AIM and Media Release
28 February 2022
BASE RESOURCES
LIMITED
Ongoing price increases and operational consistency drive strong
financial performance
African mineral sands producer and developer, Base Resources
Limited (ASX & AIM: BSE) (Base Resources or the
Company) is pleased to present its results for the six-month
period ended 31 December 2021 (H1
FY22, reporting period or half-year), which
include announcement of an interim dividend of AUD 3 cents per share (unfranked), and the following
extracts from the Half-Year Financial Report for the Company and
its controlled entities (Group) for the same period.
- Review of Operations
- Market Developments and Outlook
- Kwale Operations Extensional Opportunities
- Toliara Project
- Review of Financial Performance
- After Balance Date Events
- Consolidated Condensed Statement of Profit or Loss and Other
Comprehensive Income
- Consolidated Condensed Statement of Financial Position
- Consolidated Condensed Statement of Changes in Equity
- Consolidated Condensed Statement of Cash Flows
The extracts from the Half-Year Financial Report
should be read in conjunction with the notes contained in the full
version of that report, a copy of which is available
from the Company’s website:
www.baseresources.com.au. The full version of the
Half-Year Financial Report also contains the auditor’s independence
declaration, the directors’ declaration and the auditor’s review
report.
The Company has also released a presentation to accompany its
Half-Year Financial Report. The presentation contains, among
other things, further details about the Company’s half-year results
and details about the Company’s expected capital expenditure for
the six-month period ending 30 June 2022. A copy of
the presentation is available from the Company’s
website: www.baseresources.com.au.
All references to currency ($ or US$)
is United States Dollars, unless otherwise stated.
Highlights
Kwale Operations performed strongly, maintaining operational
continuity throughout the period with effective controls to
mitigate COVID-19 risks and impacts. Markets for all mineral
sands products saw high levels of demand over the period,
supporting continued price improvement for all products.
Kwale Operations mine life was extended to late 2023 with
additional initiatives to secure further mine life extensions
progressed.
The Toliara Project in Madagascar continues to represent a
significant and attractive growth opportunity for the Company, with
discussions with the Government of Madagascar on the fiscal terms applicable to
the project and the lifting of the on-the-ground suspension
continuing.
Financial highlights for H1 FY22
- Record first-half revenue of US$104.6
million following increased production and an 18% increase
in average realised unit sales price compared to the six-month
period ended 31 December 2020 (H1
FY21comparative period).
- EBITDA of US$54.2 million.
- Net profit after tax increased to US$19.2 million, from a net loss of US$6.4 million in H1 FY21, partially due to
reduced depreciation following the extension of Kwale Operations’
mine life.
- Free cashflow of US$8.8 million
(operating cashflows of US$20.6
million less investing cashflows of US$11.9 million) was impacted by the previously
announced US$18.8 million catch-up
royalty payments to the Government of Kenya during the period.
- Net cash position of US$37.1
million at 31 December
2021.
Interim dividend of AUD 3.0 cents per share determined
The Company’s capital management policy is that cash not
required to meet the Company’s near-term growth and development
requirements, or to maintain requisite balance sheet strength in
light of prevailing circumstances, could be expected to be returned
to shareholders. With net cash of US$37.1 million at the end of the period,
continued strong financial performance and the timing of the
Toliara Project final investment decision still uncertain, the
Board has determined an interim dividend of AUD 3.0 cents per share (unfranked), totalling
AUD$35.3 million in aggregate (approximately US$25.0 million) that will be paid wholly from
conduit foreign income. The record date for the interim
dividend is 14 March 2022 and the
payment date is 31 March 2022 – refer
to Base Resources’ accompanying announcement “FY22 Interim Dividend
– Key dates and information” for further information about the
dividend.
Upon payment of the FY22 interim dividend, dividends distributed
to shareholders since October 2020
will total AUD 13.5 cents per share,
equal to AUD$159.6 million in aggregate (approximately US$116.2 million).
Operational and development highlights
for H1 FY22
- Production of 36,180 tonnes of rutile, 156,877 tonnes of
ilmenite and 12,849 tonnes of zircon from Kwale Operations.
- Continued strengthening of demand for all products, with
increases in achieved prices of 12% for rutile, 43% for ilmenite
and 36% for zircon compared to H1 FY21.
- Kwale Operations mine life extended to late 2023 following
finalisation of the Kwale South Dune mining lease extension.
- Bumamani pre-feasibility study (PFS) completed and
concluded that higher grade subsets of the Bumamani and Kwale North
Dune deposits can be economically mined, which would extend Kwale
mine life to mid-20241.Bumamani definitive feasibility
study (DFS) progressed and nearing completion.
