Interim Financial Report – period ended 31 De...

AIM and Media Release 

27 February 2020

BASE RESOURCES LIMITED
Interim Financial Report – period ended 31 December 2019

Base Resources Limited (ASX & AIM: BSE) (Base Resources or the Company) is pleased provide the operational and financial highlights from the Company’s interim results for the six-month period ended 31 December 2019 and the following extracts from its Interim Financial Report for the same period.

1. Review of Operations
2. Market Developments and Outlook
3. Review of Financial Performance
4. Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income
5. Consolidated Condensed Statement of Financial Position
6. Consolidated Condensed Statement of Changes in Equity
7. Consolidated Condensed Statement of Cash Flows

The extracts from the Interim 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 Interim Financial Report also contains the auditor’s independence declaration, the directors’ declaration and the auditor’s review report.  The Company has also released a presentation to accompany its Interim Financial Report, a copy of which is available from the Company’s website:  www.baseresources.com.au .

Highlights

Key achievements in the six-month period ended 31 December 2019 (H1 FY20) for the Company were the successful ramp up of mining operations on the South Dune orebody at Kwale Operations in Kenya, and the continued progression of the Toliara Project in Madagascar.

Following the transition of mining from the high-grade Central Dune to the lower-grade South Dune orebody in July 2019, production from Kwale Operations was lower compared to the H1 FY19 comparative period.  Demand for rutile and ilmenite remained strong throughout the period and prices continued to strengthen, while global economic uncertainties tempered demand for zircon.

Operational Highlights for H1 FY20

• Successful transition and ramp up of mining operations on the South Dune orebody.
• Production of 36,201 tonnes of rutile, 165,214 tonnes of ilmenite and 14,904 tonnes of zircon, reduced as a consequence of the lower grade of the South Dune orebody and the ramp up of operations.
• Continued strengthening of rutile and ilmenite prices.
• Kwale Operations mine life extension opportunities progressed, including commencement of the North Dune pre-feasibility study and submission of additional prospecting licence applications.
• Toliara Project definitive feasibility study (DFS) completed, with the findings reinforcing the Company’s view that the Toliara Project is a world class mineral sands project.
• Toliara Project drilling revealed significant additional high-grade mineralisation within the existing mining permit.
• Total Recordable Injury Frequency Rate of zero, with there being no lost time due to injury since 2014.
• US$1.8m invested in community and environmental programs, including scholarships and livelihood enhancement.

Financial Highlights for H1 FY20

• Revenue decreased to US$83.5m, impacted by lower production and shipment timing.
• EBITDA decreased to US$43.5m.
• NPAT decreased to US$9.1m.
• Net cash position of US$32.6m at 31 December 2019.
• Revenue to cash cost of sales ratio of 2.6:1.

Managing Director of Base Resources, Tim Carstens, said:

“With the transition of mining operations to the South Dune, we have entered the next phase of Kwale Operations.  As was anticipated, overall production has been lower than was the case when mining the Central Dune due to the lower heavy mineral grade, but we were pleased to be able to increase our production guidance for FY20 in January as we continue to optimise mining and processing operations for the new orebody.”

“We continued to pursue mine life extension opportunities at Kwale, with additional prospecting licence applications lodged and the commencement of the pre-feasibility study for mining the North Dune orebody.”

“The Toliara Project is progressing well with the DFS completed and its findings released in December 2019, reinforcing the Company’s view that the Toliara Project is a world class mineral sands project. We continue to engage with the Government of Madagascar regarding fiscal terms for the Toliara Project as well as progressing offtake and funding arrangements as we work towards a final investment decision in the second half of 2020.”

Investor and shareholder call

Base Resources’ Managing Director, Tim Carstens, CFO, Kevin Balloch and GM Marketing, Stephen Hay, will an investor and shareholder conference call to discuss Base Resources’ H1 FY20 results.

