TIDMBSE
AIM and Media Release
27 September 2021
BASE RESOURCES LIMITED
DFS2 enhances scale and economics of the Toliara Project
Key Points
· Increase in post-tax / pre-debt (real) NPV @ 10% discount rate to US$1.0
billion, measured at FID
· Average revenue to cost of sales ratio of 3.5
· Increase of LOM free cash flow by 60% to US$5.9 billion, with first 10
years averaging US$210 million pa
· Stage 2 scaled up to increase mining rates by 33% to 25Mtpa and
increasing MSP production capacity by 47%
· The increased scale of the Toliara Project is underpinned by significant
increases to the Ranobe Mineral Resources and Ore Reserves estimates and the
long-term supply-demand outlook for mineral sands:
o Ranobe Mineral Resources estimate has almost doubled to 2,580Mt at an
average heavy mineral grade of 4.3%
o Ranobe Ore Reserves estimate increased to 904Mt at an average heavy mineral
grade of 6.1%, a 45% increase in contained heavy mineral, supporting an initial
mine life of 38 years
· Stage 1 capex cost, to establish a 13Mtpa mining processing operation,
has increased by 18% to US$520 million, primarily due to cost escalation
· Stage 2 capex cost increase to US$137 million due to scale up of the
operation to 25Mtpa mining rate
· Annual averages (excluding first and last partial operating years):
o Production of 960kt ilmenite (sulphate, slag and chloride), 66kt zircon and
8kt rutile
o Revenue of US$317 million - 65% ilmenite, 32% zircon and 3% rutile
o Operating costs of US$77 million or US$90 million incl. a 4% government
royalty
o Non-operating costs of US$8 million (community, external affairs, marketing
etc.)
o EBITDA of US$219 million, NPAT US$152 million
o Free cash flow of US$174 million
African mineral sands producer and developer, Base Resources Limited (ASX &
AIM: BSE) (Base Resources) is pleased to release the outcomes of its enhanced
Definitive Feasibility Study (DFS2) for its Toliara Project in Madagascar. The
increased scale of DFS2 (from the 2019 DFS1) has delivered a substantial
improvement in the 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.
[Note (1): For further information refer to Base Resources' market
announcement on 12 December 2019 "DFS reinforces Toliara Project's status as a
world class mineral sands development" available at https://
baseresources.com.au/investors/announcements/.]
Executive Director Operations and Development of Base Resources, Colin Bwye,
said:
"The true size and value of the Ranobe mineral sands deposit is only just
beginning to reveal itself, as evidenced by the significant increase in the
Ranobe Mineral Resources and Ore Reserves estimates, with more expected to come
once we can complete the mineralogy work required to incorporate the lower
sandy unit which holds great potential. Encouraged by this, and the expected
future supply deficit in mineral sands markets, we have taken the opportunity
to scale up the Toliara Project in DFS2."
"The scaled-up project now supports average annual production of 960kt of
ilmenite, 66kt of zircon and 8kt of rutile, with the first 10 years of stage 2
operations materially higher at 1.2Mt of ilmenite and 82kt of zircon."
"In addition, since the release of the 2019 DFS, significant effort has gone
into optimising the mine plans and increasing the level of project engineering,
as well as engaging with preferred suppliers to improve scope definition,
giving greater confidence in the capital cost estimates and allowing a
reduction in associated contingencies. While the initial stage 1 capital cost
estimate has increased by US$78 million to US$520 million, primarily driven by
sector-wide cost escalation for capital development, the economics of the
project have been substantially enhanced."
Managing Director of Base Resources, Tim Carstens, said:
"We are pleased to share the outcomes of our enhanced DFS2 which reaffirms our
view that the Toliara Project is a world class mineral sands development
opportunity."
"While capital costs have increased, the subsequent expansion in production has
materially improved the financial performance of the project, with a 55% lift
in forecast NPV and free cash flow generated of almost US$6 billion over the
life of the project. Importantly, and despite the increased development costs,
the capital payback period is still only 4.5 years."
"We have always firmly believed in the Toliara Project's potential to be a
catalyst for growth in Madagascar, creating transformational opportunities for
our communities, economic stimulus for the Toliara region and a flagship
foreign investment for the government. The increased scale of DFS2 enhances
these opportunities for all stakeholders with the project now forecast to
generate almost US$2.0 billion in direct government revenue and community
development expenditure over the 38-year mine life."
"We will be maintaining a high degree of engagement with the Government of
Madagascar in seeking to secure fiscal terms and the lifting of the current
suspension of on-ground activities as soon as possible. We remain confident
that acceptable terms can be secured that will support the development of the
Toliara Project, delivering clear and compelling benefits to our host
communities, the nation of Madagascar and our shareholders."
Investment evaluation
Set out below are the key financial and production outcomes from DFS2, compared
against those from the 2019 DFS.
Unit DFS2 DFS Change
NPV10 (discount rate of 10%), post US$ millions 1,008 652 55% higher
tax, real
NPV8 post tax, real* US$ millions 1,385 910 52% higher
NPV12 post tax, real* US$ millions 733 461 59% higher
NPV10 - TZMI Q2-2021 price US$ millions 996 722# 38% higher
forecast, post tax, real
IRR % 23.8 21.4 11% higher
Initial (Stage 1) Capex US$ millions 520 442 up 18%
Construction time (Stage 1) Months 27 26 +1 month
Stage 2 Capex US$ millions 137 69 up 99%
Capital Payback Period Years 4.5 4.3 +2 months
(Stage 1 + 2)
Production (ILM/RUT/ZIR) kt pa 1,033 839 25% higher
Life of mine (LOM) years 38 33 +5 years
LOM Operating Costs + US$/t ore 3.78 4.31 12% lower
Royalty mined
LOM Operating Costs + (A) US$/t 88 94 6% lower
Royalty produced
LOM Revenue (B) US$/t 306 295 4% higher
produced
LOM Cash Margin (B-A) US$/t 218 201 8% higher
produced
LOM Revenue: Cost of Sales (B/A) Ratio : 1 3.5 3.2 10% higher
Ratio
LOM Free Cash Flow US$ millions 5,922 3,692 60% higher
* Alternative NPV calculations are provided for illustrative and comparative
purposes only. Base Resources considers a 10% discount rate to be the most
appropriate for evaluation purposes. # Based on TZMI Q3 2019 price forecast.
Updated mining and production profile
Production Life of Mine (LOM) Stage 1# Peak Stage 2# Stage 2?
Profile Years 2 - 4.5 Years 6 - 15 Years 16+
Total annual avg* annual avg# annual avg annual avg?
Ore mined (Mt) 904 23.9 12.6 25.1 25.1
HM% 6.1% 6.1% 9.4% 7.1% 5.4%
HMC produced (Mt) 55.6 1.5 1.2 1.2 1.4
Period (years) 38.4 37.0 3.5 10.0 23.0
Produced (kt):
Sulphate ilmenite 16,941 450 388 566 407
Slag ilmenite 9,804 261 225 327 236
Chloride ilmenite 9,371 249 215 313 225
Total 36,115 960 828 1,206 868
ilmenite
Rutile 283 8 6 9 7
Zircon 2,468 66 56 82 60
# excludes ramp up. * Does not include the first and last years of operation
as these are both partial operating years. ? Does not include the last year of
operation as this is a partial operating year.
Further information about DFS2
Included below is a section titled "Toliara Project Definitive Feasibility
Study 2 - Summary Outcomes" which contains detailed information about DFS2 and
its outcomes. This information includes, as applicable, the material
assumptions, underlying methodologies and detailed reasoning supporting and
used to derive the financial and production outcomes and other forward-looking
statements set out in this release (including above), such as the material
price and operating cost assumptions. Accordingly, this release should be read
together with this information.
Base Resources has concluded that it has a reasonable basis for providing the
forward-looking statements set out in this release. This includes a reasonable
basis to expect that Base Resources will be able to fund development of the
Toliara Project when required. The Disclaimer & Important Notices sub-section
below also applies to this release.
Graphics and charts referenced in this release have been omitted. A full PDF
version of this release, including all graphics, is available from the
Company's website: www.baseresources.com.au.
Toliara Project Definitive Feasibility Study 2 - Summary Outcomes
Disclaimer & Important Notices
Definitive Feasibility Study 2
This document has been prepared by Base Resources. The information included in
this document relates to the outcomes of the Definitive Feasibility Study 2 for
the Toliara Project (DFS2). DFS2 is based on technical, economic and other
conditions and information as at the date of this document, which may be
subject to change. Accordingly, the outcomes, conclusions and other
information presented in this document should be viewed in this light.
Information in this document should also be read in conjunction with other
releases made by Base Resources to AIM.
Mineral Resources and Ore Reserves estimates, production targets and forecast
financial information
This document contains estimated Mineral Resources, estimated Ore Reserves,
production targets and forecast financial information for the Toliara Project.
Save in the case of the estimates on a mineralised unit basis, the details
included about the estimated Ranobe Mineral Resources and Ore Reserves have
been extracted from Base Resources' market announcement titled "Updated Ranobe
Mineral Resources and Ore Reserves estimates" dated 27 September 2021,
available at https://baseresources.com.au/investors/. Base Resources confirms
that it is not aware of any new information or data that materially affects the
information included in this announcement, and that all material assumptions
and technical parameters underpinning those estimates continue to apply and
have not materially changed.
The details included about the estimated Ranobe Mineral Resources on a
mineralised unit basis are based on, and fairly represent, information and
supporting documentation prepared by Mr Ian Reudavey. Mr Reudavey is a member
of the Australian Institute of Geoscientists. Mr Reudavey is employed by Base
Toliara, a wholly-owned subsidiary of Base Resources, does not hold securities
in Base Resources and is not presently eligible to participate in Base
Resources' long-term incentive plan and receive equity securities under that
plan. Mr Reudavey has sufficient experience that is relevant to the style of
mineralisation and type of deposits under consideration and to the activity
which he is undertaking to qualify as a Competent Person as defined in the JORC
Code and is considered a Qualified Person for the purposes of the AIM Rules for
Companies. Mr. Reudavey has reviewed this document and consents to the
inclusion in this document of the Mineral Resources estimate on a mineralised
unit basis and the supporting information in the form and context in which that
information appears.
The Ranobe Mineral Resources included in this document are reported inclusive
of the Ranobe Ore Reserves.
The estimated Ranobe Ore Reserves underpin the production targets and forecast
financial information for the Toliara Project included in this document. This
Ore Reserves estimate has been prepared by Competent Persons in accordance with
the requirements of the JORC Code. The proportions of Probable and Proved Ore
Reserves underpinning the production targets are set out in the sub-section
titled "Geology - Ore Reserves". The material assumptions on which the
production targets and the forecast financial information derived from those
targets included in this document are based are included in this document.
Forward-looking statements
Certain statements in or in connection with this document contain or comprise
forward looking statements. Such statements may include, but are not limited
to, statements with regard to capital cost, operating cost, capacity, future
production and available grades, forecast global supply, product prices, 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. Some risks that could impact Base Resources' ability to
achieve the outcomes or results expressed or implied by such statements include
those set out in the sub-section titled "Pre-FID and Post-FID Risks". 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.
Not advice, not an offer and other
Nothing in this document constitutes investment, legal or other advice. You
must not act on the basis of any matter contained in this document, 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. In particular, this document does not constitute an offer to
sell, or a solicitation of an offer to buy, securities in the United States or
to any "US Person" (as defined in the US Securities Act of 1933). This
document may not be distributed or released in the United States or to, or for
the account of, any US Person.
No representation or warranty, express or implied, is made as to the fairness,
accuracy or completeness of the information contained in this document (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 document or
its contents, including any error or omission from, or otherwise in connection
with, it.
Glossary
A glossary of key terms used in this document is set out below.
All references to currency ($ or US$) are to United States Dollars unless
otherwise stated.
Changes since DFS
Rationale and overview of DFS2
Since the release of the DFS in 2019, the Ranobe Mineral Resources and Ore
Reserves estimates have substantially increased, which, when combined with the
attractive long-term supply-demand outlook, have provided the opportunity to
enhance the project value by increasing its scale.
The project NPV10 (post-tax real) improves from US$652m in the DFS to US$1,008m
in DFS2. The main factors contributing to this overall increase in value are:
· Ranobe Ore Reserves estimate increased to 904Mt at an average heavy
mineral grade of 6.1%, a 45% increase in contained heavy mineral - extending
initial mine life to 38 years.
· Increased scale and scope of Stage 2, lifting mining rates to 25Mt per
annum (33% higher than DFS) and adding a further 47% to the MSP production
capacity (to 220tph) to deliver average LOM annual production of 960kt ilmenite
(sulphate, slag and chloride), 66kt zircon and 8kt rutile.
· Stage 1 capex increased to US$520m (up US$78m), primarily due to cost
escalation, while the larger scale of Stage 2 is reflected in higher capex of
US$137m (up US$68m).
· Updated Base Resources internal price forecasts and TZMI long term pricing
assumptions.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a chart showing the key drivers of
project NPV from DFS to DFS2.
Side by side comparison - DFS2 to DFS
DFS2 significantly improves the financial outcomes, despite increases in
royalties and capital costs.
· 55% increase in post-tax / pre-debt (real) NPV @ 10% discount rate to
US$1,008m.
· Average revenue to cost of sales ratio improves to 3.5.
· LOM free cash flow increased by 60% to US$5.9 billion, with first 10 years
averaging US$210m per annum.
· Stage 1 capex cost, to establish a 13Mtpa mining and processing operation,
increased to US$520m, primarily due to cost escalation.
· Stage 2 scaled up to increase mining rates by 33% to 25Mtpa and
increasing MSP production capacity by 47% at a higher capex cost of US$137m.
· Increase in Malagasy government royalty to 4% in line with the proposed
revised Mining Code.
· The increased scale of the Toliara Project is underpinned by significant
increases to the Ranobe Mineral Resources and Ore Reserves estimates and the
attractive long-term supply-demand outlook for mineral sands.
· Annual averages (excluding first and last partial operating years):
o Production of 1,033kt (ilmenite 960kt) increased from 839kt (ilmenite
780kt).
o Revenue US$317m - a 28% increase.
o Operating costs of US$90m (inclusive of 4% royalties) higher than DFS US$77m
(inclusive of 2% royalties) due to increased scale of operation and royalties.
o EBITDA US$219m - 34% higher.
o Free cash flow US$174m - 32% higher.
Unit DFS2 DFS
NPV10 (discount rate of 10%), post tax, real US$ 1,008 652
millions
IRR % 23.8 21.4
Initial (Stage 1) capex US$ 520 442
millions
Construction period (Stage 1) Months 27 26
Stage 2 capex US$ 137 69
millions
Construction period (Stage 2) Months 21 12
Capital payback period (Stage 1 + 2) Years 4.5 4.3
Life of mine Years 38 33
LOM operating costs + royalty US$/t ore 3.78 4.31
mined
LOM operating costs + royalty (A) US$/t 88 94
produced
LOM revenue (B) US$/t 306 295
produced
LOM cash margin (B-A) US$/t 218 201
produced
LOM revenue : cost of sales ratio (B/A) Ratio : 1 3.5 3.2
LOM free cash flow US$ 5,922 3,692
millions
Source of change from DFS - Stage 1 capex
Input cost escalation, scope changes and additional contingency bring the DFS2
capex for Stage 1 to US$520m.
