977).
the nature, size and representativeness of the
samples. BD = 1.61 + (0.01 x HM).
The bulk density for bulk material must have been Experience with these styles of ore bodies suggests that this algorithm is
measured by methods that adequately account for void appropriate for calculating the in-situ dry bulk density for the USU (which
spaces (vugs, porosity, etc), moisture and differences forms the majority of the resource), and likely to be conservative for the SSU,
between rock and alteration zones within the deposit. USSU and ICSU given these units contain elevated silt and/or some clay.
Discuss assumptions for bulk density estimates used in
the evaluation process of the different materials.
Classification The basis for the classification of the Mineral The resource classification for the Ranobe deposit was based on the following
Resources into varying confidence categories. criteria: drill hole spacing, variography and the distribution and influence of
mineral assemblage composite samples.
Whether appropriate account has been taken of all Material lying beneath an infrastructure perimeter encompassing the proposed
relevant factors (i.e. relative confidence in tonnage/ camp, workshop and processing plant, solar farm and sand tails storage facility
grade estimations, reliability of input data, was excluded from the Mineral Resources estimate.
confidence in continuity of geology and metal values,
quality, quantity and distribution of the data). The classification of the Measured, Indicated, and Inferred Resources was
supported by the uncomplicated geology, continuity of mineralisation,
Whether the result appropriately reflects the confidence in the drill hole data and all the supporting criteria as noted
Competent Person's view of the deposit. above.
The Competent Person considers that the result appropriately reflects a
reasonable view of the deposit categorisation.
Audits or The results of any audits or reviews of Mineral An audit and review on the previous Mineral Resources estimate carried out by
reviews. Resource estimates. WTR was completed during the due diligence assessment prior to the project
acquisition by Base Resources, which concluded the WTR Mineral Resources
estimate was sound.
An audit and review undertaken by SRK on the 2019 Ranobe Mineral Resources
estimate concluded the estimate was sound. Key recommendations from the SRK
audit were implemented in this estimate.
A similar audit and review was undertaken by SRK for this 2021 Ranobe Mineral
Resources estimate. Key points are: (a) Database validated and deemed
acceptable, (b) Methods and process used are appropriate, (c) QA/QC checks
highlight a potential issue with the reliability of slimes analysis (noting the
USU has low Slimes grades - hence minor impact), (d) Density for ICSU not
appropriate (conservative) due to increased slimes, (e) Potential bias between
drilling programs, but difficult to quantify given limited data, (f) ICSU
sequence in eastern area often not fully drilled or has insufficient MinMod
data to support meaningful grade interpolation, and (g) Potential mixing of
grade populations at the lower USU contact.
Discussion of Where appropriate a statement of the relative accuracy No statistical or geo-statistical review of the accuracy of the resource
relative and confidence level in the Mineral Resource estimate estimate has been undertaken.
accuracy/ using an approach or procedure deemed appropriate by
confidence the Competent Person. For example, the application of Variography was undertaken to determine the drill hole support of the selected
statistical or geostatistical procedures to quantify JORC classification.
the relative accuracy of the resource within stated
confidence limits, or, if such an approach is not Validation of the model vs drill hole grades by direct observation and
deemed appropriate, a qualitative discussion of the comparison of the results on screen, swathe plot and population distribution
factors that could affect the relative accuracy and analysis were favourable.
confidence of the estimate.
The Mineral Resources estimate is a global estimate for the entire known extent
The statement should specify whether it relates to of the Ranobe deposit within PDE 37242.
global or local estimates, and, if local, state the
relevant tonnages, which should be relevant to There has been no production to date.
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 listed in section 1, and where relevant in sections 2 and 3, also
apply to this section)
Criteria Explanation Comment
Mineral Description of the Mineral Resource estimate used as a The 2021 Ranobe Ore Reserves estimate is based entirely on the Measured and
Resource basis for the conversion to an Ore Reserve. Indicated portion of the 2021 Ranobe Mineral Resources estimate.
estimate for
conversion to Clear statement as to whether the Mineral Resources 2021 Ranobe Mineral Resources estimate is reported inclusive of the 2021 Ranobe
Ore Reserves are reported additional to, or inclusive of, the Ore Ore Reserves Estimate.
