Upgrade & Increase In Mineral Resources At ...

ASX, AIM and Media Release

14 October 2014

UPGRADE & INCREASE IN MINERAL RESOURCES AT KWALE

Base Resources Limited (ASX:BSE; AIM:BSE) ("Base" or the "Company") is pleased
to announce an upgrade and increase in Mineral Resources for its 100% owned
Kwale Project.

The updated Mineral Resources estimate is the product of new drilling, assaying
and mineralogical testwork, bulk density testwork and updated resource
estimation work and follows twelve months of mining. These updated Mineral
Resources represent an overall increase of 5 per cent for total material tonnes
and 2 per cent for heavy mineral ("HM") tonnes for the combined Central and
South dune deposits (refer to Table 1), notwithstanding depletion by mining of
the Central deposit of approximately 0.36Mt of HM. Excluding depletion by
mining to 30 June 2014, this represents an overall increase in the total Kwale
Project Mineral Resources of 8 percent for material tonnes and 7 per cent for
HM tonnes on the previously reported Mineral Resources at the commencement of
the project. (Refer to Table 2 of ASX Release).

In addition, there has been a significant increase in the confidence of the
Kwale Mineral Resources with 81 percent of material tonnes and 88 percent of HM
tonnes in the JORC Measured category.

These updated Mineral Resources will form the basis for the preparation and
reporting of updated Kwale Project Ore Reserves over the next couple of months.

TABLE 1: Mineral Resources for the Kwale Project at 30 June 2014 compared with
previously reported Mineral Resources

MINERAL RESOURCES SUMMARY FOR KWALE PROJECT (Note 2 & 3)
30 JUNE 2014
                                                                  HM ASSEMBLAGE (Note 4) 
DEPOSIT	MINERAL        MATERIAL IN-SITU  HM	SL	OS	ILM	RUT       ZIR
          RESOURCE    (Note 5)    HM
          CATEGORY
			(Mt)	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Central	Measured		63.6	4.20	6.6	25	0	55	14	6
	Indicated 	15.6	0.42	2.7	29	2	52	13	6
	Total		79.1	4.62	5.8	26	1	54	13	6
										
South	Measured		60.3	2.18	3.6	28	4	46	13	6
	Indicated 	13.3	0.45	3.4	26	4	47	13	6
	Total		73.6	2.63	3.6	27	4	46	13	6
										
Total	Measured		123.9	6.38	5.2	26	2	51	14	6
	Indicated 	28.9	0.87	3.0	27	3	50	13	6
	Grand Total	152.7	7.25	4.7	26	3	51	13	6
                                                                   

MINERAL RESOURCES SUMMARY FOR KWALE PROJECT (Note 2 & 3)
13 MAY 2011
                                                                 HM ASSEMBLAGE (Note 4) 
DEPOSIT	MINERAL 	      MATERIAL  IN-SITU  HM	 SL	OS     ILM	RUT       ZIR
         RESOURCE      (Note 5)    HM
         CATEGORY
			(Mt)	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
Central	Measured		46.2	3.30	7.1	n/a	n/a	56	13	6
	Indicated 	29.9	1.40	4.6	n/a	n/a	54	13	6
	Total		76.2	4.60	6.1	n/a	n/a	56	13	6
										
South	Measured		40.0	1.50	3.8	n/a	n/a	51	14	6
	Indicated 	29.8	1.00	3.4	n/a	n/a	40	11	5
	Total		69.9	2.50	3.6	n/a	n/a	47	13	6
										
Total	Measured		86.2	4.80	5.5	n/a	n/a	55	14	6
	Indicated 	59.8	2.40	4.0	n/a	n/a	48	13	6
	Grand Total	146.0	7.10	4.9	n/a	n/a	53	13	6
               
Notes:

1. Kwale Central depleted by mining.
2. Mineral Resources reported at a cut-off-grade of 1% HM.
3. Rounding may generate differences in the last decimal place.
4. Mineral assemblage is reported as a percentage of in situ HM content.
5. Bulk density is a variable algorithm depending on HM and SL grades.
6. Bulk density is a fixed value of 1.7g/cm3

MINERAL RESOURCE STATEMENT

As at 30 June 2014, the total Mineral Resources at the Kwale Project at a
cut-off-grade of 1 per cent HM comprised 152.7Mt @ 4.7 per cent HM and 26 per
cent slimes containing 7.25Mt of HM. The breakdown of the component Mineral
Resource categories for the total Kwale Project resource inventory is as
follows:

-  a combined Measured Resource of 123.9Mt @ 5.2 per cent HM and 26 per cent
   slimes containing 6.38Mt of HM with an assemblage of 51 per cent ilmenite, 13
   per cent rutile and 6 per cent zircon; and

-  a combined Indicated Resource of 28.9Mt @ 3.0 per cent HM and 27 per cent
   slimes containing 0.87Mt of HM with an assemblage of 50 per cent ilmenite, 13
   per cent rutile and 6 per cent zircon.