Escalation - US$59m
· US$44m observed escalation from DFS capex estimate to Q2-2021.
· US$15m forward looking escalation to the assumed FID in Q4-2022.
Key scope changes since DFS completion - US$15m
· MSP storage shed concrete quantity update and increased marine costs.
· Schedule optimisation changes:
o Early works (site access road and camp earthworks) moved from Pre-FID to
Post-FID.
o Haul road south design and establishment of quarry contract moved from
Post-FID to Pre-FID.
· Provision for a new DMU for Stage 1 in lieu of the previously assumed
refurbished Kwale Operations DMU.
· Changes to the MSP to avoid later re-work when throughput increases,
including larger up-current classifier and HMC surge bin.
· Site access road upgraded to double lane to improve traffic control.
· Process plant optimisation savings including consolidation of wet
circuits.
· FOREX exchange movements.
Contingency - US$4m
· Contingency increase of US$4m, inclusive of escalation. However, overall
proportion of contingency decreased from 10.5% (DFS) to 9.7% (DFS2) due to
increased scope certainty from post-DFS work.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a chart showing the increased Stage 1
capital cost estimate from DFS to DFS2.
Progress since the DFS
After the delivery of the DFS in November 2019, a significant amount of the
front-end engineering design has been completed, preferred suppliers appointed
for a number of key contract packages and lender due diligence well progressed.
Progress made following the DFS
· Power (largest contract package) - finalised tender evaluation, selected
the preferred contractor and commenced contract negotiations.
· Processing plants - finalised the Basis of Design documentation, updated
all equipment specifications, datasheets and scopes of work for equipment
packages ready to issue to vendors. This facilitates early access to vendor
data to allow detailed design and long lead fabrication to commence quickly
following FID.
· Bridge and export facility piling (critical path contracts) - concluded
tender process and selected preferred contractors and awarded design portion of
bridge scope (hydrology, geotechnical and detailed design) for early
progressing.
· Transport and logistics - confirmed shipping to port logistics, including
a detailed review of container quantities and timing, and routes to project
site.
· Accommodation - reviewed our manning requirements and strategy, resulting
in shifting some pre-FID works associated with this to post FID.
· Ground water - updated the ground water model for DFS2 scale and finalise
location of production and monitoring bores.
· Schedule - review, stress tested and optimised the overall delivery
schedule.
· Mine planning - detailed review of mine path, DMU block sizes and shape
resulted in less mine moves, more uptime, optimised production and HMC stock
management.
Lender due diligence
· Lenders' Independent Engineer (IE) and Independent Environmental and
Social Consultant (IESC) engaged to undertake project due diligence.
· IE technical due diligence completed on the DFS, subject to a confirmatory
site visit. Due diligence involved an extensive technical audit and review of:
o Geology, Mining and Tailing;
o Mineral processing;
o Infrastructure - water, power, roads;
o Construction;
o Operational Management;
o Operating and capital costs; and
o Technical economic model.
· IESC have reviewed the project's environmental and social management
systems against international best practice standards and prepared a
preliminary gap analysis which will form the basis for the project's
Environmental and Social Action Plan. However, due to COVID-19 constraints,
the field work required to complete their report has not yet been started.
Enhanced Toliara Project - DFS2
Introduction
The world class Ranobe mineral sands deposit is located in south west
Madagascar, 45km north of the regional port town of Toliara, 18km inland,
approximately 640km southwest of Antananarivo, the capital of Madagascar.
The Toliara Project
· The Toliara Project is based on the Ranobe deposit, located 45km north
Toliara on a 125.4 km2 mining lease.
· The deposit comprises a single continuous body of mineralization
approximately 20km long, 1.5 to 4.5km wide and 3m to 60m in thickness and
situated immediately west of a prominent north-south escarpment. The HM
mineralisation (including ilmenite, rutile and zircon) extends from the
surface.
History
· Madagascar Resources NL (MRNL) started exploring for minerals in
Madagascar in 1995 and discovered several zones of HM mineralisation.
· In 2003, Ticor Ltd (now Exxaro Resources) negotiated an option over the
project. Drilling occurred at Ranobe and Basibasy and a pre-feasibility study
commenced on the Ranobe deposit. Between 2005 and July 2009, a bankable
feasibility study commenced, but was not completed (strategic focus shifted).
· MRNL, which became World Titanium Resources Limited (WTR) in 2011, engaged
TZMI to undertake a comprehensive review of the project, resulting in a
definitive engineering study being completed in September 2012.
· A concept to produce only an ilmenite and non-magnetic concentrate as the
saleable product (at a time of weak overall market conditions) was developed.
· In early 2016, African Minerals and Exploration Development Fund II
purchased a majority stake in WTR and increased the proposed project scale from
a mining rate of 8Mtpa to 12.8Mtpa. A definitive feasibility study was
completed by external consultants, Hatch.
· Base Resources acquired the project in January 2018 and completed a
concept study, the PFS, the DFS and DFS2.
Introduction (cont.)
Following acquisition in January 2018, the Toliara Project has been progressing
through Base Resources' structured project development system - commencing with
identifying conceptual value adding options and then progressively evaluating
and selecting the best of those options to progress through to DFS stage. DFS2
redefines the project scope to further enhance value by increasing the scale of
Stage 2 and optimising the life of mine plan and associated production rates.
· Base Resources acquired the Kwale Mineral Sands Project in Kenya in
mid-2010 and over the ensuing three years successfully funded, engineered,
constructed, and commissioned the project.
· In late 2013, mining started at Kwale Operations and the final completion
test was satisfied, and normal operations established by mid-2015.
· To fully capitalise on Base Resources' organisational capability, business
model and financial platform built at Kwale, Base Resources had been seeking
the right growth opportunity from which to drive shareholder value and, after
extensive evaluation of many opportunities, acquired the Toliara Project in
Madagascar in early 2018.
· The Toliara Project was identified by Base Resources as one of the premier
mineral sands development opportunities in the world due to the size of the
deposit, the consequent long mine life, its expansion potential, scope for
operational scale up, technical simplicity and expected competitive positioning
in the sector.
· Project development of the Toliara Project immediately started following a
clearly defined Base Project Development System.
· The PFS, completed in March 2019, evaluated development options and
selected the preferred development option to progress to the DFS. A clear
business case for the Toliara Project was confirmed.
· In December 2019, the DFS was completed. It defined the project scope,
how it will be implemented, and confirmed a requisite business case for future
investment. The Stage 1 mining rate was 12.6Mtpa, increasing to 18.6Mtpa in
Stage 2.
· In September 2021, DFS2 was completed which increased the Stage 2 mining
rate to 25Mtpa and the MSP feed rate from 150tph to 220tph as well as updating
capital costs, operating costs and product pricing assumptions.
Project description
The Toliara Project will be implemented in two stages, with Stage 2 production
commencing 4 years after Stage 1 completion. Once the Government-imposed
suspension is lifted and fiscal terms are agreed, an 11-month early works
program is required to reach FID.
On average, the Toliara Project is expected to deliver a combined 1,033ktpa
chloride ilmenite, sulphate ilmenite, slag ilmenite, zircon and rutile over a
predicted 38-year mine life based upon exploiting the estimated Ranobe Ore
Reserves.
Stage 1 consists of engineering, procurement, construction and commissioning
of:
· Heavy mobile equipment (HME).
· A dry mining unit (DMU).
· 1,750tph wet concentrator plant (WCP).
· 150tph mineral separation plant (MSP).
· Field services (pipes, pumps, powerlines, roads).
· Power generation facility.
· Borefield.
· Camp.
· Offices, laboratories and workshops.
· Haul/access road and bridge.
· Export facility storage shed, workshop and offices.
· Jetty, multi buoy mooring (MBM) facility and ship loader (located at
Batterie Beach).
Stage 2 production commences 4 years after Stage 1 mining commences. It will
consist of the engineering, procurement, construction and commissioning of:
· A second DMU.
· A second 1,750tph WCP.
· Upgrading the MSP capacity from 150tph to 220tph.
· Additional HME.
· Upgrading the power plant capacity to accommodate increased process plants
power demand.
· Additional boreholes to accommodate increased water demand.
The haul road, bridge and export facility are not impacted by Stage 2.
Geology
Located 45km north of the town of Toliara, the Ranobe deposit comprises five
mineralised units.
Deposit geology
· Upper sand unit (USU) - a well sorted, fine-grained, unconsolidated
aeolian sand containing approximately 4% slime or clay (SL) and approximately
5% HM. The HM is primarily ilmenite, with secondary zircon and rutile. The USU
can also contain a surface silt unit (SSU) within broad topographical drainage
features, and another silty sand unit (USSU) at the base of the USU profile.
· Intermediate clay sand unit (ICSU) - a thin unit of high slime content
with a dark red to orange brown sandy clay and clayey sand material averaging
approximately 3% HM and 25% SL deposited in a low energy lagoonal environment.
· Lower sand unit (LSU) - orange brown to yellow brown medium grained quartz
sand with variable mineralisation and moderately low slimes content. The LSU
is interpreted as a shallow marine or fluvial sediment that onlaps the
limestone (LST) basement with HM primarily ilmenite and garnet, with
secondary zircon.
· The deposit thickness generally increases to the west.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a stylised cross section of the
mineralised units.
Geology - tenure and drilling
A Mining Lease exists over the entirety of the current Ranobe Mineral Resources
estimate.
Tenure
· The instrument providing tenure is Permis d'Exploitation 37242 (PDE
37242), which is a mining lease under Malagasy law, issued to Base Toliara on
23 October 2017.
· PDE 37242 expires on 20 March 2052 (40 years from 21 March 2012, being the
date of grant of the original mining lease). The lease may be renewed by
increments of 20 years thereafter.
· PDE 37242 provides the right to extract and produce ilmenite, zircon,
leucoxene, rutile, guano, basalt, and limestone.
Drilling
· The Ranobe deposit has had five reverse circulation drilling exploration
programs. The first four were carried out by the previous owners of the
project and the most recent was completed by Base Resources.
· All programs used Wallis Drilling to perform the drilling.
· Some drilling completed during 2019 are yet to be assayed and have the
potential to enable the upgrade of Inferred Resources to Indicated Resources
and expansion of the Mineral Resources estimate to the south.
· Further drilling is planned which is aimed at providing more definition to
the encouraging results from the LSU in the northwest of the tenure area.
Historical drilling
Program Company # Holes # Metres
2001 Madagascar Resources NL 121 3,074
2003 Ticor/Kumba Resources (Exxaro) joint 400 9,424
venture
2005 Ticor/Kumba Resources (Exxaro) joint 288 6,135
venture
2012 WTR 363 8,087
2018-19 Base Resources 770 29,753
Total 1,942 56,473
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the historic drill
hole summary.
Geology - Mineral Resources
Following a significant drill program completed in 2018 and 2019, the
JORC-compliant Ranobe Mineral Resource has been updated to an estimated 2,580Mt
at 4.3% HM, including 1,390Mt at 5.1% HM in the Measured and Indicated
categories.
Mineral Resources and Ore Reserves estimates update completed
Assays of 12,759 samples from a 29,753m drilling program completed during 2018
- 2019 were utilized to update the Mineral Resources estimate. A further 5,443
samples from the drill program remain in Toliara awaiting export and analysis
following the lifting of suspension.
Ranobe Deposit Mineral Resources estimate as at HM Assemblage as % of HM
27 September 2021
Category Tonnes HM HM SL OS ILM RUT LEUC ZIR MON GARN
(Mt) (Mt) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Measured 597 36 6.1 4.3 0.2 74 1.0 1.0 5.9 1.9 2.2
Indicated 793 35 4.4 7.1 0.5 71 1.0 1.0 5.9 1.9 3.6
Inferred 1,190 39 3.3 9.7 0.6 69 1.0 1.0 5.8 2.0 4.3
Total 2,580 111 4.3 7.7 0.4 71 1.0 1.0 5.9 2.0 3.4
Table subject to rounding differences. Mineral Resources estimated at 1.5% HM
cut off grade. Mineral Resources are reported inclusive of Ore Reserves.
Ranobe Deposit Measured and Indicated Mineral HM Assemblage as % of HM
Resources estimate as at 27 September 2021^
Mineralised M&I HM HM SL OS ILM RUT LEUC ZIR MON GARN
Unit Tonnes
(Mt) (Mt) (%) (%) (%) (%) (%) (%) (%) (%) (%)
Upper sand 1,229 66 5.4 3.6 0.1 73 1.0 1.0 5.9 1.9 2.9
unit*
Surface silt 12 0.5 4.2 18 0.6 71 1.0 0.9 5.8 2.0 4.1
unit*
Upper silty 13 0.8 6.3 23 2.3 72 0.9 0.8 6.5 1.5 4.4
sand unit
Intermediate 136 4 3.0 24 2.0 68 1.2 1.1 6.1 2.2 3.4
clay sand unit
Total 1,390 71 5.1 5.9 0.3 72 1.0 1.0 5.9 1.9 2.9
Table subject to rounding differences. Mineral Resources estimated at 1.5% HM
cut off grade. ^Refer to the Appendix for estimates of the individual
categories for the mineralised units. *Mineral Resources are reported
inclusive of Ore Reserves.
Geology - Ore Reserves
DFS2 is underpinned by the JORC-compliant Ranobe Ore Reserves estimate of 904Mt
at 6.1% HM, comprising the USU and SSU material only.
· Resource model was optimised to generate pit shells via industry standard
Lerch Grossman algorithm using Base Resources internally forecast product
pricing, DFS test-work derived mineral recoveries and DFS derived operating
costs.
· Building on the DFS work, ten pit shells (71% to 80% of revenue) were
scheduled at high level and input into the DFS financial model to select the
optimum pit.
· The 74% of revenue shell was selected based on a better match of HMC
production with MSP design throughput of 150 tph (Stage 1) and 220 tph (Stage
2), financial metrics (weighted towards NPV and revenue to cost of sales ratio)
and mine life expansion from DFS. This shell was subject to preliminary mine
planning and scheduled in detail for financial modelling.
· Additional optimisation and mine planning work will occur during FEED and
the implementation phase.
Ranobe Ore Reserves estimate as at 27 September 2021 HM Assemblage as a % of HM^
Category Tonnes HM HM SL OS ILM RUT LEUC* ZIR
(Mt) (Mt) (%) (%) (%) (%) (%) (%) (%)
Proved 433 30 6.9 3.8 0.1 75 1.0 1.0 6.0
Probable 472 25 5.3 3.9 0.2 72 1.0 1.0 5.8
Total 904 55 6.1 3.8 0.1 73 1.0 1.0 5.9
Table subject to rounding differences. ^ Monazite and Garnet excluded from the
Ore Reserves estimate because PE 37242 does not currently provide the right to
exploit these products. *Recovered Leucoxene will be split between Rutile and
Chloride Ilmenite products depending on product specification requirements.
Geology - exploration opportunity
Additional high grade mineralisation discovered in the NW sector of the LSU in
2019 has not been included in the current Ranobe Mineral Resource estimate, due
to insufficient mineralogy work having been completed. This mineralisation has
the potential to add significant additional value to the Project.
· During the 2019 drill program significant heavy mineral intercepts were
identified in the Lower Sandy Unit (LSU) in the NW sector.
· These intercepts are within the Toliara Projects mining lease.
· Further drilling, and subsequent resource definition, targeting high-grade
LSU zones in the NW sector will be completed as access to site becomes
available.
