REG-Base Resources Limited: 2023 AGM - Chair's Address and Management Presentation

Base ResourcesAnnouncement

24/11/2023 07:15

 

 

 

AIM and Media Release 

24 November 2023

 

Base Resources Limited 
2023 AGM – Chair’s Address and Management Presentation
Friday, 24 November 2023, 11.00am (AWST)

 

African mineral sands producer, Base Resources Limited (ASX & AIM: BSE) (Base
Resources or the Company) advises that the following address was delivered by
Base Resources’ Chair at the Company’s Annual General Meeting held today
at 11.00am (Perth time) in Perth, Western Australia and online via the Lumi
software platform.

 

Management also delivered a presentation at the Annual General Meeting.  A
copy of that presentation is attached to this release and available from the
Company's website:  www.baseresources.com.au.

 

Chair’s AGM Address

 

Good morning shareholders, Base Resources staff and guests.  Welcome to the
2023 Annual General Meeting of Base Resources.

 

The 2023 financial year has been another operationally and financially
successful one, in which the company has continued to deliver robust results
at our Kwale Operations in Kenya, even as we made the transition to the more
challenging and lower grade ore sources that will characterise the remainder
of the operation.  Tight control of costs and a supportive pricing
environment contributed to an operating result that was only marginally behind
the previous year’s record.  Notwithstanding the complexity and intensity
of the year, I’m pleased to report that the Kwale team continued to maintain
its focus on health, safety and wellbeing with no lost time injuries in the
year.  In the 36.4 million hours worked since commencing production at Kwale
Operations, there have only been two lost time injuries.

 

The robust pricing environment more than offset lower production following the
introduction of the North Dune orebody, with the group generating an
underlying EBITDA of US$158.6 million.  Despite this, a net loss of US$4.8
million was recorded, as profitability was impacted by a non-cash impairment
of US$88.9 million.  This impairment followed a reassessment of the carrying
value of Kwale Operations and reflects the increased operating costs of mining
the North Dune, the softening outlook for mineral sands product prices over
the remaining mine life and an improved understanding of the ultimate costs of
closure.

 

Strong underlying cashflow enabled the company to end the year with US$92.9
million net cash, with the Board determining a final dividend of AUD 4.0 cents
per share, unfranked. Together with the AUD 2.0 cents per share paid in March,
this brings the total distributions to shareholders determined in respect of
the 2023 financial year to AUD 6.0 cents per share, unfranked, totalling
US$45.6 million.

 

Kwale Operations has been the foundation on which we have built Base
Resources.  However, after extensively exploring all avenues, we have been
unsuccessful in identifying additional deposits of sufficient grade or scale
to support further extension.  Consequently, mining is expected to end in
December 2024 and the company’s focus at Kwale now necessarily turns to
detailed closure planning and transition to post mining land use.  Just as we
have done over the past 10 years of mining at Kwale, we intend to close with
the clear objective of cementing our reputation for excellence in the full
life cycle of mining.

 

With Kwale Operations now coming to an end, the next phase of shareholder
value creation will come from progression of the world-class Toliara Project
to development and realising both its mineral sands and rare earth
potential.  This project continues to represent a transformational growth
opportunity for the company.

 

Building on the updated Definitive Feasibility Study released in FY2022, which
significantly increased both the scale and economic value of the mineral sands
project, a concept study assessing the commercial potential of the Toliara
Project's monazite content, a source of valuable rare earth elements, has been
completed.  This study confirmed substantial economic potential and further
reinforced our belief that the Toliara Project is the best undeveloped mineral
sands asset in the world.  We look forward to sharing more about this
opportunity (likely to be in the coming weeks) once we have completed a
pre-feasibility study for the addition of a monazite concentrator.

 

After making sound progress in our discussions with the Government of
Madagascar in relation to the fiscal terms applicable to the project and, with
that, the expected lifting of the on-ground suspension, engagement slowed due
to the Government's focus on an overhaul of the Malagasy Mining Code and
preparations for the Presidential elections.  The first round of the
elections was held on 16 November and the new Mining Code has now come into
effect, however engagement is expected to continue to be limited until the new
Government has been formed and the full suite of Mining Code reform is
completed. Tim will provide more colour on this in his presentation.

 

With the delay in advancing the Toliara Project, substantial effort is being
applied to identification of attractive business development opportunities to
provide broader funding options for Toliara Project development and to secure
optionality in pursuit of our longer-term Vision 2031 objective of multiple
concurrent operations.  We are also accelerating our wider Kenyan exploration
efforts with the recent lifting of the licensing moratorium.

 

Sustainability has always been central to our business model – it’s been
embedded across every phase of our approach to developing mineral sands mines
from exploration, through mining and then post mine land use.  While we are
proud of the impacts of our actions, the recognition of our peers, following
the release of the company’s inaugural sustainability report in October
2022, through two sustainability awards at the 2023 Mining Indaba conference,
is particularly pleasing and hopefully an indication that we are encouraging
others on a similar path.

 

While we are cognisant of the challenges before us, we are confident that we
have the team, approach, reputation and support to successfully navigate them.
 As part of our approach to both renewal and ensuring the right mix of skills
for the coming years’ challenges, the Board was bolstered by the addition of
Sheila Khama as a Non-Executive Director earlier this year.  As well as a
deep personal connection to Africa, Ms Khama brings a wealth of valuable
experience and expertise in managing relations and working collaboratively
with host governments and in the sustainable development of natural resources,
all of which are critical to Base Resources’ future growth and success.

 

Non-Executive Director, Malcolm Macpherson, will also retire at the conclusion
of today’s meeting.  On behalf of the Board, I would like to thank Malcolm
for his commitment and outstanding contribution to the Board during his
tenure.  Everyone at Base Resources has benefited considerably from
Malcolm’s guidance, insights and deep mineral sands experience.  Malcolm
leaves us well-positioned to execute on the next phase of shareholder value
creation that will come from progression of the world-class Toliara Project.

 

Finally, on behalf of shareholders, and on behalf of the Board, I’d like to
extend my sincere thanks and appreciation to the management and all staff of
the Base Resources Group, both for “living the Base Way” and for another
highly commendable year of achievement.

 

ENDS.

 

For further information contact:

 Australian Media Relations        UK Media Relations             
 Citadel Magnus                    Tavistock Communications       
 Cameron Gilenko and Michael Weir  Jos Simson and Gareth Tredway  
 Tel: +61 8 6160 4900              Tel: +44 207 920 3150          

 

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 8 9413 7400
Fax: +61 8 9322 8912

 

NOMINATED ADVISER & JOINT BROKER
Canaccord Genuity Limited
James Asensio / Raj Khatri / George Grainger
Phone: +44 20 7523 8000

 

JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44 20 3207 7800

 2023 Management AGM presentation (https://mb.cision.com/Public/22548/3881974/8e37057db6d79289.pdf)  



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