Europe conference call

Date: Thursday, 27 February 2020
Time: 5.00pm AWST / 9.00am GMT
Conference ID: 10004382

Telephone dial in details:

United Kingdom:	0800 051 8245	Ireland:	1800 948 625	UAE:	8000 3570 2705
Belgium:	0800 72 111	Italy:	800 793 500	United States:	[phone]
Sweden:	020 791 959	Norway:	800 69 950	Canada:	[phone]
France:	080 098 1498	Switzerland:	0800 820 030	Other international:	61 7 3145 4010
Germany:	0800 182 7617	South Africa:	0800 999 976

Extracts from Interim Financial Report

1. Review of Operations

Base Resources operates the 100% owned Kwale Operation in Kenya, which commenced production in late 2013.  The Kwale Operation is located 50 kilometres south of Mombasa, the principal port facility for East Africa. In July 2019, after fully depleting the Central Dune orebody, mining operations successfully transitioned to the lower grade South Dune orebody. As a result of the transition and subsequent ramp up, mining volume decreased 3% to 9.5 million tonnes in the reporting period. As expected, the mined ore grade improved over the reporting period to average 3.41% for the six months, lower than the comparative period’s 4.18%.

Mining and Wet Concentrator Plant (WCP) Performance	Six months to Dec 2019	Six months to Dec 2018
Ore mined (tonnes)	9,489,385	9,828,180
Heavy mineral (HM) %	3.41%	4.18%
Heavy mineral concentrate produced (tonnes)	304,100	348,015

Due to the combination of reduced ore mined and lower grade, production of heavy mineral concentrate (HMC) decreased by 13% to 304,100 tonnes. Following the depletion of HMC stocks during the transition to the South Dune, stocks were rebuilt throughout the reporting period to a closing balance of 45,905 tonnes (20,010 tonnes at the commencement of the reporting period).

Mineral Separation Plant (MSP) Performance	Six months to Dec 2019	Six months to Dec 2018
MSP feed (tonnes of heavy mineral concentrate)	276,816	385,944
MSP feed rate (tph)	77	90
MSP recovery % (i)
Ilmenite	102%	102%
Rutile	102%	99%
Zircon	85%	76%
Production (tonnes)
Ilmenite	165,214	226,730
Rutile	36,201	49,630
Zircon	14,904	17,935
Zircon low grade	1,012	-

[(i) The presence of altered ilmenite species that are not defined as either “rutile” or “ilmenite” in the Mineral Resource but are recovered in the production of both, results in calculated recoveries above 100% being achievable for both products]

MSP throughput was lower at 77tph in the reporting period (comparative period: 90tph) due to the reduced volume of HMC available in the early part of the reporting period when mining commenced on the northern fringes of the South Dune, where grades are lower. Ore grades increased as mining progressed towards the centre of the orebody, and HMC production with it, allowing MSP feed rates to correspondingly increase. However, total MSP feed was lower at 276,816 tonnes (comparative period: 385,944 tonnes).

As a result of the above, production of ilmenite, rutile and zircon was lower than the comparative period:

• Ilmenite production was 165,214 tonnes in the reporting period (comparative period: 226,730 tonnes) with recoveries steady at 102% (comparative period: 102%).
• Rutile production was 36,201 tonnes in the reporting period (comparative period: 49,630 tonnes) with improved recoveries of 102% (comparative period: 99%) and higher contained rutile in the feed.
• Zircon production was 14,904 tonnes in the reporting period (comparative period: 17,935 tonnes) with the lower feed rate partially offset by improved recoveries of 85% (comparative period: 76%). The higher zircon recovery is a function of the mineral properties encountered to date in the South Dune orebody, which improves separation efficiency.

There were no workplace lost time or medical treatment injuries during the reporting period at the Kwale Operation and, as a result, the lost time injury (LTI) frequency rate and total recordable injury frequency rate were both zero during the reporting period. No lost time or medical treatment injuries were recorded for the Toliara Project and the total number of injuries of any type since Toliara Project commencement remains at zero. Base Resources’ employees and contractors have now worked 19.1 million man-hours LTI free, with the last LTI recorded in early 2014. Further, 9.4 million hours have been worked without a medical treatment injury.

Marketing and sales	Six months to Dec 2019	Six months to Dec 2018
Sales (tonnes)
Ilmenite	166,653	214,420
Rutile	27,096	47,588
Zircon	13,803	17,764
Zircon low grade	1,455	-

Across each of its three main products, the Company maintains a balance of multi-year, annual and quarterly offtake agreements with long term customers as well as a small proportion of ongoing spot sales. These agreements, in place with some of the world’s largest consumers of titanium dioxide and zircon products, provide certainty for the Kwale Operation by securing minimum offtake quantities. Selling prices in these agreements are derived from prevailing market prices, based on agreed price indices or periodic price negotiations.