- Three Tanzanian prospecting licences granted and exploration
underway, with 231 shallow auger holes completed.
- Toliara Project enhanced DFS (DFS2) completed, with
increased mining and processing scale underpinned by a significant
growth in estimated Ore Reserves, increasing the project’s post-tax
/ pre-debt (real) NPV @ 10% discount rate to US$1.0 billion2.
[Note (1): For further information, refer
to Base Resources’ announcements on 3
September 2021 “Bumamani PFS supports extension of Kwale
mine life” and “Further supporting information for Bumamani
PFS”. Base Resources confirms that all the material
assumptions underpinning the production information and forecast
financial information in these announcements continue to apply and
have not materially changed.]
[Note (2): For further
information, refer to Base Resources’ announcement on 27 September 2021 “DFS2 enhances scale and
economics of the Toliara Project”. Base Resources confirms
that all the material assumptions underpinning the production
information and forecast financial information in this announcement
continue to apply and have not materially changed.]
Managing Director of Base Resources,
Tim Carstens, said:
“Operationally, we have delivered a strong first half with
consistent mining at Kwale and improved ore grade lifting
production. Ongoing strong demand for all of our products is
resulting in significant price increases which have contributed to
increases in group revenue, EBITDA and NPAT. This, and a
disciplined approach to capital management, has enabled
continuation of meaningful returns to shareholders with the
determination of a fourth consecutive dividend.”
“Given the value creation lever it represents, the extension of
mine life at Kwale Operations is an intense focus. With the
finalisation of a mining lease extension, we have successfully
secured mine life at Kwale until late 2023. Looking beyond
this, the PFS on mining the Bumamani and higher-grade subsets of
the North Dune deposits has now been completed, with the DFS well
underway and on schedule for completion in the June quarter this
year. The inclusion of an additional pit area in the DFS
could further extend Kwale mine life to late 2024. We
continue to pursue both near mine extension initiatives and
regional exploration opportunities, with exploration commencing in
northern Tanzania and prospective
tenure in Kenya being progressed
towards licensing. Our stakeholders – employees, communities,
governments, customers and shareholders – are aligned in a desire
to extend our successful presence in East Africa.”
“The Toliara Project in Madagascar continues to represent a
significant growth opportunity for Base Resources. The
release of an enhanced DFS incorporating an increased scale,
supported by a substantial increase in Ore Reserves and improvement
in the long-term supply-demand outlook for mineral sands, has
further revealed the Toliara Project’s potential. We are
fully committed to realising that value, with the next catalyst to
achieving this being securing fiscal terms with the Government of
Madagascar. Discussions with
respect to the project’s fiscal terms are ongoing and we remain
confident that acceptable terms will be able to be
secured.”
“We are operating in a mineral sands sector that both enjoys a
robust pricing environment in the short term and an attractive
supply/demand outlook in the longer term. With a Kwale
operation consistently delivering significant cashflow and a
development ready Toliara Project with outstanding economics, Base
Resources is well positioned to capitalise on this outlook and
actively considering wider growth opportunities that can further
enhance that position.”
Investor and shareholder webcast
The webcast will be hosted by Base Resources’ Managing Director,
Tim Carstens, Chief Financial
Officer, Kevin Balloch, and General
Manager - Marketing, Stephen Hay,
who will each also be available to answer questions following a
presentation of the Company’s results.
Details for the webcast are below. Participants will be
able to ask questions via the messaging function on the webcast
platform or via the teleconference line. Participants
proposing to use the teleconference line will need to pre-register
their details using the teleconference registration URL provided
below. Upon registering, participants will receive an email
with their unique PIN and dial-in details so that they can join the
call on the day without needing to speak with an operator.
- Date: Monday, 28 February
2022
- Time: 5.00pm AWST /
9.00am GMT
- Webcast URL:
https://edge.media-server.com/mmc/p/5fp4rz36
- Teleconference registration URL:
https://s1.c-conf.com/diamondpass/10019890-asm222d.html
Extracts from half-year Financial
Report
1. Review of
Operations
Base Resources operates the 100% owned Kwale Operations in
Kenya, which commenced production
in late 2013. Kwale Operations is located 50 kilometres south
of Mombasa, the principal port facility for East Africa. Mining operations continued
according to plan on the South Dune orebody with approximately 8.7
million tonnes mined (comparative period: 8.5 million tonnes).
The higher ore tonnes and improved grade of ore mined in the
reporting period has resulted in a 7% increase in the contained
valuable heavy mineral (rutile, ilmenite and zircon) mined.