Each of the resource statements for the Kwale Central and South deposits is
presented below.

As at 30 June 2014 the total Mineral Resources for the Kwale Central deposit at
a cut-off-grade of 1 per cent HM comprised 79.1Mt @ 5.8 per cent HM and 26 per
cent slimes containing 4.62Mt of HM. The breakdown of the component Mineral
Resource categories are as follows:

-  a Measured Resource of 63.6Mt @ 6.6 per cent HM and 25 per cent slimes
   containing 4.20Mt of HM with an assemblage of 55 per cent ilmenite, 14 per cent
   rutile and 6 per cent zircon; and

-  an Indicated Resource of 15.6Mt @ 2.7 per cent HM and 29 per cent slimes
   containing 0.42Mt of HM with an assemblage of 52 per cent ilmenite, 13 per cent
   rutile and 6 per cent zircon.

As at 30 June 2014 the total Mineral Resources for the Kwale South deposit at a
cut-off-grade of 1 per cent HM comprised 73.6Mt @ 3.6 per cent HM and 27 per
cent slimes containing 2.63Mt of HM. The breakdown of the component Mineral
Resource categories are as follows:

- a Measured Resource of 60.3Mt @ 3.6 per cent HM and 28 per cent slimes
  containing 2.18Mt of HM with an assemblage of 46 per cent ilmenite, 13 per cent
  rutile and 6 per cent zircon; and

- an Indicated Resource of 13.3Mt @ 3.4 per cent HM and 26 per cent slimes
  containing 0.45Mt of HM with an assemblage of 47 per cent ilmenite, 13 per cent
  rutile and 6 per cent zircon.

The supporting criteria for the resource classifications are presented in Appendix 2 
of the ASX release and in accordance with the reporting requirements for Table 1 from
the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves ("JORC Code 2012"). The ASX release including all appendices 
and tables referred to above have been included in the PDF version of this announcement 
which appears on the Company's website at www.baseresources.com.au.

The classification of the Kwale Central and South deposit Mineral Resource
estimates has been assigned Measured and Indicated JORC classification and are
supported by criteria as follows:

- drill hole spacing;

- variography in the XY and Z directions;

- the quality of QA/QC sampling; and

- the weighting and distribution of mineral assemblage assay composites.

Compared with the previous Mineral Resource estimate, the new Kwale Central and
South deposit Mineral Resource estimates are dominantly Measured, with
accessory Indicated. The previous ratio of Measured to Indicated HM tonnes was
2:1 whilst the ratio of HM tonnes in Measured and Indicated for the combined
new Mineral Resource estimates is 7.3:1. This increase in the ratio of Measured
to Indicated is a direct result of infill drilling undertaken by Base during
2013 to infill areas of the deposits where previous drilling was deemed to be
either old, not to required depth or too widely spaced. Additional mineral
assemblage composites were taken from this 2013 phase of drilling to further
improve the confidence in the Mineral Resource category.

ORE RESERVES

The Ore Reserves for the Kwale Project are currently being revised on the back
of the updated Mineral Resource estimates. This work is anticipated to be
completed over the coming months and will be reported when available.

SUPPORTING STATEMENT FOR JORC MINERAL RESOURCES

A summary of the information used to prepare the Mineral Resource estimates as
presented in this report is as follows.

The Kwale Project is located on Special Mining Lease No. 23 (lying within the
Kwale exploration license area comprising an area of 56 km2) which is located
approximately 50 kilometres south of Mombasa and approximately 10 kilometres
inland from the Kenyan coast.

The Kwale Project comprises two areas, separated by the Mukurumudzi River, that
contain economically viable concentrations of heavy minerals. These are the
Central and the South deposits. A third deposit, the Kwale North Dune is not
currently included in published resources.

The project was initially owned by Tiomin Resources Inc. ("Tiomin") who
conducted drilling in 1997 and then by Base Resources who drilled out the
Central and South deposits during October-December 2010 drilling phase covering
the Exploration License 173.

