AIM and Media Release
6 December 2019
BASE RESOURCES LIMITED
Maiden Ranobe Ore Reserves Estimate
The Company’s announcement on
27 November 2019 (“Maiden Ranobe Ore Reserve Estimate”) has
been updated to provide further supporting information for the
Ranobe Ore Reserves estimate, including Sections 1, 2 and 3 of
Table 1 of the JORC Code. The Ranobe Ore Reserves estimate
detailed in this announcement is unchanged from the estimate
included in the Company’s announcement on 27 November
2019.
HIGHLIGHTS
- Ranobe Ore Reserves estimate of 586Mt of ore at an average
heavy mineral grade of 6.5%, containing 38Mt of in-situ HM.
- The Ore Reserves estimate is consistent with the Mineral
Resources assumptions underpinning the pre-feasibility study.
- Samples from a 26,141m drilling
program completed during 2019 are currently being processed,
seeking to upgrade the Mineral Resources and Ore Reserves estimates
for Ranobe over the course of 2020.
Base Resources Limited (ASX & AIM: BSE) (Base
Resources or the Company) is pleased to release its
maiden Ranobe Ore Reserves estimate which forms the foundation of
its Toliara Project in Madagascar.
The Company completed the acquisition of the Toliara Project in
January 2018 and, following positive
findings from the Pre-Feasibility Study (PFS) completed in
March 20191, is currently
progressing the project through a Definitive Feasibility Study
(DFS) phase due for completion later this month. With
the PFS demonstrating a positive economic outcome, an initial Ore
Reserves estimate has been prepared (the Ranobe Ore
Reserves).
The Ranobe Ore Reserves estimate shown below underpins an
expected 33-year mine life, consistent with the PFS.
Table 1: 2019 Ranobe Ore Reserves estimate
|
Ranobe Ore
Reserves
as at 27 November 2019 |
| Category |
Tonnes
(Mt) |
HM
(Mt) |
HM
(%) |
SL
(%) |
OS
(%) |
HM Assemblage (% of
HM) |
| ILM |
RUT |
LEUC* |
ZIR |
| (%) |
(%) |
(%) |
(%) |
| 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 products depending on product specification
requirements.
Base Resources is the operator of the Toliara Project and has a
net attributable interest of 100% in the Ranobe Ore Reserves
estimate.
The Ranobe Ore Reserves estimate has been prepared by Base
Resources and IHC Robbins and is based on the Ranobe Mineral
Resources estimate released on 23 January
2019 (2019 Ranobe Mineral Resources), which was
reported in accordance with the JORC Code2. The
Ranobe Ore Reserves are contained within the Measured and Indicated
categories of the 2019 Ranobe Mineral Resources estimate.
Figures (graphics) referenced in this announcement have been
omitted. A full PDF version of this announcement, including
all figures (graphics), is available from the Company’s
website: www.baseresources.com.au.
Information material to understanding
the Ranobe Ore Reserves estimate
The Ranobe Ore Reserves estimate is reported in accordance with
the JORC Code. The information set out below is a summary of
the information material to understanding the Ranobe Ore Reserves
estimate. This information should be read in conjunction with
the information provided for the purposes of Sections 1 to 4 of
Table 1 of the JORC Code, included as Appendix 1 to this
announcement.
The Toliara Project is based on the Ranobe deposit which is
located on the 125.4 km2 Mining Lease (Permis
D’Exploitation) 37242 (PDE 37242), approximately 40
kilometres north of the regional town of Toliara in south west of
Madagascar and 15 kilometres
inland from the coast (see Figure 1)3.
The Ranobe deposit comprises a single continuous body of
mineralisation, comprising three units: the upper sand unit
(USU), the intermediate clay sand unit (ICSU) and the
lower sandy unit (LSU) (see
Figure 2)3. The Ranobe Ore Reserves estimate only
comprises material in the Measured and Indicated resource
categories from the USU, refer to Table 2 below. A
26,141m drilling program was
completed over the course of 2019 with the samples currently being
analysed. The aim of this drilling program is to increase the
volume of Mineral Resources in the Measured and Indicated
categories in all three mineralised units and provide a basis to
update the Ranobe Ore Reserves estimate over the course of
2020.
Table 2: The 2019 Ranobe Mineral Resource Estimate at a
1.5% HM cut-off
|
Ranobe Mineral
Resources
as at 23 January 2019 |
| Zones |
Upper Sandy Unit |
Intermediate Clay Sandy Unit |
Total |
|
| Category |
Measured |
Indicated |
Total
M&I |
Inferred |
Total
USU |
Indicated |
Inferred |
Total
ICSU |
USU +
ICSU |
|
| Tonnes |
420 |
300 |
720 |
420 |
1,140 |
73 |
79 |
150 |
1,290 |
|
| HM % |
6.6 |
5.3 |
6.1 |
4.1 |
5.3 |
3.2 |
3.1 |
3.2 |
5.1 |
|
| HM tonnes |
28 |
16 |
44 |
17 |
61 |
2.4 |
2.5 |
4.8 |
66 |
|
| Slimes % |
3.8 |
3.9 |
3.9 |
3.9 |
3.9 |
26 |
25 |
25 |
6.4 |
|
| OS % |
0.1 |
0.2 |
0.1 |
0.2 |
0.2 |
2.6 |
2.1 |
2.4 |
0.4 |
|
| ILM % of HM |
75 |
72 |
74 |
70 |
73 |
71 |
71 |
71 |
72 |
|
| RUT* % of HM |
2.0 |
2.1 |
2.0 |
2.1 |
2.0 |
2.2 |
2.3 |
2.2 |
2.1 |
|
| ZIR % of HM |
5.9 |
5.7 |
5.8 |
5.4 |
5.7 |
5.6 |
5.8 |
5.7 |
5.7 |
|
Table subject to rounding differences.
*RUT reported in the table is rutile + leucoxene mineral
species
The Ranobe Mineral Resources reported in Table 2 above are
inclusive of the Ranobe Ore Reserves.
The Ranobe deposit has been assigned Mineral Resources
classifications of Measured, Indicated and Inferred under the JORC
Code. The criteria used to support those classifications
was:
- Regular drill hole spacing that defines the geology and HM
mineralisation distribution and trends.
- Domain controlled variography for HM that supports the drill
spacing for each of the classifications.
- The distribution of mineral assemblage composites having
adequately identified the various mineralogical domains as well as
the variability within those domains.
Generally, where the drill hole spacing was 100 x 200 meters and
the mineralogy was sourced from Base Resources’ MinMod mineralogy
system, material was classified as Measured. Drill hole
spacing up to 100 x 400 metres and with MinMod mineralogy was
classified as Indicated, and wider hole spacing or with the prior
owner’s mineralogy (where there were no samples available for
MinMod) was accorded Inferred classification. The Mineral
Resources classifications and drill hole locations are shown in
Figure 10 and the classifications and mineralogy sample locations
are shown in Figure 113.
The Ranobe Ore Reserves estimate was restricted to the Measured
and Indicated Resource categories and to the USU.
In addition to the 2019 Ranobe Mineral Resources estimate, the
Ranobe Ore Reserves estimate is also based on the Toliara Project
PFS metrics. The key findings from the PFS
were:4
- Post-tax / pre-debt (real) NPV @ 10% discount rate of
US$671m, measured from the date of
the final investment decision.
- Revenue to cost of sales ratio of 3.06.