· Higher garnet levels are evident in the LSU mineral assemblage and initial
indications suggest that it is suitable to produce an 80 mesh product for the
waterjet and blast markets.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the location of the
significant results from the 2019 drill program.
For further information in relation to the drill results set out above, refer
to Base Resources' announcement on 21 January 2020 "Toliara Project drill
assays reveal significant high-grade mineralisation" available at https://
baseresources.com.au/investors/announcements. Base Resources confirms that it
is not aware of any new information that materially affects the information
included in that announcement.
Mining
The selected mining method is conventional dozer-fed DMU with in-pit tailings
deposition, enabling a short 3 to 4-year cycle from initial land clearing to
final rehabilitation.
Planned mining activity cycle
· Scrub clearing - removal of trees and scrub by bulldozers, excavators and
dump trucks. Stockpiled for community use or mulching.
· Topsoil stripping - using bulldozers, excavators, and dump trucks, topsoil
is stockpiled for later rehabilitation or directly replaced onto rehabilitation
areas. The aim is to preserve seed viability by minimizing time in stockpile.
· Mining - utilizing D11 bulldozers, in 200m x 100m blocks, into the DMU
with some excavator assistance. Run of mine feed (ROM) enters the DMU through
a grizzly (400mm screen), passes up the DMU conveyor which discharges through a
slurry chute onto a 4mm screen. The screen undersize is pumped to the WCP.
Oversize is disposed of in the pit void.
· Coarse tailing - 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. Water is recovered and pumped
back to the WCP. Sand is stacked to a height approximating the planned
finished surface level and then formed into fine tails evaporation ponds by
bulldozer.
· Fine tailing - Flocculated clay tailings from the thickener at the WCP is
pumped to the evaporation ponds built on coarse tails. Initially, until enough
coarse tails area is available, some ponds will be constructed on ore and the
dried tails removed to allow subsequent mining. The tails ponds will be filled
to a depth of 1.5m and, when dry, the clay will be 0.4m thick. An
alternative co-disposal methodology (directly mixing fine and coarse tailings
prior to deposition) using technology developed at Kwale will be evaluated
during the FEED stage.
· Landform reconstruction and topsoil return - The desiccated fine tails are
worked by bulldozer into the coarse tails to make a nominal 2m thick water
retention layer at the surface, graded into final landform and topsoil replaced
on top using front-end loader (FEL), dump truck and dozer or grader. The area
will then be ready for rehabilitation.
· The process from scrub clearing to final rehabilitation is expected to
take 3 to 4 years.
Mining life cycle
The selected mining method is conventional dozer-fed dry mining with in-pit
tailings deposition, enabling a short 3 to 4-year cycle from initial land
clearing to final rehabilitation.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the mining life
cycle.
Optimisation of mine path
A detailed review of the Stage 1 mine path has been completed to incorporate
the latest Ore Reserves and identified mining optimisation opportunities
enabling an improved and more stable production profile.
The review included all mining areas and associated schedules that encompass
Stage 1. The schedule is similar to the DFS Stage 1 mine path but has been
further optimised to maintain heavy mineral concentrate (HMC) production to
meet MSP design capacity whilst remaining within the optimal 2km pumping radius
of the WCP.
Operational maximum throughputs for Stage 1 are consistent with the DFS:
· Dry Mining Unit - 1,750tph.
· WCP - 1,750tph.
· MSP - 150tph.
Three main areas were optimised and modelled to improve Stage 1:
· Pit design & optimisation - a change from the spherical pit shape
contemplated in the DFS to a more traditional rectangular pit shape.
· Pre-mining earth works - reduced starter pit requirements, scope and cost
as well as optimised associated schedules.
· Revised mine path - optimised to balance ore grade, WCP/MSP commissioning
schedule, HMC stocks and final product production.
The optimisation process decreased the planned off-path mining tonnes (truck
and shovel) by 60% and reduced the number of DMU moves by 40% over the life of
Stage 1. This optimisation has also enabled mining of additional high-grade
tonnes at the northern limit of the WCP pumping radius of WCP1.
Further mine planning optimisation opportunities around the time usage model,
WCP and starter pit locations have been identified and will be reviewed during
FEED.
Mining schedule
Mining will utilise D11 bulldozers feeding into a DMU to deliver 12.8Mtpa to
the WCP in the first 4.25 years before increasing to 25Mtpa with the addition
of a second DMU and WCP for the remainder of the mine life.
Mining schedule
· Stage 1: 0 - 4.25 years - Single DMU and WCP, a fleet of two operating D11
bulldozers mining at a combined rate of 1,750tph. Mining of high-grade ore
averaging 9.1% HM.
· Stage 2: 4.25 - 38 years - Additional DMU, D11 bulldozers and WCP
operating at 1,750tph. Combined mining rate of 3,500tph, total D11 fleet of
four operating units. Average ore grade of 6.1% HM.
· To maintain acceptable overland pumping distances, WCP1 moves in years 12
and 23 and WCP2 in year 23.
Water abstraction
· Stage 1: 526m3 per hour.
· Stage 2: 976m3 per hour.
· Approved bore-field abstraction: 886m3 per hour. The approval to increase
abstraction rates will be applied for prior to the commencement of Stage 2.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the Stage 1 and 2
mining blocks.
Tailings schedule
The tailings management plan allows creation of viable final landforms for
rehabilitation approximately 18-24 months after mining.
The tailings management plan is:
· Initially tailings will be stored out-of-pit tailing until sufficient pit
void is available after 15 months of mining.
· A second out-of-pit tailing storage is required to service the first nine
months of operation at the second location of WCP1 (Year 12).
· Subsequent WCP1 and WCP2 locations will use remnant pit voids for their
initial tailings.
· Generally, coarse tailings will fill pit voids created 6-12 months
earlier.
· Coarse tailings will be used to form evaporation ponds for fine tailings
deposition.
· Initial fine tailing areas will be created on ore, and the dry tailings
removed prior to mining.
· Fine tailings will normally fill evaporation ponds created on coarse
tailings.
· Landform restoration will take place when fine tailings have dried and
been reincorporated into upper layer of coarse tailings.
· Topsoil will be placed on reinstated landform, approximately 18-24 months
after mining.
· Co-disposal of coarse and fine tails together to create a mix of clay and
sand that reflects in-situ levels and promotes regrowth of native vegetation
will be further developed and tested at Kwale before being refined during the
initial 15 months of the Toliara operation when ex-pit tails storage is
undertaken.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the coarse tails
placement sequence.
Metallurgical testwork and flowsheet design
The DFS metallurgical testwork program, using full scale spirals, was the basis
of the WCP flowsheet design and resultant design mineral recoveries.
WCP
· In early 2018, Base Resources generated three bulk samples (low grade -
4.8% HM, medium grade - 8.2% HM, high grade - 10.5% HM) to represent a range of
ore grades on which to base the WCP design.
· Base Resources' mineralogy methodology, MinModel, was adapted for the
Ranobe deposit and used to calculate WCP performance during the testwork.
· A three-stage spiral wet gravity circuit was tested on the low, medium and
high-grade bulk samples using a combination of MG12 and VHG spirals. The
testwork was performed by Mineral Technologies in Brisbane.
· The testwork results were modelled using industry proven programs to
optimise the flowsheet design, mass balance and resultant performance metrics.
· Bulk HMC samples were generated from each HM grade test as feed for MSP
testwork and market sample generation.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for graphics showing the location of the
bulk testwork samples and WCP flowsheet.
Metallurgical testwork and flowsheet design (cont.)
DFS metallurgical testwork program, using full plant scale separation
equipment, was the basis of the MSP flowsheet design and confirmed the mineral
recoveries and final product qualities.
MSP
· Three feed samples representing HMC from low, medium and high-grade ore
generated from WCP testwork were used as feed for MSP flowsheet development
testing. The testwork conducted by IHC Robbins provided final product samples
for marketing and established mineral recoveries and final product grades.
· The ability to produce varying ratios of three ilmenite products,
sulphate, slag and chloride grades from the full range of HMC feedstock to
match market conditions was confirmed and built into the process design.
· A comprehensive and iterative series of tests were completed to establish
flowsheets for each processing stage consistent with the design intent:
o Feed preparation - removal of coarse and fine quartz using wet gravity
separation.
o Ilmenite circuit - produce three ilmenite products under varying ore types
and generate a non-magnetic stream, using magnetic and electrostatic
separation.
o Wet non-magnetics circuit - remove residual quartz to enable efficient
rutile separation using wet gravity separation.
o Rutile circuit - produce a rutile product and a non-conductor zircon stream
using electrostatic and magnetic separation.
o Dry zircon circuit - remove Fe and Ti contaminants to produce a standard
zircon product using electrostatic and magnetic separation.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the MSP flowsheet.
Product recoveries
An extensive suite of testwork was undertaken that provides a sound basis for
product recovery estimation.
WCP
· Testwork on each of the low, medium and high-grade bulk samples was used
to generate a model (Mineral Technologies) from which the WCP recoveries
(ilmenite, rutile and zircon) were estimated.
· High-grade scenario recoveries were assumed and then further reduced (for
ilmenite, rutile and zircon) by 1.5% to allow for the reality of plant
operations often running at sub-optimal conditions.
· Insufficient data and accuracy was available for leucoxene recovery
estimation using the Minmod mineralogy method and the Mineral Technologies WCP
simulation. This was calculated based on the non-mag TiO? recovery.
WCP Recoveries
Low Grade Medium Grade High Grade Avg DFS Design
Ore Ore Ore
Rutile 97.1 95.8 93.8 95.6 92.3
Zircon 98.5 98.6 98.7 98.6 97.2
Ilmenite 97.1 96.6 96.4 96.7 94.9
Leucoxene 85.0 80.0 70.0 78.3 75.0
% HM in HMC 91.0 91.0 91.0 91.0 91.0
MSP
· Ilmenite recovery - derived from the MSP testwork and calculated on a
circuit-by-circuit basis, an average total recovery (from three bulk samples
processed) of 94.4% was established.
· The proportion of each ilmenite product produced (sulphate, slag and
chloride) used testwork results adjusted for product quality targets using a
mathematical model with interpolation algorithms. The quality targets and
splits were optimised for NPV. The design accommodated a range of potential
ilmenite splits.
· Zircon recovery - derived from the MSP testwork, a recovery was calculated
on a circuit-by-circuit basis to give an overall zircon recovery of 79.4%.
· Rutile recovery - derived from the MSP testwork and calculated on a
circuit-by-circuit basis, giving an average total recovery (from three bulk
samples processed) of 54.1%.
· Leucoxene is recovered to a HiTi stream which is redirected to both rutile
and ilmenite products.
· Leucoxene recovery - derived from the MSP testwork, a leucoxene recovery
of 23.2% was calculated that is distributed to ilmenite and rutile, 79% and 21%
respectively. This increases the ilmenite and rutile total recoveries to 94.6%
and 58.4% respectively.
MSP Recoveries
Base Leucoxene re-distributed
Ilmenite 94.4 94.6
Zircon 79.4 79.4
Rutile 54.1 58.4
Leucoxene 23.2 0
Ilmenite Splits
Ilmenite Proportion % Target %TiO2
Sulphate Ilmenite 47.0 48.5
Slag Ilmenite 27.2 50.5
Chloride Ilmenite 25.8 57.0
Process engineering - dry mining unit
The processing plants design for Stage 1 includes a DMU, 1,750tph WCP, 150tph
MSP, water circuit, tails disposal and electrical reticulation. Stage 2
includes a second DMU, 1,750tph WCP and upgrade of the MSP to 220tph.
Dry mining unit
· Piacentini & Son will be commissioned to supply a new DMU for Stage 1,
similar to the existing unit at Kwale Operations. The existing Kwale Operations
unit will be refurbished and shipped to Madagascar for the Stage 2 upgrade in
year 4.
· A 4mm screen will be installed on the DMU hopper to remove all +4mm
material in the mining area.
· The DMU pump will be supported by ROM booster pumps to pump ore to the WCP
from the DMU when the distance between the two plants is greater than 800m.
· Each DMU is designed to be relocatable (using Caterpillar D11 bulldozers),
which is anticipated to be every 2-4 weeks.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the mining process
flowsheet.
Process engineering - wet concentrator plant
Both 1750tph WCP's are simple but robust 3-stage spiral plant designs based on
bulk sample testwork programs conducted at Mineral Technologies metallurgical
facilities and caters for the range of heavy mineral grades within the Ranobe
deposit.
Wet concentrator plant
· The flowsheet developed uses proven spiral technology to produce a HMC
grade above 90% HM.
· De-sliming cyclone and thickening circuit designed for wide range of ore
clay content.
· A constant density surge tank provides a one-hour buffer between the DMU
and WCP.
· MG12 spirals, operating at 2.5tph per start, used in rougher and scavenger
stages minimises footprint and simplifies the design, reducing pumping costs
and power requirements.
· The cleaner spirals are twin start VHG operating at 1.5tph per start.
· Cross launders have been incorporated in the design to simplify material
flow and reduce the number of gravity launders by 75%.
· HMC will be pumped to the MSP from each WCP.
· Tailings are pumped back to the mine void as back fill with water
recovered to minimise make up water required from the borefield.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the WCP flowsheet.
Process engineering - mineral separation plant
Extensive design optimisation was undertaken to balance plant availability (by
reducing number of drives), operating costs and capital costs.
Mineral separation plant
· Stage 1 feed rate of 150tph, decoupled from the mining operation by a HMC
stockpile which buffers changing ore grades and differing plant run times.
· The MSP will be upgraded to 220tph in year 4 as part of Stage 2. A larger
dryer, belt filter, HMC surge bin, screen and UCC will be included as part of
Stage 1 to minimise overall combined Stage 1 & 2 project capex and downtime
during the Stage 2 upgrade.
· The MSP location is fixed for the life of mine. It is a 50m tall
building with multiple machine floors to reduce operating cost (by utilising
gravity to reduce materials handling equipment and drives).
· Final products will be stored in 1,000t bins (350t for rutile). Additional
site storage is provided for the three ilmenite products (two week's
production).
· Tails from the MSP are pumped back to the WCP to be disposed with the main
tails lines.
· The ilmenite circuit design incorporates the facility to isolate a single
machine for cleaning and maintenance.
· Fresh raw water will be used where necessary to ensure product quality.
Sampling
· All incoming and outgoing streams throughout the plant are automatically
sampled, including dry stream analysers on the zircon and rutile circuits.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for graphics showing the MSP flowsheet and
a 3D render of the stage 1 and stage 2 MSP.
Design progression
The plant design progressed substantially during the DFS. Further engineering
development occurred during DFS2 in preparation for detailed design following
FID.
Electrical
· Majority of the power requirements are in overland pumping. Pipe loop
testwork has been undertaken to determine the optimum pumping velocities.
· Site high voltage reticulation is at 11kV.
· Switchrooms, electrical equipment rooms and field skid switchrooms are
modular pre-fabricated buildings with main equipment pre-installed to minimise
construction time.
· Site wide power distribution system is well developed, with a significant
effort put into power consumption on a year by year basis, matching the mine
plan and pumping requirements.
· High degree of integration across multiple sites (power plant, DMU, WCP
and MSP) to enable efficient operation.
· Modelling and sizing of plant cabling requirements well developed (cable
schedule).
· Completed lighting study with lux level modelling and selection of optimal
luminary locations.
