Half-yearly Report
21 FEBRUARY 2014
INTERIM FINANCIAL REPORT
Base Resources Limited (ASX:BSE, AIM:BSE) ("Base" or "the Company") is pleased to provide its Interim Financial Report for the six month period ended 31 December 2013.
Please find below an extract from the Interim Financial Report (reported in Australian dollars) including;
* The Directors' Report
* Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income
* Consolidated Condensed Statement of Financial Position
* Consolidated Condensed Statement of Changes in Equity
* Consolidated Condensed Statement of Cash Flows
A copy of the full Interim Financial Report, including the accompanying notes to the accounts, is available from the Company's website at www.baseresources.com.au.
BASE RESOURCES LIMITED
CONSOLIDATED ACCOUNTS
ABN 88 125 546 910
Interim Financial Report for the six month period
ended 31 December 2013
DIRECTORS' REPORT
Your directors submit the interim financial report of the Group, being the
Company, Base Resources Limited, and its controlled entities for the half-year
ended 31 December 2013.
Directors
The names of the directors in office at any time during or since the end of the
half-year are:
Mr Andrew King
Mr Tim Carstens
Mr Colin Bwye
Mr Winton Willesee - retired 26 November 2013
Mr Samuel Willis
Mr Michael Anderson
Mr Trevor Schultz
Mr Mike Stirzaker - alternate for Trevor Schulz
Mr Malcolm Macpherson - appointed 25 July 2013
Directors have been in office since the start of the financial year to the date
of this report with the exception of Mr Malcolm Macpherson who was appointed on
25 July 2013 and Mr Winton Willesee who retired on 26 November 2013.
Company Secretary
Mr Winton Willesee held the position of company secretary during the half-year.
Principal Activities and Significant Changes in Nature of Activities
The principal activity of the Group is the development and operation of the
Kwale Mineral Sands Project in Kenya.
Operating Results
The loss for the Group for the half-year after providing for income tax
amounted to $5,522,393 (2012: $2,393,937).
Dividends Paid or Recommended
There were no dividends paid or declared for payment during the period ended 31
December 2013.
Review of Operations
Base has made significant progress in the development of the Kwale Mineral
Sands Project during the current period. All work packages are now complete and
operational with only minor defect list items remaining outstanding.
Following commissioning of the dry mining unit ("DMU") and wet concentrator in
early October, the production of heavy mineral concentrate ("HMC") commenced.
Optimisation of these circuits continued throughout the December quarter
resulting in a steady increase in throughput, recoveries, availability and
runtime towards design targets.
The DMU proved extremely effective with the Caterpillar D11T dozers performing
to expectation. Slimes separation and disposal and sand tails stacking has
proceeded and performed according to plan. Wet concentrator production and
performance has been ramping up consistently and is in line with ramp up
expectations.
Commissioning of the mineral separation plant ("MSP") commenced in December
with the main focus on balancing and debottlenecking in order to progress the
ramp-up to achieve nameplate throughput. Ilmenite production is on track in
terms of both tonnage and quality, with the first 25,000 tonne shipment
exported in February 2014. Ramp up of rutile production has been slower due to
an initial focus on the front end ilmenite circuit as well as the rectification
of a number of plant bottlenecks.
Subsequent to year end, in February 2014, the zircon circuit of the MSP was
commissioned and production of zircon product commenced.
Financial Position
The Group's working capital, being current assets less current liabilities, has
decreased from $88 million at 30 June 2013 to $16 million at 31 December 2013,
due to the use of funds in the development of the Kwale Project.
In December 2013, the Group executed documentation to extend its existing
project finance facility agreements by a further US$25 million which has been
utilised in January 2014 to increase the working capital buffer available
during the ramp up phase of the Project. The additional debt facility will
ensure that Base has the funding required to take Kwale through ramp up and to
positive cash flow.
In the Directors' opinion, there are reasonable grounds to believe that the
Group will be able to pay its debts as and when they become due and payable.
Auditor's Declaration
The lead auditor's independence declaration under section 307C of the
Corporations Act 2001 is set out on page 6 for the half-year ended 31 December
2013.
This report is signed in accordance with a resolution of the Board of
Directors.
Andrew King
Director
Dated this 21st day of February 2014
CONSOLIDATED CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED 31 DECEMBER 2013
6 months to 6 months to
31 December 31 December
2013 2012
Note $ $
Other income 36,581 -
Directors' and related fees (782,985) (1,081,949)
Employee benefits expense (926,521) (419,299)
Consultant fees (1,066,439) (786,867)
Administrative expense (1,023,732) (761,635)
Accounting, audit and related services fees (234,916) (137,952)
Share based payment expense (296,015) (215,069)
Community development costs (491,527) -
Depreciation (73,962) (35,961)
Write down of exploration costs (1,034,422) -
Other expenses from ordinary activities (82,093) (42,829)
Loss before financing income and income (5,976,031) (3,481,561)
tax
Financing income, net 2 508,059 1,087,624
Loss before income tax (5,467,972) (2,393,937)
Income tax expense (54,421) -
Net loss for the period (5,522,393) (2,393,937)
Other comprehensive income
Items that may be reclassified subsequently to
profit or loss:
Foreign currency translation differences 4,172,910 (980,091)
- foreign operations
Total other comprehensive income / (loss) 4,172,910 (980,091)
for the period
Total comprehensive loss for the period (1,349,483) (3,374,028)
Net Loss per share Cents Cents
Basic profit / (loss) per share (cents per share) (0.98) (0.47)
Diluted profit / (loss) per share (cents per share) (0.98) (0.47)
The accompanying notes form part of these consolidated financial statements.
