Quarterly Activities Report

ASX, AIM and Media Release

20 January 2015

                            BASE RESOURCES LIMITED                             
                  Quarterly Activities Report - December 2014                  

HIGHLIGHTS
  * Maiden corporately cash flow positive quarter.
  * An increase of 8% in production of final products quarter on quarter to
    131,873 dmt.   
  * Ilmenite circuit achieved an average MSP recovery of 106%.   
  * Rutile circuit achieved a consistent MSP recovery of 94% throughout the
    quarter.   
  * Ongoing process design enhancements and optimisation work achieving
    consistent improvements in zircon recovery throughout the quarter with MSP
    recovery in December of 53%.   
  * Over 23,000 tonnes of rutile shipped.
  * No lost time injuries.   
  * Completion of the rescheduling of the Kwale Project finance debt
    facilities.   
  * US$20 million in additional funding secured.   
  * Off-market takeover offer for World Titanium Resources Limited launched.
   
Base Resources Limited (ASX & AIM: BSE) ("Base") is pleased to provide a
quarterly production and ramp-up update at its Kwale Mineral Sands Operations
("Kwale Operations") in Kenya, East Africa. With the consistent achievement of
design availabilities and throughputs in both the wet concentrator plant
("WCP") and mineral separation plant ("MSP"), the focus has been firmly on
continuing to drive product recoveries, with considerable success achieved.

KWALE OPERATIONS

Mined ore grades were lower at 7.5% heavy mineral ("HM") as mining proceeded
closer to the perimeter of the Central Dune (8.4% HM during the previous
quarter) while tonnage mined increased by 6% to 2.3Mt in the December quarter.

Despite the higher mining tonnages and continued improvement in recoveries in
the concentrator (from 96% to 97%), Heavy Mineral Concentrate ("HMC")
production declined by 4% to 165,953 tonnes as a result of the lower mined ore
grades. WCP utilisation remained above plan at 84% for the quarter.

Slime and sand deposition continued to operate according to plan and, by
quarter end, sufficient storage capacity had been established to accommodate
the next 3.5 years' slime production.

The onset of the "short rains" in October ensured the Mukurumudzi Dam remained
full throughout the quarter.

MSP throughput of 166,000 tonnes was in line with the previous quarter and feed
rates remained at design levels of 80tph. MSP utilisation improved from 92% to
94% over the quarter.

Ilmenite production continued above design capacity, increasing 7% to 108kt due
to further improvement in recoveries. With some altered ilmenite species that
are not defined as "ilmenite" in the Resource being recovered to ilmenite
production, ilmenite recoveries (or yields) of over 100% are now consistently
being achieved. Rutile production increased 12% over the prior quarter, from
16,612 tonnes to 18,672 tonnes with MSP recoveries consistently averaging 94%
for the quarter. Further rutile recovery improvements are expected from ongoing
design enhancements throughout 2015, including the installation of modified
screens scheduled towards the end of the March quarter. Zircon production is
consistent with the planned twelve month ramp-up to design capacity and average
recoveries increased from last quarter's 47% to 50% this quarter, including 53%
for December. The focus for zircon over the next quarter is on improving
recoveries through improvements to the wet zircon piping and pumping systems to
provide greater control and flexibility.

All availabilities, throughputs and recoveries are ahead of the ramp-up plan.

Bulk loading at Base's Likoni Port facility continued to perform well
throughout the December quarter, dispatching more than 76,000 tonnes during the
quarter. In order to take advantage of considerable savings in freight rates,
we are increasingly shipping 50,000 tonne cargoes. This change in shipping
strategy, combined with the normal seasonal slowdown towards year end, has
resulted in lower ilmenite sales during the quarter with additional sales
volume pushed into January. Ilmenite sales are expected to normalise in 2015 at
approximately 100,000 tonnes per quarter.

Containerised shipments of rutile and zircon proceeded according to plan.

SUMMARY           March 2014       June 2014    September 2014   December 2014 
PHYSICAL DATA      Quarter          Quarter         Quarter         Quarter    
                                                                               
Ore mined (dmt)    1,940,951       1,759,211       2,191,455       2,328,746   
HMC produced (dmt)   113,196         141,753         172,885         165,953    
Production (dmt)                                                                    
  Ilmenite            68,193          91,620         100,533         107,893    
  Rutile               8,843          15,221          16,612          18,672     
  Zircon                 356           4,130           5,210           5,308     
Sales (dmt)                                                                    
  Ilmenite            47,300          91,529         116,578          53,345     
  Rutile                   0          14,005          12,923          23,328     
  Zircon                   0           2,704           2,601           5,883     

Cash operating costs for the quarter (inclusive of royalties) were US$14.4
million or US$109 per tonne of product produced (rutile, ilmenite and zircon).

SAFETY AND TRAINING

No serious injuries occurred during the quarter.

A comprehensive training and development program is underway aimed at a
sustainable workforce transition to national employees with leadership
development, apprenticeship programs and graduate traineeships underway.

COMMUNITY AND ENVIRONMENT

Agricultural trials, run in conjunction with partners Business for Millennium
Development and DEG, have produced successful results for both potato and
cotton crops. 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.

Utilising the knowledge gained from the trial programmes, preparations are
underway to expand the number of local farmers involved in the program with the
aim of producing commercial quantities of both crops. Further training of local
farmers for a poultry trial programme is now underway with the intention of
increasing productivity and quality through modern chicken rearing techniques
focussed on bio-controls and sustainability.