Control systems
· Fully automated and supported by instruments measuring density, flow,
level, temperature, tonnage etc.
· Completed datasheet sets for all instrumentation packages.
· Operating and control philosophy developed for control system design.
· The operator interface system is typical of supervisory control and data
acquisition (SCADA) systems. The SCADA monitors and controls instruments in
the plant through a programmable logic controller.
DFS / DFS2 design deliverables produced
· Scope of work documents and firm pricing received from vendors for all
mechanical equipment in the processing plant.
· Mechanical equipment list [3].
· Electrical load list.
· Piping & instrumentation diagrams [110].
· Processing plant 3D models, including piping, instrumentation, pipe racks,
cable trays and valves.
· Process design criteria, flowsheets and mass balances [18].
· Site layouts, general arrangements and sections [71].
· Standard drawings for electrical, structural, instrumentation, civil,
mechanical & piping [68].
· General specifications.
· Tender reviews on mechanical equipment.
· Preliminary platework drawings for vendor pricing [186].
· Single line electrical diagrams [28].
· Valve schedule and piping material take off.
· Instrument list and datasheets [25].
· Detailed structural calculations and material take-offs.
· Detailed pump calculations for all slurry and water lines.
· Fire protection and fire detection system equipment schedules.
Marketing - product quality
The quality of Toliara Project products ensure they are suitable for a wide
range of applications.
The following three ilmenite products to be produced with qualities that
specifically target different ilmenite markets.
· Sulphate Ilmenite
Of similar quality to Kwale Operations' ilmenite which is widely consumed in
the global sulphate pigment industry.
· Slag Ilmenite
A higher TiO2 (>50%) makes this ilmenite attractive to chloride slag producers
where elevated Fe2O3 has no detriment. An option exists to re-blend it with
sulphate ilmenite and have more volume targeting either the sulphate pigment
market (albeit with a higher Fe2O3 specification than the sulphate ilmenite
stream) or the slag market (albeit with lower TiO2 than the slag ilmenite
stream).
· Chloride Ilmenite
A typical 57.0% TiO2 ilmenite. Optimises revenue while producing a product
that suits direct feed chloride pigment production as well as chloride slag and
synthetic rutile production.
Processing plant design flexibility and testwork confirms that the split
between the ilmenite products and qualities can be adjusted within
specification constraints to respond to ore variations and market requirements.
Final Product Typical Specifications
% Kwale Sulphate Slag Chloride
Ilmenite Ilmenite Ilmenite Ilmenite
Typical Typical Typical Typical
TiO2 48.3 48.5 50.5 57.0
Cr2O3 0.09 0.08 0.08 0.10
ZrO2 0.12 0.02 0.04 0.03
CaO 0.02 0.01 0.03 0.02
MgO 0.7 0.6 0.4 0.3
MnO 0.6 0.8 1.0 1.5
Fe2O3 20.4 21.0 27.5 30.5
FeO 27.6 26.8 16.0 6.0
P2O5 0.02 0.02 0.07 0.06
Nb2O5 0.06 0.12 0.15 0.20
V2O5 0.23 0.24 0.23 0.22
SiO2 0.7 0.6 1.2 1.0
Al2O3 0.6 0.5 1.0 0.9
U+Th (ppm) 55 40 85 148
Marketing - product quality
A very good standard grade zircon product and a rutile product suitable for all
end use sectors.
Zircon
· A very good standard grade zircon product will be produced.
· The quality is acceptable to all key end use sectors, particularly in
China.
% Kwale Standard Zircon Toliara Zircon
Typical Typical
ZrO2+HfO2 65.8 65.6
TiO2 0.14 0.09
Fe2O3 0.12 0.12
SiO2 32.4 32.9
Al2O3 1.15 0.89
U+Th (ppm) 400 550
Rutile
· Rutile very similar to Kwale Operations' rutile, suitable for chloride
pigment, titanium metal and welding consumables, will be produced.
· A TiO2 of 95.0% can be produced (with a potential option drop to a minimum
of 93% if significant recovery benefits can be achieved).
% Kwale Rutile Toliara Rutile
Typical Typical
TiO2 95.5 95.0
Cr2O3 0.22 0.15
ZrO2 0.64 0.84
CaO 0.02 < 0.01
MgO 0.05 0.01
MnO 0.03 0.01
Fe2O3 1.08 0.8
P2O5 0.02 0.03
Nb2O5 0.28 0.47
V2O5 0.61 0.59
SiO2 0.8 1.1
Al2O3 0.4 0.6
U+Th (ppm) 53 240
Infrastructure
Existing infrastructure required for the development of the Toliara Project is
limited. The project scope addresses this through building a dedicated product
haulage and access road, bridge, export facility, hybrid power plant, bore
field for water supply and a permanent camp.
Existing infrastructure
· Toliara has an existing container port able to accommodate coastal
vessels, an airport with scheduled domestic and international flights and good
mobile and data communications.
· The RN9 national route, although upgraded and sealed during the last few
years, is not suitable for oversize and heavy construction loads or road train
product haulage. The existing bridge over the Fiherenana river also has
limited capacity.
· There is no electrical power grid in the vicinity of the mine. Power
supply at Toliara is limited and unreliable and currently not adequate for the
new export facility site, although plans are in place to upgrade the local
generation facility by addition of solar power.
· There is limited existing accommodation in Toliara for the anticipated
non-local construction and operations personnel requirements.
· There are no suitable sewage treatment facilities in the area but there is
a solid waste recycling plant some 10kms north of Toliara.
· Toliara has a diesel bulk storage facility at the port with limited HFO
storage capacity that is shared amongst four distributors.
Roads
· A new 45km long, sealed, dedicated, haul and permanent access road will be
constructed, including a new 630m long concrete bridge over the Fiherenana
river. Provision is made for several community crossing points as well as an
underpass at the RN9 crossing. The bridge will be designed to withstand 1:
100-year floods.
· A staged development approach includes:
o Upgrading of existing Ranobe road for early process plant contractors'
access through the RN9 immediately after FID.
o Construction of the northern section of the haul road in conjunction with
upgrading the PK24 road to facilitate movement of heavier WCP / MSP mechanical
equipment. This route avoids populated villages along the RN9 north of PK24.
o Construction completion of the southern haul road section to the export
facility in time for first product export.
o Contractor access to the export facility will be constructed pre-FID to
provide the piling contractor access immediately on FID.
Infrastructure (cont.)
Comprehensive groundwater modelling has confirmed suitable quantities of water
can be abstracted from an aquifer without adverse community or environmental
impacts. Detailed, binding offers have been received for bulk power supply.
Water
· Ground water modelling (Knight Piesold) has confirmed the ability to
sustainably source the required make-up water for the Stage 2 (25Mtpa) mining
rate from four borefields within the mining permit area, consisting of nine
operating (5 for Stage 1 and 4 for Stage 2) and two standby 30l/s boreholes.
· Permits are in place for abstraction of 889 m³/hr of raw water but will
require renewal after lifting of suspension as they expire in Q4 2022. The
estimated raw water requirement for Stage 1 is 526 m³/hr and Stage 2 is 972 m3/
hr. Further regulatory approval is required for the increased Stage 2
abstraction and will be progressed prior to Stage 2 development.
· Drilling of 3 production boreholes to enable step testing and refinement
of the groundwater model is planned during the pre-FID phase and monitoring
bores for baseline and operational purposes will be installed.
Power
· Power for the mine site will be "self-supplied" by Base Toliara, with the
generation facility to be constructed by an IPP who will in turn operate and
maintain that facility on Base Toliara's behalf.
· Power generation will be based on a hybrid HFO, solar photovoltaics (PV)
and battery storage system located near the MSP. The design aims to maximise
solar contribution to reduce CO2 emissions.
· Stage 1 installed power is 23.5MW with a maximum demand of 15.1MW with an
average usage of 10.5MW. Stage 2 will increase installed power to 35MW with a
maximum demand of 24MW and an average usage of 15.2MW.
· Export facility power will be self-generated using high speed diesel
generators with a small contribution from solar PV.
Accommodation camp
· An accommodation camp of 272 rooms (converted to 511 beds with shared
rooms) will be constructed to accommodate the peak construction workforce. 219
rooms are required for operational workforce leaving 53 surplus rooms.
· The 53 surplus rooms are sufficient to accommodate Stage 2 construction
and operations workforce.
· National labour and off-site contractors will be housed in the local
communities. Local workforce will be bused in daily.
Infrastructure (cont.)
Full bridge simulations have confirmed the operability of the multi-buoy
mooring berth for vessels in a wide range of operating and environmental
conditions up to Panamax class (partially loaded to 68kt). Typically, Ultramax
vessels (loaded to 63kt) will be used during operations. Stage 1 ship loading
will occur 14-17 times per year while ship loading at Stage 2 peak production
will occur up to 26 times per year.
Mine complex
· Provision has been made for fencing, security, offices, workshops,
laboratories, stores, change houses, ablution blocks, control rooms,
weighbridge, clinics and first aid facilities, water storage dams and tanks,
fuel storage facilities, firefighting systems, storm water management and
landscaping. No additional infrastructure will be required for Stage 2.
Waste treatment
· A sewage treatment plant (STP) will be constructed at the mine complex and
serve the process plant, mine complex buildings and accommodation camp.
Conservancy tanks will be utilised at remote sites such as the export facility
and sewage transported to the STP for treatment. No additional infrastructure
required for Stage 2.
Product haulage
· Up to a maximum of 1,303kt of product will be hauled annually from the
mine to the export facility by a transport contractor utilising 90t triple
trailer road trains operating 13 hours per day on a seven days a week basis.
Export facility
· An export facility at Batterie Beach will include a storage shed for 135kt
of ilmenite, 10kt rutile, with a separate shed to store 17kt of zircon. At the
MSP, an additional 38kt of product storage will be provided during Stage 1.
For Stage 2, the MSP storage capacity will be increased to 75kt.
· Ground improvement (rigid inclusion piles) required for the shed
foundations.
· A 550m long jetty with pipe conveyor and fixed ship loader will load
Panamax vessels (loaded up to 68kt) or Ultramax vessels (loaded up to 63kt)
moored on a multi-buoy mooring berth. No additional infrastructure is required
for Stage 2.
· A charter contract will be placed for a fully crewed tug with minimum
bollard pull of 40 ton and a mooring line handling vessel for the operations
phase.
Marketing - pricing
Product pricing forecasts through to 2030 are derived from Base Resources'
internal supply/demand analysis before transitioning to TZMI's long term
inducement prices from 2035.
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 its internal
view of future production from existing operations as well as new brownfield
and greenfield projects. For each new project forecast to commence production
in the future, Base Resources considers the stage of development, estimated
economics, mine life, applicable risks and the forecast market supply gap to
determine a likely start-up date.
DFS2 forecast product prices
· Base Resources' internal price forecast for each product is used until
2030.
· From 2035 prices are assumed to be the long-term inducement prices, as
forecast by TZMI, re-based to 2021 real. The exception to this is chloride
ilmenite, which is derived from Base Resources' internal long-term outlook
specific to the chloride ilmenite sector and a pricing structure that is more
consistent with traditional practice within that sector.
· Prices transition between 2030 and 2035 in a straight line.
· All forecast prices are FOB, real 2021, after adjusting for expected
product quality.
Base Resources' internal supply/demand analysis and price forecast methodology
Base Resources' internal price forecast is derived from continuous supply and
demand analysis. In broad terms, when a supply deficit is forecast, prices are
predicted to trend upwards and when a supply surplus is forecast, prices are
predicated to trend downwards. However, the direction and extent of forecast
price movements also take into consideration:
· Industry inventory levels relative to levels considered to be normal.
· Estimated "floor" and "ceiling" prices derived from historical precedents,
for example, where low price levels would threaten the economic viability of
many producers or excessively high prices encourage product substitution to
take significant effect.
· The anticipated behaviour of key suppliers actively managing production to
support prices.
Base Resources' internal supply and demand analysis utilises historical
production and consumption data. Base Resources' forecast product demand
utilises TZMI's five year demand outlook before transitioning to a steady
annual growth rate, generally consistent with global GDP growth forecasts,
adjusted for product specific considerations where applicable.
Product Prices Average Average From LOM
USD/t (FOB) 2025 - 2030 2031-2034 2035 Average
Sulphate ilmenite $187 $197 $189 $189
Slag ilmenite $196 $207 $199 $199
Chloride ilmenite $254 $281 $285 $278
Rutile $1,369 $1,259 $1,117 $1,185
Zircon $1,628 $1,573 $1,496 $1,532
Marketing outlook - sulphate TiO2 feedstock
A future sulphate feedstock supply deficit is forecast, providing robust
support for the development of the Toliara Project.
Sulphate and slag ilmenite
· Longer term there is an anticipated emerging supply gap assumed to be
partially filled by the Toliara Project and other new greenfield projects.
· Medium term outlook subject to high cost "swing" supply (concentrates and
Vietnam). Prices in the range of US$190 to US$230 are generally required to
stimulate and/or sustain swing supply.
· Upside demand for sulphate ilmenite is likely given the extent of the
deficit in the chloride feedstock market which will lead to increased sulphate
pigment production (to fill the shortage from feedstock-constrained chloride
pigment) and/or new chloride slag capacity to fill the chloride feedstock
deficit (which will use sulphate ilmenite as feed).
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the sulphate feedstock
outlook.
Marketing outlook - chloride TiO2 feedstock
A future chloride feedstock supply deficit is forecast, providing robust
support for the development of the Toliara Project.
Chloride ilmenite and rutile
· Substantial anticipated deficits for chloride pigment feedstocks support a
positive outlook for rutile and chloride ilmenite from the Toliara Project.
· Chloride ilmenite is a unique feedstock within the overall chloride
feedstock sector which has its own dynamics - see below.
· Rutile is a preferred high-grade feedstock for chloride pigment production
and the relatively small quantities produced from the Toliara Project will be
easily absorbed.
· The longer-term supply deficit should either:
o stimulate further chloride slag production which will result in higher
demand for sulphate ilmenite suitable as a feedstock for chloride slag; or
o constrain chloride pigment production (lack of feedstock availability) which
would result in more sulphate pigment being produced and more demand for
sulphate ilmenite.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the chloride feedstock
outlook.
Marketing outlook - chloride ilmenite
The forecast chloride ilmenite supply deficit is more significant than overall
chloride feedstocks, providing a source of high value for the development of
the Toliara Project.
Chloride ilmenite
· Stage 1 production of chloride ilmenite will add 20% to global supply in
a market that is forecast to be in substantial deficit, ensuring production is
easily absorbed.
· Demand for chloride ilmenite is driven by pigment, synthetic rutile and
chloride slag production. Pigment expansions in recent years and an increased
focus on external sourcing of chloride ilmenite for chloride slag and synthetic
rutile production suggests that actual demand for chloride ilmenite now exceeds
historic peak consumption levels and will continue to increase into the
future.
· Availability of chloride ilmenite supply has historically constrained
consumption, with end users able to consume significantly higher volumes.
Chloride ilmenite consumers from each end use sector have expressed concern
over the significant deficit of this specific titanium mineral in coming years.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the low grade chloride
feedstock outlook.
Marketing outlook - zircon
A future zircon supply deficit is forecast, providing robust support for the
development of the Toliara Project.
Market outlook - zircon
· Significant new supply is needed from new supply to meet projected zircon
demand.