Mining, Production and
Sales |
Six months to
Dec 2021 |
Six months to
Dec 2020 |
Ore mined (tonnes) |
8,680,545 |
8,538,666 |
Heavy mineral (HM) % |
3.54% |
3.28% |
Valuable heavy mineral (VHM) % |
2.71% |
2.59% |
Production
(tonnes) |
|
|
Ilmenite |
156,877 |
144,363 |
Rutile |
36,180 |
33,684 |
Zircon |
12,489 |
12,677 |
Zircon low
grade |
1,062 |
942 |
Rutile low
grade |
970 |
- |
Sales (tonnes) |
|
|
Ilmenite |
164,080 |
129,300 |
Rutile |
25,383 |
23,668 |
Zircon |
11,787 |
13,735 |
Zircon low
grade |
1,179 |
505 |
Rutile low
grade |
919 |
- |
Stable recoveries in both the wet concentrator plant
(WCP) and mineral separation plant (MSP) resulted in
a higher production of rutile and ilmenite by 7% and 9%
respectively. Zircon production was 1% lower than the
comparative period due to lower contained zircon in the mineral
assemblage of ore mined and marginally lower MSP recoveries.
Heavy mineral concentrate (HMC) stocks closed the reporting
period marginally higher at 23,135 tonnes (19,841 tonnes as at
30 June 2021).
Production of two streams of low-grade concentrate products
(zircon and rutile) occurred in the reporting period, together they
had a contained 661 tonnes of zircon and 1,337 tonnes of
rutile.
There were no lost time injuries during the reporting period, at
Kwale Operations or the Toliara Project, resulting in a lost time
injury frequency rate (LTIFR) for Base Resources of zero.
Compared to the Western Australian All Mines 2019/2020 LTIFR of
2.1, this is an exceptional performance, reflective of the ongoing
focus and importance placed on safety by management. Base
Resources group employees and contractors had worked 26.9 million
hours lost time injury (LTI) free, with the last LTI
recorded in early 2014. With two medical treatment injuries
recorded in the last 12 months, both within the reporting period,
Base Resources’ total recordable injury frequency rate is 0.50 per
million hours worked.
The Company maintains a balanced portfolio of multi-year and
quarterly offtake agreements with long term customers, supplemented
by a small proportion of ongoing spot sales. These
agreements, with some of the world’s largest consumers of titanium
dioxide feedstocks and zircon products, provide certainty for Kwale
Operations by securing minimum offtake quantities. Sales prices in
these agreements are typically either negotiated on a
shipment-by-shipment basis or set for periods of up to six months
and are derived from prevailing market prices. The strength of the
mineral sands market for all products in the reporting period
ensured that sales continued to closely match production, with
minimal inventories being maintained.
2.
Market Developments and Outlook
Titanium Dioxide
Ilmenite and rutile are primarily used as feedstock for the
production of titanium dioxide (TiO2) pigment,
with a small percentage also used in the production of titanium
metal and fluxes for welding rods and wire. TiO2
is the most widely used white pigment because of its non-toxicity,
brightness and very high refractive index. It is an essential
component of consumer products such as paint, plastics and
paper. Pigment demand is therefore the major driver of
ilmenite and rutile pricing.
Major western pigment producers typically use high grade
TiO2 feedstocks (which includes rutile) while Chinese
pigment producers typically rely on sulphate ilmenite as their main
feedstock.
Inventories of TiO2 pigment throughout the supply
chain have remained at very low levels since mid-way through the
2021 financial year due to demand continuing to outpace pigment
production capacity across all regions. Western pigment
producers have continued to target capacity production levels and
have been preferentially seeking the highest grade TiO2
feedstocks (particularly rutile) in order to maximise yield.
During the reporting period, some major chloride pigment producers
reported that, due to logistics challenges and a shortage of raw
materials (including TiO2 feedstock), they were not able
to achieve capacity production rates and could not meet all of the
demand from their customers, a situation likely to continue through
until at least the mid-way point of the second half of financial
year 2022.
The impact of the very strong demand for rutile by western
pigment producers has been compounded by the strong rebound in
demand from the welding and titanium metals sectors. Demand
from these sectors has continued to strengthen through the
reporting period and is expected to continue into the second half
of financial year 2022. At the same time, supply of natural
rutile and other high-grade feedstocks have been significantly
constrained by a variety of issues at some major production plants
and uncertainty remains over the ability of some of those producers
to achieve steady state production going forward. The
resultant tightness in the market has led to a 12% increase in the
average achieved price of Base Resources rutile from the
comparative period.
