FY23 Half Year Results

AIM and Media Release 

27 February 2023

BASE RESOURCES LIMITED
FY23 half-year results - high prices deliver record first half revenue

African mineral sands producer and developer, Base Resources Limited (ASX & AIM: BSE) (Base Resources or the Company) is pleased to present its results for the six-month period ended 31 December 2022 (H1 FY23, reporting period or half-year), which include announcement of an interim dividend of AUD 2 cents per share (unfranked), and the following extracts from the Half-Year Financial Report for the Company and its controlled entities (Group) for the same period.

1. Review of Operations
2. Market Developments and Outlook
3. Kwale Operations Extensional Opportunities
4. Toliara Project
5. Tanzanian Exploration
6. Review of Financial Performance
7. After Balance Date Events
8. Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income
9. Consolidated Condensed Statement of Financial Position
10. Consolidated Condensed Statement of Changes in Equity
11. Consolidated Condensed Statement of Cash Flows

The extracts from the Half-Year Financial Report should be read in conjunction with the notes contained in the full version of that report, a copy of which is available from the Company’s website:  www.baseresources.com.au.  The full version of the Half-Year Financial Report also contains the auditor’s independence declaration, the directors’ declaration and the auditor’s review report.  Amounts in the extracts have been rounded to the nearest thousand dollars, unless otherwise stated.

The Company has also released a presentation to accompany its Half-Year Financial Report.  The presentation contains, among other things, further details about the Company’s half-year results.  A copy of the presentation is available from the Company’s website:  www.baseresources.com.au.

All references to currency ($ or US$) is to United States Dollars, unless otherwise stated.

HIGHLIGHTS

Kwale Operations continued to perform consistently and remains on track to achieve production guidance for FY23.  Strong markets for mineral sands in the first part of H1 FY23 saw price improvements for all products, delivering a record first half revenue of US$126.6 million.  Implementation of the Bumamani Project, to extend Kwale Operations mine life to late 2024, progressed to plan with mining of the Kwale North Dune recently commencing.

The Toliara Project in Madagascar is a significant growth opportunity for the Company and remains an area of critical focus.  Discussions with the Government of Madagascar on the fiscal terms applicable to the project progressed substantially during the period though an agreement has not yet been signed.

Financial highlights for H1 FY23

• Record first half revenue of US$126.6 million following a 32% increase in average realised unit sales price compared to the prior period ended 31 December 2021 (H1FY22 or comparative period).
• Group EBITDA of US$80.7 million and net profit after tax of US$44.6 million.
• Free cashflow of US$29.0 million (operating cashflows of US$56.1 million less investing cashflows of US$27.1 million).
• Net cash position of US$60.2 million at 31 December 2022.

Interim dividend of AUD 2.0 cents per share determined

The Company’s capital management policy is that cash not required to meet the Company’s near-term growth and development requirements, or to maintain requisite balance sheet strength in light of prevailing circumstances, could be expected to be returned to shareholders.  With net cash of US$60.2 million at the end of the period and continued strong financial performance, the Board has determined an interim dividend of AUD 2.0 cents per share (unfranked), totalling A$23.6 million in aggregate (approximately US$16.0 million), which is to be paid wholly from conduit foreign income.  The record date for the interim dividend is 13 March 2023 and the payment date is 30 March 2023 – refer to Base Resources’ accompanying release “FY23 Interim Dividend – Key dates and information” for further information. 

Upon payment of the FY23 interim dividend, dividends distributed to shareholders since October 2020 will total AUD 18.5 cents per share, equal to A$217.9 million in aggregate (approximately US$156.0 million).

Operational and development highlights for H1 FY23

• Production of 38,384 tonnes of rutile, 170,771 tonnes of ilmenite, 14,043 tonnes of zircon and a combined 9,228 tonnes of low-grade rutile and zircon products from Kwale Operations.
• Increases in average achieved product prices of 36% for rutile, 12% for ilmenite and 29% for zircon compared to H1 FY22.
• Kwale Operations Bumamani Project implementation, to extend mine life to late 2024, saw mining operations commence on the Kwale North Dune in late February as planned.
• Near-mine exploration drilling at Kwale East commenced, with 493 holes for 5,071m drilled to date.
• Phase 1 of the initial exploration drilling program in northern Tanzania was completed, with a total of 149 holes for 3,889m drilled.
• Toliara Project rare earths concept study was completed subsequent to period end, with the Board approving progression to the pre-feasibility study phase.
• Inaugural Sustainability Report and Sustainability Databook released.