· There is limited opportunity of "swing" supply from concentrates to manage
this in the medium term.
· Over the long term there are forecast to be growing shortages.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the zircon outlook.
Implementation strategy
The Toliara Project is a "greenfields" mineral sands project that will be
constructed on a remote site in a developing country with limited construction
resources. The delivery approach addresses this, incorporating Base Resources'
experience in delivering and operating Kwale Operations.
Toliara Project implementation objectives
That the wider industry will see the delivery of the Toliara Project as the
best reference project to emulate:
· It has been delivered safely, on time, on budget and environmentally
responsibly.
· It is making a real and sustainable positive difference to the surrounding
people and communities.
· A new standard has been reached in terms of incorporating an optimum
balance between innovation, low capital cost and risk.
· Design and delivery have ensured the facilities are effectively operated,
maintained and quickly ramped up to the requisite production efficiencies and
outputs.
· People and companies who are part of the delivery feel they have been part
of an outstanding success and experience.
A number of factors drive the implementation strategy
· Complex scope (mineral sands) and long life requires continual owners
input to ensure an enduring, fit for purpose and world class design is
delivered.
· Remoteness of the project and the country risk limits the appeal of "lump
sum" contracts (to a limited contractor market for complex processing plants)
making this approach high cost with minimal increase in delivery certainty.
· Government and community engagement and approval processes are more
effectively conducted by Base Resources due to the complexity, risk, and
existing/future relationships.
· Utilising Base Resources' knowledge gained through the Kwale project
delivery and operation.
· Outsourcing or fixed price contracts where Base Resources doesn't have the
requisite knowledge (power) or competitive value is tied to a contractor's
unique methods or capability (marine and power).
The broad delivery approach is as follows
· Mining - Owner Implementation.
· Processing plants and field services - EPCM.
· Infrastructure - EPCM.
· Fiherenana bridge - EPC.
· Jetty, shiploader and marine infrastructure - EPC.
· Power - "self-supplied" by Base Toliara, with the generation facility to
be constructed by an Independent Power Provider (IPP) that will operate and
maintain that facility on Base Toliara's behalf.
Implementation strategy (cont.)
The delivery of the Toliara Project will follow Base Resources' proven project
development system and standards.
Project development phases
Base Resources has followed its proven project development system and standards
for the concept, pre-feasibility and definitive feasibility study phases. This
was achieved by retaining engineering companies and key staff from PFS through
DFS, and now DFS2. Subject to performance and cost, this is intended to carry
through into implementation.
Pre-FID works program
· Following lifting of the on-the-ground suspension (LOS), 11 months will be
required to complete the necessary work before FID can be achieved. This work
includes community engagement, permitting and environmental approvals, land
acquisition, funding and geotechnical investigations, engineering and
contractor procurement for key packages.
· The pre-FID work aims to de-risk the overall implementation schedule by
progressing engineering designs and selecting preferred contractors to start
construction of the camp, export facility shed piling, haul road, bridge, jetty
and power plant as soon as practical after FID. The project implementation
plan will be updated during this period.
Final investment decision
· The Board will consider the DFS2, forecast market conditions and funding
availability in order to make the FID.
Implementation phase
· Planned in two stages:
o Stage 1 includes DMU1, WCP1, MSP, haul road, bridge, export facility and all
associated infrastructure and is scheduled over 27 months from FID.
o Stage 2 comprises the construction DMU2, WCP2 and MSP upgrade over a 21
month period, delivered 4.25 years after Stage 1 implementation ends.
Transport and logistics
· An experienced logistics contractor will be engaged to manage freight
forwarding, customs clearance and organise road transport to site.
Stage Commence Finish Duration Cost
(months) (US$m)
Assumed LOS Jan-22 - - -
Pre-FID Dec-17 Dec-22 60 194*
Stage 1 FID Dec-22 - - -
Stage 1 Implementation Jan-23 Mar-25 27 520
Stage 2 Studies / FEED Nov-25 Mar-27 17 2
Stage 2 FID Mar-27 - - -
Stage 2 Implementation Apr-27 Dec-28 21 137
*$149m spend up to LOS and US$45m required from LOS to FID
Construction workforce
The construction effort will be spread over a wide geographic area covering the
MSP, WCP, mine infrastructure, road, bridge and export facility. These works
will be performed by multiple civil, structural mechanical & piping (SMP),
electrical & instrumentation (EI) and marine contractors, with a workforce
peaking at 2,150.
· Peak workforce of 2,150 personnel excluding Base Resources operational,
community, environmental and administration personnel.
· Up to 800 skilled contractor personnel and 1,350 unskilled local workers
will be on site during the 27-month construction period.
· The accommodation camp facilities will be completed early and are sized to
cater for the non-local workforce and supervisory staff working on the process
plant site facilities.
· Local Toliara people and contractors working on facilities other than the
process plant site construction activities, will be accommodated in Toliara and
local towns.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a chart showing the Stage 1
construction manning levels.
Operational workforce
A detailed manning ramp-up plan has been developed to estimate the requirements
for the operational phase. For Stage 1, a total of 690 employees is forecast
for mining and WCP start-up at September 2024, increasing to 731 by February
2026, prior to commencement of Stage 2 construction.
· It is anticipated that the total operations workforce at the commencement
of mining in September 2024 will be 690 employees, rising to 731 employees by
February 2026 and will remain stable until the commencement of Stage 2
operations. Of these, it is expected that 60 employees will be expatriate at
start up, reducing to 49 employees by the start of Stage 2 operations. The
remainder of the employees and contractors will be Malagasy, primarily from the
Toliara region.
· Accommodation objectives balance several factors including community
impact, benefits to the community, availability of accommodation, fit-for-work
standards and the attraction and retention of capability. On-site camp
accommodation is planned for expatriate fly-in fly-out, shift workers on night
shift, emergency response teams, apprentices, clinicians, on-call tradespeople
and consultants.
· Malagasy employees from outside the Toliara region are expected to
relocate to the surrounding communities and transported to work daily.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a chart showing the operations manning
ramp-up levels.
Operational management and readiness
Early capability and capacity building programs were initiated to develop
Toliara regional skills in semi-skilled, skilled and professional categories
prior to the operational phase.
Operating and construction readiness
The complete range of skills required to commission, start up and operate the
Toliara Project are not readily available in the Toliara region. While there
are many skills available and people with diverse academic qualifications,
these need to be augmented with:
· Specific mining and processing training and work experience in order to
reach acceptable capacity and capability for the needs of the project.
· Use of expatriate employees in key technical and managerial positions
during early operational phases.
In accordance with the Labour, Recruitment and Influx Management Plan (LRIMP),
a comprehensive early capacity building program commenced in early 2019:
· Registration of over 7,000 local people for traineeships.
· Over 2,000 people progressed through a selection process to finalise the
selection of over 500 people to train in a variety of skill sets.
· Construction and operational traineeships in trades, equipment operation,
maritime operations and computing, combined with English literacy, numeracy and
leadership training have been completed. The first group of 24 apprentices
have successfully completed internationally recognised trade qualifications
whilst on secondment at the Kwale Operations. Further to this, the early
selection of 17 Malagasy nationals for the graduate program is complete.
Training programs will resume prior to and throughout the construction period.
· Monitoring of employee performance during construction will provide a
basis for operational phase training and employment.
Management systems
· Health and safety systems address the relative inexperience of locals
working in the mining industry.
· Administrative systems are computer based and integrate with existing Base
Resources applications.
· Maintenance systems reflect the need for the operations to be
self-sufficient due to remoteness.
Workforce skills and training
The required construction and operational skills are not readily available in
the Toliara region. Base Toliara has implemented strategies to maximise the
availability of skills for the implementation and operational phases of the
Toliara Project.
To ensure the required skills are available, Base Toliara has planned and is
implementing:
· A system of preferential recruitment, agreed with community stakeholders,
where skills are sourced locally where available, and then from progressively
further afield in Madagascar and internationally, where they are not available
in Toliara. This arrangement is embodied in the LRIMP.
· Training for trades apprentices and professional graduates from
Madagascar, at Base Resources' Kwale Operations in Kenya, through the national
and in-house training programmes.
· Community capacity-building and training to develop local construction and
other work skills.
Following a registration and screening process, over 7,000 applicants from the
project area have registered for employment and training opportunities. Over
500 of these have completed Base Resources' construction readiness training
courses in mobile equipment operation, construction "wet trades", and other
work skills.
Contractors from outside the local area will utilise their existing management,
supervisory and specialist personnel to the extent allowable. Procedures are
in place to support contractor access to the Base Resources registration
database for skilled, semi-skilled, and unskilled local labour, and to assist
contractor recruitment of additional skilled personnel from outside Toliara if
required.
Inductions and training will be used to prepare construction workers for shift
work during construction which will serve as an introduction to the long-term
shift work required for operations.
For maximum effectiveness, leadership positions relating to local functions
such as community and government relations will be held by a Malagasy
national. To date, three senior positions in this area (General Manager
External Affairs, Manager Community Relations and Manager Government Relations)
have been successfully sourced.
Operational management and readiness (cont.)
Operating philosophy
The majority of the operation functions will be owned and operated by Base
Resources.
Functions outside Base Resources' experience or where financial benefits accrue
will be outsourced allowing focus on core activities:
· Mining - owner operator.
· Processing - owner operator.
· Administration - owner operator.
· Product transportation - contractor.
· Export facility operation (land) - owner operator.
· Export facility operation (marine) - contractor.
· Power - "self-supplied" by Base Toliara, with the generation facility to
be constructed by an IPP that will operate and maintain that facility on Base
Toliara's behalf.
· Laboratory services - owner operator.
· Camp services - contractor.
Management
Internal candidates have been identified for key operational positions:
· General Manager Operations.
· Manager Human Resources.
· Manager Finance & Administration.
· Manager Environment.
Stakeholder engagement
Stakeholder mapping
Analysis of the various stakeholders' ability to influence Toliara Project
development provides an understanding of the potential for persons,
organisations and institutions to play a supportive or disruptive role in
development of the Toliara Project.
Base Resources has been able to form an understanding of the "on ground"
situation in the Toliara area through its own stakeholder mapping in
conjunction with initial stakeholder mapping performed during the Environmental
and Social Impact Assessment (ESIA) study by the previous owners (WTR).
Consultation process
Community consultation programs have commenced but are currently on hold due to
the Government-imposed suspension of activities. These programs are intended
to improve information sharing and bring communities and other stakeholders
closer to the Toliara Project. An overview of the Community Stakeholder
Engagement Plan process and participants is as follows:
· The Regional Coordination Committee (SCRC in French) was established by
the Government to manage stakeholder engagement during WTR project ownership.
It comprises 45 members and is intended to sit monthly to discuss progress,
grievances and give feedback. The Governor (the senior most administrative
position in the region) is the Chairman. Its current function remains focused
on high-level communication and information sharing amongst regional players.
· The Resettlement Working Groups (RWG), one for the mine site and another
representing communities along the haul road and at the export facility site,
are committees that bring together communities that will be subject to the
resettlement requirements of the Toliara Project, enabling them to participate
in the decision-making process and provide input into how to achieve positive
outcomes for the process. These committees comprise community representatives
that will be directly affected by resettlement and relevant government agencies
and local administrators that have a participatory role in delivering positive
resettlement outcomes aligned to IFC Performance Standard 5 - Involuntary
Resettlement.
· Community Liaison Committees (PLL in French) are the main stakeholder and
communication link between communities outside the Toliara Project's footprint.
The PLL will be formed once the RWG process is well established. The PLL
committees are intended to be very mobile, reaching out to remote areas to
establish trust with local communities and avoid issues of information
distribution shortcomings which can be a result of closed-door static
committees. Each village will have a representative in a PLL to enhance the
community's ability to share information amongst themselves.
Land acquisition
Foreign controlled companies are not permitted to own land in Madagascar but
can obtain surface rights through a lease arrangement with the Government.
A high-level overview of the process of obtaining surface rights being employed
by Base Resources is as follows:
· Establish title/ownership of land - only a small number of land parcels
required have an existing formal title (106 of 1,041), the rest are held
through customary interests. This stage has been completed.
· Agree/determine the land value. There are two options to do this:
o Compulsory acquisition of land through the DUP process. Currently on hold
pending the lifting of suspension following which the Evaluation and
Compensation Committee (CAE) will finalise field work required and negotiate
compensation.
o Private treaty negotiations direct with landowners is permitted under the
Mining Code. Currently on hold pending the lifting of suspension and completion
of CAE's negotiations.
· As Base Toliara cannot own land, it will fund the Government (on the basis
of values determined above once the process is completed) to:
o acquire land titles where available; or
o acquire the customary interests where no land title exists.
· Where the Government acquires customary or privately owned interests
through compulsory acquisition, a title must be created for that land in the
name of the State.
· Base Toliara will then negotiate a lease with the Government for the
surface rights to the land held by the Government as required for the project.
A total of 20 households associated with Base Toliara employees working at the
exploration camp, and residing nearby on the mine site, were forcibly removed
by a group of people opposed to the Toliara Project. Base Toliara supported
them to return to Benetse, their village of origin, and constructed temporary
accommodation and provided materials to replace lost belongings. They remain
listed as subject to physical relocation and will receive full compensation and
relocation benefits in compliance with IFC Standards after preparation of the
Resettlement Action Plan (RAP) once the consultation process can begin again in
collaboration with the RWGs.
The DUP process does not extend to dealing with livelihood replacement, the
relocation of tombs and other requirements under IFC Standards which Base
Resources seeks to comply with through the RAP. These additional steps will
involve the RWGs and run in parallel to ensure legal and IFC compliance. The
Livelihood Replacement Plan has been completed and will be further refined
through consultation with affected stakeholders once engagement activities can
resume. The tombs relocation program was about one third complete prior to the
suspension of activities.
Land acquisition - DUP process
Compulsory acquisition of land can be achieved through the DUP process.
An overview of the DUP process:
· The process commences with public notification of the intention to
undertake compulsory acquisition. This has been completed.
· Those affected are given 30 days to register their interest. This has
been completed.
· Following registration, the DUP Decree is issued and land parcel
identification and socio-economic studies are undertaken. The DUP Decree for
the haul road and export facility was issued on 15 April 2018 and the mine site
issued on 19 July 2018.
· A list of land interests is prepared and posted in the community for a
30-day public review period. This has been completed.
· Following a review process, the issuance of the Act of Transferability
confirms land parcels impacted by the Toliara Project. The applications for
the Acts must be submitted within 12 months of issuance of the DUP Decree or it
expires. This has been completed.
· Concurrently, the CAE is established to manage the final steps. The CAE
is responsible for confirming the eligibility of landowners of each of the
parcels listed and the evaluation of any associated private assets such as
structures and crops. Following this, negotiation of compensation rates is
undertaken, culminating in agreed amounts for the various assets involved. The
CAE has been established for the Toliara Project land acquisition and
eligibility and values have been determined subject to field confirmations
which are now awaiting lifting of the suspension.
· Once compensation amounts are finalised, the CAE will advise Base
Resources of the total cost of compensation.
· Following payment of the compensation amount to the Government, the
compulsory acquisition is finalised by transfer of land title to the
Government.
Community development, employment and local content
Community development
Base Resources recognises the significance community development plays in
building positive relationships and ensuring locals benefit from development of
the mineral resource.
The approach is focused in specific areas of development:
· The health sector.
· Education programs.