Despite uncertainties in China
relating to power supply, COVID-19 outbreaks, the property sector
and environmental controls, the pigment market has held up well and
demand for ilmenite, as the main source of TiO2
feedstock for Chinese producers, has continued to be very strong.
Chinese pigment producers have continued to target capacity
production levels through the reporting period and Chinese pigment
exports remain very strong, benefiting from the shortage of supply
from western pigment producers. Overall, ilmenite supply has
increased in response to the tight market conditions and high
prices but this has not been sufficient to meet demand. The
supply deficit has resulted in the average achieved price for Base
Resources ilmenite increasing 43% from the comparative period.
Zircon
Zircon has a range of end-uses, the predominant of which is in
the production of ceramic tiles, accounting for more than 50% of
global zircon consumption. Milled zircon enables ceramic tile
manufacturers to achieve brilliant opacity, whiteness and
brightness in their products. Zircon’s unique properties
include heat and wear resistance, stability, opacity, hardness and
strength, making it sought after for other applications such as
refractories, foundries and specialty chemicals.
Demand growth for zircon is closely linked to growth in global
construction and increasing urbanisation in the developing
world.
Demand for zircon in all sectors continued to strengthen through
the reporting period. European zircon ceramic millers have
struggled to source sufficient zircon sand to meet their targeted
capacity production levels and continue to seek more zircon than is
available. Despite the challenges and uncertainties in
China referred to above, demand
for zircon from Chinese users has remained firm. The chemical
zirconia and refractory sectors have been particularly strong and
Chinese zircon ceramic millers have continued to target high
production rates. Low inventory levels, supply chain delays
and restricted supply of zircon into China from some major zircon producers has
maintained tightness in the Chinese market into the start of
2022. These very tight market conditions have led to a 36%
increase in the average achieved price for Base Resources zircon
from the comparative period.
3. Kwale
Operations Extensional Opportunities
During the reporting period the Company extended the boundary of
the Kwale Special Mining Lease 23 (SML 23) to incorporate
previously identified additional Mineral Resources, leading to the
Kwale South Dune Ore Reserves estimates increasing and extending
mine life to December 2023.
In addition, Base Resources completed the Bumamani PFS in the
reporting period which concluded that it was economically viable to
mine the Bumamani and higher-grade subsets of the Kwale North Dune
deposits, which would extend mine life at Kwale Operations to July
2024. The Company is now progressing a DFS and an application
to further extend SML 23 to cover these areas has been lodged.
The Bumamani DFS is expected to be completed in the second
half of the financial year.
Prospecting licence applications lodged for an area in the
Kuranze region of Kwale county, about 70 km west of Kwale
Operations), together with an area south of Lamu, remain in process
towards granting. In November
2019, the Government of Kenya imposed an industry wide moratorium on
the issuance of prospecting licences which has affected the
progress of all licence applications. The Company continues to work
with the Government, and other mining sector stakeholders, to see
the moratorium lifted to enable the recommencement of the issuance
of mineral rights.
Base Resources’ wholly-owned Tanzanian subsidiary was granted
three prospecting licences in Tanzania for areas adjacent to the Kuranze
region in Kenya with a fourth
licence pending. A shallow auger drilling program is underway
to assess geochemical anomalies and identify future air core
drilling targets, with 231 holes completed in the reporting period.
Sample assaying is in progress at the Kwale Operations
laboratory, with infill auger drilling and test pits planned in the
second half of the financial year to better understand the more
prospective areas.
4.
Toliara Project
In November 2019, the Government
of Madagascar required Base
Resources to suspend on-the-ground activity on the Toliara Project
while discussions on fiscal terms applying to the project were
progressed. Activity remains suspended as Base Resources
continues to engage the Government in relation to the country’s
Large Mining Investment Law (LGIM) regime, fiscal terms
applicable to the Toliara Project and the lifting of the
on-the-ground suspension, with discussions continuing during the
reporting period.
In September 2021, the Company
completed DFS2 for the Toliara Project to incorporate an update to
the estimated Ranobe Ore Reserves and an increase in project scale.
The outcomes of DFS2, compared to the earlier 2019 DFS,
included substantially improved forecast financial returns for the
Toliara Project, including a post-tax/pre-debt (real) NPV10 of
US$1.0 billion and an average revenue
to cost of sales ratio of 3.5, over an initial 38-year mine life.
Timing of a financial investment decision (FID) in
respect of the Toliara Project (and therefore commencement of
construction) remains subject to lifting of the suspension of
on-the-ground activities and agreeing acceptable fiscal terms with
the Government of Madagascar.