Managing Director of Base Resources, Tim Carstens, said:

“We have achieved another consistent and operationally strong half year period at Kwale Operations which, when combined with increased prices for all products, has resulted in record first half revenue and the continuation of returns to shareholders via another dividend.”

“With the recent commencement of mining operations on the North Dune, the Bumamani Project has extended Kwale mine life until late 2024.  Beyond this, the exploration program underway in the Kwale East region represents our best opportunity for further, near term, mine life extension, with over 5,000m drilled to date.  Further afield, and a longer dated prospect, we have also completed the first phase of reverse circulation exploration drilling in the Umba region of northern Tanzania, with preliminary results expected to be released shortly.”

“We retain a heavy focus on advancing the Toliara Project in Madagascar and have continued to progress our discussions with the Government of Madagascar on fiscal terms and lifting of the on-ground suspension.  Though we have not yet signed an agreement, we are encouraged by our recent engagement and the ongoing support from local communities and leaders.”

“This is an exciting time for Base Resources.  We look forward to sharing a series of significant, and long awaited, developments with investors over the coming months.”

Investor webcast

The webcast will be hosted by Base Resources’ Managing Director, Tim Carstens, Chief Financial Officer, Kevin Balloch, and General Manager - Marketing, Stephen Hay, who will each also be available to answer questions following a presentation of the Company’s results.

Details for the webcast are below.  Participants will be able to ask questions via the messaging function on the webcast platform or via the teleconference line.  Participants that propose using the teleconference line will need to pre-register their details using the teleconference registration URL provided below.  Upon registering, participants will receive an email with their unique PIN and dial-in details so that they can join the call without needing to speak to an operator.

• Date: Monday, 27 February 2023
• Time: 5.00pm AWST / 9.00am GMT
• Webcast URL: https://edge.media-server.com/mmc/p/ni5izmm7
• Teleconference registration URL:  https://register.vevent.com/register/BIee6b0b2e83194de58e54e496b04268b5

EXTRACTS FROM HALF-YEAR FINANCIAL REPORT

1.  Review of Operations

Base Resources operates the 100% owned Kwale Operations in Kenya, which commenced production in late 2013.  Kwale Operations is located 50 kilometres south of Mombasa, the principal port facility for East Africa.  Mining operations continued according to plan on the South Dune orebody with approximately 8.8 million tonnes mined (comparative period: 8.7 million tonnes).  The higher tonnes mined and improved ore grade has resulted in higher production of all products by between 6% and 12%, with differences due to the proportion of each mineral present.  Production of low-grade concentrate products (zircon and rutile) continued in the reporting period.

Mining, Production and Sales	Six months to Dec 2022	Six months to Dec 2021
Ore mined (tonnes)	8,848,556	8,680,545
Heavy mineral (HM) %	3.90%	3.54%
Valuable heavy mineral (VHM) %	2.98%	2.71%
Production (tonnes)
Ilmenite	170,771	156,877
Rutile	38,384	36,180
Zircon	14,043	12,489
Zircon low grade	1,099	1,062
Rutile low grade	8,129	970
Sales (tonnes)
Ilmenite	136,773	164,080
Rutile	28,859	25,383
Zircon	11,140	11,787
Zircon low grade	1,208	1,179
Rutile low grade	8,037	919

Heavy mineral concentrate (HMC) stocks have increased in the reporting period to 15,494 tonnes (9,713 tonnes as at 30 June 2022), in advance of a planned shut in early 2023 to transition part of our mining operations to the Kwale North Dune.

There were no lost time injuries during the reporting period resulting in a lost time injury frequency rate (LTIFR) for Base Resources of 0.23 per million hours worked.  Compared to the Western Australian All Mines 2020/2021 LTIFR of 2.0, this remains an exceptional performance and reflects the ongoing focus and importance placed on safety by management.  With two medical treatment injuries recorded in the last 12 months, Base Resources’ total recordable injury frequency rate is 0.69 per million hours worked.