· Community infrastructure.
· Livelihood enhancement projects.
A Community Development Management Plan will be developed in consultation with
affected communities, Non-Government Organisations (NGOs) and regional
authorities to align outputs with stakeholder priorities and local development
plans.
Funding for community development activities is by way of:
· Distribution of 70% of mineral royalties by legislative requirement to
communities in the region affected by the Toliara Project.
· Planned annual community development expenditure of US$3m by Base
Resources from commencement of operations is now assumed in the modelling.
· An upfront community development fund of US$10m is now assumed to be
established prior to the commencement of operations.
Employment
Affected communities will be prioritised for employment during both the
construction and operations stages. To facilitate this, community training
programs have commenced. Though not all who participate in this training will
be employed, it will give people, particularly youth and women, valuable skills
to secure employment elsewhere.
Base Resources has developed the LRIMP which has been approved for use by the
Committee for Transparency in Recruitment, a regional committee set up to
oversee the Toliara Project recruitment process. The LRIMP identifies job
seekers and prioritises them based on impact (i.e. if they were resettled) and
their proximity to the Toliara Project. A lower priority is assigned to those
living further away.
This system is also a commitment under the ESIA approval process outlining the
need for both skills development and local employment prioritisation as
mitigation for social impacts.
Local content
The procurement of goods and services from local organisations creates benefits
through direct and indirect job creation and helping to build the local
economy. Local businesses will be given training on Base Resources minimum
standards to prepare them for tendering and possible selection as a supplier or
contractor.
Environment
Environmental setting
Madagascar is the world's fourth largest island and is recognised as one of the
world's top ten hotspots for biodiversity, owing to its unique biota and the
high degree of threat to its natural habitats.
It is estimated that there are about 10,000 plant species on the island. Of
these, 80% or more occur nowhere else. Human settlement commenced in
Madagascar 2,000 years ago and has resulted in the clearing of much of the
island's forest habitats.
Madagascar is globally important in terms of its biodiversity and is within the
Madagascar and Indian Ocean Islands Biodiversity Hotspot as designated by
Conservation International. Despite considerable biological interest,
knowledge of the flora and faunal biodiversity in the region is still hampered
by unresolved taxonomic problems and poor sampling.
The Toliara Project area falls into the Madagascar Spiny Thicket Ecoregion,
which is divided into succulent woodlands and Madagascar spiny thickets. The
total size of the ecoregion is 124,000km2, falling into the deserts and
succulent shrublands habitat type of Madagascar and is classified as a
Critically Endangered region.
The spiny thicket is exceptional in this regard, with 95% of all plant species,
and 48% of the genera occurring in the ecoregion endemic to Madagascar. The
thicket is dominated by members of the endemic Didiereaceae family.
Fauna is also important for this region, with Madagascar and the Spiny Thicket
Ecoregion exhibiting high levels of endemicity. The conservation of forested
habitats is a priority as they are subject to the greatest threats (slash-burn
agriculture and charcoal production). There are few protected areas covering
the ecoregion with very little known about the biodiversity and ecology of the
region.
Reserves protect approximately 3% of the region, leaving the rest susceptible
to degradation. The main threats include charcoal production, logging for
construction, grazing of domestic animals (primarily zebu cattle, but also
goats) and agriculture. Invasive plant species also cause a loss of habitat,
as does illegal collecting of endemic and endangered species for commercial
trade.
A rare opportunity to make a significant contribution to conservation
The environmental setting of the Toliara Project within a Biodiversity Hotspot
and one of the ecoregions of the Madagascar and Indian Ocean Islands supporting
a rich fauna and flora with high levels of endemism presents a significant
opportunity for Base Resources to make a meaningful contribution to the
region's biodiversity and conservation efforts through:
· Targeted environmental programs.
· Collaboration with conservation partners - government environmental
departments, research institutions, NGOs and communities.
· Collaborations with regional, national and international researchers such
as Missouri Botanical Garden, Flora & Faunal International, Reef Doctor and the
African Butterfly Research Institute.
Environment (cont.)
Regulatory framework
· Environment Permit No 55-15/MEEMF/ONE/DG/PE is granted and valid.
· Approved Plan de Gestion Environnementale (PGE) (an environmental
management plan) in place.
· Office National Pour l'Environement (ONE), the Malagasy environmental
management authority, have advised that subsequent amendments to the Toliara
Project should be made through an updated PGE and the Construction and
Operations Plan de Gestion Environnementale Spécifique (PGES') - see below.
· The Construction PGES', prepared during FEED and submitted to ONE three
months prior to commencement of construction, will present project changes to
date.
· Operational PGES' will be prepared and submitted to ONE three months prior
to commencement of operations.
Environmental and Social Impact Assessment documentation
A number of ESIAs have been prepared and approved over the years for the
Toliara Project, with the principal documents being:
· 2005-2006: Scoping Report prepared and submitted to ONE.
· 2006-2007: Specialist studies conducted, not submitted to ONE.
· 2012: Revised Scoping Report submitted to ONE for public review.
· 2012-2014: Specialist assessments redone, detailed ESIA completed and
submitted to ONE.
· 2015: PGE issued by ONE together with the Environmental Permit.
· 2017: Addendum ESIA submitted to ONE. PGE Addendum 1 issued by ONE.
Base Resources is committed to international best practice
The Toliara Project will develop and operate a comprehensive Environmental and
Social Management System (ESMS) to meet the requirements of Base Resources'
policies, Malagasy legislation and international best practice, including the
Equator Principles, IFC Performance Standards and the World Bank Group's
Environmental, Health and Safety Guidelines.
Environmental and Social Management System
· ESMS will give effect to Base Resources' commitments.
· ESMS based on a 'Plan-Do-Check-Act' business performance improvement cycle
utilising risk and impact assessments as a key tool.
· ESMS components will include:
o Update of the PGE to reflect name change and Project changes.
o Summary ESIA to consolidate ESIAs and reflect Project changes.
o PGES' for construction, operational and decommissioning phases for
submission to ONE three months before the start of associated activities.
o Construction phase, operational phase and decommissioning phase ESMPs.
o Baseline studies - update of previous studies, new studies and modelling.
o Comprehensive environmental monitoring program, including ecological
monitoring.
o Environmental programs to support Base Resources' commitment to improving
biodiversity, promoting conservation and sustainability, including an
indigenous tree nursery to research propagation methods of the region's unique
flora, establishment of biodiversity corridors and offset and reforestation
programs.
Government and political
Overview
Madagascar is a country with a heightened degree of political risk, with a
history of regular events of instability, most recently with the political
crisis in 2009. Madagascar does not have a history of civil war and most of
its troubles are characterised by political paralysis rather than widespread
violence.
The Presidential elections concluded in December 2018 were relatively free from
social unrest, regarded as materially free and fair and the result met with
general acceptance, including by the key opposition candidates. Consequently,
the President can be considered to have a clear mandate and there is an
expectation of a period of relative political stability. The presidential term
is five years.
Government engagement
The President has expressed support for development of the Toliara Project both
during the late-2018 election campaign and subsequently. This, combined with
statements from key advisers, is considered to represent a genuine support for
the Project's development.
A structured and intensive stakeholder engagement strategy has been focused on
establishing and building relationships with the relevant national and local
government authorities as well as key influencers who can contribute to a
lobbying coalition in shaping the Government's policy in relation to mining
and, more specifically, its disposition towards the Toliara Project.
Proposed changes to the mining regime
The national government has documented its desire to implement a "new vision
for mining" and is undertaking a consultation process with key stakeholders as
it develops its mining policy. While the scope and timing for any changes to
the mining regime remain uncertain, key aspects being considered for reform
are:
· Taxes applicable to mining projects, including concessions applicable
large-scale mining.
· Securing Government free carried interest in mining projects.
· An increase in royalty rates.
· Increased mining company contribution to regional development,
specifically aligned to the Government's development priorities (e.g. roads,
power access, food security).
An intensive, coordinated and broad-based lobbying campaign is ongoing to
ensure that the Government makes informed decisions on policy and implements
them in a way that does not render the Toliara Project, as well as the wider
mining sector in Madagascar, unviable. Separately, Base Resources is engaged
in direct discussions with the Government seeking to agree the fiscal regime
that will apply to the Toliara Project, which will allow the project to proceed
independent of any reform to the mining regime. While an acceptable outcome
should be achievable, the risk remains significant.
Applicable legal regime
General
The legal system in Madagascar is based upon the French civil law system. This
is a codified legal system based on the Napoleonic model. As in all civil law
systems, statute law (which is contained in a series of codes) has the greatest
importance. In contrast with common law systems, the doctrine of precedent
(jurisprudence) has little weight.
Mining law
The Code Minier or Mining Code and the Large Mining Investment Law (LGIM) (and
their implementing decrees) are the main pieces of legislation that govern the
mining sector in Madagascar.
Under the Mining Code, Madagascar is divided into squares of 625m. Only one
permit exists per square.
Mining permits are administered by the Bureau de Cadastre Minier de Madagascar,
the Madagascar Mining Registry. It operates on a first-come, first-served
basis. The system operates in a generally reliable, stable fashion and the
risk of outright expropriation is considered low.
A royalty is payable to the Government based on the value of the product
extracted. The Mining Code currently prescribes the rate as 2% of the value of
the first sale.
Environmental laws
Any entity wishing to perform exploration activities is required to obtain an
environmental authorisation, and any entity wishing to perform exploitation
activities is required to obtain an environmental permit.
Land laws
There is a system of land registration in Madagascar. Land that is registered
is recorded in the books at the land registry. The Topographic Service holds
an official plan drawn up by a surveyor, showing the boundaries of the land.
In practice, regional land registries (including the one in Toliara) are
largely paper-based and often incomplete.
Foreign controlled entities are not entitled to own land in Madagascar.
Instead, occupation of land by foreign entities is typically through a long
term lease (with a maximum term of 99-years).
LGIM explained
Overview
The Large Mining Investment Law, or LGIM, which was drafted with the assistance
of the World Bank and is intended to create a beneficial legal and financial
platform to attract investment in the mining sector.
To date, only the Ambatovy project has been certified as eligible under the
LGIM.
Eligibility certification requires submission of environmental authorisations,
obtaining of exploration or exploitation permits, and certification of the
investment plan, including evidence that the proposed investment will exceed
MGA50 billion (approximately US$15m).
Key benefits of the LGIM
· Guaranteed stability of taxes and custom duties, and no restrictions on
the sale of mining products.
· Entitlement to use foreign currencies and hold foreign bank accounts.
· Beneficial tax regime, including VAT exemptions.
· Beneficial customs regime.
· Protections from expropriation.
· Access to international arbitration for the resolution of disputes with
Government.
The process after submission is generally expected to take five months from the
date of application (potentially more) depending on the number of documents or
clarifications required by the Government. Generally, the LGIM eligibility
period runs from the date of LGIM certification until expiry of the mining
permit granted to the permit holder. For the Toliara Project, the eligibility
period would be expected to end on 20 March 2052, to coincide with the end of
the initial term of PE 37242.
LGIM eligibility certification (or equivalent legal and financial stability
regime) is considered a pre-requisite for successful funding of the Project.
Base Resources filed its application for eligibility certification under the
LGIM in August 2020, based on the outcomes of the DFS, however this application
has not progressed as a result of the Government's suspension of the Project's
activities and pending agreement on the fiscal terms that will apply to the
Project. Base Resources is confident that the Toliara Project satisfies the
criteria for eligibility certification under the LGIM and expects timely
consideration of its application once fiscal terms are agreed and the
Government's suspension of the Project's activities is lifted.
Progress with fiscal terms negotiations
In November 2019, the Government of Madagascar required Base Toliara to suspend
on-the-ground activity on the Toliara Project. Activity remains suspended as
Base Resources continues to engage with the Government in relation to the
fiscal terms applicable to the Toliara Project and lifting of the on-the-ground
suspension.
Negotiations of fiscal terms with the Government of Madagascar
· Base Resources is engaged in direct discussions with the Government
seeking to agree the fiscal regime that will apply to the Toliara Project.
Progress is being made and Base Resources remains confident that an acceptable
outcome is achievable, however the timing for reaching an agreement, and the
precise terms of that agreement, remain uncertain.
· Upon agreeing the fiscal regime, the intent is for those terms to be
secured through eligibility certification under the LGIM, a convention, or
another mechanism that achieves an acceptable level of legal and fiscal
stability.
· Base Resources lodged its LGIM eligibility certification application with
the Government in August 2020, supported by the outcomes of the DFS. However,
this application has not progressed pending agreement on fiscal terms and LOS.
Suspension and COVID-19
· With the Government suspension of activity, continuing international
travel restrictions and broader COVID-19 measures and impacts both in
Madagascar and globally, the FID to proceed with development of the Toliara
Project has been delayed.
· Once fiscal terms are agreed, it is expected that there will be a LOS.
There will be approximately 11 months' work to complete prior to FID following
the LOS. This work includes finalising financing, obtaining LGIM eligibility
certification (or similar legal and fiscal stability), completing the land
acquisition process and concluding major construction contracts.
· Consequently, in order to achieve the assumed FID in December 2022, the
LOS would need to be secured by the end of January 2022.
Activities planned upon LOS
· Community engagement to allow access for geotechnical investigations.
· Land acquisition processes.
· Obtaining the LGIM eligibility certification or comparable legal and
fiscal stability arrangements.
· Securing of required statutory construction approvals and permits at the
local, regional and national government levels.
· Conducting environmental baseline studies and monitoring and securing
required environmental construction approvals.
· Negotiation and verification of indicative offtake terms with customers
and finalising term sheets with offtake partners.
· Completion of project funding, including JV partner negotiations.
· Early works - water drilling, quarry investigations and building of
contractor access roads.
· Concluding major construction contracts.
Key approvals - Project Development
Key Approval Notes
Export facility
MoU Provides the mechanism for land to be incorporated
into the export facility site
Permission Agreement to allow construction and operation of the
export facility site
Design and construction approvals,
and issue of construction permit
Land acquisition (export facility, road and mine site)
Private contracts and agreement Used to acquire private rights, where possible
Land decree classifying lands as Act of Transferability (acte de classement) to be
State public domain issued by way of decree
Government lease Long term lease over government land (Domaine privé
de l'Etat) in favour of Base Toliara. Applies to
haulage road and mine site
Haulage road
MoU Establishes the basis for the construction and use of
the haulage route
Design and construction approvals
Camp
Design and construction
approvals, and issue of
construction permit
Borehole construction and water
extraction
Mine construction
Design and construction
approvals, and issue of
construction permit
Borehole construction and water
extraction
Authorisation to operate the Applies to larger facilities (over 500kW for thermal,
power facility (Autoproduction hydraulic and solar installations, and over 1MW for
authorisation) biomass installations, geothermal, wind or waste
processing).
Environment
Environmental impact assessment Environmental impact assessment issued and approved
approval through issuance of PGE.
Environmental permit Environmental permit issued
Large mining law
Large Mining Investment Law Provides financial and legal stability regime for
(LGIM) certification large scale mining investments, favourable customs
regime, guaranteed foreign exchange rights and certain
tax benefits
Capital cost
Stage 1 capital cost is estimated at US$520m (accuracy +10%/-5%) based on
definitive engineering designs, tendered pricing, budget quotes and escalation
allowance. Stage 2 capital cost is US$137m.