Once these two key milestones are achieved, there will be
approximately 11 months’ work to complete prior to reaching FID,
including finalisation of funding, completion of land acquisition,
conclusion of major construction contracts and entering into
offtake agreements with customers. Resumption of reasonable
international travel will also be required to complete a
significant portion of this pre-FID work. Following FID,
there is an estimated 27 month construction and commissioning
period to reach the first shipment of production. The Company
maintains readiness to accelerate progress when conditions
support.
5.
Review of Financial Performance
Base Resources achieved a profit after tax of US$19.2 million for the reporting period, an
increase compared with a loss of US$6.3
million in the comparative period, primarily due to higher
sales revenues.
|
Six months to 31 December 2021 |
Six months to 31 December 2020 |
|
Kwale
Operations |
Toliara Project |
Other |
Total |
Kwale
Operations |
Toliara Project |
Other |
Total |
|
US$000s |
US$000s |
US$000s |
US$000s |
US$000s |
US$000s |
US$000s |
US$000s |
Sales
Revenue |
104,615 |
- |
- |
104,615 |
72,763 |
- |
- |
72,763 |
Cost of
goods sold excluding depreciation & amortisation: |
Operating
costs |
(35,919) |
- |
- |
(35,919) |
(33,376) |
- |
- |
(33,376) |
Inventory
movement |
6,771 |
- |
- |
6,771 |
9,455 |
- |
- |
9,455 |
Royalties
expense |
(7,754) |
- |
- |
(7,754) |
(5,069) |
- |
- |
(5,069) |
Total cost of goods
sold (i) |
(36,902) |
- |
- |
(36,902) |
(28,990) |
- |
- |
(28,990) |
Corporate &
external affairs |
(1,817) |
(54) |
(3,947) |
(5,818) |
(1,854) |
(38) |
(3,698) |
(5,590) |
Community
development |
(2,228) |
- |
- |
(2,228) |
(2,071) |
- |
- |
(2,071) |
Selling &
distribution costs |
(1,461) |
- |
- |
(1,461) |
(881) |
- |
- |
(881) |
COVID-19 response
costs |
(102) |
- |
- |
(102) |
(975) |
- |
- |
(975) |
Net write-off of
Kenyan VAT receivable and royalty payable |
(3,012) |
- |
- |
(3,012) |
- |
- |
- |
- |
Other expenses |
(35) |
- |
(823) |
(858) |
(28) |
- |
(310) |
(338) |
EBITDA
(i) |
59,058 |
(54) |
(4,771) |
54,234 |
37,964 |
(38) |
(4,008) |
33,918 |
Depreciation &
amortisation |
(22,404) |
(94) |
(198) |
(22,696) |
(29,224) |
(101) |
(161) |
(29,486) |
EBIT
(i) |
36,654 |
(148) |
(4,968) |
31,538 |
8,740 |
(139) |
(4,169) |
4,432 |
Net financing
(expenses) / income |
(2,783) |
- |
311 |
(2,472) |
(3,320) |
- |
(105) |
(3,425) |
Income tax
expense |
(5,352) |
- |
(4,500) |
(9,852) |
(2,845) |
- |
(4,500) |
(7,345) |
NPAT
(i) |
28,519 |
(148) |
(9,157) |
19,214 |
2,575 |
(139) |
(8,774) |
(6,338) |
(i) Base Resources’
financial results are reported under International Financial
Reporting Standards (IFRS). These Financial Statements include
certain non-IFRS measures including EBITDA, EBIT and NPAT. These
measures are presented to enable understanding of the underlying
performance of the Group and have not been audited/reviewed.
Sales revenue increased 44% to US$104.6
million for the reporting period (comparative period:
US$72.8 million) due to higher sales
volumes and an 18% increase in the average price of product sold to
US$514 per tonne (comparative period:
US$435 per tonne), with higher prices
achieved across all products.
Total operating costs of US$35.9
million were 8% higher than the comparative period
(US$33.4 million), due to a 9%
increase in production volume, with operating costs per tonne
produced remaining stable at US$171
per tonne (comparative period: US$174
per tonne).
Cost of goods sold (operating costs, adjusted for stockpile
movements, and royalties), was US$185
per tonne of product sold, 4% lower than the comparative period
(US$192 per tonne) due to lower unit
operating costs and product sales mix.
With a margin of US$329 per tonne
sold for the reporting period (comparative period: US$243 per tonne) and an achieved revenue to cost
of sales ratio of 2.8 in the reporting period (comparative period:
2.3), Base Resources remains well positioned amongst mineral sands
producers.