Reserves.
Site visits Comment on any site visits undertaken by the Competent Scott Carruthers (Joint Competent Person) has visited the site on several
Person and the outcome of those visits. occasions.
If no site visits have been undertaken indicate why
this is the case.
Study status The type and level of study undertaken to enable The Toliara Project 2019 DFS and the DFS2 support the 2021 Ranobe Ore Reserves
Mineral Resources to be converted to Ore Reserves. estimate.
The Code requires that a study to at least Modifying factors accurate to the study level have been applied. The resulting
Pre-Feasibility Study level has been undertaken to mine plan is technically achievable and economically viable.
convert Mineral Resources to Ore 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 A value model was developed that assigns mining and processing recoveries,
parameters parameters applied. costs, and revenue to the geological model. This value model follows the
entire mining process from initial land clearing to final rehabilitation.
There is no ore/waste definition due to the mining method selected.
Mining factors The method and assumptions used as reported in the Mineral Resources are converted to Ore Reserves by open pit optimisation
or assumptions Pre-Feasibility or Feasibility Study to convert the software (Datamine MaxiPit) to provide a guide for detailed design and
Mineral Resource to an Ore Reserve (i.e. either by scheduling. The software uses the Lerch-Grossman algorithm to generate a
application of appropriate factors by optimisation or series of nested pit shells. A subset of the shells were preliminarily
by preliminary or detailed design). scheduled to test HMC production profiles, final production requirements, and
financial investment decisions. The preferred pit shell was selected for more
The choice, nature and appropriateness of the selected detailed mine planning and scheduling.
mining method(s) and other mining parameters including
associated design issues such as pre-strip, access, The initial mining area (Stage 1) was selected based on its high grade and
etc. location. Detailed mining shapes based on rectangular dozing push profiles to a
centrally located DMU were developed. Mining shapes that were identified as
The assumptions made regarding geotechnical parameters too small (less than nominal 150kt) and inefficient to direct feed (greater
(e.g. pit slopes, stope sizes, etc), grade control and than 100m away) a DMU by dozer mining, were marked for auxiliary mining using
pre-production drilling. truck and excavator, where the material would be hauled to feed an existing
DMU.
The major assumptions made and Mineral Resource model
used for pit and stope optimisation (if appropriate). Only material identified as SSU and USU was included in the 2021 Ranobe Ore
Reserves estimate (and DFS2).
The mining dilution factors used.
There is no ore/waste discrimination and sub-economic SSU/USU. Material that
The mining recovery factors used. cannot be selectively left in the void is included as planned dilution in the
ore feed for Stage 1. No global dilution factor has been applied.
Any minimum mining widths used.
Pit slopes for the Stage 1 mining shapes have been assumed at 33 degrees, with
The manner in which Inferred Mineral Resources are a maximum target of a 100m dozing distance. Where possible, the mining
utilised in mining studies and the sensitivity of the locations and sequence was developed to avoid uphill dozing.
outcome to their inclusion.
For the purposes of scheduling the ore for Stage 2, mining shapes have been
The infrastructure requirements of the selected mining assumed as rectangular sides up to a maximum size of 200m by 400m for the
methods. remainder of the LOM schedule.
A mining recovery factor of 98% was applied when using the Lerch-Grossman
algorithm to undertake economic evaluation and the generation of the pit
shells. Following more detailed mining shape design, planning and scheduling,
a mining recovery factor of 100% was applied in the 2021 Ranobe Ore Reserves
estimate. Mining recovery also makes provision for a 0.25m topsoil profile.