- Stage 1 capex cost of US$439m –
to establish 13 million tonnes per annum (Mtpa) operation
consisting of a single 1,750 t/hr dozer mining unit paired
with a relocatable primary wet concentrator plant
(WCP).
- Stage 2 capex cost of US$67m – to
increase the operation to 19Mtpa from year 3.5 onwards through the
addition of a smaller 825 t/hr dozer mining unit paired to a
second fixed location WCP.
- Annual averages (excluding first and last partial operating
years):
- Production of 806kt ilmenite (sulphate, slag and chloride),
54kt zircon and 8kt rutile.
- Revenue of US$254m – 62%
ilmenite, 34% zircon and 4% rutile.
- Operating costs of US$77m, or
US$82m including assumed 2%
royalty5.
- Non-operating costs of US$7m
(community, external affairs, marketing etc.)5.
- EBITDA of US$165m, NPAT
US$110m.
- Free cash flow of US$133m.
For the purposes of the PFS, Base Resources’ internal price
forecasts were used up to 2030. From 2035, TZMI’s forecast
long term inducement prices were used, with prices transitioning
between 2030 and 2035 in a straight line. Refer to Table 6
for details of the product sale prices assumed for the PFS.
The reference point for the Ranobe Ore Reserves estimate was
2022, being operating year 1 for the PFS. The estimation
methodology for the Ranobe Ore Reserves estimate used an economic
derived cut-off. Material Modifying Factors drawn from the
PFS were operating costs, product recoveries and yields, and
expected product pricing. MaxiPit (a Datamine product which
performs Lerch-Grossman pit optimisations) was then used to
determine, on a model cell by model cell basis, whether material is
ore or waste. Because the Lerch Grossman algorithm cannot
know when material is mined, flat operating costs and product
pricing, selected from operating years 3 and 5, respectively,
were assumed.
Year 3 operating costs were selected as they are 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. Further details of the assumed year 3 operating
costs are not separately disclosed as they are considered
commercially sensitive, however the assumed costs are not
materially different from the combined Stage 1 and 2 operating
costs shown in Table 7 below.
The operating year 5 product prices assumed for the purposes of
the Ranobe Ore Reserves estimate are Base Resources’ own internal
price forecasts for each product for that year. Base
Resources’ internal price forecast is derived from its internal
supply and demand analysis. In relation to forecast demand,
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.
Operating year 5 product prices were selected as these were
considered more conservative than those forecast for operating year
3. Further details of the assumed product prices are not
disclosed as these are considered to be commercially sensitive,
however the assumed product prices are not materially different
from the average revenue assumptions used for the PFS for the 2022
– 2030 period as shown in Table 6 below. As a result of this
approach, cut-off grades were not used.
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
dozer mining units (DMU), using Caterpillar D11T dozers
operating in approximately 100m
radius semi-circular 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 path derived from the Ranobe Ore Reserves is shown in Figure
4. The mine site layout at commencement of operations is
shown in Figure 33.
Ore is pumped from the DMU to the Wet Concentration Plant
(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 0.4 metres 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 5 and
63. The DMU process flow is depicted in Figure
73.
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, MinModel, was adapted for the Ranobe deposit and used
to estimate WCP performance during the testwork 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 testwork 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
testwork 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 83.
In 2013, previous owners, World Titanium Resources, generated
bulk HMC samples from two test pits which were used for PFS MSP
design testwork 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 93.
Processing recoveries are summarised in Table 3 (WCP) and Table
4 (MSP). The split of ilmenite into three products shown in
Table 5.
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. Before the Toliara Project
construction and subsequent mining operations can commence, surface
rights need to be secured, which requires completion of the land
acquisition process currently in progress.
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 and
bridge and the export facility. These are within the scope of
project development and the costs are included in the PFS capital
expenditure estimates.
Table 3: PFS reported WCP recoveries
|
Low
Grade Ore %* |
Medium Grade Ore % |
High
Grade Ore % |
Avg
% |
PFS
Design % |
| Ilmenite |
97.1 |
96.6 |
96.4 |
96.7 |
94.9 |
| Zircon |
98.5 |
98.6 |
98.7 |
98.6 |
97.2 |
| Rutile |
97.1 |
95.8 |
93.8 |
95.6 |
92.3 |
| Leucoxene |
85.0 |
80.0 |
70.0 |
78.3 |
75.0 |
| % HM in HMC |
91.0 |
91.0 |
91.0 |
91.0 |
91.0 |
* low, medium and high grade refer to
the HM grade (4.8%, 8.2% and 10.5%) of the three bulk samples
processed during the PFS. The PFS design recoveries were used
in the MaxiPit Optimisation.
Table 4: PFS reported MSP recoveries
|
Base
% |
After leucoxene re-distributed % |
| Ilmenite |
93.6 |
93.9 |
| Zircon |
79.0 |
79.0 |
| Rutile |
59.5 |
73.7 |
| Leucoxene |
53.4 |
0 |
Table 5: PFS reported average ilmenite split
| Ilmenite |
Proportion % |
Target % TIO2 |
| Sulphate Ilmenite |
36.5 |
48.3 |
| Slag Ilmenite |
35.0 |
50.5 |
| Chloride Ilmenite |
28.4 |
57.0 |
Table 6: PFS product sales prices
| Product Prices
US/t |
Average
2022 – 2030 |
Average
2031-2034 |
From
2035 |
LOM
Average |
| Sulphate ilmenite |
$154 |
$174 |
$183 |
$174 |
| Slag ilmenite |
$162 |
$183 |
$193 |
$183 |
| Chloride ilmenite |
$241 |
$256 |
$233 |
$238 |
| Rutile |
$1,267 |
$1,321 |
$1,142 |
$1,198 |
| Zircon |
$1,822 |
$1,650 |
$1,450 |
$1,576 |
Table 7: PFS derived operating costs
| Operating cost
category |
LOM
Total US$m |
US$m
per annum |
US$/t
mined |
US$/t
produced |
Comments |
| Power |
671 |
20 |
1.14 |
24 |
Power sourced from an
independent power producer (IPP) and based on a solar hybrid
solution using HFO as a fuel source. Assumes an HFO price of
US$0.73/L, which results in an average power price of
US$0.20/kWhr. |
| Maintenance |
577 |
18 |
0.98 |
21 |
Maintenance is based
on experience gained from the Company’s Kwale mineral sand
operation in Kenya and scaled where appropriate. |
| Labour –
Expatriates |
122 |
4 |
0.21 |
4 |
Operations commence
with 71 expats, dropping to 27 after four years before reaching a
steady state of six senior managers from FY31 onwards. |
| Labour –
Nationals |
186 |
6 |
0.32 |
7 |
Operations commence
with 707 national employees, before peaking at 861 in FY25
following completion of the Stage 2 expansion. |
| Fuel – Drying |
187 |
6 |
0.32 |
7 |
Diesel for the MSP
drying process. Cost based on actual usage at the Company’s
Kwale mineral sands operations in Kenya and a delivered diesel fuel
price is US$0.88/L. |
| Fuel – Mobile
Equip. |
167 |
5 |
0.28 |
6 |
Mobile equipment fuel
burn rates are based on actual usage at the Company’s Kwale mineral
sands operations in Kenya and a delivered diesel fuel price is
US$0.88/L. |
| Product Transport
& Port Rates |
200 |
6 |
0.34 |
7 |
All products
transported in bulk to the export facility at an estimated cost of
US$3.99/t. |
| Flocculant |
11 |
1 |
0.02 |
1 |
Flocculant usage
between 0.08 and 0.12kg/t slime at cost of US$3.67/kg. |
| Other Operating
Costs |
358 |
11 |
0.61 |
12 |
Other fixed operating
costs, including insurance, camp management and laboratory. |
| Total Operating
Costs |
2,479 |
77 |
4.22 |
89 |
|
| Royalties |
162 |
5 |
0.27 |
6 |
Government royalty
rate of 2%5 |
| Total Operating
Costs (incl. Royalties) |
2,641 |
82 |
4.49 |
95 |
|
[Notes:
1: For further information refer to Base
Resources’ announcement on 21 March
2019 “Toliara Project PFS confirms status as a world-class
mineral sands development” available at
https://www.baseresources.com.au/investor-centre/asx-releases/
(PFS Announcement).