The increased sales volume together with higher product prices
have delivered an increased Kwale Operations EBITDA for the
reporting period of US$59.1 million
(comparative period: US$38.0 million)
and a Group EBITDA of US$54.2 million
(comparative period: US$33.9
million).
The majority of Kwale Operations assets are depreciated on a
straight-line basis over the remaining mine life. During the
reporting period the Kwale South Dune Ore Reserves estimate was
increased, allowing depreciation and amortisation charges to be
spread over a longer remaining mine life. Accordingly,
depreciation and amortisation in the reporting period decreased 24%
to US$22.7 million (comparative
period: US$29.5 million).
Due to increased EBITDA and reduced depreciation and
amortisation, Kwale operations recorded a net profit after tax of
US$28.5 million (comparative period:
US$2.6 million). During the reporting
period, the Group’s Kenyan subsidiary, Base Titanium Limited
(Base Titanium), distributed US$30.0
million of surplus cash, via dividend, to the Group’s
ultimate parent entity, Base Resources Limited. The dividend
distribution by Base Titanium incurred 15% Kenyan dividend
withholding tax of US$4.5 million,
which has been recorded as an income tax expense, thus contributing
to a profit after tax of US$19.2 million for the Group (comparative
period: loss of US$6.3 million).
Cash flow from operations was US$20.6
million for the reporting period (comparative period:
US$31.1 million), lower than Group
EBITDA due to Base Titanium settling previously provided for
increased royalties3 totalling US$18.8 million upon reaching agreement with the
Government of Kenya. Base Titanium
also paid corporate tax instalments of US$8.1 million and Kenyan dividend withholding
tax of US$9.0 million to the
Government of Kenya (US$4.5m payable from 30
June 2021) on the distribution of surplus cash to Base
Resources. Operating cashflows were used to fund capital
expenditure at Kwale Operations, Toliara Project progression and
dividend distribution.
Total capital expenditure for the Group was US$12.0 million in the reporting period
(comparative period: US$13.0 million)
comprised of US$5.8 million at Kwale
Operations (comparative period: US$5.1
million), primarily for extending mining further south and
land compensation for SML 23 extension, and US$4.1 million on the progression of the Toliara
Project (comparative period: US$7.5
million).
Consistent with Base Resources’ strategy, the Group seeks to
provide returns to shareholders through both long-term growth in
the Base Resources share price and appropriate cash
distributions. Cash not required to meet the Group’s
near-term growth and development requirements, or to maintain
requisite balance sheet strength in light of prevailing
circumstances could be expected to be returned to shareholders.
Applying this capital management policy, the Board determined to
pay an interim dividend of AUD 3
cents per share, unfranked, with a record date of
14 March 2022 and payment date of
31 March 2022. The interim dividend
will be paid wholly from conduit foreign income. The
financial impact of the interim dividend, estimated to be
approximately US$25.0 million (based
on the prevailing AUD:USD exchange rate), has not been recognised
in the Consolidated Interim Financial Statements for the reporting
period.
[Note (3): Refer to Base
Resources’ market announcement “Kwale mining lease extension
secured and royalty discussions finalised” released on 30 September 2021 for further information, which
is available at
https://baseresources.com.au/investors/announcements/.]
6. After
Balance Date Events
Other than the interim dividend determined by the Board, there
have been no other significant events since the reporting
period.
7.
Consolidated Condensed Statement of Profit or Loss and Other
Comprehensive Income
|
|
6 months to
31 December 2021 |
6 months to
31 December 2020 |
|
Note |
US$000s |
US$000s |
|
|
|
|
Sales revenue |
2 |
104,615 |
72,763 |
Cost of sales |
3 |
(59,307) |
(58,214) |
Profit from
operations |
|
45,308 |
14,549 |
|
|
|
|
Corporate and external
affairs |
|
(6,109) |
(5,852) |
Community development
costs |
|
(2,228) |
(2,071) |
Selling and
distribution costs |
|
(1,461) |
(881) |
COVID-19 response
costs |
|
(102) |
(975) |
Net write-off of
Kenyan VAT receivable and royalty over accrual |
4 |
(3,012) |
- |
Other expenses |
|
(858) |
(338) |
Profit before
financing costs and income tax |
|
31,538 |
4,432 |
Financing costs |
|
(2,472) |
(3,425) |
Profit before income
tax |
|
29,066 |
1,007 |
Income tax
expense |
5 |
(9,852) |
(7,345) |
Net profit / (loss)
after tax for the period |
|
19,214 |
(6,338) |
|
|
|
|
Other comprehensive
income |
|
|
|
Items that
may be reclassified subsequently to profit or loss: |
|
|
Foreign currency
translation differences - foreign operations |
|
(1,166) |
5,671 |
Total other
comprehensive income for the period |
|
(1,166) |
5,671 |
Total comprehensive
income for the period |
|
18,049 |
(667) |
|
|
|
|
Net earnings /
(loss) per share |
|
Cents |
Cents |
Basic earnings /
(loss) per share (US cents per share) |
|
1.64 |
(0.54) |
Diluted earnings /
(loss) per share (US cents per share) |
|
1.60 |
(0.54) |
The notes contained in the full version of the Half-Year
Financial Report form part of these consolidated financial
statements, a copy of which is available from the Company’s
website: www.baseresources.com.au.
