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Base Resources happy with progress at Kwale South Dune

  • Minerals sands miner in Kenya
  • Working on a new project in Madagascar on similar size to Kenya deposit
  • Ilmenite used as a whitener in paint and toothpaste

What it owns


In Kenya, during Kwale’s 13-year mine life, Base expects to mine and process 140mt of ore and produce 4.6mt of the final product for sale.


In Madagascar, Toliara’s Ranobe deposit has 586mln tonnes (Mt) of ore with an average heavy mineral grade of 6.5%, giving some 38mln tonnes of in-situ minerals.

Samples taken from the 2019 drill programme are now being processed, and, subsequently, the company aims to upgrade both resources and reserves estimates further in due course.

Its net present value (measured at a 10% discount rate) was put at US$671mln, while the investment required to build a 13Mt a year operation was calculated to be US$439mln.

How it’s doing?

Base said its Kwale operations in Kenya exceeded expectations in the first full year of mining in the South Dune.

In a statement released on the day of the company’s annual general meeting, chairman Keith Spence noted that the Kwale operations remained at full-pelt and met shipping schedules throughout the fiscal year despite the problems posed by the coronavirus pandemic.

Spence said the company remains focused on extending the life of the Kwale mine. A number of mine life extension and near-mine exploration options continue to be pursued and a pre-feasibility study on mining the North Dune deposit was commenced in January 2020.

The African mineral sands producer added that good progress is being made with its world-class Toliara development project in Madagascar.

The company is committed to the development of the project and remains confident that a positive outcome on the fiscal terms of the project can be achieved.


Inflexion points

  • Kwale Mine Life extension
  • Further analysis at Toliara
  • Strong demand currently for titanium feedstocks

What the broker says

Base Resources Limited (LON:BSE) surprised the market by announcing a maiden dividend with its 2020 results, says Berenberg.

A consensus view on Base was that all funds generated by its Kwale mine in Kenya would be directed to its treasury to provide cash reserves for the eventual commencement of the Toliara project in Madagascar.

The maiden dividend of A$0.035 per share, however, implies a yield of c14%.

Berenberg says this adds a new dimension to the investment case through a portion of Kwale cash flow that can be paid out as dividends at a compelling yield.

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