Metallurgical The metallurgical process proposed and the The ore will be processed via screens, thickeners and spirals as in almost
factors or appropriateness of that process to the style of every other mineral sand operation to produce HMC. The HMC will be processed
assumptions mineralisation. using magnetic and conductor separators to produce ilmenite and rutile
products. The remaining material will be further processed using classifiers,
Whether the metallurgical process is well-tested wet tables and cleaned with conductor separators to produce zircon and recover
technology or novel in nature. some more rutile. This is a typical process for mineral sands.
The nature, amount and representativeness of The plant design is based on the results of metallurgical test work conducted
metallurgical test work undertaken, the nature of the as part of the PFS, DFS and utilised for DFS2.
metallurgical domaining applied and the corresponding
metallurgical recovery factors applied. WCP recovery is assumed to be: ilmenite - 94.9%, rutile - 92.3%, zircon - 97.2%
and leucoxene - 75.0%.
Any assumptions or allowances made for deleterious
elements. MSP recovery is assumed to be: ilmenite - 94.4%, rutile - 54.1%, zircon - 79.4%
and leucoxene - 23.3%. Leucoxene will ultimately report to rutile and chloride
The existence of any bulk sample or pilot scale test ilmenite products at 25.7% and 74.3% respectively.
work and the degree to which such samples are
considered representative of the orebody as a whole. Due to the expected variation in ilmenite product split to satisfy market
demands, a single overall ilmenite recovery (of the combined three ilmenite
For minerals that are defined by a specification, has recoveries) has been used rather than separate ilmenite product recovery.
the ore reserves estimation been based on the
appropriate mineralogy to meet the specifications? The 2021 Ranobe Mineral Resources estimate, upon which the 2021 Ranobe Ore
Reserves estimate is based, incorporates 1,942 individual drill holes and
22,736 individual drill samples.
Environmental The status of studies of potential environmental The Company holds a valid Permis Environnemental (Environment Permit No 55-15/
impacts of the mining and processing operation. MEEMF/ONE/DG/PE) and approved Plan de Gestion Environnementale (Environmental
Details of waste rock characterisation and the Management Plan). More detailed environmental management plans and specific
consideration of potential sites, status of design work instructions addressing construction, operational and decommissioning
options considered and, where applicable, the status matters are required to be prepared and submitted three months prior to the
of approvals for process residue storage and waste commencement of each stage.
dumps should be reported.
As required by the PGE, base-line monitoring programs have been established and
will continue through the construction, operational and decommissioning phases.
There will be two tailings streams: coarse (sand) and fine (thickened clay).
The coarse tails will be clean sand having been washed in the WCP. The fine
tails will be flocculated and thickened prior to pumping to solar drying areas.
Sand tails will be pumped initially to an ex-pit tailings storage facility
until sufficient mining void is established, after which appropriate in-pit
tails deposition assumptions have been applied.
Fine tails will be dried and mixed with coarse tails, prior to return of
topsoil.
Infrastructure The existence of appropriate infrastructure: The Toliara Project mine site is approximately 40km due north of the existing
availability of land for plant development, power, port of Toliara and approximately 15km inland from the coastline. The Ranobe
water, transportation (particularly for bulk deposit lies west of the north-south limestone escarpment running parallel with
commodities), labour, accommodation; or the ease with the coast at an elevation of between 80m and 160m above current sea level.
which the infrastructure can be provided or accessed.
Existing transport links are via a bituminised road to within 15km of the
proposed mine site with only minor dirt tracks leading to the mine site.
Existing infrastructure at site is limited and designed to support an
exploration camp only. There is no power or water distributed in the area.
The development of the Toliara Project will incorporate all the infrastructure
required to support the mining, concentration, separation, haulage and shipment
of approximately 1,033ktpa of ilmenite, zircon and rutile products. Temporary
infrastructure will be required to support the early construction activities.
The 2019 DFS and DFS2 estimate the costs for the development of all
infrastructure items.