The rocks of the area are essentially of sedimentary origin and range in age
from Upper Carboniferous to Recent. Three divisions are recognised: the
Cenozoic rocks, the Upper Mesozoic rocks (not exposed on the area) and the
Duruma Sandstone Series giving rise to the dominant topographical feature of
the area: the Shimba Hills.

The Magarini sands form a belt of low hills running parallel to the coast. They
rest with slight unconformity on the Shimba grits and Mazeras sandstone. This
formation was deposited during Pliocene times and consists of unconsolidated
sediments derived from the Duruma Sandstone Series. The Magarini sands are
believed to be of aeolian origin, deposited as coastal dunes after conditions
of intense erosion.

The Kwale Project deposits are a subset of the Magarini sands and are generally
poorly stratified and contain a fraction of clay and silt of around 24 - 30 per
cent. Heavy minerals, mainly ilmenite, rutile and zircon, are locally
concentrated within the Magarini sands giving rise to deposits such as Central
and South.

The environment and land use in the Kwale County is defined as humid and
intensive subsistence agriculture/mixed farming/forestry. The approximate
population for the Kwale County is 500,000 persons.

Tiomin conducted drilling in 1997 over the Kwale Project using a variety of
drilling methodologies. Subsequent to acquiring the project, Base Resources
carried out drilling using primarily reverse circulation air core ("RCAC") via
Wallis Drilling and a small number of hand auger holes. The RCAC drilling was
conducted in two campaigns, from October to November 2010 and then in January
to February 2013.

Previous resource estimation work was carried out by Tiomin in 2006 and then by
Base in 2010 via a consulting company, Creative Mined Pty Ltd, and under the
direction of the Competent Person, Scott Carruthers.

RCAC drilling was used to obtain 1 to 3m samples from which approximately 1.2 -
2.5kg was collected using a rotary splitter beneath a cyclone. Samples were
then dried, weighed, and screened for material less than 45µm (slimes) and +1mm
(oversize).

Approximately 100 grams of the screened sample was then subjected to a HM float
/sink technique using the heavy liquid, tetra-bromo-ethane (TBE with an SG of
2.92 - 2.96gcm-3). The resulting HM concentrate was then dried and weighed as
were the other separated constituent size fractions (the minus 45µm material
being calculated by difference).

Mineral assemblage composites were prepared by Base (via Allied Mineral
Laboratories) in order to characterise the mineralogical and chemical
characteristics of specific mineral species and magnetic fractions. These
mineral assemblage composite samples were subjected to magnetic separation
using a Carpco magnet capturing various magnetic and non-magnetic fractions
which were then subjected to XRF analysis. The XRF analysis was then used to
calculate by formula and ratios, the percentage of mineral species that
constitute the valuable and non-valuable HM.

Drill hole, collar and assay data was captured and managed in the form of an MS
Access database. Key tables were then exported into MS Excel for checking out
of range values and modifying header information prior to being imported into
the mining software package DatamineTM using standard routines.

A standard precision analysis was conducted on the key assay fields: HM, slimes
or clay ("SL") and oversize ("OS") for both laboratory and drill rig or field
duplicate samples. Normal scatter and QQ plots were prepared for HM, SL and OS
for laboratory and drill rig or field duplicates. All mineral assemblage
composites were reviewed as part of the Mineral Resource estimation and
modifications were made to sample allocation where geological interpretations
were modified from what was originally intended.

A topographic DTM was prepared by Base in GEMCOMTM format which was based on a
LIDAR survey.

Three geological domains have been identified at the Central deposit by
previous work and two of those domains are also present at the South deposit.
These were used and honoured during the geological interpretation and some
modifications to the location of geological contacts were made between
different domains.

Construction of the geological grade model was based on a combination of coding
model cells and drill holes below open wireframe surfaces, comprising
topography, geology and basement. Model cell sizes and sub splitting was
conducted in a manner that would allow for an effective translation of
DatamineTM into GEMCOMTM format.

Conventional cell sizes based on the drill hole and sample spacing were
selected following a number of estimation trials for different grade sizes. A
final model cell dimension of 100m x 100m x 3m in the XYZ directions was
selected for the Central deposit allowing for sub splits down to 25m x 25m x
20cm. A final model cell dimension of 50m x 50m x 3m in the XYZ directions was
selected for the South deposit allowing for sub splits down to 12.5m x 12.5m x
20cm.

