Published on March 4, 2014
Into Production AJM Mineral Sands Conference, Melbourne March 2014 BASE RESOURCES BUILDING THE FOUNDATIONS
Statements Restriction on Distribution Not for distribution directly or indirectly, to US persons or in or into the United States, Canada, Japan or South Africa. Forward Looking Statements Certain statements made during or in connection with this presentation contain or comprise forward looking statements regarding the capital cost, production and financial performance of the Kwale Project. Although Base believes the expectations reflected in such forwardlooking statements are reasonable, no assurance can be given that such expectations will prove to be correct. 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. Base 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. Competent Persons Statement Information in this presentation that relates to Mineral Resources at the Kwale Project is based on information compiled by BSE’s Manager – Geology, Scott Carruthers, who is a member of The Australasian Institute of Mining and Metallurgy. Mr Carruthers has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Carruthers consents to the inclusion in this announcement of the information based on his work in the form and context in which it appears. BASE RESOURCES BUILDING THE FOUNDATIONS
A snapshot ► Based in Perth, Australia. Substantial Shareholders ► Market Listings Pacific Road Capital 20.5% Taurus Funds Management 13.0% ASX & AIM - code BSE ► An institutionally dominated share register. Interest ► US$302 million incurred on development. (to 31 January 2014). $310 million estimated at completion Acorn Capital 8.2% 6.0% Aterra Investments ► 100% owner of the advanced Kwale mineral sands project in Kenya. 8.8% BT Investment Management ► Market capitalisation of around A$250 million at A$0.45 per share. L1 Capital 5.7% Total interest of Substantial Shareholders Total interest of top 10 shareholders Global Covering Brokers ► US$44 million in cash (at 31 January 2014). RFC Ambrian ► US$215 million in drawn debt facilities Euroz (at 31 January 2014). Credit Suisse GMP RBC Goldman Sachs Macquarie BASE RESOURCES BUILDING THE FOUNDATIONS JP Morgan 62.2% approx 75%
Another busy 12 months... Mining & production of all finished products is underway and the first bulk product shipment left port in mid February 2014. Base 120% All Ords Commenced zircon production Kenyan elections 100% Commencement of ilmenite & rutile production Closing of Mukurumudzi Dam 80% Commencement of mining 60% First bulk shipment 40% Secured $25m debt extension 20% Project 50% complete 0% Secured $20m COF increase AG confirms no LEP -20% Jan-13 Feb-13 Mar-13 BASE RESOURCES Apr-13 May-13 Jun-13 BUILDING THE FOUNDATIONS Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14
The right project. Kwale is large scale, technically straightforward and supported by well developed physical and social infrastructure. See project animation at www.baseresources.com.au BASE RESOURCES BUILDING THE FOUNDATIONS
First shipment. BASE RESOURCES BUILDING THE FOUNDATIONS
Developed safely. Establishing our required safety culture has been one of the key challenges…..and our success and a lead indicator for operational performance. 5 Frequency Rate 4 3 2 1 0 Feb-13 LTIFR Mar-13 Apr-13 May-13 Jun-13 Jul-13 WA All Mines LTIFR 2011/12 Aug-13 Sep-13 Oct-13 Nov-13 WA All Mines DIFR 2011/12 ► ► ► ► 8.4 million man hours (mmh) worked to date. 2 LTI’s for entire project (6.5 mmh LTI free) 2400 people on site at peak. 1000 people recruited from local community – most have never had a job before. ► 20 full time safety specialists. BASE RESOURCES BUILDING THE FOUNDATIONS Dec-13 Jan-14 TRIFR
Operational management team A highly experienced management team is in place, with deep experience in mineral sands, African operations and their respective fields. Colin Bwye • Metallurgist • Mineral sands experience: 24 yrs • Project commissionings: 2 Tim Carstens • Chartered accountant • Mining industry experience: 15 yrs Denham Vickers • Mining engineer • Project commissionings: 5 • African experience: 20 yrs Kevin Balloch • Certified practicing accountant • Mining industry: 10 yrs • African experience: 9 yrs Christo Schmidt • Metallurgist • Mineral sands experience: 25 yrs • African experience: 25 yrs Stephen Hay • Lawyer • Marketing experience: 10 yrs • Mineral sands experience: 13 yrs Vaughan Shaw • Tailings dam const. & ops: 20 yrs • Mineral sands experience: 10 yrs • African experience: 20 yrs Joe Schwarz • Chemical engineer • Mining industry: 40 years • African experience: 35 years Tony Venturini • Mining industry: 30 years • Project commissionings: 3 • Mineral sands experience: 4 yrs Colin Forbes • Social management • Community engagement: 14 yrs • African experience: 24 yrs Pieter Kros • Port management: 25 yrs • Worldwide experience Georgina Jones • Environmental science • Environmental consulting: 12 yrs • African experience: 20 yrs Director - Operations GM - Operations Manager - Production Manager - Mining Manager - Maintenance Manager - Port BASE RESOURCES BUILDING THE FOUNDATIONS Managing Director Chief Financial Officer GM - Marketing GM – External Affairs GM – Social & Enviro Manager - Environment