Costs The derivation of, or assumptions made, regarding The mine planning underpinning the 2021 Ranobe Ore Reserves estimate was
projected capital costs in the study. conducted using capital and operating costs derived from the 2019 DFS, which
are suitable for block model coding, strategic planning and mine design. All
The methodology used to estimate operating costs. costs have been estimated in US Dollars.
Allowances made for the content of deleterious The 2019 DFS capital cost was estimated at US$442m (+10%/-15%) based on
elements. preliminary engineering and budget quotes from vendors, following an extensive
budget quotation request process on major contract packages to establish unit
The source of exchange rates used in the study. rates that reflect the market conditions in Madagascar for all earthworks,
concrete, SMP and buildings contractors.
Derivation of transportation charges.
The 2019 DFS estimated operating costs have been derived from experience gained
The basis for forecasting or source of treatment and operating the Company's Kwale mineral sands mine in Kenya, incorporating local
refining charges, penalties for failure to meet Malagasy cost inputs where appropriate. With the benefit of this experience,
specification, etc. operating cost were modelled using a bottom up approach which considered the
equipment being used, manning schedules and work rosters, and local supplier
The allowances made for royalties payable, both quotes for inputs such as product haulage, power, diesel and HFO prices.
Government and private. General and administration operating costs were derived from the 2019 DFS
manning schedules, labour work rosters, and other administration-related fixed
costs such as communications, IT, consultants, recruitment, annual tenement
costs and the like.
DFS2 financial outcomes were superior to the 2019 DFS outcomes. Therefore,
DFS2 estimated capital costs and operating costs will not result in any portion
of the 2021 Ranobe Ore Reserves not being economically mineable.
The fiscal terms applicable to the Toliara Project have not yet been agreed
with the Government of Madagascar. A royalty of 4% of sales revenue payable to
Government of Madagascar has been assumed for DFS2, on the basis that it is
consistent with the rate proposed in a recent draft revision to the Malagasy
Mining Code. While, at the time of determining modifying factors for pit
optimisation, a 2% royalty rate was assumed, an increase in royalty rate to 4%
will not result in any portion of the 2021 Ranobe Ore Reserves not being
economically mineable.
There are no additional treatment or refining charges applied, and minerals are
sold as finished products.
Revenue The derivation of, or assumptions made regarding Revenue is a function of block modelled grade and mineral assemblage, which is
factors revenue factors including head grade, metal or then comprehensively modelled through the mining, wet and dry separation
commodity price(s) exchange rates, transportation and processes to estimate final products which is expected to be delivered to a
treatment charges, penalties, net smelter returns, customer at a forecast price.
etc.
During the evaluation of the resource model, various pit shells were generated
The derivation of assumptions made of metal or using a range of 1 or 2% revenue decrements from the original 100% of revenue
commodity price(s), for the principal metals, minerals using the MaxiPit Software. A subset of these pit shells (71% to 80%) was
and co-products. selected for high level scheduling and financial modelling to identify a pit
shell (74%) that met production requirements and an acceptable EBITDA and
return on investment. This pit shell provided the basis for more detailed mine
planning and scheduling.
The mine planning underpinning the 2021 Ranobe Ore Reserves was conducted using
preliminary product pricing that was suitable for block model coding, strategic
planning and mine design. In the final financial analysis, revenue from ore
deliveries were then recalculated using Base Resources' anticipated product
pricing at the time of optimisation and sales product mix and shipping
schedules from the 2019 DFS.
The 2021 Ranobe Ore Reserves are feasible and economic under both TZMI's and
Base Resources' pricing schedules, as well as DFS2 product pricing.
Prices for products used in the pit optimisation were the mean prices from
operating years 4-6 of the 2019 DFS and are as follows (US$/t FOB):
Ilmenite - chloride $257, Ilmenite - sulphate $168, Ilmenite - slag $177,
Rutile $1,250, Zircon $1,200.
Market The demand, supply and stock situation for the Demand for mineral sands products has historically been closely linked to
assessment particular commodity, consumption trends and factors growth in global GDP, which has grown at close to 3% per annum.
likely to affect supply and demand into the future.