The Company continues its strong market presence in China, the world’s largest market for both ilmenite and zircon, with over 160,000 tonnes of ilmenite and over 9,000 tonnes of zircon products sold into the Chinese market during the reporting period.

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.

After more than two years of strong growth, the global TiO2 pigment industry moderated through the first half of calendar year 2019 and stabilised during the reporting period (second half of calendar year 2019).  Global economic uncertainties have led to pigment consumers moving to, and maintaining, very low pigment inventories.  However, underlying pigment consumption has held up and most major pigment producers continued to operate at high production levels which fuelled solid demand for feedstocks, including rutile and ilmenite. Any improvement in the global economic outlook has the potential to rapidly lead to re-stocking activity from pigment consumers and a spike in pigment demand.

Chinese domestic ilmenite production was stable through the reporting period while production and exports from India and Vietnam remain significantly constrained.  Indian government-imposed bans on mineral sands mining and exports (at both the national and state levels) remain in place and now appear likely to be permanent.  Government-issued export quotas in Vietnam expired at the end of the 2018 calendar year and new quotas have not yet been forthcoming. These ilmenite supply constraints continue to support strengthening ilmenite prices.

Significant supply constraints on high grade feedstocks, combined with the ongoing firm demand, has resulted in continued price improvement for rutile.

To date, there has been no direct impact on the Company’s sales of ilmenite or rutile stemming from the COVID-19 outbreak.  Ilmenite demand is much more exposed to the Chinese market than rutile, but, like zircon, the impact that COVID-19 will have on the Chinese economy and downstream demand in the coming months remains uncertain.

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.  Following a period of strong growth, the economic uncertainties that persist in most key markets led to cautious buying behaviour and de-stocking by zircon consumers through the reporting period and into 2020.  This has resulted in a slight surplus of zircon production from some major producers and a moderation of prices through the reporting period.

The outlook for zircon in the short term has become dependent on the full extent of the COVID-19 impact - which is expected to be much more significant in China, a major market for the Company.  The direct impact on zircon sales to date has been minimal, with only a slight delay in the timing of shipments to Chinese customers.  While these customers are now resuming shipments and clearing the backlog of the past few weeks, it remains uncertain how the impact on the general economy and downstream markets will affect zircon demand in the coming months.

As a result of the low inventory levels being maintained by zircon consumers, any improvement on the COVID-19 outlook and general economic sentiment would likely result in a rapid tightening of market conditions as zircon supply is expected to remain stable through calendar year 2020.

Kwale Operations Extensional Exploration

Mining tenure arrangements continue to progress with the Kenyan Ministry of Petroleum and Mining as a precursor to an anticipated updated Ore Reserves estimate based on the expanded 2017 Kwale South Dune Mineral Resource¹. A concept study for mining the 171Mt North Dune Mineral Resources estimate (136Mt Indicated and 34Mt Inferred)² was completed in early January 2020, with the results supporting progression to a pre-feasibility study, which has now commenced.

Other exploration drill programs within the Kwale region remained on hold pending resolution of community access issues.  After wider prospectivity work, additional prospecting licence applications have been lodged for an area south of Lamu (Apps No/2136, 2146 and 2153) together with an area in the Kuranze region of Kwale county about 70 km west of the Kwale Operation (App No/2123). These applications are progressing through the granting process.

[Notes:

(1) Refer to Base Resources’ market announcement “Mineral Resource Increase for Kwale South Dune” released on 4 October 2017, which is available at:  https://baseresources.com.au/investors/announcements/, for further information.

(2) For further information on the Kwale North Dune Mineral Resources estimate, refer to Base Resources’ market announcement “Mineral Resource for Kwale North Dune deposit” released on 1 May 2019, which is available at https://baseresources.com.au/investors/announcements/. Base Resources confirms that it is not aware of any new information or data that materially affects the information included in the 1 May 2019 announcement and all material assumptions and technical parameters underpinning the estimates in the 1 May 2019 announcement continue to apply and have not materially changed.]