The Company maintains a balanced portfolio of multi-year and quarterly offtake agreements with long term customers, supplemented by a small proportion of ongoing spot sales.  These agreements, with some of the world’s largest consumers of titanium dioxide feedstocks and zircon products, provide certainty for Kwale Operations by securing minimum offtake quantities.  Sales prices in these agreements are typically either negotiated on a shipment-by-shipment basis or set for periods of up to six months and are derived from prevailing market prices.

Ilmenite, and the majority of rutile, is sold in bulk, with typical shipment sizes of 50-54kt for ilmenite and 10-12kt for rutile, which frequently results in sales volumes of these products being out of step with production volumes, which was the case in the reporting period.  Zircon is sold in smaller parcels and, in the absence of any market constraints, sales generally align with production volume.  Bulk shipments of both ilmenite and rutile took place in early 2023.

2.  Market Developments and Outlook

Titanium Dioxide

Ilmenite and rutile are primarily used as feedstock for the production of titanium dioxide (TiO2) pigment, with a small percentage also used in the production of titanium metal and fluxes for welding rods and wire.  TiO2 is the most widely used white pigment because of its non-toxicity, brightness and very high refractive index.  It is an essential component of consumer products such as paint, plastics and paper.  Pigment demand is therefore the major driver of ilmenite and rutile pricing.

Major western pigment producers typically use high grade TiO2 feedstocks (which includes rutile) while Chinese pigment producers typically rely on sulphate ilmenite as their main feedstock.

Financial year 2023 commenced with a very tight TiO2 feedstock market.  Demand was strong, with most global pigment plants operating near capacity levels.  Feedstock supply could not keep up with demand and inventories throughout the supply chain were at very low levels.  However, a slowdown in pigment consumption, driven by a deterioration in global economic conditions, led to a sharp downturn in pigment demand through later part of the reporting period.  Pigment demand is expected to recover as it more closely reflects improving underlying consumption through the second half of financial year 2023.

In response to the sharp drop in pigment demand, and to avoid a build-up of pigment inventory, western pigment producers began curtailing production rates through the middle of the reporting period.  This was particularly the case in Europe, where pigment consumption was weak and operating costs (due to energy cost inflation) have been very high.  A subsequent build in raw material inventories led to declining demand for TiO2 feedstock, including both rutile and ilmenite, through the latter part of the reporting period.

China, the major global market for ilmenite, was significantly impacted by government imposed COVID-19 restrictions through the reporting period.  Domestic demand for pigment was weak throughout the reporting period and major pigment producers in China became increasingly dependent on export sales.  Cost-related cuts to sulphate pigment production in Europe provided an opportunity for Chinese pigment exports to Europe to remain at high levels.  For quality and logistics reasons, most major pigment producers in China, who typically maintain a high exposure to export sales, have a heavy dependence on imported ilmenite.  Therefore, while overall pigment production in China declined, the ongoing need for imported ilmenite through the reporting period to support export sales provided solid support for Base Resources’ ilmenite.

Demand for rutile into the welding and titanium metal sectors continued to be very strong throughout the reporting period and into the second half of financial year 2023.  A booming ship-building industry is the main driver of demand for the high value welding sector and the sharp increase in aerospace manufacturing, combined with sanctions on Russian-supply of raw materials, is driving demand for titanium metal.

On the back of the strong conditions at the beginning of the reporting period, further price gains were achieved for both rutile and ilmenite.  Rutile prices, mostly contracted during the middle of calendar year 2022, and with an exposure to the strong welding and metal markets, continued to increase throughout the reporting period.  Ilmenite prices, mostly set on a spot basis, came under pressure and moderated through the latter stages of the reporting period.  Over the reporting period, rutile prices were 36% higher and ilmenite prices were 12% higher than the comparative period (first half of financial year 2022).

Western pigment producers have advised their intent to increase their production rates, to match an expected return in underlying pigment demand, back to normal levels through the second half of financial year 2023.  Optimism is also growing in the Chinese domestic pigment market as lifting of government imposed COVID-19 restrictions continues, which should lead to improved pigment demand through the coming period.  It is, therefore, expected that both rutile and ilmenite prices will soften through early 2023, before stabilising towards the end of the financial year. 