Base Resources performs its own internal assessment of the market and also
A customer and competitor analysis along with the subscribes to the various market outlook and commentaries provided by TZMI.
identification of likely market windows for the The 2019 DFS covers the supply and demand outlook for all products and
product. highlights future supply deficits that in turn provide support for the
development of the Toliara Project.
Price and volume forecasts and the basis for these
forecasts. Base Resources has existing customers for ilmenite, rutile and zircon products
from its Kwale mineral sands mine in Kenya. Product samples produced from
For industrial minerals the customer specification, Toliara Project PFS and DFS test work indicates the product quality will meet
testing and acceptance requirements prior to a supply customer requirements and have been assessed as such by potential customers.
contract. Contracts and agreements pertaining to Base Resources are confidential.
Economic The inputs to the economic analysis to produce the net Financial modelling was completed by Base Resources using parameters developed
present value (NPV) in the study, the source and during DFS2.
confidence of these economic inputs including
estimated inflation, discount rate, etc. The DFS2 NPV of US$1.0 billion is reported on a post-tax, pre-debt, real basis
using a 10% discount rate.2 Sensitivity to changes in capital costs, operating
NPV ranges and sensitivity to variations in the costs, product recoveries, product prices, discount rate etc are shown in DFS2.
significant assumptions and inputs. [Note (2): For further details about DFS2, refer to Base Resources' market
announcement 'DFS2 enhances scale and economics of the Toliara Project' dated
27 September 2021. Base Resources confirms that all the material assumptions
underpinning the forecast financial information disclosed in this announcement
continue to apply and have not materially changed.]
Social The status of agreements with key stakeholders and Base Resources is working closely with local communities, government and other
matters leading to social licence to operate. key stakeholders to ensure all agreements will be in place to allow
construction, mining and processing to commence.
The Company operates a comprehensive Stakeholder Engagement Plan in concert
with a Community Development Plan. Close liaison with stakeholders will be
maintained through the operation by a series of liaison committees representing
those affected by the mine's presence.
This is discussed in detail in DFS2.
Other To the extent relevant, the impact of the following on All naturally occurring risks are assumed to have adequate prospects for
the project and/or on the estimation and control and mitigation.
classification of the Ore Reserves:
The right to mine the Ranobe deposit is provided by Mining Lease (Permis
Any identified material naturally occurring risks. d'Exploitation) 37242, a mining lease under Malagasy law. In October 2017
Mining Lease PDE 37242 merged with Mining Lease PDE 39130 and Exploration
The status of material legal agreements and marketing Licence PR 3315 to form a single tenure giving complete coverage of the
arrangements. deposit. PDE 37242 is valid for a period of 40 years from 21 March 2012 (the
date of grant of the original PDE 37242) and may be renewed in 20-year
The status of governmental agreements and approvals increments thereafter. Before the Toliara Project construction and subsequent
critical to the viability of the project, such as mining operations can commence, surface rights need to be secured, which
mineral tenement status, and government and statutory requires completion of the land acquisition process.
approvals. There must be reasonable grounds to expect
that all necessary Government approvals will be The Company holds a valid Permis Environnemental (Environment Permit No 55-15/
received within the timeframes anticipated in the MEEMF/ONE/DG/PE) and approved Plan de Gestion Environnementale (Environmental
Pre-Feasibility or Feasibility study. Highlight and Management Plan). More detailed environmental management plans and specific
discuss the materiality of any unresolved matter that work instructions addressing construction, operational and decommissioning
is dependent on a third party on which extraction of matters are to be prepared and submitted three months prior to the commencement
the reserve is contingent. of each stage.
Fiscal terms applicable to the Toliara Project are yet to be agreed with the
Government of Madagascar and on-ground activities are currently suspended by
the Government pending those terms being agreed.
The Competent Persons consider there are reasonable grounds for the Toliara
Project to obtain the remaining approvals required and agree acceptable fiscal
terms.