2: For further information refer to Base
Resources’ announcement on 23 January
2019 “Updated Ranobe Deposit Mineral Resources (corrected)”
available at
https://www.baseresources.com.au/investor-centre/asx-releases/.
3: Figures (graphics) referenced in this
announcement have been omitted. A full PDF version of this
announcement, including all figures (graphics), is available from
the Company’s website: www.baseresources.com.au.
4: For further information in relation to
the PFS, refer to the PFS Announcement.
5: Fiscal terms applicable to the Toliara
Project are yet to be agreed with the Government of Madagascar. For further information refer to
Base Resources’ announcement on 7 November
2019 “Toliara Project – Government of Madagascar statement” available at
https://www.baseresources.com.au/investor-centre/asx-releases/.]
Competent Persons' Statement
In respect of the 2019 Ranobe Mineral Resources contained in
this announcement, Base Resources confirms that it is not aware of
any new information or data that materially affects the information
included in the announcement of 23 January
2019 “Updated Ranobe Deposit Mineral Resources (corrected)”
available at
https://www.baseresources.com.au/investor-centre/asx-releases/ and
all material assumptions and technical parameters underpinning the
estimates in that announcement continue to apply and have not
materially changed.
The information in this announcement that relates to Ore
Reserves is based on, and fairly represents, information and
supporting documentation prepared by Mr. Chris Sykes and Mr. Scott Carruthers. Mr. Sykes and Mr.
Carruthers are members of the Australasian Institute of Mining and
Metallurgy. Mr. Sykes acts as Consultant Mining Engineer for
Base Resources. Mr. Carruthers is employed by Base Resources,
he holds equity securities in Base Resources, and is entitled to
participate in Base Resources’ long-term incentive plan and receive
equity securities under that plan. Details about that plan
are included in the Company’s 2019 Annual Report. Both Mr.
Sykes and Mr. Carruthers have sufficient experience that is
relevant to the style of mineralisation and type of deposits under
consideration and to the activity which they are each undertaking
to qualify as a Competent Person as defined in the JORC Code, and
both are considered Qualified Persons for the purposes of the AIM
Rules for Companies. Mr. Sykes and Mr. Carruthers have each
reviewed this announcement and consent to the inclusion in this
announcement of the Ranobe Ore Reserves estimate and the supporting
information in the form and context in which the relevant
information appears.
Other Announcements
Information in this announcement should be read in conjunction
with other announcements made by Base Resources, particularly the
Company’s announcements on:
- 21 March 2019 titled “Toliara
Project PFS confirms status as a world-class mineral sands
development”.
- 23 January 2019 titled “Updated
Ranobe Deposit Mineral Resources (corrected)”.
The PFS Announcement contains further information about the PFS,
including key pre and post FID risks and an NPV sensitivity
analysis in respect of the Toliara Project. Base Resources
confirms that the material assumptions underpinning the production
information and the forecast financial information disclosed in the
PFS Announcement continue to apply and have not materially
changed.
The Company’s announcements are available at
https://www.baseresources.com.au/investor-centre/asx-releases/.
Forward Looking Statements
Certain statements in or in connection with this announcement
contain or comprise forward looking statements. Such
statements include statements with respect to the anticipated
production and financial performance for the Toliara Project.
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 report 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 |
Explanation |
Comment |
| Sampling
techniques |
Nature and quality of sampling (e.g. cut channels, random chips,
or specific specialised industry standard measurement tools
appropriate to the minerals under investigation, such as down hole
gamma sondes, or handheld XRF instruments, etc). These examples
should not be taken as limiting the broad meaning of
sampling.
Include reference to measures taken to ensure sample
representivity and the appropriate calibration of any measurement
tools or systems used.
Aspects of the determination of mineralisation that are Material
to the Public Report. In cases where ‘industry standard’ work has
been done this would be 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. |
All
holes were drilled vertically
All holes were sampled over a consistent 1 – 3 m interval
All holes were drilled using a reverse circulation Wallis Drill
setup to collect the complete sample with a basic cyclone
separation by means of a swivel outlet feeding two alternate sample
bags
No sample splitting was performed on the drill site for earlier
drill programs, however sample splitting was carried out for the
2018 drilling program. |
| Drilling
techniques |
Drill type (e.g.
core, reverse circulation, open-hole hammer, rotary air blast,
auger, Bangka, sonic, etc) and details (e.g. core diameter, triple
or standard tube, depth of diamond tails, face-sampling bit or
other type, whether core is oriented and if so, by what method,
etc). |
All holes
were drilled vertically
All drilling was undertaken using an air pressured reverse
circulation Wallis Mantis drill
Core diameter is NQ (76 mm external diameter), with 3m rod lengths
fitted with a face discharge drill bit |
| Drill sample
recovery |
Method of recording and assessing core and chip sample
recoveries and results assessed.
Measures taken to maximise sample recovery and ensure
representative nature of the samples.
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. |
Wallis
Mantis drill rig uses face discharge bits, at low air pressures
(105 - 140kPa) and low rotation speeds (45-65RPM) to maximize
recovery
There is no correlation between recovery and grade resulting in no
sample bias |
| Logging |
Whether core and chip samples have been geologically and
geotechnically logged to a level of detail to support appropriate
Mineral Resource estimation, mining studies and metallurgical
studies.
Whether logging is qualitative or quantitative in nature. Core
(or costean, channel, etc) photography.
The total length and percentage of the relevant intersections
logged. |
All
samples were visually checked and logged on site by rig geologist
and logged for lithotype, grain size, sorting, colour, competence,
moisture content
A small subsample was taken for each drill interval and manually
panned for estimation of HM and clay content |
| Sub-sampling
techniques and sample preparation |
If
core, whether cut or sawn and whether quarter, half or all core
taken.
If non-core, whether riffled, tube sampled, rotary split, etc
and whether sampled wet or dry.
For all sample types, the nature, quality and appropriateness of
the sample preparation technique.
Quality control procedures adopted for all sub-sampling stages
to maximise representivity of samples.
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. |
The
material was split using a 40 mm single tier riffle to produce a
sample for submission of approximately 1 kg in a calico sample bag.
The calico sample bags were sundried before being shipped
For one sample in every 20, an additional two 1 kg calico bagged
samples were taken for checking purposes. These are referred to as
the B and C samples, the primary sample being designated as the A
sample
2001 drill samples were dispatched to Western Geochem Labs in
Perth, Australia. WGL was retained for the analysis of check
samples in 2003 and 2005
The A samples were sent to IMP Laboratory in Boksburg, South Africa
in 2003, ACT Laboratory in Pretoria, South Africa in 2005 and 2012,
and to Bureau Veritas, South Africa in 2018
All laboratories: separation of concentrates was by heavy liquid
(tetrabromoethane (TBE) at density 2.95 g/cc)
All samples were:
|
| Quality of assay
data and laboratory tests |
The
nature, quality and appropriateness of the assaying and laboratory
procedures used and whether the technique is considered partial or
total.
