Quarterly Activities Report

ASX, AIM and Media Release

30 October 2013

BASE RESOURCES LIMITED

QUARTERLY ACTIVITIES REPORT - September 2013

Highlights

  * Commencement of ore processing through the mining unit and wet concentrator
    at the Kwale Project.
   
  * All Kwale Project supporting infrastructure completed and operational
    including - water supply dam, tailings storage facility, power line and
    ancillary borefield.
   
  * Three new, three-year, take or pay off-take agreements signed with leading
    Chinese off-takers, securing a large portion of the previously
    un-contracted sales volumes for ilmenite and zircon.
   
  * Malcolm Macpherson appointed to the Board, bringing significant additional
    mineral sands, African and corporate development experience to the Company.
   
Base Resources Limited (ASX & AIM: BSE) ("Base" or the "Company") has commenced
ore processing through the mining unit and wet concentrator at the Kwale
Mineral Sands Project ("Kwale Project" or the "Project") in Kenya, East Africa.
All work packages are now complete and operational with the exception of the
mineral separation plant ("MSP") and port facilities which are nearing
completion, and the Project remains on schedule to make the first bulk product
shipments in January 2014.

KWALE PROJECT IMPLEMENTATION

The mining unit and wet concentrator are now operational and, in October,
commenced the ramp up process and the building of a stockpile of heavy mineral
concentrate ("HMC") ahead of the commissioning of the MSP. Construction work on
the MSP is now in its final stages with commissioning of the ilmenite and
rutile circuits and commencement of concentrate processing expected towards the
end of November, which will be followed by the zircon circuit.

Onshore construction works at the Likoni port facility are in the final stages
with the 60,000 tonne capacity storage shed complete and administration
buildings progressing on track. Following construction and trial assembly in
South Africa, the ship loader was successfully erected on the wharf platform in
August and its installation is on target for completion prior to the first
planned bulk shipment in January 2014.

The 16 kilometre 132kVA power line was commissioned in June and subsequently
provided power for the latter stages of construction and continues to be the
source for ongoing operations.

The Mukurumudzi Dam main embankment has now been completed to its final
elevation, providing a storage capacity of eight gigalitres, and the spillway
is functionally complete. The dam currently holds some six gigalitres of water,
which is more than sufficient for the first year's production requirements.

The tailings storage facility was completed in August and is now accepting
tails from HMC production through the wet concentrator.

Safety Performance

The Company's safety performance remains high following its transition from
construction, into commissioning. Operations having been relatively incident
free to date with only minor permit to work, or systems breaches occurring. The
Lost Time Injury frequency rate for the project is currently 0.15 per million
man hours with over six million hours worked since the last (and only) lost
time injury in July 2012.

Community and Environment

With the completion of many project infrastructure components during the
quarter, demobilisation of construction workers is underway. Base has conducted
demobilisation workshops to assist local workers with skills that will improve
their employability. Local residents are also assisting with several
environmental projects in and around the mine site.

The Company has now recruited the permanent operational workforce of around 370
with 60% being from Kwale County, 70% from Coast Province and 90% Kenyan.
Base's Labour Recruitment Centre, which currently has over 14,000 people
registered on the database, is no longer registering new job seekers. The next
opportunity to be pursued is opening the recruitment centre up and making it
available to other regional employers as an ongoing employment portal for the
local community.

Construction of social infrastructure continued during the quarter with the
commencement of Magaoni Health Centre. Discussions are still taking place with
local administration and the community to locate another feeder school at
Miembeni to the north of the mining lease. Permitting and authorisations have
been received for the installation of three boreholes intended to provide clean
water to villages near the mine site. In Likoni, the Muslim Primary School was
rehabilitated to improve learning conditions for the 900 students enrolled. A
further school and dispensary will be constructed once the Fingirika Settlement
Scheme is established by the Government or suitable alternatives identified in
collaboration with local communities.

Establishment of Base's indigenous tree nursery continued and it is now one of
the largest in Kenya. The nursery will provide the stock for the Biodiversity
Offset Programme and, ultimately, the rehabilitation of the mine site.

Budget

The estimated cost at completion for the Project is currently US$306 million,
of which US$287 million had been incurred to 30 September 2013.

Financing

Subsequent to quarter end, the final US$20 million tranche of the existing debt
facilities was drawn in October 2013, bringing the total Kwale Project debt
facilities drawn to US$190 million.

As previously indicated in the June 2013 quarterly report, Base considers it
prudent to increase the funding buffer available for working capital during the
ramp up phase of operations and is currently pursuing a further extension of
the existing debt facilities.

Marketing

The short-term market for titanium dioxide feedstocks continued to show signs
of improvement through the September quarter with major pigment producers
reporting a significant reduction in final product stocks and announcing
pigment price increases. Continued strength in the US housing market, together
with improvement in the Chinese housing sector, provides support for market
conditions to continue improving through the December quarter of 2013 and into
2014. However, ilmenite and rutile stock levels in the supply chain are likely
to result in subdued pricing through until at least the end of the first half
of 2014.

Zircon demand, from Chinese customers in particular, increased significantly
throughout the first half of 2013. Due to the extent of re-stocking by zircon
users that occurred during the first half of 2013, demand growth is expected to
occur at a slower rate through the second half of 2013, as evidenced in the
September quarter. The timing of a recovery in zircon pricing will be dependent
on the pace of stock re-balancing throughout the supply chain.

The long term outlook for all mineral sands products remains very positive.
Enquiry levels for Base's products remains strong and during the September
quarter Base finalised three new, three-year, take or pay off-take agreements
with leading Chinese off-takers, securing a large portion of the previously
un-contracted sales volumes for ilmenite and zircon.

Kenyan Exploration Projects

As part of the Kwale Project acquisition, Base acquired an option to purchase
three further exploration projects - Kilifi, Mambrui and Vipingo. As reported
previously, on 28 December 2012, the then Kenyan Minister of Environment &
Mineral Resources published a gazette notice purporting to cancel the three
exploration licenses covering these projects. The Company has taken the
appropriate legal action to protect the rights and has received a court order
staying the cancellation pending a hearing. Base continues to pursue the matter
and is confident of a positive outcome.

Further exploration activity, focused on enhancing the Kwale North Dune
resource estimate has been completed. Composite samples have been sent for
assaying, which is to be followed by the preparation of the updated resource
model in the December quarter. The North Dune is not currently included in the
Kwale Project.

Corporate

In summary, at 30 September 2013:
  * Cash and cash equivalents were A$44.3 million. 
  * Debt drawn of US$170.0 million.   
  * 561,840,029 shares on issue.   
  * 16,600,000 unlisted options.
   
A full PDF 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: [e-mail]
Phone: [phone]

RFC Ambrian Limited (Nominated Adviser and Broker)
As Nominated Adviser                   As Broker
Andrew Thomson or Trinity McIntyre     Jonathan Williams
Phone: [phone]              Phone: [phone]

Africapractice (East Africa) (Kenyan Media Relations)
David Maingi/ James Njuguna/Joan Kimani
Phone: [phone]
Email: [e-mail]

Tavistock Communications (UK Media Relations)
Jos Simson / Emily Fenton / Nuala Gallagher
Phone: [phone]

Cannings Purple (Australian Media Relations)
Annette Ellis / Warrick Hazeldine
Email: [e-mail]
[e-mail]
Phone: [phone]

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       Non-Executive Director & Company Secretary

Principal & Registered Office:      Contacts:
Level 1                             Email: [e-mail]
50 Kings Park Road                  Phone: [phone]
West Perth WA 6005                  Fax: [phone]