Marketing arrangements are commercially sensitive but detailed test work
suggests that the expected product specifications are within marketable ranges.
Classification The basis for the classification of the Ore Reserves Measured Mineral Resources are converted to Proved Ore Reserves and Indicated
into varying confidence categories. Mineral Resources are converted to Probable Ore Reserves. The only exception
to this is for material found in the lowest 1.5m of blocks scheduled for mining
Whether the result appropriately reflects the in Stage 2 where detailed design has not yet been undertaken to provide
Competent Person's view of the deposit. confidence in the level of the pit floor and as a result this material is
classified as Probable Ore Reserves regardless of its Mineral Resources
The proportion of Probable Ore Reserves that have been estimate classification as Measured. Approximately 20Mt of Probable Ore
derived from Measured Mineral Resources (if any). Reserves have been derived from Measured Mineral Resources.
Inferred Mineral Resources are not included in the Ore Reserves estimate.
The results reflect the views that both Competent Persons have of the deposit.
Audits or The results of any audits or reviews of Ore Reserves No external audit of the 2021 Ranobe Ore Reserves estimate has been undertaken.
reviews estimates.
Discussion of Where appropriate a statement of the relative accuracy Mining and processing methods selected are typical for mineral sands and have
relative and confidence level in the Ore Reserves estimate been demonstrated in various other mineral sand operations, they are considered
accuracy/ using an approach or procedure deemed appropriate by a low risk of impacting the 2021 Ranobe Ore Reserves estimate.
confidence the Competent Person. For example, the application of
statistical or geostatistical procedures to quantify The Mineral Resource estimate and therefore the 2021 Ranobe Ore Reserves
the relative accuracy of the reserve within stated estimate are global estimates of the entire known extent of the Ranobe deposit
confidence limits, or, if such an approach is not within the Mining Lease.
deemed appropriate, a qualitative discussion of the
factors which could affect the relative accuracy and No production data is available against which the 2021 Ranobe Ore Reserves
confidence of the estimate. estimates may be reconciled.
The statement should specify whether it relates to Stress testing of operating cash flow shows this remains positive well beyond
global or local estimates, and, if local, state the the stated accuracy of the cost estimates.
relevant tonnages, which should be relevant to
technical and economic evaluation. Documentation Detailed mine design has been undertaken for Stage 1. As additional resource
should include assumptions made and the procedures definition drilling, processing test work and other key project parameters and
used. costs are updated, the mine design will be updated accordingly.
Accuracy and confidence discussions should extend to The MSP and mining throughputs are based on detailed assessment of market
specific discussions of any applied Modifying Factors capacity to absorb the mine production, and the impact of the additional
that may have a material impact on Ore Reserves production on expected pricing. This gives confidence that the product price
viability, or for which there are remaining areas of expectations are realistic.
uncertainty at the current study stage.
It is recognised that this may not be possible or The metallurgical test work has been conducted with those throughputs in mind,
appropriate in all circumstances. These statements of giving confidence that the recovery estimates are accurate.
relative accuracy and confidence of the estimate
should be compared with production data, where The 2021 Ranobe Mineral Resources estimate used as the basis for the 2021
available. Ranobe Ore Reserves estimate was made in accordance with JORC Code, and only
Measured and Indicated categories have been considered.
Generally, there is a high level of confidence in the technical and economic
aspects of modifying factors. The confidence in social and government related
modifying factors is moderate to high. Overall, the confidence in the 2021
Ranobe Ore Reserves estimate is high.
Glossary
Assemblage The relative proportion of heavy mineral components including ilmenite,
rutile, zircon and leucoxene.
Base Toliara Base Resources' wholly owned Malagasy incorporated subsidiary, Base
Toliara SARL.
Competent The JORC Code requires that a Competent Person be a Member or Fellow of
Person The Australasian Institute of Mining and Metallurgy, 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.