For geophysical tools, spectrometers, handheld XRF instruments,
etc, the parameters used in determining the analysis including
instrument make and model, reading times, calibrations factors
applied and their derivation, etc.
Nature of quality control procedures adopted (e.g. standards,
blanks, duplicates, external laboratory checks) and whether
acceptable levels of accuracy (i.e. lack of bias) and precision
have been established. |
Analytical procedure conforms to AS4350.2-1999; Australian
Standards Heavy mineral sand concentrates - Physical testing using
TBE.
Quality control procedures: |
| Verification of
sampling and assaying |
The
verification of significant intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data, data entry procedures, data
verification, data storage (physical and electronic)
protocols.
Discuss any adjustment to assay data. |
Assay
data was compared with geology logs of panned HM grades for out of
range assay produced by site geologist
Replicate assaying undertaken 2003 and 2005 drilling and sample
assaying undertaken independently by Ticor/Kumba Resources
2012 drilling, logging and sampling undertaken by independent site
geologist
2018 drilling, logging and sampling undertaken by Base Resources
company geologists
Validation of the drill database was undertaken independently by
IHC Robbins |
| Location of data
points |
Accuracy and quality of surveys used to locate drill holes
(collar and down-hole surveys), trenches, mine workings and other
locations used in Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic control. |
2003,
2005, 2012, and 2018 drill hole collars were surveyed using DGPS.
2001 drill collars were surveyed by GPS
Topographic data was derived from ground controlled LIDAR survey
undertaken by Southern Surveys
All drill holes are vertical, down hole surveys were deemed
inappropriate
Grid system used throughout the program UTM Grid, Zone 38S,
WG84
IHC Robbins adjusted the RL of the 2001 collars using CAE software
'Datamine Studio RM' to the LIDAR topographic surface to increase
accuracy and precision for mineral resource or ore reserve
estimation for the deposit |
| Data spacing and
distribution |
Data
spacing for reporting of Exploration Results.
Whether the data spacing and distribution is sufficient to
establish the degree of geological and grade continuity appropriate
for the Mineral Resource and Ore Reserve estimation procedure(s)
and classifications applied.
Whether sample compositing has been applied. |
Three
basic drill patterns used:
Variography demonstrates that drill spacing of 100 mE x 200 mN
sufficient to classify as Measured Resource; 100 mE x 400 mN
sufficient to classify as Indicated Resource
No sample compositing has been applied |
| Orientation of data
in relation to geological structure |
Whether the orientation of sampling achieves unbiased sampling
of possible structures and the extent to which this is known,
considering the deposit type.
If the relationship between the drilling orientation and the
orientation of key mineralised structures is considered to have
introduced a sampling bias, this should be assessed and reported if
material. |
All
drill holes were drilled vertically
Drill line were drilled north - south, east - west within 12
degrees of the deposit anisotropy
No bias to drill grid sampling has been introduced |
| Sample
security |
The measures taken
to ensure sample security. |
All
samples were placed in calico bags and grouped in rice bags by
drill hole
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
reviews |
The results of any
audits or reviews of sampling techniques and data. |
Audits
and reviews or the sampling data and techniques have been carried
out by:
- Ticor 2004
- Kumba Resources 2006
- Exxaro 2007
- McDonald Speijers and Associates 2012
- World Titanium Resources (WTR) 2016
- 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 |
Explanation |
Comment |
| Mineral tenement
and land tenure status |
Type,
reference name/number, location and ownership including agreements
or material issues with third parties such as joint ventures,
partnerships, overriding royalties, native title interests,
historical sites, wilderness or national park and environmental
settings.
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. |
The
Ranobe deposit is 100% owned by Base Resources subsidiary, Base
Toliara SARL which is 85% owned by Base Resources and is located
wholly within Mining Lease PDE (Permis D’Exploitation) 37242
(Figure 13).
Base Resources will acquire the remaining 15% interest upon payment
of deferred consideration on achievement of key milestones as the
project advances to mine development. If the key milestones have
not been achieved within two years of the acquisition date, the
remaining 15% interest automatically transfers to Base
Resources.
October 2017 saw Mining Lease PDE 37242 merge with both Mining
Lease 39130 and Exploration Lease 3315 to form one complete
footprint of the previous three leases. |
| Exploration done by
other parties |
Acknowledgment and
appraisal of exploration by other parties. |
1999 -
2002 Deposit first discovered and explored by Madagascar Resources
NL:
- 120 RC air core holes for 3,068 m
2003 - 2009 Ticor/Kumba Resources (Exxaro) joint venture:
- 689 RC air core holes for 15,559 m
- Pre-Feasibility Study completed
2012 WTR:
- 361 RC air core holes for 8,088 m
2018 Base Resources:
- 78 RC air core holes for 3,617 m
|
| Geology |
Deposit type,
geological setting and style of mineralisation. |
Project
comprises a Heavy Mineral Sand deposit and is located on the
southwest coast of Madagascar within the Mesozoic Morondava Basin
along a 30 km wide coastal plain juxtaposed to an Eocene limestone
scarp. The coastal plain which is floored by faulted limestone is
overlain by a succession of progressively shallowing sequence of
beach and lagoon type unconsolidated clastic and subaerial dunes
which successively overstep and on-lap onto 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 3 metres to 60 m. The deposit anisotropy parallels
the scarp slope, with higher HM grades concentrated along the mega-
dune crest line. |
| Drill hole
Information |
A
summary of all information material to the understanding of the
exploration results including a tabulation of the following
information for all Material drill holes:
- easting and northing of the drill hole collar
- elevation or RL (Reduced Level – elevation above sea level
in metres) of the drill hole collar
- dip and azimuth of the hole
- down hole length and interception depth
- hole length.
If the exclusion of this information is justified on the basis
that the information is not Material and this exclusion does not
detract from the understanding of the report, the Competent Person
should clearly explain why this is the case. |
All
holes were drilled vertically
Air core holes averaged 24 m long for the project
2018 drilling had an average depth of 46.4 m as the program looked
to also target a lower mineralisation zone
See drill hole location plan in Figure 103.
Exploration Results are not being reported at this time
|
| Data aggregation
methods |
In
reporting Exploration Results, weighting averaging techniques,
maximum and/or minimum grade truncations (e.g. cutting of high
grades) and cut-off grades are usually Material and should be
stated.
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. |
Exploration results are not being reported at this time
No metal equivalent values were used
No aggregation of short length samples was used as samples were
consistently sampled at 1 - 3 m intervals |
| Relationship
between mineralisation widths and intercept lengths |
These
relationships are particularly important in the reporting of
Exploration Results.
If the geometry of the mineralisation 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’). |
The
deposit is flat lying and intersected by vertical holes
The 1.5% HM cut-off zone averages 17.5 m thick and ranges in
thickness from 6 to 21 m |
| Diagrams |
Appropriate maps
and sections (with scales) and tabulations of intercepts should be
included for any significant discovery being reported These should
include, but not be limited to a plan view of drill hole collar
locations and appropriate sectional views. |
Plan of
Mineral Resources see Figures 10 and 113.
