Quarterly Activities Report

ASX, AIM and Media Release

25 July 2014

                          Quarterly Activities Report                          
                                   June 2014                                   

HIGHLIGHTS:

  * Bulk rutile and containerised zircon shipments commenced in April
   
  * Design through puts, plant availability and runtime now being consistently
    achieved
   
  * Recoveries progressively improving towards design targets with ongoing
    implementation of process design enhancements and optimization
   
  * No lost time injuries occurred
   
  * First quarter of positive operating cash flows
   
  * Achievement of "Commercial Production" for accounting purposes with effect
    from 1 April
   
Base Resources Limited (ASX & AIM: BSE) ("Base") ("Base" or the "Company") is
pleased to provide a quarterly production and ramp-up update at its Kwale
Mineral Sands Operations ("Kwale Operations" ) in Kenya, East Africa. Following
the completion of commissioning in the March quarter, the focus has been on
debottlenecking and metallurgical optimisation of the mineral separation plant
("MSP") circuits towards achieving design throughput, recoveries, availability
and run-time. With significant success achieved in relation to runtime and
throughput, the focus is now firmly on the progressive improvement in
recoveries.

KWALE OPERATIONS

Mining activities delivered steadily increasing feed grades as the mine path
approached the central, high grade, section of the Central Dune. Tonnages were
restricted due to a planned program of rectifying the concentrator spiral
collection launders under a defects liability claim. This was, however,
compensated for by the higher grade areas which maintained heavy mineral
concentrate output to plan with the mined ore grade increasing from 6.4% to
8.1% heavy mineral over the quarter. This rectification work was successfully
completed by the end of June.

Heavy Mineral Concentrate ("HMC") production continued to increase over the
quarter as a function of higher ore grades and improved recoveries. Valuable
Heavy Mineral ("VHM") recoveries in the concentrator improved by 3.5% over the
previous quarter to 93.8%.

Slime and sand deposition continued to operate according to plan. By the end of
the quarter, stacking of the second 5 metre sand wall lift was underway.

Excellent rains during May filled the Mukurumudzi Dam to its 8.6GL capacity
and, at the end of June, the spillway was still flowing.

Mineral separation plant ("MSP") throughput of 152,777 tonnes was 38% above the
previous quarter's 110,860 tonnes and feed rates were consistently at design
levels of 80tph during the quarter. MSP availability increased from 72% to 87%
over the quarter, providing a stable operation on which to undertake further
refinement testwork and plant optimisation over the next few quarters.

Ilmenite production has reached design capacity and is exceeding expectations.
Zircon production is consistent with a planned twelve month ramp-up to design
capacity. Rutile production ramp-up has been hampered by wet gravity circuit
losses (feed preparation and zircon wet plants) which are expected to be
largely resolved during the September quarter. Further plant modifications and
optimisation are expected to increase production to design output over the
balance of the 2015 financial year. Early results from this work have been
encouraging with MSP recoveries of 85% and 51% achieved in the month of July to
date for rutile and zircon respectively.

Bulk loading at Base's fully owned and operated Likoni Port facility continued
to perform to expectations throughout the June quarter. Base completed four
bulk shipments of ilmenite (a total of more than 90,000 tonnes) and two bulk
shipments of rutile (a total of approximately 14,000 tonnes) during the June
quarter. A further bulk shipment of 10,000 tonnes of rutile scheduled for late
June was delayed into the first week of July by the late arrival of the vessel.

Base commenced container shipments of zircon in April and completed a total of
12 individual shipments (a total of approximately 2,700 tonnes) through the
June quarter. The first container shipment of rutile was dispatched in early
July and this will be followed by a regular container shipping schedule.