8.
Consolidated Condensed Statement of Financial Position
|
|
31 December 2021 |
30 June 2021 |
|
Note |
US$000s |
US$000s |
Current
assets |
|
|
|
Cash and cash
equivalents |
|
37,066 |
64,925 |
Trade and other
receivables |
6 |
40,852 |
62,635 |
Inventories |
7 |
25,051 |
18,355 |
Other current
assets |
|
7,083 |
8,208 |
Total current
assets |
|
110,052 |
154,123 |
|
|
|
|
Non-current
assets |
|
|
|
Capitalised
exploration and evaluation |
8 |
160,012 |
157,909 |
Property, plant and
equipment |
9 |
90,362 |
104,917 |
Total non-current
assets |
|
250,374 |
262,826 |
Total
assets |
|
360,426 |
416,949 |
|
|
|
|
Current
liabilities |
|
|
|
Trade and other
payables |
|
15,717 |
21,618 |
Provisions |
10 |
6,804 |
38,687 |
Income tax
payable |
|
123 |
- |
Deferred revenue |
11 |
1,500 |
- |
Deferred
consideration |
|
7,000 |
7,000 |
Finance lease
liabilities |
|
155 |
41 |
Total current
liabilities |
|
31,299 |
88,259 |
|
|
|
|
Non-current
liabilities |
|
|
|
Provisions |
10 |
13,235 |
15,088 |
Deferred tax
liability |
|
1,465 |
4,615 |
Deferred
consideration |
|
10,000 |
10,000 |
Finance lease
liabilities |
|
635 |
- |
Total non-current
liabilities |
|
25,335 |
29,703 |
Total
liabilities |
|
56,634 |
97,049 |
Net assets |
|
303,792 |
319,900 |
|
|
|
|
Equity |
|
|
|
Issued capital |
12 |
307,811 |
307,811 |
Treasury shares |
13 |
(1,660) |
(2,273) |
Reserves |
|
(15,828) |
(14,201) |
Retained earnings |
|
13,469 |
28,563 |
Total
equity |
|
303,792 |
319,900 |
The notes contained in the full
version of the Half-Year Financial Report form part of these
consolidated financial statements, a copy of which is available
from the Company’s website: www.baseresources.com.au.
9.
Consolidated Condensed Statement of Changes in Equity
|
Issued
capital |
Retained earnings |
Share
based payment reserve |
Foreign currency
translation reserve |
Treasury shares
reserve |
Total |
|
US$000s |
US$000s |
US$000s |
US$000s |
US$000s |
US$000s |
Balance at 1 July
2020 |
307,063 |
72,898 |
5,038 |
(22,265) |
- |
362,734 |
Loss for the
period |
- |
(6,338) |
- |
- |
- |
(6,338) |
Other comprehensive
income |
- |
- |
- |
5,671 |
- |
5,671 |
Total comprehensive
income for the period |
- |
(6,338) |
- |
5,671 |
- |
(667) |
Transactions with owners, recognised directly in equity |
Dividends |
- |
(29,765) |
- |
- |
- |
(29,765) |
Purchase of treasury
shares |
- |
- |
- |
- |
(1,143) |
(1,143) |
Share based payments
|
748 |
1,169 |
(1,238) |
- |
448 |
1,127 |
Balance at 31
December 2020 |
307,811 |
37,964 |
3,800 |
(16,594) |
(695) |
332,286 |
|
|
|
|
|
|
|
Balance at 1 July
2021 |
307,811 |
28,563 |
4,465 |
(18,666) |
(2,273) |
319,900 |
Profit for the
period |
- |
19,214 |
- |
|
- |
19,214 |
Other comprehensive
income |
- |
- |
- |
(1,166) |
- |
(1,166) |
Total comprehensive
income for the period |
- |
19,214 |
- |
(1,166) |
- |
18,048 |
Transactions with owners, recognised directly in equity |
Dividends |
- |
(34,838) |
- |
- |
- |
(34,838) |
Purchase of treasury
shares |
- |
- |
- |
- |
(537) |
(537) |
Share based payments
|
- |
529 |
(460) |
- |
1,150 |
1,219 |
Balance at 31
December 2021 |
307,811 |
13,469 |
4,005 |
(19,832) |
(1,660) |
303,792 |
The notes contained in the full
version of the Half-Year Financial Report form part of these
consolidated financial statements, a copy of which is available
from the Company’s website: www.baseresources.com.au.