Toliara Project

In November 2019, the Government of Madagascar (GoM) required the Company to temporarily suspend on-the-ground activity on the Toliara Project while discussions on fiscal terms applying to the project were progressed³.  Activity remains suspended as Base Resources engages with the GoM in relation to the fiscal terms applicable to the mining sector in Madagascar, including the Toliara Project.  Base Resources is confident that mutually beneficial terms can be secured that will support a sound and sustainable Toliara Project and broader mining sector, while delivering clear benefits to the communities, the nation of Madagascar and shareholders.

The DFS for the Toliara Project was completed in December 2019, with the results of that study reinforcing the Company’s view that the project is a world class mineral sands development.

The DFS outcomes closely align with the PFS released in March 2019 and include a post-tax/pre-debt (real) NPV¹⁰ of US$652 million, construction capital cost estimate of US$442 million and an average revenue to cost ratio of 3.15 over the initial 33 year mine life⁴. The Company is now advancing the Project towards a planned decision to proceed to construction later in 2020, with production expected to start late 2022.

[Notes:

(3) Refer to Base Resources’ market announcement “Toliara Project – Government of Madagascar statement” released on 7 November 2019, which is available at:  https://baseresources.com.au/investors/announcements/, for further information.

(4) Refer to Base Resources’ market announcement “DFS reinforces Toliara Project’s status as a world class mineral sands development” released on 12 December 2019, which is available at https://baseresources.com.au/investors/announcements/ (DFS Announcement), for further information. The DFS Announcement discloses details about the material assumptions and underlying methodologies adopted for deriving the forecast financial information included in this document in respect of the Toliara Project, such as the material price and operating cost assumptions, which include the currently legislated government mineral royalty of 2%. The DFS Announcement also discloses key pre and post FID risks and an NPV sensitivity analysis in respect of the Toliara Project. Base Resources confirms that the material assumptions underpinning the forecast financial information disclosed in the DFS Announcement continue to apply and have not materially changed.]

3. Review of Financial Performance

Base Resources achieved a profit after tax of US$9.1 million for the six-month reporting period, a decrease compared with US$17.4 million in the comparative period, primarily due to lower sales revenues.

	Six months to 31 December 2019				Six months to 31 December 2018
	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	83,463	-	-	83,463	102,166	-	-	102,166
Cost of goods sold excluding depreciation & amortisation:
Operating costs	(33,647)	-	-	(33,647)	(31,968)	-	-	(31,968)
Inventory movement	7,417	-	-	7,417	2,557	-	-	2,557
Royalties expense	(5,861)	-	-	(5,861)	(7,119)	-	-	(7,119)
Total cost of goods sold (i)	(32,091)	-	-	(32,091)	(36,530)	-	-	(36,530)
Corporate & external affairs	(2,533)	(45)	(2,706)	(5,284)	(2,188)	(197)	(2,782)	(5,167)
Community development	(1,798)	-	-	(1,798)	(1,534)	-	-	(1,534)
Selling & distribution costs	(1,147)	-	-	(1,147)	(1,316)	-	-	(1,316)
Other income / (expenses)	630	1	(310)	321	443	-	(528)	(85)
EBITDA (i)	46,524	(44)	(3,016)	43,464	61,041	(197)	(3,310)	57,534
Depreciation & amortisation	(27,919)	(51)	(129)	(28,099)	(26,025)	-	(62)	(26,087)
EBIT (i)	18,605	(95)	(3,145)	15,365	35,016	(197)	(3,372)	31,447
Net financing expenses	(2,047)	-	(358)	(2,405)	(7,131)	-	(1,690)	(8,821)
Income tax expense	(3,817)	-	-	(3,817)	(5,209)	-	-	(5,209)
NPAT (i)	12,741	(95)	(3,503)	9,143	22,676	(197)	(5,062)	17,417

[(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 Base Resources and its controlled entities (the Group) and have not been audited/reviewed.]

Sales revenue decreased to US$83.5 million for the reporting period (comparative period: US$102.2 million), achieving an average price of product sold (rutile, ilmenite, zircon and zircon low grade) of US$399 per tonne (comparative period: US$365 per tonne). Average unit revenue is influenced by both product sales mix and realised product prices.  During the reporting period, proportionally less rutile and more ilmenite was sold than in the comparative period, which would usually result in a lower average unit revenue price, however, higher averaged realised prices for ilmenite and rutile, offset by lower prices for zircon, pushed the unit revenue price higher.