Off-take arrangements Portfolio of agreements with global customers covering first 5 years of production is in place. Rutile (48% of revenue) Contracted Contracted Ilmenite (28% of revenue) Contracted Contracted Contracted Zircon (24% of revenue) Contracted BASE RESOURCES Contracted BUILDING THE FOUNDATIONS
Which brings us to now Since acquisition in August 2010, Base has driven the rapid development of the Kwale Project with production of ilmenite and rutile commencing in December 2013 and first bulk shipment in February 2014. 2014 2013 Aug 1 Sep Oct Nov Dec Jan Feb Mar Infrastructure ► CP4 - Mukurumudzi Dam ► CP5 - Tailings storage facility 2 CP 1 – Production Plants ► Wet Plant completion ► HMC production ► MSP completion ► Rutile & Ilmenite production ► Zircon production 3 CP 2 – Port Facility ► Shiploader & conveyor completion ► First bulk shipment BASE RESOURCES BUILDING THE FOUNDATIONS Cash
Early production profile Planning a rapid ramp up for ilmenite and rutile, a little longer for zircon, to being a “globally significant” producer. 12.0 400,000 350,000 10.0 300,000 250,000 6.0 200,000 150,000 4.0 100,000 2.0 50,000 0 0.0 Ilmenite Produced BASE RESOURCES BUILDING THE FOUNDATIONS Rutile Produced Zircon Produced Ore mined Ore Mined (Mt) Tonnes of Product 8.0
Ramp-up experience to date While it hasn’t all been plain sailing with some delays to shipments, no issues have emerged which indicate a divergence from our operational performance assumptions. Mining & Concentration ► DMU performing to expectations and to design throughput. ► Slimes separation and deposition – less than1% HM losses. ► Early challenges with concentrator logic control, mass balance and valve performance now rectified. Primary screen distribution and level control being addressed during March. ► Annualised HMC production now > 550k tpa Mineral Separation ► MSP feed rates now achieving design targets. ► Ilmenite circuit is performing well with annualised production now at >300k tpa. ► Rutile circuit performance is steadily improving with annualised production at 40k tpa ► Required pipework, RER speed and screen work as well as zircon plant production. Fixes underway with target completion during March. ► Zircon circuit is has commenced production. ► Pipework and pumping system rework – completion during March. BASE RESOURCES BUILDING THE FOUNDATIONS
What does Kwale mean for Kenya? A key to unlock the potential of the mineral sector and a model for operations. Kwale will have significant direct impact on the Kenyan economy: ► $310 million FDI and $900 million in operating costs ► More than triple mineral sector export earnings – US$1.9 billion in sales – will replace coffee in 4th on export value. ► Adds 0.8% to GDP. ► US$220+ million in tax and royalties over 13 years. ► Significant multiplier effect and skills development. But an even bigger impact as a catalyst for an inflow of mining investment: ► Project has high international visibility. ► Opportunity to establish a model (and benchmark) for effective mining investment in Kenya. ► The GoK recognises and is playing its role: ► Modernisation of mining administration. ► Establishment of an “appropriate” fiscal regime. ► Encouraging broad local participation. BASE RESOURCES BUILDING THE FOUNDATIONS
Community engagement Achieving our long term goals depends on our ability to build relationships with the communities in which we operate and establish a balanced flow of mutual benefit, not CSR. Training Scholarships Agricultural development Basic needs Health Drinking water Education Employment Transport Establishment Relocation and compensation Infrastructure replacement Livelihood restoration BASE RESOURCES BUILDING THE FOUNDATIONS NGO’s, specialist NFP’s, Co-sponsors (Ausenco, Lenders) Community liaison committees Capability building
www.baseresources.com.au Building the foundations BASE RESOURCES BUILDING THE FOUNDATIONS
Board and Management. Keith ... set to the development of Base Resources, ... of the Kwale Mineral Sands Projects resettlement programmes and ...
Colin Bwye, Base Resources: Kwale Mineral Sands Project
Significant Milestones in Acquisition of Kwale Mineral Sands Project ... Experienced mineral sands executive, Colin Bwye, to join Base as ...
... development projects. Colin Bwye ... bringing Base Resources’ Kwale Mineral Sands Project in Kenya ... and treasury management, project ...
View Colin Bwye's business ... of development projects into production. Colin was born in ... Base Resources' Kwale Mineral Sands Project in ...
Colin Bwye, Executive Director, Operations & Development, Base Resources, will be addressing the annual Mineral Sands Conference in Melbourne ...
Get detailed financial information on Base Resources Limited ... in the operation of Kwale Mineral Sands project ... subsidiary Base Titanium ...
Technology Manager, Mineral Sands at Exxaro Resources, ... Director Industrial Minerals and Ilmenite & Mineral Sands Director at Hatch, ...