10. Consolidated Condensed
Statement of Cash Flows
|
|
6 months to
31 December 2021 |
6 months to
31 December 2020 |
|
|
US$000s |
US$000s |
|
|
|
|
Cash flows from
operating activities |
|
|
|
Receipts from
customers |
|
115,276 |
85,283 |
Payments in the course
of operations |
|
(77,522) |
(49,542) |
Income tax paid |
|
(17,118) |
(4,644) |
Net cash from
operating activities |
|
20,636 |
31,097 |
|
|
|
|
Cash flows from
investing activities |
|
|
|
Purchase of property,
plant and equipment |
|
(6,806) |
(5,145) |
Payments for
exploration and evaluation |
|
(5,163) |
(7,812) |
Other |
|
93 |
128 |
Net cash used in
investing activities |
|
(11,877) |
(12,829) |
|
|
|
|
Cash flows from
financing activities |
|
|
|
Repayment of
borrowings |
|
- |
(50,000) |
Dividends paid |
|
(34,838) |
(29,765) |
Purchase of treasury
shares |
|
(537) |
(1,143) |
Payments for debt
service costs |
|
(55) |
(2,329) |
Net cash used in
financing activities |
|
(35,430) |
(83,237) |
|
|
|
|
Net decrease in cash
held |
|
(26,671) |
(64,969) |
Cash at beginning of
period |
|
64,925 |
162,559 |
Effect of exchange
fluctuations on cash held |
|
(1,188) |
2,012 |
Cash at end of
period |
|
37,066 |
99,602 |
The notes contained in the full
version of the Half-Year Financial Report form part of these
consolidated financial statements, a copy of which is available
from the Company’s website: www.baseresources.com.au.
FORWARD LOOKING STATEMENTS
Certain statements in or in connection with this release contain
or comprise forward looking statements. Such statements may
include, but are not limited to, statements with regard to capital
cost, capacity, future production and grades, sales projections and
financial performance and may be (but are not necessarily)
identified by the use of phrases such as “will”, “expect”,
“anticipate”, “believe” and “envisage”. By their nature,
forward looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur
in the future and may be outside Base Resources’ control.
Accordingly, results could differ materially from those set out in
the forward-looking statements as a result of, among other factors,
changes in economic and market conditions, success of business and
operating initiatives, changes in the regulatory environment and
other government actions, fluctuations in product prices and
exchange rates and business and operational risk management.
Subject to any continuing obligations under applicable law or
relevant stock exchange listing rules, Base Resources undertakes no
obligation to update publicly or release any revisions to these
forward-looking statements to reflect events or circumstances after
today's date or to reflect the occurrence of unanticipated
events.
ENDS.
For further information contact:
James Fuller, Manager Communications
and Investor Relations |
UK Media Relations |
Base Resources |
Tavistock Communications |
Tel: +61 (8) 9413 7426 |
Jos Simson and Gareth Tredway |
Mobile: +61 (0) 488 093 763 |
Tel: +44 (0) 207 920 3150 |
Email:
jfuller@baseresources.com.au |
|
About Base Resources
Base Resources is an Australian based, African focused, mineral
sands producer and developer with a track record of project
delivery and operational performance. The Company operates
the established Kwale Operations in Kenya and is developing the Toliara Project in
Madagascar. Base Resources is an ASX and AIM listed
company. Further details about Base Resources are available
at www.baseresources.com.au
PRINCIPAL & REGISTERED
OFFICE
Level 3, 46 Colin Street
West Perth, Western Australia, 6005
Email: info@baseresources.com.au
Phone: +61 (0)8 9413 7400
Fax: +61 (0)8 9322 8912
NOMINATED ADVISOR
RFC Ambrian Limited
Stephen Allen
Phone: +61 (0)8 9480 2500
JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44 20 3207 7800
JOINT BROKER
Canaccord Genuity
Raj Khatri / James Asensio /
Patrick Dolaghan
Phone: +44 20 7523 8000