· The Capital Cost Estimate (CCE) reflects the maturity of the design and is
based on engineering layout and design drawings, equipment lists or general
arrangement layouts and prices have been derived from a combination of the
following sources:
o 42% from project specific tenders (marine, export facility shed piling,
bridge, IPP, drilling and equipment), 50% from project specific budget
quotations, 7% estimated or built-up rates and 1% factored from similar works.
· Approx. 25-30% of engineering has been completed, underpinning a CCE
accuracy of +10 to -5%.
· An extensive Tender and BQR process was conducted for major contract
packages to establish unit rates that reflect the market conditions in
Madagascar. Firm quotes were received (Q4-2019) for all major mechanical /
electrical equipment vendor packages and over 90% of the CCE is supported by
pricing sourced from reputable suppliers and contractors.
· The onshore piling, offshore marine facility and bridge costs were
obtained via a tender process supported by post-tender technical and commercial
clarification meetings.
· The DFS CCE completed in December 2019 was updated in Q2-2021 for:
o Escalation, including additional owners labour costs, reflecting the DFS2
revised FID timing. The cost escalation estimate has been derived from data
collected from various African projects and forward-looking views from 5
different sources.
o Applicable foreign exchange rates - 71% of CCE is USD based, 14% ZAR, 12%
AUD and 3% EUR.
o Contingency provision reduced to 9.7% (down from 10.6%) due to the increased
scope certainty following de-risking and optimisation work completed since DFS
release.
· Owner's costs were developed from Kwale Operations experience and the
planned production ramp up.
Capital Cost Estimate (US$m) Stage 1 Stage 2
Mining (including HME and DMU) 39 20
Process Plants 110 67
Infrastructure (Camp, roads, bridge, power, water, buildings) 86 8
Product Storage & Export Facility 82 -
Professional Services (EPCM's, Vendor Reps, Specialists Consultants) 32 6
Owner's costs (see further breakdown in table below) 66 6
Sub total 415 107
Escalation (14.2% and 16.0%) 59 17
Contingency (9.7% and 10.5%) 46 13
Total Project Capital Costs 520 137
Owner's Costs Estimate (US$m) Stage 1
Integrated Management Team - Labour & Expenses 12.7
Initial Clearing for mining, TSF & Starter Pit 1.4
Camp operating (based on Kwale + US$2m fuel) 5.8
Spares, tools and 1st fills 8.0
In-country operations (community, environment, external affairs, 32.9
operations team, finance, admin)
Light Vehicles 2.0
1% customs stamp duty on value of imports 1.1
Plant Mobile Equipment 2.6
Total Owner's Cost 66.4
Project Development expenditure timeline
Pre-FID expenditure of US$195m includes acquisition costs, feasibility studies,
land compensation, construction early works and in-country operating costs.
Early works expenditure on a number of work packages will result in a fast
ramp up of construction following an FID and allow construction to meet phased
operational implementation and ramp-ups in line with critical path items. FID
is assumed to be Q4 2022.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the anticipated pre-FID
and post-FID expenditure.
Operating costs
Operating costs have been derived from first principles and experience gained
at Kwale Operations, incorporating local Malagasy cost inputs where
appropriate.
Operating cost LOM US$m US$/t US$/t Comments
category Total per mined1 produced1
US$m annum1
Power 720 19 0.79 18.2 Power is based on a solar hybrid solution
using HFO as a primary fuel source and a
small amount of supplementary diesel.
Assumes a HFO price of US$0.63/L, which
results in an average power price of
US$0.16/kWhr.
Maintenance 602 16 0.67 15.5 Maintenance is based on Kwale experience
and scaled where appropriate.
Labour - 159 4 0.16 3.8 Operations reach 60 expats in early years,
expatriates before dropping to 17 after 6 years and
reaching a steady state of 8 expatriate
senior managers from 2033 onwards.
Labour - 276 7 0.30 6.9 Excluding contractors and corporate staff,
nationals operations commence with 631 national
employees, before peaking at 820 in 2033
following completion of the Stage 2 and
transition of managerial roles.
Fuel - drying 259 7 0.29 6.6 Diesel usage for the MSP drying process is
based on Kwale experience and a delivered
diesel fuel price of US$0.85/L.
Fuel - mobile 161 4 0.18 4.1 Equipment fuel burn rates are from Kwale
equipment experience, and a delivered diesel fuel
price is US$0.85/L.
Product 342 9 0.38 8.7 Bulk transport to the export facility
transport & estimated at US$3.45/t plus US$0.60/t for
export facility free issue diesel. Marine operations will
rates be contracted to a chartering service at
US$2.4M per annum. Port of Toliara export
rates are estimated at US$2/t shipped,
plus annual lease costs of US$0.7M.
Flocculant 14 1 0.02 0.4 Flocculant usage between 0.08 and 0.12kg/t
slime at cost of US$2.85/kg.
Other operating 410 11 0.44 10.3 Other fixed operating costs, including
costs insurance, camp management, security
contractors and training.
Total operating 2,943 77 3.22 74.5
costs
Royalties 475 13 0.53 12.3 Government royalty rate of 4%.
Total operating 3,419 90 3.75 86.7
costs (incl.
royalties)
1 Annual averages, excludes first and last partial operating years
Unit operating cost per tonne produced
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the LOM unit operating
cost per tonne produced.
Contracts
A comprehensive strategy has been developed for the key contracts that will be
required to obtain FID, construct the project or operate the assets.
Strategy
· Maintain project knowledge through continuing successful relationships
with customers and key engineering and construction contractors.
· Selecting contract delivery models (e.g. EPC, EPCM, build own operate and
transfer, supply, services) with a combination of bespoke and standard FIDIC
terms and conditions to provide optimum benefit/risk balance.
· Consolidate contract packaging to optimise contractor overhead costs.
· In addition to commercial terms, all implementation and operating
contracts will include clauses related to Toliara Project specific objectives
such as labour recruitment, remuneration, health, safety and environmental
management.
Key FEED/early works agreements
· Mineral Technologies and Lycopodium Alliance (joint venture) appointed as
an EPCM contractor for the FEED and Early Works program.
· Marine consultant, PRDW, appointed to provide technical support on the
export facility FEED work.
· Zutari and Johnson, Winter & Slattery appointed to support during power
tender evaluation and Power Agreement negotiations.
· Zutari appointed to support roads design and contractor procurement.
· Colas Madagascar appointed to conduct river hydrology, geotechnical
investigations and preliminary design for the Fiherenana bridge.
· Fugro and Subtech appointed to conduct marine geotechnical investigations
and Seismic Survey.
· Wave International appointed to provide support for project controls.
· Early Works construction packages will be awarded to a mixture of first
tier and local contractors on re-measurable rates contracts.
Key implementation contracts to be finalised during FEED subject to FID
· EPCM Contract for EPCM services.
· Marine EPC Contract including the marine works, ship loader and jetty
conveyor contract. Contract based on FIDIC Yellow Book conditions.
· Fiherenana River Bridge EPC Contract based on FIDIC Yellow Book
conditions.
· Export Facility Piling Contract based on FIDIC Red Book conditions.
· Haul Road North Construction Contract based on FIDIC Red Book conditions.
· Haul Road South and Export Facility Bulk Earthworks Construction Contract
based on FIDIC Red Book conditions.
· Ranobe Road and Processing Plants Bulk Earthworks Construction Contracts
based on FIDIC Red Book conditions.
· Accommodation Design and Construction Contract based on FIDIC Red Book
conditions for the design and construction of the balance of the camp.
· Bespoke contract for power.
Contracts (cont.)
A comprehensive strategy has been developed for the key contracts that will be
required to obtain FID, construct the project or operate the assets.
Key implementation contracts to be finalised after FID
· Civil construction contracts based on FIDIC Red Book conditions. One
contract at the mine site and one at the export facility. EPCM manage supply
and logistics of the "free issued" reinforcing steel.
· SMP installation contracts based on FIDIC Red Book conditions. Two
contracts at the mine site and one at the export facility. EPCM manage supply
and logistics of the "free issued" materials and equipment.
· Electrical and instrumentation installation contracts based on FIDIC Red
Book conditions. Two contracts at the mine site and one at the export
facility. EPCM manage supply and logistics of the "free issued" materials and
equipment.
· Bespoke contract for supply chain and logistics management.
Key operations contracts to be negotiated during FEED subject to FID
· Fuel supply contract.
· Camp operations contract.
· Communications contract.
Key operations contracts to be negotiated post FID
· Marine operations contract (tug and line boat) will be fully chartered.
Tendering to commence at FID.
· Product haulage contract. Tendering for a five-year contract will
commence with prequalified contractors after FID. Base Toliara will supply
fuel on a flow-through basis.
Offtake agreements
Base Resources has provided potential customers with product samples and aims
to leverage its market reputation and existing customer base to secure offtake
agreements or final term sheets, prior to FID, that will support project
funding activities.
Owner operate
During the DFS, an owner operate approach was selected for mining and
laboratory services.
Mining and production profile
Production Profile Life of Mine (LOM) Stage 1# Peak Stage 2# Stage 2?
Years 2 - 4.5 Years 6 - 15 Year 16+
Total annual avg* annual avg annual avg annual avg
Ore mined (Mt) 904 23.9 12.6 25.1 25.1
HM% 6.1% 6.1% 9.4% 7.1% 5.4%
HMC produced (Mt) 55.6 1.5 1.2 1.8 1.4
Period 38.4 37.0 3.5 10.0 23.0
Produced (kt):
Sulphate ilmenite 16,941 450 388 566 407
Slag ilmenite 9,804 261 225 327 236
Chloride ilmenite 9,371 249 215 313 225
Total ilmenite 36,115 960 828 1,206 868
Rutile 283 8 6 9 7
Zircon 2,468 66 56 82 60
# excludes ramp up. * Does not include the first and last partial operating
years. ? Does not include the last partial operating year.
Mining and production profile (cont.)
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the LOM mining and
production profile.
Financial performance profile
Financial Profile Life of Mine (LOM) Stage 1# Peak Stage 2# Stage 2?
Years 2 - 4.5 Years 6 - 15 Year 16+
Total annual avg* annual avg annual avg annual avg
Ore mined (Mt) 904 23.9 12.6 25.1 25.1
Total production (kt) 38,866 1,033 889 1,298 935
Revenue - Total $11,899m $317m $265m $402m $286m
Operating Costs - $3,419m $90m $80m $97m $87m
Total
EBITDA $8,163m $219m $176m $297m $190m
Free Cash Flow $5,922m $174m $117m $241m $151m
Revenue - per tonne $306 $306 $298 $310 $306
produced
Operating Costs^ - $3.78 $3.75 $6.38 $3.87 $3.49
per tonne mined
Operating Costs^ - $88 $87 $90 $75 $94
per tonne produced
Cash Margin $218 $220 $207 $235 $212
Revenue : Cost of 3.5 3.5 3.3 4.1 3.3
sales ratio
# excludes ramp up. * Does not include the first and last partial operating
years. ? Does not include the last partial operating year. ^ Operating costs
include royalties.
Project cash flows (excludes funding)
Strong operating cash flows result in capital payback (for both stage 1 and 2
capex) occurring after four and half years of operation.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the LOM project cash
flows.
NPV sensitivities
NPV Sensitivities - Post tax / Pre debt, 10% discount rate, US$m
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a an NPV sensitivities "tornado" chart.
Pre-FID expenditure
Pre-FID expenditure of US$42.3m is required from October 2021 to FID in
December 2022.
In-country operating activities will ramp up when the suspension is lifted and
US$20.9m is forecast to maintain and support external affairs, community
initiatives, baseline studies, training and administrative activities.
The Project Development Pre-FID forecast of US$12.2m includes cost for:
· Integrated Management Team - Base Resources team for design management,
project controls and contracts development.
· Front End Engineering and Design:
o Engineering design to "Issue for Tender" status for bulk earthworks,
accommodation camp, haul road and the Ranobe access road. Detailed design for
processing plants and Fiherenana bridge.
o Consultancy services for marine, power, geotechnical, ground water
investigations and piling.
o Procurement to allow contract award for the bridge, marine, piling, roads
and bulk earthworks.
· Geotech/borehole investigation and drilling:
o Geotechnical drilling for the haul road, marine works and bridge.
o Production water borehole drilling.
· Early works construction:
o Toliara Port bridge upgrade.
o Quarry mining and stockpiling contract.
Toliara Pre-FID Cost Forecast (LOS to FID)
US$m
Labour costs 6.4
Security contractors 2.4
External consultants 2.7
Environmental studies & programmes 1.3
Community programmes 2.4
Travel & accommodation 1.2
OHS & training 0.3
Public & investor relations 1.1
Employee overheads 0.4
Other 2.7
Toliara in-country operating activities 20.9
Land acquisition costs 9.2
Project Development (FEED / EW) cost 12.2
Total Toliara pre-FID cost 42.3
Toliara Project FEED / EW cost (US$m) Forecast (LOS to FID)
US$m
Integrated Management Team 3.2
Front End Engineering and Design 3.7
Geotech/borehole investigation and drilling 2.6
Early works construction 2.7
Total PD cost 12.2
Funding update
Base Resources does not have the financial capacity to internally fund the
project development on its own. External funding in the form of some
combination of debt, JV interest and/or equity will be required to supplement
Base Resources' internally generated cashflow.
Funding for the Toliara Project can be broken down into three elements:
1. Deferred acquisition consideration of US$17m payable to the Project's
prior owners on receiving LGIM certification ($7m) and on FID ($10m).
2. Pre-FID funding (October 2021 to December 2022) of US$42.3m to advance
the Project, comprising in-country operating activities ($20.9m), land
acquisition ($9.2m) and project development cost ($12.2m).
3. Construction and operational start-up funding of US$700m (increased
from US$595m in the DFS), consisting of:
· Capex of US$520m.
· Working capital of US$124m, including an estimated US$55m for VAT (legally
refundable but assumed for this funding analysis to not be recovered until
operating year 5).
· Debt establishment and servicing during construction of US$51m (based on
the funding mix assumed below).
It is anticipated that the deferred acquisition consideration and pre-FID costs
will be funded internally from cash generated by Kwale Operations.
The ultimate funding mix for construction and start-up will be determined prior
to FID and will be dependent on Base Resources' internally generated cashflow
position and forecasts for the construction and ramp-up period, market outlook,
debt availability and cost, and scope of any strategic joint venture at the
time. For the purposes of the funding analysis, the following assumptions have
been made for the US$700m of construction and start-up funding:
· 40% equity contribution - US$280m sourced from some combination of cash
generated from Kwale Operations, equity contributions from a joint venture
participant (in conjunction with substantial offtake arrangements) and/or a
capital raising. Additionally, successful negotiation of a targeted VAT
exemption, or timely refunds, could reduce the overall funding requirement by
up to US$55m and contribute to reducing the required equity funding.
· 60% debt facility - US$420m sourced from commercial banks, DFIs and export
credit agencies.
Financial modelling confirms the Project's ability to comfortably support this
debt load.
On the basis of the project economics established by the DFS2 (in particular
free cash flow generation), the robust market outlook for mineral sands
products (refer Marketing analysis), Base Resources' sound financial position
(net cash and cash generation from Kwale Operations), track record of
successfully developing, operationalising and repaying financing on a similar
project (Kwale Operations), prior success in capital raisings as and when
required (including for the acquisition of the Toliara Project in early 2018)
and preliminary work already undertaken in relation to debt and JV
participation, Base Resources' considers that there is a reasonable basis that
development of the Toliara Project can be successfully funded.