MARKETING

The global TiO2 pigment industry softened towards the end of the December
quarter as the northern hemisphere entered its usual seasonal slowdown.
Inventories of ilmenite feedstocks are expected to remain at elevated levels
until the pigment market picks up late in the March quarter and through the
June quarter. The cyclical slowdown in the pigment sector in China during the
December quarter (and in the lead up to Chinese New Year) has resulted in
ilmenite prices coming under renewed pressure. Output from some of the
principal ilmenite sources for the Chinese market continues to be suppressed
which should support pricing once demand regains pace (post Chinese New Year)
and stocks are further worked down.

Pricing of high grade titanium dioxide feedstock (including rutile) remained
relatively stable through the December quarter but may come under some pressure
in the early months of 2015.

Zircon trade activity remained firm through the December quarter with strong
levels of enquiry being received from the market. Prices were stable throughout
the December quarter and are expected to remain stable through the March
quarter. There is potential for some zircon price growth in 2015 provided that
major producers continue to manage their production output in line with market
demand.

CORPORATE

TAKEOVER OFFER FOR WORLD TITANIUM RESOURCES LIMITED

Base launched an off-market takeover offer (the "Offer") for World Titanium
Resources Limited ("World Titanium") with the Bidder's Statement being
dispatched to World Titanium shareholders, and the Offer formally opening, on
the 6th January 2015.

On 5th January 2015, World Titanium announced that it had secured binding
undertakings to not accept the Offer from World Titanium shareholders with
combined holdings exceeding 60%. Following discussions with key World Titanium
shareholders, we have concluded that the Offer is now unlikely to succeed
unless there is a significant change in circumstances.

As previously announced, the Offer Price will not be increased and the Offer
will close at 7.00pm (WST) on 6th February 2015 and will not be extended unless
all remaining Conditions of the Offer are fulfilled or waived prior to that
time, or the Offer is subject to an automatic extension under the Corporations
Act.

DEBT RESCHEDULING COMPLETED

The restructure of the US$215 million Kwale Project debt facility ("Project
Debt Facility") was completed in early December. The rescheduling has the
primary effect of realigning the Project Debt Facility repayment schedule to
reflect the delay in commencement of sales from the Kwale Project to February
2014 from the original expectation of October 2013 when the facility was
arranged in 2011.

Under the terms of the restructure, all principal repayments and funding of the
debt service reserve account have been deferred by six months with some
re-profiling to suit future cash flows. The first principal repayment is
deferred from December 2014 to June 2015 and the debt repayments during the
2015 financial year are reduced from US$45.9 million to US$11.0 million.

In addition, Base committed to contribute up to US$15 million in additional
liquidity by 30 June 2015 ("Liquidity Injection"), if required by any lender.

ADDITIONAL US$20 MILLION DEBT FACILITY EXECUTED

In December, Base executed a US$20 million unsecured debt facility with one of
its major shareholders, Taurus Funds Management ("Taurus Facility"). The Taurus
Facility puts Base on a sound financial footing, providing a source of
additional funding for the Kwale Project should it be needed, the means to
satisfy the US$15 million Liquidity Injection (refer above) and US$5 million in
corporate funding.

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 and AIM Release dated 5
June 2014) on the basis that it is unconstitutional. Base remains comfortable
with its legal position and expects to have the matter resolved in the near
future.

KENYAN VAT RECEIVABLE

Base has a refund claim of approximately US$25 million for VAT paid in Kenya,
most of which relates to the construction of the Kwale Project. This claim is
currently proceeding through the Kenya Revenue Authority process. The Kenyan
Cabinet Secretary to the Treasury has recently announced the Government of
Kenya's intention to settle all outstanding VAT claims by April 2015.

CLOSING CASH POSITION

The closing cash balance (unrestricted) at 31 December of A$12.7 million was
lower than expected and affected by several factors, including:
  * Reduced ilmenite sales as a consequence of a move to larger shipment sizes
    to take advantage of lower freight rates;   
  * The cyclical impact of the northern hemisphere winter on demand,
    particularly for ilmenite;   
  * Customer shipping schedules pushing sales later in the quarter and further
    into January; and   
  * Impacts of tightened credit conditions in China impacting on both shipment
    timing and revenue receipt.
   
These timing impacts have now largely resolved and not expected to be repeated
in the March quarter.

In summary, at 31 December 2014:
  * Cash and cash equivalents (unrestricted) were A$12.7 million.   
  * Debt drawn of US$215.0 million, undrawn debt of US$20.0 million.   
  * 563,902,771 shares on issue.   
  * 47,312,531 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
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)
Michael Vaughan / 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
Mike Stirzaker      Non-Executive Director
Malcolm 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 Details:
As at 31 December 2014, there were 563,902,771 ordinary shares on issue.

Substantial Shareholders:
Pacific Road Capital      20.4%
Taurus Funds Management   12.4%
Sustainable Capital        9.5%
L1 Capital                 7.8%
Acorn Capital              7.6%
Aterra Investments         5.5%
Genesis Asset Managers     5.0%

Unlisted Share Options:
Options expiring July 2015 ex A$0.09
Options expiring July 2015 ex A$0.25
Options expiring December 2018 ex A$0.40

Share Registry:
ASX
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
PERTH WA 6000
Enquiries: 1300 850 505 / [phone]
www.computershare.com.au

AIM
Computershare Investor Services PL C
The Pavilions
Bridgwater Road
BRISTOL BS99 6ZZ
Enquiries: [phone]
www.computershare.co.uk

Tenement Schedule:
Special Mining Licence 23, 100% interest, Kwale, Kenya
Exploration Licence 173, 100% interest, Kwale, Kenya