A moving or variable search ellipse (sometimes called dynamic search ellipse)
was used to prepare a more representative grade interpolation into the block
model. The anisotropy of the search ellipse was based on domain based
variography which highlighted the longest search direction (within the dominant
geological domain which had the greatest number of samples and continuity) for
each of the deposits. All other domains were found to broadly align to this.

Interpolation was undertaken for the primary grade fields (HM, SL and OS),
non-numeric fields (mineral assemblage composite ID) and index fields
(hardness). Inverse distance weighting ("IDW") to a power of 3 was used for
primary assay fields whilst nearest neighbour was used to interpolate index and
non-numeric.

COMPETENT PERSON STATEMENT: MINERAL RESOURCES

The information in this report that relates to Mineral Resources is based on
information compiled by Mr. Greg Jones who is a Member of The Australasian
Institute of Mining and Metallurgy. Mr. Jones is the Principal for GNJ
Consulting and has been retained by Base to conduct Mineral Resource estimation
for the Kwale Project. Mr. Jones has sufficient experience that is relevant to
the style of mineralisation and type of deposits under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in
the 2012 Edition of the Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves (JORC Code). Mr. Jones consents to the
inclusion in this report of the matters based on his information in the form
and context in which it appears.

A full PDF version of this announcement, including all tables and appendices, 
is available at the Company's website:www.baseresources.com.au

ENDS

GLOSSARY

MINERAL RESOURCE: A Mineral Resource is a concentration or occurrence of solid 
material of economic interest in or on the Earth’s crust in such form, grade 
(or quality), and quantity that there are reasonable prospects for eventual 
economic extraction. The location, quantity, grade (or quality), continuity 
and other geological characteristics of a Mineral Resource are known, estimated 
or interpreted from specific geological evidence and knowledge, including 
sampling.  Mineral Resources are sub-divided, in order of increasing geological 
confidence, into Inferred, Indicated and Measured categories.

MEASURED RESOURCE: A Measured Mineral Resource is that part of a Mineral Resource 
for which quantity, grade (or quality), densities, shape, and physical c
haracteristics are estimated with confidence sufficient to allow the application 
of Modifying Factors to support detailed mine planning and final evaluation of 
the economic viability of the deposit.

INFERRED RESOURCE: An Inferred Mineral Resource is that part of a Mineral Resource 
for which quantity and grade (or quality) are estimated on the basis of limited 
geological evidence and sampling. Geological evidence is sufficient to imply but 
not verify geological and grade (or quality) continuity. It is based on 
exploration, sampling and testing information gathered through appropriate 
techniques from locations such as outcrops, trenches, pits, workings and drill 
holes.

INDICATED RESOURCE: An Indicated Mineral Resource is that part of a Mineral 
Resource for which quantity, grade (or quality), densities, shape and physical 
characteristics are estimated with sufficient confidence to allow the application 
of Modifying Factors in sufficient detail to support mine planning and evaluation 
of the economic viability of the deposit.

ORE RESERVE: An Ore Reserve is the economically mineable part of a Measured 
and/or Indicated Mineral Resource.

COMPETENT PERSON:The JORC Code requires that a Competent Person must be a Member or 
Fellow of The Australasian Institute of Mining and Metallurgy, or of the Australian 
Institute of Geoscientists, or of a ‘Recognised Professional Organisation’.  
A Competent Person must have a minimum of five years’ experience working with 
the style of mineralisation or type of deposit under consideration and relevant 
to the activity which that person is undertaking.

JORC: The Joint Ore Reserves Committee: The Australasian Code for Reporting of 
Exploration Results, Mineral Resources and Ore Reserves (‘the JORC Code’), as 
published by the Joint Ore Reserves Committee of The Australasian Institute 
of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals 
Council of Australia.

VARIOGRAPHY: A geostatistical method that investigates the spatial variability 
and dependence of grade within a deposit.  This may also include a directional analysis.

LIDAR SURVEY: LIDAR is a remote sensing technology that measures distance by 
illuminating a target with a laser and analysing the reflected light.

DTM: Digital Terrain Model

XRF ANALYSIS: A spectroscopic method used to determine the chemical composition of 
a material through analysis of secondary X-ray emissions, generated by excitation 
of a sample with primary X-rays that are characteristic of a particular element.

INVERSE DISTANCE WEIGHTING: A statistical interpolation method whereby the influence 
of data points within a defined neighbourhood around an interpolated point 
decreases as a function of distance.


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
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