Operating cost per tonne produced was higher at US$155 per tonne for the reporting period (comparative period: US$109 per tonne), due to reduced production as a result of the transition of mining operations to the lower grade South Dune orebody in July 2019, and increased costs associated with mining higher volumes and moving ore over longer distances, specifically power required for pumping.

Unit cost of goods sold is influenced by both the underlying operating costs and product sales mix.  Operating costs are allocated to each product based on revenue contribution, which sees the higher value rutile and zircon products attracting a higher cost per tonne than the lower value ilmenite.  Therefore, the greater the sales volume of rutile and zircon relative to ilmenite in a period, the higher both unit revenue per tonne and unit cost of goods sold will be.

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 means any given half-year will usually contain either three or four rutile and ilmenite sales.  Zircon is sold in smaller parcels and, in the absence of any market constraints, sales generally align with production volume.  Product sales mix will therefore vary depending on the number of bulk shipments of ilmenite and rutile in each period.

Total cost of goods sold, excluding depreciation and amortisation, was US$32.1 million for the reporting period (comparative period: US$36.5 million) at an average cost of US$154 per tonne of product sold (comparative period: US$131 per tonne), lower than the unit operating cost as a result of inventory movements – primarily a build-up of rutile stocks for an early January 2020 shipment.

With a margin of US$245 per tonne sold for the reporting period (comparative period: US$234 per tonne) and an achieved revenue to cost of sales ratio of 2.6 in the reporting period (comparative period: 2.7).

The reduced sales volume resulted in a lower Kwale Operations EBITDA for the reporting period of US$46.5 million (comparative period: US$61.0 million) and a Group EBITDA of US$43.5 million (comparative period: US$57.5 million).

A net profit after tax of US$12.7 million was recorded by Kwale Operations (comparative period: US$22.7 million) and US$9.1 million for the Group (comparative period: US$17.4 million). Basic earnings per share for the Group was US0.78 cents per share (comparative period: US1.52 cents per share).

Cash flow from operations was US$35.5 million for the reporting period (comparative period: US$53.8 million), lower than Group EBITDA due to the payment of US$20.7 million in corporate income tax to the Kenya Revenue Authority during the reporting period, offset by a $16.6 million reduction in trade receivables. The operating cashflows were used to fund capital expenditure at Kwale Operations, Toliara Project progression, as well as debt servicing and repayment.

Total capital expenditure for the Group was US$20.0 million in the reporting period (comparative period: US$14.0 million) comprised of US$5.1 million at Kwale Operations (comparative period: US$7.3 million), primarily for the transition of mining operations to the South Dune deposit, US$14.7 million on the progression of the Toliara Project (comparative period: US$6.3 million) and US$0.2 million for Corporate capital works (comparative period: US$0.4 million).

In July 2019, the Group made a payment of US$5.0 million to reduce the amount owing on the RCF debt. The Group continues to operate in a net cash positive position. At 31 December 2019, the Group held cash reserves of US$47.6 million and the RCF balance was US$15.0 million.

After Balance Date Events

Subsequent to period end, in January 2020, the outstanding US$15.0 million balance of the RCF debt was repaid in full from cash reserves.

In January 2020, in accordance with the terms of the share sale agreement with World Titane Holdings Limited, the Group acquired the remaining minority interest in the Toliara Project.  As a result, the Group now owns 100% of the Toliara Project.

