Quarterly Activities Report

ASX, AIM and Media Release

7 April 2014

                          Quarterly Activities Report                          
                                  March 2014                                   

HIGHLIGHTS:

  * Maiden shipment of 25,000 tonnes of ilmenite departed port in February
    bound for China.
   
  * First product sales proceeds were received in March.
   
  * Zircon production through the mineral separation plant commenced in
    February with containerized zircon sales commencing in April.
   
  * Fifth and final US$25 million drawdown on the Kwale Project Debt Facility
    completed in January.
   
  * The Kwale Project has now made the transition to the Kwale Operations.
   
Base Resources Limited (ASX & AIM: BSE) ("Base") ("Base" or the "Company") is
pleased to provide a quarterly production and commissioning update at its Kwale
Mineral Sands Operations ("Kwale Operations") in Kenya, East Africa. All work
packages are now complete and operational with only minor defect list items
remaining outstanding. The shiploader successfully underwent `load on'
commissioning during the quarter and regular bulk shipments of finished
products have commenced.

KWALE OPERATIONS

Following the commissioning of the ilmenite and rutile circuits of the mineral
separation plant ("MSP") in December 2013, first production from the zircon
circuit occurred in February. The main focus is now on balancing and
debottlenecking the zircon circuit as well as the metallurgical optimisation of
the remaining MSP circuits in order to progress the ramp-up to achieve design
throughput, recoveries, availability and runtime.

Mining activities proceeded according to plan with a number of dry mining unit
("DMU") moves successfully carried out. Mining rates increased steadily
averaging over 1,200tph with nameplate tonnages being demonstrated. Valuable
heavy mineral ("VHM") recovery in the wet concentrator is nearing design
performance.

Heavy mineral concentrate ("HMC") production was in line with ramp up
expectations and the grade of ore mined.

Slime and sand deposition proceeded according to plan and sealing of the
upstream sand wall face of the tailings storage facility with bitumen
impregnated geotextile commenced.

MSP commissioning proceeded well and by the end of the quarter debottlenecking
of the ilmenite and rutile circuits was virtually complete.

Design ilmenite recoveries have been achieved and by the end of the quarter
rutile recoveries were steadily improving with the implementation of some
design modifications. Further planned design modifications, seeking to address
the remaining identified areas of recovery losses, are currently underway and
are expected to result in achievement of design rutile recoveries over the
coming months.

The wet and dry zircon circuits were commissioned during February and
optimisation of throughput and recovery is in progress. A focus on
debottlenecking and defect rectification, prior to the EPCM engineer
demobilising from site at quarter end, meant that zircon production was
sacrificed in the short term. With the areas of concern now addressed, our
efforts are now concentrated on ramping up the zircon circuits and optimising
production which, due to the complexity of these circuits, will take place over
the next 12 months as planned.

The Likoni Port bulk loading facility was successfully commissioned with two
ships loaded during the quarter and the first shipment of containerised zircon
was despatched to Mombasa Port.

SUMMARY PHYSICAL DATA

                 Oct-13  Nov-13   Dec-13   Q4-13   Jan-14   Feb-14   Mar-14    Q1-14 
                                           Total                               Total

Ore mined (dmt) 105,304  275,315 451,373  831,992  583,928  661,725 695,298  1,940,951
HMC produced(dmt) 4,080   10,163  28,229   42,472   28,746   42,998  41,452    113,196

Production (dmt)
Ilmenite              0        0   5,539    5,539   15,686   24,872  27,635     68,193
Rutile                0        0     152      152    1,969    2,902   3,972      8,843
Zircon                0        0       0        0        0       37     319        356

Sales (dmt)
Ilmenite              0        0       0        0        0   25,300  22,000     47,300
Rutile                0        0       0        0        0        0       0          0
Zircon                0        0       0        0        0        0       0          0

SAFETY PERFORMANCE

Kwale Operations suffered its first Lost Time Injury (LTI) when a trainee
operator suffered a hand injury in a conveyor incident. The injury was non-life
threatening and the employee is back at work on alternate duties. The incident
investigation recommended a number of corrective actions, including design
changes, which have been fully implemented.

COMMUNITY AND ENVIRONMENT

Rehabilitation of construction areas following contractor demobilisation is
ongoing, with successful revegetation and indigenous tree planting continuing
to take place across all areas.

Road safety remains an important feature of our community sensitisation
programme and 37 schools were visited along the transport corridor to discuss
the hazards, with an emphasis on heavy vehicles including Base's mineral haul
trucks.

Plans are well advanced with respect to the preliminary agricultural trials for
a series of projects being conducted in conjunction with Business for
Millennium Development aimed at significantly improving agricultural
livelihoods in the region.

Several community construction programmes have been completed in the quarter
including a training centre in Bwiti, emergency repairs to Matuga Girls
Secondary School, construction of new ablution facilities for Mwapala Primary
School and work commenced on replacing a Likoni primary school roof blown off
by high winds.

Base's collaboration with Little Sports Organisation in providing after school
sports to primary school children has shown very positive results. This
programme has recently expanded from 6 schools to 11 schools in nearby
communities and is focussed on teaching life skills through play and sports
activities.

BUDGET

The estimated cost at completion for the Kwale Project remains at US$310
million.

FINANCING

In January, the additional US$25 million project finance facility executed in
December 2013 was drawn, bringing the total debt facilities drawn to US$215
million.

MARKETING

Base completed two bulk shipments of ilmenite during the March quarter (a total
of 47,300 tonnes) and have vessels booked for three further bulk ilmenite
shipments during April and May.

A bulk shipment of rutile and a container shipment of zircon were previously
scheduled for the latter part of March but vessel availability has resulted in
the bookings for these shipments falling into the early part of April.

Reports from major pigment producers indicate continued improvement in pigment
demand, with inventory levels and plant utilisation rates normalising in the
early part of 2014. Producer inventory of titanium dioxide feedstock remains at
elevated levels which is maintaining pressure on feedstock prices. However, as
the excess inventory position is run down, the pricing position of titanium
dioxide feedstock is expected to improve. Recent industry results commentary
points towards possible feedstock price improvement (including rutile and
ilmenite) during the second half of 2014.

Demand for zircon has remained firm through the March quarter with reports of
good trade activity. Stocks of zircon held by producers continued to be run
down and prices stabilised through the March quarter with some major zircon
producers increasing their offered pricing for zircon sales in the June
quarter.

CORPORATE

In summary, at 31 March 2014:

• Cash and cash equivalents were A$27.8 million.
• Debt drawn of US$215.0 million.
• 561,840,029 shares on issue.
• 16,600,000 unlisted options.

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: [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]

TENEMENT SCHEDULE:

Tenement Number                Interest         Location
Special Mining Licence 23        100%           Kwale - Kenya
Exploration Licence 173          100%           Kwale North - Kenya

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: [e-mail]
50 Kings Park Road                             Phone: [phone]
West Perth                                     Fax: [phone]
WA 6005