SUMMARY PHYSICAL DATA
                          March 2014 Quarter          June 2014 Quarter

Ore mined (dmt)                    1,940,951                  1,759,211
HMC produced (dmt)                   113,196                    141,753

Production (dmt)
   Ilmenite                           68,193                     91,620
   Rutile                              8,843                     15,221
   Zircon                                356                      4,130

Sales (dmt)
   Ilmenite                           47,300                     91,529
   Rutile                                  0                     14,005
   Zircon                                  0                      2,704

SAFETY PERFORMANCE

No serious injuries or incidents occurred during the quarter. Positive
performance indicators have been the focus this quarter with over 800 formal
inspections and hazard reports submitted. The annual Department of Safety and
Health compliance audit was conducted during the quarter resulting in a
favorable report. Occupational health monitoring together with occupational
health programs were also implemented this quarter and these included noise
mapping and monitoring, dust monitoring, radiation monitoring and heat stress
mapping.

COMMUNITY AND ENVIRONMENT

Agricultural trials have been implemented on seven farms throughout Kwale
County for a series of projects being conducted in conjunction with Business
for Millennium Development. Potato and cotton trials began in time for seasonal
rains and germination has been achieved, whilst commercial poultry production
is in the planning stage. Leveraging the existing significant agricultural
activity and experience in Kwale County, these projects have the potential to
deliver significant improvement in livelihoods in the area through increased
crop diversity, enhanced agricultural practices, output aggregation and access
to stable markets.

Base's collaboration with Little Sports Organisation in providing after-school
sports to primary children, aimed at teaching life skills through play and
sports activities, is continuing to prove a success. Planning has been
completed to expand the programme to over 20 schools from July 2014.

On the environmental front, the effectiveness of the recent rehabilitation of
construction areas and stabilisation of slopes was demonstrated recently with
the onset of the wet season. All embankments and rehabilitated construction
areas have remained stable.

MARKETING

The global pigment industry continued to improve throughout the June quarter.
Recent feedback from China suggests that Chinese pigment demand had improved,
and the prices achieved by Chinese pigment producers commenced a gradual
uplift, during the quarter. Inventories of titanium dioxide feedstock are being
gradually worked down but are likely to remain at elevated levels for the
remainder of 2014. Pricing of high grade titanium dioxide feedstock (including
rutile) appeared to stabilise through the June quarter and Base now expects
prices to remain relatively flat for the remainder of the year. Ilmenite prices
continued to be under pressure through the June quarter but recent reports of
reduced output in some of the main ilmenite-producing regions may indicate that
prices will stabilise at, or near, current levels.

Zircon trade activity continued to firm through the June quarter. Stocks of
zircon held by producers continued to be run down and prices have remained
relatively flat since the early stages of 2014. There are increasing signs that
the zircon market has reached the bottom of the cycle and is turning towards a
firm recovery. With this expected strength in the zircon market over the coming
months there may be support for zircon price improvement towards the end of
2014 or the beginning of 2015.

CORPORATE

"Commercial Production"

The achievement of "Commercial Production" by an operation in ramp-up
represents the point at which revenue and costs are no longer capitalised and
depreciation of the asset commences. It is achieved when the plant is producing
at commercial levels and the Board believes there will be no impediments to the
plant reaching its intended operating capacity per design specifications (i.e.
when the Board feel the plant is capable of operating as intended.)

The Kwale processing plant achieved the "Commercial Production" milestone with
effect from 1 April 2014.

DEBT RESCHEDULING

Base is currently working with the syndicate of lenders that has provided the
Kwale Project debt facility to realign the repayment schedule to reflect the
delay in commencement of sales to February 2014 from the original expectation
of October 2013, with a satisfactory outcome expected in the next couple of
months.

KWALE COUNTY MINERAL LEVY

Base is currently continuing to work with both the Kwale County Government and
the Kenyan National Government to have the export levy purported to be imposed
by the Kwale County withdrawn or rescinded (see ASX Release dated 5 June 2014)
on the basis that it is unconstitutional. Base is comfortable with its legal
position and expects to have the matter resolved in the near future.

In summary, at 30 June 2014:

• Cash and cash equivalents were A$20.9 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, 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

Share Registry
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