Zircon

Zircon has a range of end-uses, the predominant of which is in the production of ceramic tiles, accounting for more than 50% of global zircon consumption.  Milled zircon enables ceramic tile manufacturers to achieve brilliant opacity, whiteness and brightness in their products.  Zircon’s unique properties include heat and wear resistance, stability, opacity, hardness and strength, making it sought after for other applications such as refractories, foundries and specialty chemicals.

Demand growth for zircon is closely linked to growth in global construction and increasing urbanisation in the developing world.

Zircon experienced increasingly tight conditions through financial year 2022 and finished that year at historically high price levels.  The government imposed COVID-19 restrictions in China, who account for over 50% of the global zircon market, weighed on zircon demand through the reporting period.  However, in the first few months of the reporting period, this was off-set by ongoing firm demand in most regions outside of China, particularly in Europe, and average zircon prices were maintained at high levels.  Deteriorating economic conditions in Europe began to have an impact on zircon demand in the latter part of the reporting period which, combined with the weak conditions in China, resulted in prices for zircon dropping.  However, over the whole reporting period zircon prices were 29% higher than the comparative period.

While the weak economic conditions across the major zircon markets have continued into the beginning of 2023, the optimism building in China from the lifting of COVID-19 restrictions is expected to provide support for zircon demand in coming months.

3.  Kwale Operations Extensional Opportunities

Implementation of the Bumamani Project, which will extend Kwale Operations mine life to late 2024, continued during the reporting period, and mining activities on the Kwale North Dune remain on schedule to commence in March 2023.  The subsets of the Kwale North Dune, forming part of the Bumamani Project, will be mined concurrently with the South Dune area to maximise mining rates and better manage tailings.

Exploration activities commenced in the area immediately North-East of Kwale Operations (and within Prospecting Licence 2018/0119) with 320 holes for a total of 3,260m drilled by the end of the reporting period.  Drilling in this area will continue in second half of FY23 as further land access is secured.

Prospecting licence applications lodged for an area in the Kuranze region of Kwale county, about 70 km west of Kwale Operations, together with applications for an area south of Lamu, remain on hold pending lifting of a Government of Kenya moratorium on issuance of new mineral rights, in place since November 2019.  The Company is working with the Government of Kenya, and other mining sector stakeholders, to see the moratorium lifted.

4.  Toliara Project

In November 2019, the Government of Madagascar required Base Resources to suspend on-the-ground activity on the Toliara Project while discussions on fiscal terms applying to the project were progressed.  Activity remains suspended as Base Resources continues to engage the Government in relation to the country’s Large Mining Investment Law (LGIM) regime, fiscal terms applicable to the Toliara Project and the lifting of the on-the-ground suspension, with discussions with the Government of Madagascar on fiscal terms, and lifting of its on-ground suspension, continued to advance in the reporting period with positive progress made.

A Final Investment Decision (FID) to proceed with construction of the Toliara Project remains subject to lifting of the suspension and fiscal terms being agreed with the Government of Madagascar.  Once these two key milestones are achieved, there will be approximately 11 months’ work to complete prior to reaching FID, including finalisation of funding, completion of land access arrangements, conclusion of major construction contracts and entry of offtake agreements with customers.  Contact with major EPCM consultants, construction contractors and equipment suppliers has been maintained in readiness to accelerate progress when conditions support.  Assessment of potential funding options for the Toliara Project also progressed during the reporting period.

5.  Tanzanian exploration

The Company has four prospecting licenses in the Umba region of northern Tanzania covering 263km2, with a fifth application still pending.  An initial wide-spaced reverse circulation drill program commenced in this area, with 149 holes for 3,889m drilled during the reporting period.  The drill samples were exported to Kenya for analysis at the Kwale Operations laboratory with this work currently ongoing.  Analysis for graphite is also being concurrently undertaken by an external laboratory.  Results from this program are expected to be released in the second half of the 2023 financial year.

6.  Review of Financial Performance

Base Resources achieved a profit after tax of US$44.6 million for the reporting period, an increase compared with a profit of US$19.2 million in the comparative period, primarily due to increased product prices and lower depreciation.