Risks
During the DFS, a comprehensive risk review was completed. The risk outcomes
have been continuously reviewed and updated to capture new risks and track risk
mitigation activities to ensure all information remains current and relevant.
The risks presented in DFS2, reflect the Toliara Project risk profile as at
Q3-2021. 86 project risks are captured of which 47 had an initial risk rating
of "high" or "extreme", reduced to 12 risks after factoring in mitigations.
Risk classification
· A qualitative rating is applied to each risk or opportunity based on a
likelihood and impact matrix.
· Each risk is given an initial risk rating and, where risk mitigations are
identified, a residual risk rating.
· All risks with ratings of high or extreme undergo a high-level review by
management to ensure the rating is appropriate, followed by a moderation
exercise.
· Risks are generally classified as high or extreme if there is both a
reasonable (or higher) likelihood of occurrence and the consequence of such an
occurrence is serious (or worse).
· A number of factors are considered when assessing likely consequence,
including impact on finances, environment, personal safety, company reputation,
legal or regulatory implications, operating continuity and strategic
implications.
· Risks have been classified as pre-FID, post-FID (or applicable to both)
and operational to identify those that need to be addressed prior to FID or
during implementation. Of the 86 risks identified, there were 22 pre-FID
risks, 38 post-FID and 26 risks relevant to both pre-FID and post-FID periods.
· Operational risks are captured in the knowledge management system for use
in commissioning and operations.
· No material changes to the captured risks are expected during the period
up to FID.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graph showing the initial and
residual Project risks across each of the classifications.
Pre-FID and Post-FID risks
There are 22 pre-FID risks identified, 14 of which have an initial risk rating
of high or extreme - following mitigations these reduced to one extreme and
five high residual risks. There are 26 risks identified that apply to both
pre-FID and post-FID periods, 13 of which have an initial risk rating of high
or extreme - following mitigations this reduces to three high residual risks.
38 post-FID risks have been identified, 20 of which have an initial risk rating
of high or extreme - following mitigations this reduces to three high residual
risks.
Pre-FID risks
Government and legal risks
· DFS2 project valuation assumes higher royalty rates than the current
regulatory obligation. However, any change to the mining regime through action
on the government's "new vision for mining" and associated Mining Code review
could increase this further. Any changes to royalties, contribution to
regional development or possible free carried government interest will impact
economics and potential fundability of the Toliara Project. Depending on the
magnitude of the change, this may cause project delay, possibly for an extended
period or indefinitely. (Initial rating: extreme -> Residual rating: extreme).
· Project delay associated with obtaining remaining required approvals from
the various regulatory bodies. (Initial rating: extreme -> Residual rating:
high).
· Engagement with the Government to obtain support continues. Lifting of
the suspension is linked to reaching agreement with Government on fiscal terms,
which is ongoing. (Initial rating: extreme -> Residual rating: high).
· The Project may not be certified as eligible under LGIM, or there may be a
significant delay in obtaining certification. A LGIM application, based on the
DFS, has been submitted and engagement with Government continues. (Initial
rating: extreme -> Residual rating: high).
· Land acquisition at the Ranobe mine site is not finalised in time for
construction activities to commence. (Initial rating: high -> Residual rating:
high).
Funding risks
· Inability to secure sufficient long-term take-or-pay product offtake
agreements with customers of good standing to satisfy traditional debt funding
requirements. (Initial rating: extreme -> Residual rating: high).
Pre-FID and Post FID risks
Health and safety risks
· A fatality or serious injury during construction. (Initial rating: extreme
-> Residual rating: high).
Community risks
· Project delay caused by local political interference and/or civil unrest.
(Initial rating: extreme -> Residual rating: high).
Delays caused by COVID-19 pandemic.
· COVID-19 has caused upheaval globally with significant impact on
businesses with markets slowing down which could result in delayed funding,
loss of preferred contractors due to economic strains, closed borders and
potential unforeseen new laws. (Initial rating: extreme -> Residual rating:
high).
Post FID risks
Marketing risks
· Inability to form a strategic offtake relationship with target integrated
slag/pigment producers on acceptable terms. (Initial rating: high -> Residual
rating: high).
Government and legal risks
· VAT incurred during the project construction phase ($55m) is not refunded
or significantly delayed by GoM. (Initial rating: extreme -> Residual rating:
high).
Opportunities
17 significant opportunities were identified in the DFS that could add value to
the project. High potential opportunities are centered around Mineral Resource
and Ore Reserves, mine optimisation, environmental enhancement, community
development, implementation scheduling and exploitation of the deposit's
significant rare earth content.
Mineral Resources & Ore Reserves Opportunities
· Increasing the Mineral Resources and Ore Reserves estimates through
additional drilling. The present Mineral Resources estimate remains open to
the west and does not include the deep mineralised Lower Sand Unit (LSU).
Mine Planning and Optimisation
· Mine planning design review has been completed that demonstrated improved
productivity and allowed for increased equipment utilisation. Further
optimisation opportunities with regard to productivity, mined grade and product
mix will be continually reviewed over the life-of-mine. Adopting Co-Disposal
Tailings methodology will eliminate the need to construct a solar pond for
slimes disposal as all slimes will be mixed with sand tails prior to disposal.
Environmental Opportunities
· Through the implementation of effective conservation programs, knowledge
and practices may improve species propagation, and may eventually lead to
species being removed from the critically endangered list. While not impacting
on project net present value, this would enhance the Project's contribution to
regional and national betterment and Base Resources' reputation and strength of
licence to operate.
Community Opportunities
· Engagement and positive interaction with the local community facilitated
by the early skills training program, placement of block manufacture and early
works contracts may provide a good foundation to build relationships prior to
commencement of the mine, export facility and process plants.
Implementation Schedule Opportunities
· Reducing the implementation duration provides earlier project cashflow and
improve project net present value by US$6m for every month the construction
duration is shorter. All options to improve the schedule will be considered
during further FEED work.
Rare Earths
· The 2021 Ranobe Mineral Resources estimate heavy mineral contains 2.0%
monazite, which, given the grade and size of the deposit, represents a
significant potential source of Rare Earth Oxides that will be investigated in
future studies.
Toliara Project indicative timeline
Planned FID has been delayed due to COVID travel restrictions and the
suspension of on-ground activities. Once fiscal terms are agreed and this
suspension is lifted, there will be approximately 11 months' work to complete
prior to FID, including finalising financing, completing the land acquisition
process and concluding major construction contracts. Some resumption of
international travel will also be required to complete a significant portion of
this work. We maintain readiness to accelerate progress when conditions
support. For the purposes of the DFS2, FID is assumed to be end December 2022.
Refer to the full PDF version of this release (available from the Company's
website: www.baseresources.com.au) for a graphic showing the proposed Project
timeline pre and post-FID.
Glossary and appendices
Glossary
Term Meaning
$ or US$ or USD United States Dollars
Al2O3 Aluminum oxide
Base Toliara Base Toliara SARL, Base Resources' wholly owned Malagasy
operating subsidiary
Base Resources or Base Resources Limited (ABN 88 125 546 910)
the Company
BQR Budget quotation request
CAE Evaluation and Compensation Committee
CaO Calcium oxide
Capex Capital expenditure
Ce Cerium
Competent Person The JORC Code requires that a Competent Person be a Member or
Fellow of The Australasian Institute of Mining and Metallurgy,
of the Australian Institute of Geoscientists, or of a
'Recognised Professional Organisation'. A Competent Person
must have a minimum of five years' experience working with the
style of mineralisation or type of deposit under consideration
and relevant to the activity which that person is undertaking.
Cr2O3 Chromium (III) oxide
DFI Development finance institution
DFS 2019 definitive feasibility study for the Toliara Project, the
results of which were announced on 12 December 2019
DFS2 2021 definitive feasibility study, the results of which are set
out in this document
DMU Dry mining unit
DUP Compulsory acquisition of land through the process called
Declaration of Public Utility
Dy Dysprosium
EPC Engineer-procure-construct
EPCM Engineer-procure-construct-manage
ESIA Environmental and social impact assessment
ESMS Environmental and social management system
FEED Front end engineering development
FEL Front end loader
Fe Iron
FeO Iron oxide
Fe2O3 Iron (III) oxide
FID Financial investment decision by the Board of Base Resources to
commence construction of the Toliara Project
FIDIC International Federation of Consulting Engineers
FOB Free on board
FY Financial year. 1 July to 30 June.
GARN Garnet
GoM or Government Government of Madagascar
HFO Heavy fuel oil
HiTi High grade leucoxene
HM Heavy mineral
HMC Heavy mineral concentrate
ICSU Intermediate clay sand unit
IFC International finance corporation
ILM Ilmenite
Indicated Mineral An Indicated Mineral Resource is that part of a Mineral Resource
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 An Inferred Mineral Resource is that part of a Mineral Resource
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
IPP Independent power producer
IRR Internal rate of return
JORC The Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves 2012 Edition, as published by
the Joint Ore Reserves Committee of The Australasian Institute of
Mining and Metallurgy, Australian Institute of Geoscientists and
Minerals Council of Australia.
JV Joint venture
kt Thousand tonnes
kV Kilovolts
Kwale Operations Base Resources' mineral sands operations in Kwale county, Kenya
kWhr Kilo watt hour
La Lanthanum
LEUC Leucoxene
LGIM Large Mining Investment Law
LOM Life of mine
LOS Lifting of the on-the-ground suspension
LRIMP Labour, recruitment and influx management plan
LSU Lower sand unit
LST Limestone
M&I Measured and Indicated Mineral Resource
Measured Mineral A Measured Mineral Resource is that part of a Mineral Resource
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
MG12 spirals A new high-performance spiral separator from Mineral
Technologies
MgO Magnesium oxide
Mineral Resource 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
Minmod A company developed mineralogy modelling technique, it
comprises an XRF analysis of the magnetic and non-magnetic
fractions of each composite or sample, the results from which
are then back-calculated to determine in-ground mineralogy.
MnO Manganese oxide
MON Monazite
MRNL Madagascar Resources NL
MSP Mineral separation plant
Mt Million tonnes
Mtpa Million tonnes per annum
MW Megawatt
Nb2O5 Niobium pentoxide
Nd Neodymium
NGO Non-governmental organisation
NPV Net present value
ONE Office National Pour l'Environement
Ore Reserves Ore Reserves are the economically mineable part of Measured and
/or Indicated Mineral Resources. Ore Reserves are sub-divided
in order of increasing confidence into Probable and Proved
categories.
OS Oversize
P2O5 Phosphorus pentoxide
PE 37242 Base Toliara's Permis D'Exploitation 37242, which is a mining
lease under Malagasy law
PFS Pre-feasibility study for the Toliara Project, the results of
which were announced on 21 March 2019
Pr Praseodymium
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.
ROM Run of mine
RUT Rutile
RWG Resettlement working groups
SiO2 Silicon dioxide
SL Slime or clay
SMP Structural mechanical and pipework
Solar PV Solar photovoltaic system
SSU Surficial silt unit
t Metric tonne
Tb Terbium
TiO2 Titanium dioxide
Ti Titanium
Toliara Project or The mineral sands development project, based on the Ranobe
Project deposit, located in south west Madagascar, 45km north of the
regional port town of Toliara
TSF Tailings storage facility
tph Tonnes per hour
TZMI TZ Minerals International. An independent consulting group.
WCP Wet concentration plant
WTR World Titanium Resources Limited
UCC Up current classifier
USU Upper sand unit
USSU Upper silty sand unit
U + Th Uranium and thorium
V2O5 Vanadium pentoxide
VAT Value added tax
ZIR Zircon
ZrO2+HfO2 Zirconium and hafnium
Appendix - Mineral Resources by Zone
Ranobe Deposit Mineral Resources estimate as at 27 HM Assemblage as % of HM
September 2021
Zone Category Tonnes HM HM SL OS ILM RUT LEUC ZIR MON GARN
(Mt) (Mt) (%) (%) (%) (%) (%) (%) (%) (%) (%)
USU Upper Sand Measured 575 36 6.2 3.7 0.1 74 1.0 1.0 5.9 1.9 2.2
Unit
Indicated 654 30 4.6 3.6 0.2 71 1.0 1.0 5.9 1.9 3.6
Inferred 820 27 3.3 2.8 0.1 69 1.0 1.0 5.8 2.0 4.5
Total USU 2,040 93 4.5 3.3 0.1 72 1.0 1.0 5.9 1.9 3.3
SSU Surface Measured 4 0.2 5.2 21 0.4 73 1.1 0.8 5.9 2.0 4.0
Silt Unit
Indicated 8 0.3 3.7 16 0.7 69 0.8 1.0 5.7 2.0 4.2
Inferred 6 0.2 3.0 18 0.4 70 0.7 1.0 7.7 1.7 4.7
Total SSU 18 0.7 3.8 18 0.5 71 0.9 0.9 6.3 1.9 4.3
USSU Upper Indicated 13 0.8 6.3 23 2.3 72 0.9 0.8 6.5 1.5 4.4
Silty Sand
Unit Inferred 10 0.7 6.6 26 0.7 73 0.8 0.8 6.4 1.6 4.8
Total 23 1.5 6.4 25 1.6 72 0.8 0.8 6.5 1.6 4.6
USSU
ICSU Measured 18 0.5 3.0 23 3.0 68 1.3 1.2 6.4 2.2 2.3
Intermediate
Clay Sand Unit Indicated 118 3.6 3.0 24 1.8 68 1.1 1.1 6.1 2.2 3.5
Inferred 354 11 3.2 25 1.8 69 1.0 1.0 5.8 2.1 3.8
Total 490 15 3.2 25 1.8 69 1.1 1.1 5.9 2.1 3.7
ICSU
Grand 2,580 111 4.3 7.7 0.4 71 1.0 1.0 5.9 2.0 3.4
Total
Table subject to rounding differences. Mineral Resources estimated at 1.5% HM
cut off grade. *Mineral Resources are reported inclusive of Ore Reserves.
ENDS.
For further information contact:
James Fuller, Manager Communications and Investor UK Media Relations
Relations
Base Resources Tavistock Communications
Tel: +61 (8) 9413 7426 Jos Simson and Gareth Tredway
Mobile: +61 (0) 488 093 763 Tel: +44 (0) 207 920 3150
Email: jfuller@baseresources.com.au
About Base Resources
Base Resources is an Australian based, African focused, mineral sands producer
and developer with a track record of project delivery and operational
performance. The company operates the established Kwale Operations in Kenya
and is developing the Toliara Project in Madagascar. Base Resources is an ASX
and AIM listed company. Further details about Base Resources are available at
www.baseresources.com.au
PRINCIPAL & REGISTERED OFFICE
Level 3, 46 Colin Street
West Perth, Western Australia, 6005
Email: info@baseresources.com.au
Phone: +61 (0)8 9413 7400
Fax: +61 (0)8 9322 8912
NOMINATED ADVISOR
RFC Ambrian Limited
Stephen Allen
Phone: +61 (0)8 9480 2500
JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44 20 3207 7800
JOINT BROKER
Canaccord Genuity
Raj Khatri / James Asensio / Patrick Dolaghan
Phone: +44 20 7523 8000
END
(END) Dow Jones Newswires
September 27, 2021 03:12 ET (07:12 GMT)
Base Resources (LSE:BSE)
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