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

		6 months to 31 December 2019	6 months to 31 December 2018
	Note	US$000s	US$000s
Sales revenue	2	83,463	102,166
Cost of sales	3	(60,010)	(62,555)
Profit from operations		23,453	39,611
Corporate and external affairs		(5,464)	(5,229)
Community development costs		(1,798)	(1,534)
Selling and distribution costs		(1,147)	(1,316)
Other income / (expenses)		321	(85)
Profit before financing costs and income tax		15,365	31,447
Financing costs	4	(2,405)	(8,821)
Profit before income tax		12,960	22,626
Income tax expense		(3,817)	(5,209)
Net profit after tax for the period		9,143	17,417
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations		161	(1,644)
Total other comprehensive income / (loss) for the period		161	(1,644)
Total comprehensive income for the period		9,304	15,773
Net Earnings per share		Cents	Cents
Basic earnings per share (US cents per share)		0.78	1.52
Diluted earnings per share (US cents per share)		0.77	1.50

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

5. Consolidated Condensed Statement of Financial Position

		31 December 2019	30 June 2019
	Note	US$000s	US$000s
Current assets
Cash and cash equivalents		47,563	39,242
Trade and other receivables	5	43,719	62,397
Inventories	6	26,187	19,574
Other current assets		6,764	6,313
Total current assets		124,233	127,526
Non-current assets
Capitalised exploration and evaluation	7	131,330	115,891
Property, plant and equipment	8	182,274	205,586
Total non-current assets		313,604	321,477
Total assets		437,837	449,003
Current liabilities
Trade and other payables		32,371	33,138
Borrowings	9	165	19
Provisions		3,749	3,398
Income tax payable	10	-	14,463
Deferred consideration		17,000	17,000
Other liabilities		-	625
Total current liabilities		53,285	68,643
Non-current liabilities
Borrowings	9	14,244	18,913
Provisions		25,152	24,355
Deferred tax liability		14,188	16,500
Total non-current liabilities		53,584	59,768
Total liabilities		106,869	128,411
Net assets		330,968	320,592
Equity
Issued capital	11	307,063	306,512
Reserves		(18,548)	(19,230)
Retained earnings		42,453	33,310
Total equity		330,968	320,592

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

6. Consolidated Condensed Statement of Changes in Equity

	Issued capital	Retained earnings / (Accumulated losses)	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 2018	305,277	(7,671)	5,806	(20,714)	(1,476)	281,222
Profit for the period	-	17,417	-	-	-	17,417
Other comprehensive loss	-	-	-	(1,644)	-	(1,644)
Total comprehensive income for the period	-	17,417	-	(1,644)	-	15,773
Transactions with owners, recognised directly in equity
Share based payments	1,235	1,699	(3,438)	-	1,476	972
Balance at 31 December 2018	306,512	11,445	2,368	(22,358)	-	297,967
Balance at 1 July 2019	306,512	33,310	3,399	(22,629)	-	320,592
Profit for the period	-	9,143	-	-	-	9,143
Other comprehensive loss	-	-	-	161	-	161
Total comprehensive income for the period	-	9,143	-	161	-	9,304
Transactions with owners, recognised directly in equity
Share based payments	551	-	521	-	-	1,072
Balance at 31 December 2019	307,063	42,453	3,920	(22,468)	-	330,968

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

7. Consolidated Condensed Statement of Cash Flows

		6 months to 31 December 2019	6 months to 31 December 2018
		US$000s	US$000s
Cash flows from operating activities
Receipts from customers		99,012	103,379
Payments in the course of operations		(42,786)	(48,997)
Income tax paid	10	(20,696)	(588)
Net cash from operating activities		35,530	53,794
Cash flows from investing activities
Purchase of property, plant and equipment		(5,235)	(6,661)
Payments for exploration and evaluation		(14,737)	(7,321)
Other		136	406
Net cash used in investing activities		(19,836)	(13,576)
Cash flows from financing activities
Proceeds from borrowings		-	48,180
Repayment of borrowings		(5,000)	(92,473)
Transfers from restricted cash		-	29,591
Payment of debt service costs		(1,293)	(5,832)
Net cash used in financing activities		(6,293)	(20,534)
Net increase in cash held		9,401	19,684
Cash at beginning of period		39,242	29,686
Effect of exchange fluctuations on cash held		(1,080)	(244)
Cash at end of period		47,563	49,126

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

ENDS.

For further information contact:

James Fuller, Manager Communications and Investor Relations	UK Media Relations
Base Resources	Tavistock Communications
Tel: [phone]	Jos Simson and Barnaby Hayward
Mobile: [phone]	Tel: [phone]
Email: [e-mail]

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 1, 50 Kings Park Road
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
Numis Securities Limited
John Prior / James Black / Paul Gillam
Phone: [phone]