	Six months to 31 December 2022				Six months to 31 December 2021
	Kwale Operations	Toliara Project	Other	Total	Kwale Operations	Toliara Project	Other	Total
	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s
Sales Revenue	126,611	-	-	126,611	104,615	-	-	104,615
Cost of goods sold excluding depreciation & amortisation:
Operating costs	(37,931)	-	-	(37,931)	(35,919)	-	-	(35,919)
Inventory movement	11,332	-	-	11,332	6,771	-	-	6,771
Royalties expense	(7,318)	-	-	(7,318)	(7,754)	-	-	(7,754)
Total cost of goods sold (i)	(33,917)	-	-	(33,917)	(36,902)	-	-	(36,902)
Corporate & external affairs	(2,429)	(43)	(4,397)	(6,869)	(1,817)	(54)	(3,947)	(5,818)
Community development	(2,758)	-	-	(2,758)	(2,228)	-	-	(2,228)
Selling & distribution costs	(1,005)	-	-	(1,005)	(1,182)	-	-	(1,182)
Net write-off of Kenyan VAT receivable and royalty payable	-	-	-	-	(3,012)	-	-	(3,012)
Other expenses	(1,144)	-	(228)	(1,372)	(137)	-	(823)	(960)
EBITDA (i)	85,358	(43)	(4,625)	80,690	59,337	(54)	(4,770)	54,513
Depreciation & amortisation	(14,897)	(94)	(198)	(15,189)	(22,404)	(94)	(198)	(22,696)
EBIT (i)	70,461	(137)	(4,823)	65,501	36,933	(148)	(4,968)	31,817
Net financing expenses	(1,640)	46	936	(658)	(3,062)	-	311	(2,751)
Income tax expense:
Corporate income tax	(12,168)	-	-	(12,168)	(5,352)	-	-	(5,352)
Dividend withholding tax	-	-	(8,100)	(8,100)	-	-	(4,500)	(4,500)
NPAT (i)	56,653	(91)	(11,987)	44,575	28,519	(148)	(9,157)	19,214

(i) Base Resources’ financial results are reported under International Financial Reporting Standards (IFRS).  These Financial Statements include certain non-IFRS measures including EBITDA, EBIT and NPAT.  These measures are presented to enable understanding of the underlying performance of the Group and have not been audited/reviewed.

Sales revenue increased 26% to US$126.6 million for the reporting period (comparative period: US$104.6 million) due to a 32% increase in the average price of product sold to US$681 per tonne (comparative period: US$514 per tonne).

Total operating costs of US$37.9 million represented an increase of 6% compared to the prior period (US$35.9 million), due to higher unit fuel and power costs and a 6% increase in production volume, with operating costs per tonne produced steady at US$169 per tonne (prior period: US$167 per tonne).

Cost of goods sold (operating costs, adjusted for stockpile movements, and royalties), was US$195 per tonne of product sold, 5% higher than the comparative period (US$185 per tonne) due to higher product prices driving an increase in royalties and product sales mix.

With an operating margin of US$486 per tonne sold (comparative period: US$329 per tonne) and an achieved revenue to cost of sales ratio of 3.5 (comparative period: 2.8), Base Resources remains well positioned amongst mineral sands producers.

Higher product prices have delivered an increased Kwale Operations EBITDA for the reporting period of US$85.4 million (comparative period: US$59.3 million) and a Group EBITDA of US$80.7 million (comparative period: US$54.5 million).

The majority of Kwale Operations assets are depreciated on a straight-line basis over the remaining mine life.  Shortly before the start of the reporting period, the maiden Kwale North Dune and Bumamani Ore Reserves estimate was released, which extended mine life by 13 months, allowing depreciation and amortisation charges to be prospectively spread over a longer remaining mine life.  Accordingly, depreciation and amortisation in the reporting period decreased 34% to US$15.2 million (prior period: US$22.7 million).