Oblique sections see Figures 5 and 6 of the Company’s announcement
on 23 January 2019 titled “Updated Ranobe Deposit Mineral Resources
(corrected)”. |
| Balanced
reporting |
Where comprehensive
reporting of all 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. |
Exploration results
are not being reported at this time |
| Other substantive
exploration data |
Other exploration
data, if meaningful and material, should be reported including (but
not limited to): geological 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. |
Exploration results
are not being reported at this time |
| Further
work |
The
nature and scale of planned further work (e.g. tests for lateral
extensions or depth extensions or large-scale step-out
drilling).
Diagrams clearly highlighting the areas of possible extensions,
including the main geological interpretations and future drilling
areas, provided this information is not commercially
sensitive. |
Future work will
consist of extending the drilling to the western extents of the
deposit to further determine the extents of the lower
mineralisation zone |
Section 3 Estimation and Reporting of
Mineral Resources
(Criteria in this section apply to all succeeding sections)
| Criteria |
Explanation |
Comment |
| Database
integrity |
Measures taken to ensure that data has not been corrupted by,
for example, transcription or keying errors, between its initial
collection and its use for Mineral Resource estimation
purposes.
Data validation procedures used. |
The
original drill data derived by Madagascar Resources, Ticor/Kumba
Resources (Exxaro), WTR, and Base Resources drill data have been
independently reviewed and validated by IHC Robbins.
Data review included:
- Checks of data by visually inspecting on screen (to identify
translation of samples)
- Cross checking of laboratory analysis certificates with from/to
assay data
- Validation of reported assay data against field value
estimates
- Cross checking lithology log interpretation with oversize, slimes
and HM content
- Visual and statistical comparison was undertaken to check the
validity of results
An Access data base is updated and maintained by Base Resources,
which has been reviewed by IHC Robbins.
Validation checks of the drill database include:
- Assay comparison for out of range values
- Sample gaps
- Overlapping sample intervals |
| Site visits |
Comment on any site visits undertaken by the Competent Person
and the outcome of those visits.
If no site visits have been undertaken indicate why this is the
case. |
A site
visit was undertaken in 2018 by Greg Jones, the Competent Person
for the IHC Robbins. The 2018 site visit also included
training and mentoring for the Malagasy geologists (which was
carried out in conjunction with Ian Reudavey - Geological
Superintendent)
Review of key geological units was possible by comparing drill hole
residual samples from a selected type section with the logging and
undertaking a side-by-side re-logging exercise |
| Geological
interpretation |
Confidence in (or conversely, the uncertainty of) the geological
interpretation of the mineral deposit.
Nature of the data used and of any assumptions made.
The effect, if any, of alternative interpretations on Mineral
Resource estimation.
The use of geology in guiding and controlling Mineral Resource
estimation.
The factors affecting continuity both of grade and
geology. |
The
previous geological interpretation for the Toliara deposit was
undertaken by WTR in 2012 and the data was used by IHC Robbins
which was validated using all logging data, sampling data, and
observations and modified where appropriate. The geological
interpretation undertaken by IHC Robbins was in collaboration with
the companies Resource Manager
Current data spacing and quality is sufficient to confirm or
indicate geological and grade continuity
Interpretation of modelling domains was restricted to the main
mineralised zones using THM sinks, oversize material, slimes, and
lithological logging (including colour changes)
There is a high degree of confidence in the geological
interpretation of the sand units (aeolian and shallow marine
sands)
The extent of the upper mineralized sand unit was determined by a
combination of LIDAR and drill hole data, with no assumptions
made
A further interpretation of the lower mineralised sand unit was
determined primarily along the western boundary of the Toliara
deposit with more recent drilling adding to the confidence of its
stratigraphic positioning within the Toliara deposit
The lower mineralised sand unit has been excluded from this current
resource estimate and report at this point in time on the basis
that mineralogical data is available for this unit
Only the aeolian Upper Sand Unit and the Intermediate Clay Sand
Unit have been considered for this resource estimate and report
The primary factor controlling grade and geology continuity is
mega-dune morphology. The limestone morphology also impacts
continuity of grade, primarily along the eastern extents of the
Toliara deposit
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 expressed as length (along
strike or otherwise), plan width, and depth below surface to the
upper and lower limits of the Mineral Resource. |
The
resource extends for 20 km north - south and averages 2.2 km wide
east-west
The average depth of mineralization from the surface to the 3% HM
cut-off is 17.5 m |
| Estimation and
modelling techniques |
The
nature and appropriateness of the estimation technique(s) applied
and key assumptions, including treatment of extreme grade values,
domaining, interpolation parameters and maximum distance of
extrapolation from data points. If a computer assisted estimation
method was chosen include a description of computer software and
parameters used.
The availability of check estimates, previous estimates and/or
mine production records and whether the Mineral Resource estimate
takes appropriate account of such data.
The assumptions made regarding recovery of by-products.
Estimation of deleterious elements or other non-grade variables
of economic significance (e.g. sulphur for acid mine drainage
characterisation).
In the case of block model interpolation, the block size in
relation to the average sample spacing and the search
employed.
Any assumptions behind modelling of selective mining
units.
Any assumptions about correlation between variables.
Description of how the geological interpretation was used to
control the resource estimates.
Discussion of basis for using or not using grade cutting or
capping.
The process of validation, the checking process used, the
comparison of model data to drill hole data, and use of
reconciliation data if available. |
CAE
mining software Datamine Studio RM was used to estimate the mineral
resources
Inverse distance weighting techniques were used to interpolate
assay grades from drill hole samples into the block model and
nearest neighbour techniques were used to interpolate index values
and non-numeric sample identification into the block model
The mostly regular dimensions of the drill grid and the anisotropy
of the drilling and sampling grid allowed for the use of inverse
distance methodologies as no de-clustering of samples was
required
Appropriate and industry standard search ellipses were used to
search for data 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 was used
so as not to over smooth the grade interpolations
Hard domain boundaries were used and these were defined by the
geological wireframes that were interpreted
Topographic surface was created from LIDAR data
Resource was modelled to key geological boundaries and then
reported at cut-off grades of 1.5 and 3.0% THM (no minimum
thickness)
The average parent cell size used for the interpolation was
approximately half the standard drill hole width and a half of the
standard drill hole section line spacing
The average drill hole spacing for the Ranobe deposit was 100 m
east-west and 200 m north-south and with a 1.5 m samples and so the
selected parent cell size was 50 x 100 x 1.5 m (where the Z or
vertical direction of the cell was nominated to be the same
distance as the sample length)
Four Mineral Resources estimates have been undertaken previously;
Ticor 2004, Exxaro 2006, Milne 2010, MacDonald Speijers and
Associates 2012. 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
(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 with natural moisture, and
the method of determination of the moisture content. |
Tonnages
were estimated on an assumed dry basis.