CONDENSED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2013
31 December 30 June 2013
2013
Note $ $
Current assets
Cash and cash equivalents 3 33,285,670 98,122,682
Other receivables 1,067,494 6,131,329
Inventories 4 8,894,973 60,430
Other 2,606,578 2,158,766
Total current assets 45,854,715 106,473,207
Non-current assets
Capitalised exploration and evaluation 5 1,141,499 1,980,899
Capitalised mine development 6 349,885,771 281,390,117
Property, plant and equipment 7 20,107,146 12,259,327
Inventories 4 1,152,881 -
Restricted cash 5,641,891 5,478,394
Other receivables 23,841,759 16,228,748
Total non-current assets 401,770,947 317,337,485
Total assets 447,625,662 423,810,692
Current liabilities
Trade and other payables 9,734,992 17,396,187
Borrowings 8 19,105,491 -
Provisions 994,189 712,230
Total current liabilities 29,834,672 18,108,417
Non-current liabilities
Other payables 9 1,152,881 1,088,900
Borrowings 8 189,028,148 178,850,990
Provisions 4,775,419 2,162,752
Deferred revenue 5,635,000 5,474,500
Total non-current liabilities 200,591,448 187,577,142
Total liabilities 230,426,120 205,685,559
Net assets 217,199,542 218,125,133
Equity
Issued capital 10 213,668,499 213,668,499
Reserves 21,724,130 17,127,328
Accumulated losses (18,193,087) (12,670,694)
Total equity 217,199,542 218,125,133
The accompanying notes form part of these consolidated financial statements.
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTH PERIOD TO 31 DECEMBER 2013
Issued Accumulated Share Foreign Total
losses based currency
capital payment
reserve translation
reserve
$ $ $ $ $
Balance at 1 July 2012 175,718,629 (6,009,529) 1,219,113 (1,098,427) 169,829,786
Loss for the period - (2,393,937) - - (2,393,937)
Other comprehensive loss - - - (980,091) (980,091)
Total comprehensive - (2,393,937) - (980,091) (3,374,028)
profit / (loss) for the
period
Transactions with owners, recognised directly in equity
Shares issued during the 37,725,870 - - - 37,725,870
period, net of costs
Share based payments - - 283,328 - 283,328
Balance at 31 December 213,444,499 (8,403,466) 1,502,441 (2,078,518) 204,464,956
2012
Balance at 1 July 2013 213,668,499 (12,670,694) 1,764,170 15,363,158 218,125,133
Loss for the period - (5,522,393) - - (5,522,393)
Other comprehensive - - - 4,172,910 4,172,910
income
Total comprehensive - (5,522,393) - 4,172,910 (1,349,483)
profit / (loss) for the
period
Transactions with owners, recognised directly in equity
Shares issued during the - - - - -
period, net of costs
Share based payments - - 423,892 - 423,892
Balance at 31 December 213,668,499 (18,193,087) 2,188,062 19,536,068 217,199,542
2013
The accompanying notes form part of these consolidated financial statements.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2013
6 months to 6 months to
31 December 31 December 2012
2013
$ $
Cash flows from operating activities
Payments in the course of operations (5,279,331) (3,276,310)
Income tax paid (Kenya) (59,669) -
Net cash used in operating activities (5,339,000) (3,276,310)
Cash flows from investing activities
Interest received 269,870 2,269,632
Payments for exploration and evaluation (156,680) (335,196)
Purchase of property, plant and equipment (953,857) (639,005)
Payments for mine development (88,636,877) (95,191,297)
Research and development tax received 5,030,381 -
Security deposits (280,712) (563,476)
Net cash used in investing activities (84,727,875) (94,459,342)
Cash flows from financing activities
Proceeds from issue of shares - 40,000,000
Payment of share issue costs - (2,274,130)
Proceeds from debt financing 22,540,000 50,138,400
Debt finance facility fees (246,574) (728,822)
Net cash provided by financing activities 22,293,426 87,135,448
Net decrease in cash held (67,773,449) (10,600,202)
Cash at beginning of period 98,122,682 105,805,684
Effect of exchange fluctuations on cash 2,936,437 (666,106)
held
Cash at end of period 33,285,670 94,539,376
The accompanying notes form part of these consolidated financial statements.
A full PDF version of the announcement is available at the Company's website: www.baseresources.com.au.
ENDS
For further enquiries contact:
Base Resources Limited
Tim Carstens
Managing Director
Email: tcarstens@baseresources.com.au
Phone: +61 (0)8 9413 7400
RFC Ambrian Limited (Nominated Adviser and Broker)
As Nominated Adviser As Broker
Andrew Thomson or Trinity McIntyre Jonathan Williams
Phone: +61 (0)8 9480 2500 Phone: +44 20 3440 6800
Africapractice (East Africa) (Kenyan Media Relations)
David Maingi/ James Njuguna/Joan Kimani
Phone: +254 (0)20 239 6899
Email: jkimani@africapractice.com
Tavistock Communications (UK Media Relations)
Jos Simson / Emily Fenton / Nuala Gallagher
Phone: +44 (0) 207 920 3150
Cannings Purple (Australian Media Relations)
Annette Ellis / Warrick Hazeldine
Email: aellis@canningspurple.com.au
whazeldine@canningspurple.com.au
Phone: +61 (0)8 6314 6300
Corporate Details:
Board of Directors:
Andrew King Non-Executive Chairman
Tim Carstens Managing Director
Colin Bwye Executive Director
Sam Willis Non-Executive Director
Michael Anderson Non-Executive Director
Trevor Schultz Non-Executive Director
Michael Macpherson Non-Executive Director
Winton Willesee Company Secretary
Principal & Registered Office: Contacts:
Level 1 Email: info@baseresources.com.au
50 Kings Park Road Phone: +61 (0)8 9413 7400
West Perth Fax: +61 (0)8 9322 8912
WA 6005