Due to increased EBITDA and reduced depreciation and amortisation, Kwale operations recorded a net profit after tax of US$56.7 million (comparative period: US$28.5 million).  During the reporting period, the Group’s Kenyan subsidiary, Base Titanium Limited (Base Titanium), distributed US$54.0 million of surplus cash (comparative period: US$30.0), via dividend, to the Group’s ultimate parent entity, Base Resources.  The dividend distribution by Base Titanium incurred 15% Kenyan dividend withholding tax of US$8.1 million (comparative period: US$4.5 million), which has been recorded as an income tax expense, thus contributing to a profit after tax of US$44.6 million for the Group (comparative period: US$19.2 million).

Cash flow from operations was US$56.1 million for the reporting period (comparative period: US$20.6 million), with higher sales revenue contributing to US$19.6 million increase in receipts from customers and a decrease in royalties paid due to a one-off royalty catch-up payment in the comparative period of US$18.8m.  Operating cashflows were used to fund capital expenditure at Kwale Operations, Toliara Project progression and dividend. 

Total capital expenditure for the Group was US$27.5 million in the reporting period (comparative period: US$12.0 million) comprised of US$22.6 million at Kwale Operations (comparative period: US$5.8 million), primarily for the acquisition of land and establishment infrastructure and services to support mining operations in the Kwale North Dune and Bumamani deposits, and US$4.5 million on the progression of the Toliara Project (comparative period: US$4.1 million).

Consistent with Base Resources’ strategy, the Group seeks to provide returns to shareholders through both long-term growth in the Base Resources share price and appropriate cash distributions.  Cash not required to meet the Group’s near-term growth and development requirements, or to maintain requisite balance sheet strength in light of prevailing circumstances could be expected to be returned to shareholders.

Applying this capital management policy, the Board determined a FY22 final dividend of AUD 3 cents per share, unfranked, which was paid during the reporting period.

While discussions with the Government of Madagascar on fiscal terms applicable to the Toliara Project have progressed significantly in the reporting period, an agreement has not yet been signed.  Against this backdrop, with net cash of US$60.2 million at the end of the period and continued strong financial performance, the Board has determined an interim dividend of AUD 2.0 cents per share (unfranked), totalling A$23.6 million in aggregate (approximately US$16.0 million), to be paid wholly from conduit foreign income.

7.    After Balance Date Events

Other than the interim dividend determined by the Board, there have been no other significant events since the reporting period.

8.  Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income

		6 months to 31 December 2022	6 months to 31 December 2021
	Note	US$000s	US$000s
Sales revenue	2	126,611	104,615
Cost of sales	3	(48,814)	(59,307)
Profit from operations		77,797	45,308
Corporate and external affairs		(7,161)	(6,109)
Community development costs		(2,758)	(2,228)
Selling and distribution costs		(1,005)	(1,182)
Net write-off of Kenyan VAT receivable and royalty payable		-	(3,012)
Other expenses		(1,372)	(960)
Profit before financing costs and income tax		65,501	31,817
Financing costs		(658)	(2,751)
Profit before income tax		64,843	29,066
Income tax expense	4	(20,268)	(9,852)
Net profit for the period		44,575	19,214
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations		(2,587)	(1,166)
Total other comprehensive income/(loss) for the period		(2,587)	(1,166)
Total comprehensive income for the period		41,988	18,049
Net earnings per share		Cents	Cents
Basic earnings per share (US cents per share)		3.85	1.64
Diluted earnings per share (US cents per share)		3.80	1.60

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au .

9.  Consolidated Condensed Statement of Financial Position

		31 December 2022	30 June 2022
	Note	US$000s	US$000s
Current assets
Cash and cash equivalents		60,165	55,447
Trade and other receivables	5	62,720	68,961
Inventories	6	25,932	15,098
Other current assets		7,800	9,099
Total current assets		156,617	148,605
Non-current assets
Capitalised exploration and evaluation	7	160,776	156,069
Property, plant and equipment	8	95,149	89,012
Deferred tax asset		64	-
Total non-current assets		255,989	245,081
Total assets		412,606	393,686
Current liabilities
Trade and other payables		19,322	17,652
Provisions	9	6,242	7,500
Deferred consideration		7,000	7,000
Other current liabilities		372	493
Total current liabilities		32,936	32,645
Non-current liabilities
Provisions	9	16,262	16,534
Deferred tax liability		-	162
Deferred consideration		10,000	10,000
Other non-current liabilities		522	645
Total non-current liabilities		26,784	27,341
Total liabilities		59,720	59,986
Net assets		352,886	333,700
Equity
Issued capital	10	307,811	307,811
Treasury shares	11	(2,261)	(4,957)
Reserves		(21,085)	(17,811)
Retained earnings		68,421	48,657
Total equity		352,886	333,700

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au .