The bulk density used for the Ranobe deposit is one that has been
utilised by previous workers and is based on a simple linear
algorithm originally developed by John Baxter (1977). IHC
Robbins from experience of working with these styles of ore bodies
considers that this algorithm is a fair approximation of the in
situ dry bulk density |
| Cut-off
parameters |
The basis of the
adopted cut-off grade(s) or quality parameters applied. |
Cut-off grades were
used for reporting the Mineral Resources estimate. No top or
bottom cuts were used for grade interpolation |
| Mining factors or
assumptions |
Assumptions made
regarding possible mining methods, minimum mining dimensions and
internal (or, if applicable, external) mining dilution. It is
always necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider potential
mining methods, but the assumptions made regarding mining methods
and 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. |
No
specific mining method is assumed other than potentially the use of
dry mining methods for the deposit using dozer trap and/or
front-end loader
Deposit is planned to be mined from surface with no minimum
dimensions |
| Metallurgical
factors or assumptions |
The basis for
assumptions or predictions regarding metallurgical amenability. It
is always necessary as part of the process of determining
reasonable prospects for eventual economic extraction to consider
potential metallurgical methods, but the assumptions regarding
metallurgical treatment processes and parameters made when
reporting Mineral Resources may not always be rigorous. Where this
is the case, this should be reported with an explanation of the
basis of the metallurgical assumptions made. |
Test work
completed by Ticor/Kumba Resource 2004 Pre-Feasibility Study
Test work completed Exxaro 2009 Feasibility Study
Test work undertaken by AML 2007 and 2009
Process design TZMI 2012, Definitive Engineering Study
Ongoing test work at Mineral Technologies and IHC Robbins,
Brisbane |
| Environmental
factors or assumptions |
Assumptions made
regarding possible waste and process residue disposal options. It
is always necessary as part of the process of determining
reasonable prospects for eventual economic extraction to consider
the potential environmental impacts of the mining and processing
operation. While at this stage the determination of potential
environmental impacts, particularly for a greenfield project, may
not always be well advanced, the status of early consideration of
these potential environmental impacts should be reported. Where
these aspects have not been considered this should be reported with
an explanation of the environmental assumptions made. |
EMP (Environmental
Management Plan) approved by Government of Madagascar June
2015 |
| Bulk
density |
Whether assumed or determined. If assumed, the basis for the
assumptions. If determined, the method used, whether wet or dry,
the frequency of the measurements, the nature, size and
representativeness of the samples.
The bulk density for bulk material must have been measured by
methods that adequately account for void spaces (vugs, porosity,
etc), moisture and differences between rock and alteration zones
within the deposit.
Discuss assumptions for bulk density estimates used in the
evaluation process of the different materials. |
The bulk
density used for the Ranobe deposit is one that has been utilised
by previous workers and is based on a simple linear algorithm
originally developed by John Baxter (1977).
IHC Robbins from experience of working with these styles of ore
bodies considers that this algorithm is a fair approximation of the
in situ dry bulk density, where BD = 1.61 + (0.01 x HM) |
|
Classification |
The
basis for the classification of the Mineral Resources into varying
confidence categories.
Whether appropriate account has been taken of all relevant
factors (i.e. relative confidence in tonnage/grade estimations,
reliability of input data, confidence in continuity of geology and
metal values, quality, quantity and distribution of the
data).
Whether the result appropriately reflects the Competent Person’s
view of the deposit. |
The
resource classification for the Ranobe deposit was based on the
following criteria: drill hole spacing and the distribution
and influence of bulk samples
The classification of the Measured, Indicated, and Inferred
Resources was supported by the uncomplicated geology, continuity of
mineralisation, confidence in the drill hole data and all the
supporting criteria as noted above
As a Competent Person, IHC Robbins Geological Services Manager Greg
Jones considers that the result appropriately reflects a reasonable
view of the deposit categorisation |
| Audits or
reviews |
The results of any
audits or reviews of Mineral Resource estimates. |
An audit and review
was undertaken on the previous resource estimate carried out by
WTR |
| Discussion of
relative accuracy/ confidence |
Where
appropriate a statement of the relative accuracy and confidence
level in the Mineral Resource estimate using an approach or
procedure deemed appropriate by the Competent Person. For example,
the application of statistical or geostatistical procedures to
quantify the relative accuracy of the resource within stated
confidence limits, or, if such an approach is not deemed
appropriate, a qualitative discussion of the factors that could
affect the relative accuracy and confidence of the
estimate.
The statement should specify whether it relates to global or
local estimates, and, if local, state the relevant tonnages, which
should be relevant to technical and economic evaluation.
Documentation should include assumptions made and the procedures
used.
These statements of relative accuracy and confidence of the
estimate should be compared with production data, where
available. |
No
statistical or geo-statistical review of the accuracy of the
resource estimate has been undertaken
Variography was undertaken to determine the drill hole support of
the selected JORC classification
Validation of the model vs drill hole grades by direct observation
and comparison of the results on screen, swathe plot and population
distribution analysis were favourable
The resource statement is a global estimate for the entire known
extent of the Ranobe deposit within the Exploration Permit
There has been no production to date |
Section 4 Estimation and Reporting of
Ore Reserves
| Criteria |
Explanation |
Comment |
| Mineral Resource estimate for
conversion to Ore Reserves |
Description of the
Mineral Resource estimate used as a basis for the conversion to an
Ore Reserve.
Clear statement as to whether the Mineral Resources are reported
additional to, or inclusive of, the Ore Reserves. |
The Ranobe Ore Reserves
estimate is based entirely on the Measured and Indicated portion of
the 2019 Ranobe Mineral Resources estimate.
Mineral Resources are reported inclusive of the Ore Reserve. |
| Site visits |
Comment on any site
visits undertaken by the Competent Person and the outcome of those
visits.
If no site visits have been undertaken indicate why this is the
case. |
One of the Competent Persons has
visited the site on several occasions. |
| Study status |
The type and level
of study undertaken to enable Mineral Resources to be converted to
Ore Reserves.
The Code requires that a study to at least Pre-Feasibility Study
level has been undertaken to 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. |
The Toliara Project
pre-feasibility study (PFS) study supports the Ore Reserves.
Modifying factors accurate to the study level have been applied.
The resulting mine plan is technically achievable and economically
viable. |
| Cut-off parameters |
The basis of the cut-off grade(s)
or quality parameters applied. |
A value model was
developed that assigns mining and processing recoveries, 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 or
assumptions |
The method and
assumptions used as reported in the Pre-Feasibility or Feasibility
Study to convert the Mineral Resource to an Ore Reserve (i.e.
either by application of appropriate factors by optimisation or by
preliminary or detailed design).
The choice, nature and appropriateness of the selected mining
method(s) and other mining parameters including associated design
issues such as pre-strip, access, etc.
The assumptions made regarding geotechnical parameters (e.g. pit
slopes, stope sizes, etc), grade control and pre-production
drilling.
The major assumptions made and Mineral Resource model used for
pit and stope optimisation (if appropriate).
The mining dilution factors used.
The mining recovery factors used.
Any minimum mining widths used.
The manner in which Inferred Mineral Resources are utilised in
mining studies and the sensitivity of the outcome to their
inclusion.
The infrastructure requirements of the selected mining
methods. |
Mineral Resources are
converted to Ore Reserves by open pit optimisation software
(Datamine MaxiPit) to provide a guide for detailed design and
scheduling. The software uses the Lerch-Grossman algorithm to
generate a series of nested pit shells. A subset of the
shells were preliminarily scheduled to test heavy mineral
concentrate production profiles, final production requirements, and
financial investment decisions. The preferred pit shell was
selected for more detailed mine planning and scheduling.
The initial mining area (Stage 1) was selected based on its high
grade and location. Detailed mining shapes based on circular dozing
push profiles to a centrally located Dozer Mining Unit (DMU) were
developed. Mining shapes that were identified as too small
(less than nominal 150kt) and inefficient to direct feed (greater
than 100m away) a DMU by dozer mining, were marked for auxiliary
mining using truck and excavator, where the material would be
hauled to feed an existing DMU.
