Quarterly Activities Report

ASX, AIM and Media Release

30 January 2014

BASE RESOURCES LIMITED

QUARTERLY ACTIVITIES REPORT - December 2013

HIGHLIGHTS

  * Following commissioning of the mining unit and wet concentrator in early
    October, production at the Kwale Project commenced during the quarter
    producing 42,472 tonnes of heavy mineral concentrate.
   
  * Ilmenite and rutile production through the mineral separation plant
    commenced in December ready for bulk shipments to commence in February.
   
  * Fourth US$20 million drawdown on the Kwale Project Debt Facility completed
    in October 2013.
   
  * Further US$25 million extension to the Kwale Project Debt Facility secured
    in December 2013 to provide an increase in the working capital buffer
    during the ramp up phase.
   
Base Resources Limited (ASX & AIM: BSE) ("Base" or the "Company") is pleased to
provide a quarterly production and commissioning update at its 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
zircon circuit of the mineral separation plant ("MSP") which is currently
undergoing feed commissioning. The Project will commence bulk product shipments
from February 2014.

KWALE PROJECT

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 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.

    MONTH            ORE MINED    ORE MINED    HMC PRODUCED 
                       (dmt)        (tph)          (dmt)
    October           105,304        586           4,080       
    November          275,315        685          10,163       
    December          451,373        941          28,229       
    Total Quarter     831,992        783          42,472       

Commissioning of the 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 to achieve the first bulk shipment in February 2014, slightly later
than planned. 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. The first bulk rutile shipment is scheduled for
March.

Trucking of bulk ilmenite and rutile to stockpile at the Likoni port facility
commenced during the quarter and has proceeded without incident.

Construction work at the Kwale processing plant is winding down. Over 80% of
the contractor workforce has demobilised and outstanding activity comprises
mainly remedial work and commissioning of the wet and dry zircon circuits.
Zircon production is expected to commence slightly behind schedule in early
February. Construction works at the Likoni port facility are complete with the
60,000 tonne capacity storage shed receiving both ilmenite and rutile product.

SAFETY PERFORMANCE

With an excess of 20,000 hours of operational readiness training completed
prior to start up, the Company's safety performance has been maintained through
the transition from construction into operations with only minor first aid
injuries reported. The lost time injury frequency rate ("LTIFR") is currently
0.18 per million man hours following a lost time injury (the Projects second)
during the quarter when a diver, welding underwater, was stung by a stonefish.

COMMUNITY AND ENVIRONMENT

With construction scaling back, many local workers are being demobilised. Base
is continuing to conduct demobilisation workshops to assist these workers learn
skills that will improve their employability.

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

A road safety campaign was carried out early in the quarter with the
involvement of the mineral haulage contractor, aimed at sensitising communities
along the transport corridor on road safety in preparation for the mineral
transport that commenced in December.

Construction of social infrastructure continued during the quarter with the
Magaoni Health Centre nearing completion. Construction of three boreholes to
provide clean water to villages near the mine site has commenced after
receiving regulatory approval in the September quarter. A further programme to
rehabilitate existing hand-pump boreholes for villages on the western side of
the mine property is planned for the coming quarter.

BUDGET

The estimated cost at completion for the Project is currently US$310 million,
of which US$300 million had been incurred to 31 December 2013.

FINANCING

In December 2013, Base executed documentation to extend its existing project
finance facility agreements by a further US$25 million. The additional project
finance facility will increase the working capital buffer during the ramp up
phase of the Kwale Project. The key terms of the additional facility are
consistent with the exisiting facility.

Subsequent to quarter end, the additional US$25 million project finance
facility was drawn in January 2014, bringing the total Kwale Project debt
facilities drawn to US$215 million.

MARKETING

The short term market for titanium dioxide feedstocks continued to show signs
of improvement through the December quarter with reports from major pigment
producers suggesting that pigment demand has improved, and stock levels and
plant utilisation rates have started to normalise, through H2, 2013. However,
supply of titanium dioxide feedstock into the market through the latter part of
the December quarter out-paced demand and resulted in further price weakness
towards year end.

Construction indices in the major markets of USA, China and Europe have been
trending strongly positive for the past 6-9 months which suggests that 2014
will see further improvement in pigment demand. Price improvement for ilmenite
and rutile in 2014 will be dependent on the pace of stock re-balancing between
producers and consumers.

Demand for zircon was firm in the major markets of China and USA throughout
2013, although some user segments (such as zirconium chemicals) remained
subdued. Unfavourable economic conditions continued to persist in other major
markets, Europe in particular, which suppressed demand in all user segments in
those markets for much of the year.

Overall, it is expected that global zircon consumption for 2013 has exceeded
2012 and this positive trend is expected to continue through 2014. Although
zircon pricing remained relatively stable for much of 2013, the rate of supply
into the market through the December quarter exceeded that of demand and forced
a drop in pricing by year end.

Base has agreed sales schedules with all customers for 2014 and is currently
finalising shipping and logistics arrangements for the initial shipments in Q1,
2014.

CORPORATE

In summary, at 31 December 2013:
  * Cash and cash equivalents were A$33.3 million.
  * Debt drawn of US$190.0 million.
  * 561,840,029 shares on issue.
  * 16,600,000 unlisted options.
   
A full PDF version of this 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