10.  Consolidated Condensed Statement of Changes in Equity

	Issued capital	Retained earnings	Share based payment reserve	Foreign currency translation reserve	Treasury shares reserve	Total
	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s
Balance at 1 July 2021	307,811	28,563	4,465	(18,666)	(2,273)	319,900
Profit for the period	-	19,214	-		-	19,214
Other comprehensive income/(loss)	-	-	-	(1,166)	-	(1,166)
Total comprehensive income for the period	-	19,214	-	(1,166)	-	18,048
Transactions with owners, recognised directly in equity
Dividends paid	-	(34,838)	-	-	-	(34,838)
Purchase of treasury shares	-	-	-	-	(537)	(537)
Share based payments	-	529	(460)	-	1,150	1,219
Balance at 31 December 2021	307,811	13,469	4,005	(19,832)	(1,660)	303,792
Balance at 1 July 2022	307,811	48,657	3,650	(21,461)	(4,957)	333,700
Profit for the period	-	44,575	-	-	-	44,575
Other comprehensive income/(loss)	-	-	-	(2,587)	-	(2,587)
Total comprehensive income for the period	-	44,575	-	(2,587)	-	41,988
Transactions with owners, recognised directly in equity
Dividends paid	-	(22,703)	-	-	-	(22,703)
Purchase of treasury shares	-	-	-	-	(1,151)	(1,151)
Share based payments	-	(2,108)	(687)	-	3,847	1,052
Balance at 31 December 2022	307,811	68,421	2,963	(24,048)	(2,261)	352,886

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au .

11.  Consolidated Condensed Statement of Cash Flows

		6 months to 31 December 2022	6 months to 31 December 2021
		US$000s	US$000s
Cash flows from operating activities
Receipts from customers		134,885	115,276
Payments in the course of operations		(63,292)	(77,522)
Income tax paid		(15,502)	(17,118)
Net cash from operating activities		56,091	20,636
Cash flows from investing activities
Purchase of property, plant and equipment		(22,368)	(6,806)
Payments for exploration and evaluation		(5,153)	(5,163)
Other		466	93
Net cash used in investing activities		(27,055)	(11,877)
Cash flows from financing activities
Dividends paid		(22,703)	(34,838)
Purchase of treasury shares		(1,151)	(537)
Payments for debt service costs		(534)	(55)
Net cash used in financing activities		(24,388)	(35,430)
Net increase/ (decrease) in cash held		4,648	(26,671)
Cash at beginning of period		55,447	64,925
Effect of exchange fluctuations on cash held		70	(1,188)
Cash at end of period		60,165	37,066

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au .

FORWARD LOOKING STATEMENTS

Certain statements in or in connection with this release contain or comprise forward looking statements.  Such statements may include, but are not limited to, statements with regard to capital cost, capacity, future production and grades, sales projections and financial performance and may be (but are not necessarily) identified by the use of phrases such as “will”, “expect”, “anticipate”, “believe” and “envisage”.  By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and may be outside Base Resources’ control.  Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in product prices and exchange rates and business and operational risk management.  Subject to any continuing obligations under applicable law or relevant stock exchange listing rules, Base Resources undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events.

ENDS.

For further information contact:

Australian Media Relations	UK Media Relations
Citadel Magnus	Tavistock Communications
Cameron Gilenko and Michael Weir	Jos Simson and Gareth Tredway
Tel: [phone]	Tel: [phone]

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, is developing the Toliara Project in Madagascar and is conducting exploration in Tanzania.  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:  [e-mail]
Phone: [phone]
Fax: [phone]

NOMINATED ADVISOR
RFC Ambrian Limited
Stephen Allen
Phone: [phone]

JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: [phone]

JOINT BROKER
Canaccord Genuity
Raj Khatri / James Asensio / Patrick Dolaghan
Phone: [phone]