Only material identified as Upper Sand Unit (USU) was included in
the PFS and the Ore Reserves estimate.
There is no ore/waste discrimination and sub-economic USU material
that 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.
Pit slopes for the Stage 1 mining shapes have been assumed at 30
degree, with a maximum target of a 100m dozing distance.
Where possible, the mining locations and sequence was
developed to avoid uphill dozing.
For the purposes of scheduling the ore for Stage 2, mining shapes
have been assumed as rectangular sides up to a maximum size of 200m
by 400m for the 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 Ranobe Ore Reserves estimate. Mining
recovery also makes provision for a 0.25m topsoil profile. |
| Metallurgical factors or
assumptions |
The metallurgical
process proposed and the appropriateness of that process to the
style of mineralisation.
Whether the metallurgical process is well-tested technology or
novel in nature.
The nature, amount and representativeness of metallurgical test
work undertaken, the nature of the metallurgical domaining applied
and the corresponding metallurgical recovery factors
applied.
Any assumptions or allowances made for deleterious
elements.
The existence of any bulk sample or pilot scale test work and
the degree to which such samples are considered representative of
the orebody as a whole.
For minerals that are defined by a specification, has the ore
reserves estimation been based on the appropriate mineralogy to
meet the specifications? |
The ore is processed
via screens, thickeners and spirals as in almost every other
mineral sand operation to produce a heavy mineral concentrate
(HMC). The HMC is processed using magnetic and conductor
separators to produce ilmenite and rutile products. The
remaining material is further processed using classifiers, wet
tables and cleaned with conductor separators to produce zircon and
recover some more rutile. This is a typical process for
mineral sands.
The plant design is based on the results of metallurgical test work
conducted as part of the PFS.
Wet Concentrator Plant (WCP) recovery is ilmenite - 94.9%, rutile -
92.3%, zircon - 97.2% and leucoxene - 75.0%.
Mineral Separation Plant (MSP) recovery is ilmenite - 93.6%, rutile
- 59.5%, zircon - 79.0% and leucoxene - 53.4%. Leucoxene will
ultimately report to rutile and ilmenite – chloride products at
25.7% and 74.3% respectively.
Due to the expected variation in ilmenite product split to satisfy
market demands, a single overall ilmenite recovery (of the combined
three ilmenite recoveries) has been used rather than separate
ilmenite product recovery.
The 2019 Ranobe Mineral Resource estimate, upon which the Ranobe
Ore Reserves estimate is based, incorporates 1,249 individual drill
holes and 10,717 individual drill samples. |
| Environmental |
The status of studies of
potential environmental impacts of the mining and processing
operation. Details of waste rock characterisation and the
consideration of potential sites, status of design options
considered and, where applicable, the status of approvals for
process residue storage and waste dumps should be
reported. |
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.
As required by the PGE, base-line monitoring programs have been
established and will continue through the construction, operational
and decommissioning phases.
There are two tailings streams: sand and clay. The sand tails
are clean sand having been washed in the WCP. The fine (clay)
tails are 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: availability of land for plant development, power,
water, transportation (particularly for bulk commodities), labour,
accommodation; or the ease with which the infrastructure can be
provided or accessed. |
The Toliara Project
mine site is approximately 40km due north of the existing port of
Toliara and approximately 15km inland from the coastline. The
Ranobe deposit lies west of the north-south escarpment running
parallel with the coast at an elevation of between 80m and 160m
above current sea level.
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 875ktpa of
ilmenite, zircon and rutile products. Temporary
infrastructure will be required to support the early construction
activities.
The Toliara Project pre-feasibility study estimates the costs for
the development of all infrastructure items. |
| Costs |
The derivation of,
or assumptions made, regarding projected capital costs in the
study.
The methodology used to estimate operating costs.
Allowances made for the content of deleterious elements.
The source of exchange rates used in the study.
Derivation of transportation charges.
The basis for forecasting or source of treatment and refining
charges, penalties for failure to meet specification, etc.
The allowances made for royalties payable, both Government and
private. |
The mine planning
underpinning the Ranobe Ore Reserves estimate was conducted using
capital and operating costs derived from the Toliara Project PFS,
which are suitable for block model coding, strategic planning and
mine design. All costs have been estimated in US Dollars.
The PFS capital cost is estimated at US$439m (+20%/-10%) based on
preliminary engineering and budget quotes from vendors, following
an extensive budget quotation request process on major contract
packages to establish unit rates that reflect the market conditions
in Madagascar for all earthworks, concrete, SMP and buildings
contractors.
The PFS estimated operating costs have been derived from experience
gained operating the Company’s Kwale mineral sands mine in Kenya,
incorporating local Malagasy cost inputs where appropriate. With
the benefit of this experience, operating cost were modelled using
a bottom up approach which considered the equipment being used,
manning schedules and work rosters, and local supplier quotes for
inputs such as product haulage, power, diesel and HFO prices.
The fiscal terms applicable to the Toliara Project have not yet
been agreed with the Government of Madagascar. A royalty of
2% of sales revenue payable to Government of Madagascar has been
assumed, on the basis that it is consistent with the prescribed
rate under the Malagasy Mining Code.
There are no additional treatment or refining charges applied, and
minerals are sold as finished products. |
| Revenue factors |
The derivation of,
or assumptions made regarding revenue factors including head grade,
metal or commodity price(s) exchange rates, transportation and
treatment charges, penalties, net smelter returns, etc.
The derivation of assumptions made of metal or commodity
price(s), for the principal metals, minerals and
co-products. |
The revenue is a
function of block modelled grade and mineral assemblage, which is
then comprehensively modelled through the mining, wet and dry
separation processes to estimate final products which is expected
to be delivered to an off taker at a forecast price.
During the evaluation of the resource model, various pit shells
where generated using a range of 5% revenue decrements from the
original 100% of revenue using the MaxiPit Software. A subset
of these pit shells (65% to 80%) were selected for high level
scheduling and financial modelling to identify a pit shell (70%)
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 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 the PFS pricing, sales product mix and shipping
schedules.
The PFS product pricing forecasts through to 2030 are derived from
Base Resources’ internal supply/demand analysis then moving to
TZMI’s long term inducement prices from 2035, with prices
transitioning between 2030 and 2035 in a straight line.
While the PFS prices vary over time, the pit optimisation
software (MaxiPit) cannot know when a block of material will be
mined, so a flat pricing regime from PFS operating year 5 (FY2026)
is used.
The Ranobe Ore Reserves are feasible and economic under both
pricing schedules.
Prices for products used in the evaluation of the resource model
are drawn from the PFS. |
| Market assessment |
The demand, supply
and stock situation for the particular commodity, consumption
trends and factors likely to affect supply and demand into the
future.
A customer and competitor analysis along with the identification
of likely market windows for the product.
Price and volume forecasts and the basis for these
forecasts.
For industrial minerals the customer specification, testing and
acceptance requirements prior to a supply contract. |
Demand for mineral
sands products has historically been closely linked to growth in
global GDP, which has grown at close to 3% per annum.
Base Resources performs its own internal assessment of the market
and also subscribes to the various market outlook and commentaries
provided by TZMI. The Toliara Project PFS covers the supply
and demand outlook for all products and highlights future supply
deficits that in turn provide support for the development of the
Toliara Project.
Base Resources has existing customers for ilmenite, rutile and
zircon products from its Kwale mineral sands mine in Kenya.