Cut-off grade The lowest grade of mineralised material that is thought to be
economically mineable and available. Typically used by Base Resources to
define which material is reported in a Mineral Resource estimate.
DEM Digital Elevation Model, a?representation of the bare ground (bare earth)
topographic surface of the Earth?excluding trees, buildings, and any other
surface objects.
GARN Garnet, a valuable heavy mineral.
Grade A physical or chemical measurement of the characteristics of the material
of interest. In this context, the grade is always a percentage and the
characteristics are heavy mineral, oversize, slime and the various product
minerals (ilmenite, rutile etc).
Heavy mineral In mineral sands, minerals with a specific gravity greater than 2.85 t/m3.
ILM Ilmenite, a valuable heavy mineral.
Indicated An Indicated Mineral Resource is that part of a Mineral Resource for which
Resource or quantity, grade (or quality), densities, shape and physical
Indicated 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 or quantity and grade (or quality) are estimated on the basis of limited
Inferred 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 Code The Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves 2012 Edition, 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 Digital Terrain Model.
Measured A Measured Mineral Resource is that part of a Mineral Resource for which
Resources or quantity, grade (or quality), densities, shape, and physical
Measured 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.
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.
MON Monazite, a valuable heavy mineral that contains rare earth elements
NQ Specification of drilling rods (and bits) with an outer diameter of 76mm
Ordinary A statistical interpolation method to predict the value at a given point
Kriging by computing a weighted average of the known values in the neighbourhood
of the point
Ore Reserves Ore Reserves are the economically mineable part of Measured and/or
Indicated Mineral Resources.
OS Oversize material (>1mm).
Probable A Probable Ore Reserve is the economically mineable part of an Indicated,
Reserve or and in some circumstances, a Measured Mineral Resource. The confidence in
Probable the Modifying Factors applying to a Probable Ore Reserve is lower than
that applying to a Proved Ore Reserve.
Proved Reserve A Proved Ore Reserve is the economically mineable part of a Measured
or Proved Mineral Resource. A Proved Ore Reserve implies a high degree of confidence
in the Modifying Factors.
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.
REO Rare earth oxides.
RL Reduced Level is denoted as '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.
RMS Root Mean Square Error used in processing of survey data, it is an average
but assuming that the error follows a normal distribution it will
correspond to the percentile 68% in one-dimensional distributions (e.g.
vertical error) and percentile 63% for bidimensional distributions (e.g.
horizontal error).
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.
RUT Rutile, a valuable heavy mineral.
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.
SL Slimes, being a waste product from the processing of mineral sands.
Defined at Ranobe as material <63 micrometres
TBE Tetrabromoethane, a high density liquid (2.94 - 2.98) used for sink-float
analysis of drill samples.
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.
ZIR Zircon, a valuable heavy mineral.
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 Gareth Tredway
Mobile: +61 (0) 488 093 763 Tel: +44 (0) 207 920 3150
Email: jfuller@baseresources.com.au
This release has been authorised by the Board of Base Resources.
About Base Resources
Base Resources is an Australian based, African focused, mineral sands producer
and developer with a track record of project delivery and operational
performance. The company operates the established Kwale Operations in Kenya
and is developing the Toliara Project in Madagascar. Base Resources is an ASX
and AIM listed company. Further details about Base Resources are available at
www.baseresources.com.au
PRINCIPAL & REGISTERED OFFICE
Level 3, 46 Colin Street
West Perth, Western Australia, 6005
Email: info@baseresources.com.au
Phone: +61 (0)8 9413 7400
Fax: +61 (0)8 9322 8912
NOMINATED ADVISOR
RFC Ambrian Limited
Stephen Allen
Phone: +61 (0)8 9480 2500
JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44 20 3207 7800
JOINT BROKER
Canaccord Genuity
Raj Khatri / James Asensio / Patrick Dolaghan
Phone: +44 20 7523 8000
END
(END) Dow Jones Newswires
September 27, 2021 02:00 ET (06:00 GMT)
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