Product samples produced from Toliara Project PFS and DFS
test work indicates the product quality will meet customer
requirements and have been assessed as such by potential customers.
Contracts and agreements pertaining to Base Resources are
confidential. |
| Economic |
The inputs to the
economic analysis to produce the net present value (NPV) in the
study, the source and confidence of these economic inputs including
estimated inflation, discount rate, etc.
NPV ranges and sensitivity to variations in the significant
assumptions and inputs. |
The Toliara Project PFS NPV of
US$671 million is reported on a post-tax, pre-debt, real basis
using a 10% discount rate. Sensitivity to changes in capital
costs, operating costs, product recoveries, product prices,
discount rate etc are shown in the PFS. |
| Social |
The status of agreements with key
stakeholders and matters leading to social licence to
operate. |
Base Resources is
working closely with local communities, government and other 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 the Toliara Project PFS. |
| Other |
To the extent
relevant, the impact of the following on the project and/or on the
estimation and classification of the Ore Reserves:
Any identified material naturally occurring risks.
The status of material legal agreements and marketing
arrangements.
The status of governmental agreements and approvals critical to
the viability of the project, such as mineral tenement status, and
government and statutory approvals. There must be reasonable
grounds to expect that all necessary Government approvals will be
received within the timeframes anticipated in the Pre-Feasibility
or Feasibility study. Highlight and discuss the materiality of any
unresolved matter that is dependent on a third party on which
extraction of the reserve is contingent. |
All naturally occurring
risks are assumed to have adequate prospects for control and
mitigation.
The right to mine the Ranobe deposit is provided by Mining Lease
(Permis d’Exploitation) 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. Before the Toliara Project
construction 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 to be prepared and submitted three
months prior to the commencement of each stage.
Fiscal terms applicable to the Toliara Project are yet to be agreed
with the Government of Madagascar.
The Competent Persons consider there are reasonable grounds for the
Toliara Project to obtain the remaining approvals required.
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 into varying confidence
categories.
Whether the result appropriately reflects the Competent Person’s
view of the deposit.
The proportion of Probable Ore Reserves that have been derived
from Measured Mineral Resources (if any). |
Measured Mineral
Resources are converted to Proved Ore Reserves and Indicated
Mineral Resources are converted 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 and as a result this material is classified
as Probable Ore Reserves regardless of its Mineral Resources
estimate classification as Measured. Approximately 18 Mt of
Probable Ore 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 reviews |
The results of any audits or
reviews of Ore Reserves estimates. |
No external audit of the Ranobe Ore
Reserves estimate has been undertaken. |
| Discussion of relative accuracy/
confidence |
Where appropriate a
statement of the relative accuracy and confidence level in the Ore
Reserves estimate using an approach or procedure deemed appropriate
by the Competent Person. For example, the application of
statistical or geostatistical procedures to quantify the relative
accuracy of the reserve within stated confidence limits, or, if
such an approach is not deemed appropriate, a qualitative
discussion of the factors which could affect the relative accuracy
and confidence of the estimate.
The statement should specify whether it relates to global or
local estimates, and, if local, state the relevant tonnages, which
should be relevant to technical and economic evaluation.
Documentation should include assumptions made and the procedures
used.
Accuracy and confidence discussions should extend to specific
discussions of any applied Modifying Factors that may have a
material impact on Ore Reserves viability, or for which there are
remaining areas of uncertainty at the current study stage.
It is recognised that this may not be possible or appropriate in
all circumstances. These statements of relative accuracy and
confidence of the estimate should be compared with production data,
where available. |
Mining and processing
methods selected are typical for mineral sands and have been
demonstrated in various other mineral sand operations, they are
considered a low risk of impacting the Ore Reserves.
The Ranobe Ore Reserves estimate is a global estimate for the
entire known extent of the Ranobe deposit within the Mining
Lease.
No production data is available against which the Ranobe Ore
Reserves estimates may be reconciled.
Stage 1 and Stage 2 capital cost estimate is considered to be -10%
to +20%.
Stress testing of operating cash flow shows this remains positive
well beyond the stated accuracy of the cost estimates.
Detailed mine design has been undertaken for Stage 1. As additional
resource definition drilling, processing test work and other key
project parameters and costs are updated, the mine design will be
updated accordingly.
The PFS provides a higher degree of confidence in the modifying
factors than usual because Base Resources PFS studies are conducted
in two stages: the first analyses options for mining and processing
and the second analyses the selected option in greater detail.
The MSP and mining throughputs are based on detailed assessment of
market capacity to absorb the mine production, and the impact of
the additional production on expected pricing. This gives
confidence that the product price expectations are realistic.
The metallurgical test work has been conducted with those
throughputs in mind, giving confidence that the recovery estimates
are accurate.
The 2019 Ranobe Mineral Resources estimate used as the basis for
the 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 Ranobe Ore Reserves
estimate is high. |
Glossary
| Competent Person |
The JORC Code requires
that a Competent Person must be a Member or Fellow of The
Australasian Institute of Mining and Metallurgy, or of the
Australian Institute of Geoscientists, or of a ‘Recognised
Professional Organisation’.
A Competent Person must have a minimum of five years’ experience
working with the style of mineralisation or type of deposit under
consideration and relevant to the activity which that person is
undertaking. |
| Indicated Mineral Resource |
An Indicated Mineral Resource is
that part of a Mineral Resource for which quantity, grade (or
quality), densities, shape and physical characteristics are
estimated with sufficient confidence to allow the application of
Modifying Factors in sufficient detail to support mine planning and
evaluation of the economic viability of the deposit. |
| Inferred Mineral Resource |
An Inferred Mineral Resource is that
part of a Mineral Resource for which quantity and grade (or
quality) are estimated on the basis of limited geological evidence
and sampling. Geological evidence is sufficient to imply but not
verify geological and grade (or quality) continuity. It is based on
exploration, sampling and testing information gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes. |
| JORC Code |
The Australasian Code for Reporting
of Exploration Results, Mineral Resources and Ore Reserves, 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. |
| Measured Mineral Resource |
A Measured Mineral Resource is that
part of a Mineral Resource for which quantity, grade (or quality),
densities, shape, and physical characteristics are estimated with
confidence sufficient to allow the application of Modifying Factors
to support detailed mine planning and final evaluation of the
economic viability of the deposit. |
| Mineral Resources |
Mineral Resources are a
concentration or occurrence of solid material of 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. |
| Ore Reserves |
Ore Reserves are the economically
mineable part of Measured and/or Indicated Mineral Resources. |
| Probable Ore Reserves |
The economically mineable part of an
Indicated, and in some circumstances, a Measured Mineral Resource.
The confidence in the Modifying Factors applying to a Probable Ore
Reserve is lower than that applying to a Proved Ore Reserve. |
| Proved Ore Reserves |
The economically mineable part of a
Measured Mineral Resource. A Proved Ore Reserve implies a high
degree of confidence in the Modifying Factors. |
| Variography |
A geostatistical
method that investigates the spatial variability and dependence of
grade within a deposit. This may also include a directional
analysis. |
ENDS.
For further information contact:
| James Fuller, Manager Communications
and Investor Relations |
UK Media Relations |
| Base Resources |
Tavistock Communications |
| Tel: +61 (8) 9413 7426 |
Jos Simson and Barnaby Hayward |
| Mobile: +61 (0) 488 093 763 |
Tel: +44 (0) 207 920 3150 |
| Email:
jfuller@baseresources.com.au |
|
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
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