Base Resources in milestone first ilmenite and rutile production at Kwale
Base Resources (ASX: BSE)
has reached a milestone with the first production of ilmenite and
rutile from its Kwale mineral sands project in Kenya which should
continue to see the shares re-rated.
Over the next several weeks, processing rates will be ramped up and inventories of rutile and ilmenite built up ahead of the commencement of bulk shipments in January 2014.
A small containerised shipment is scheduled in December.
This follows the commencement of concentrate processing through the mineral separation plant and the first heavy mineral concentrate taken through the ilmenite and rutile circuits.
Construction work on the zircon circuit is now in its final stages with commissioning expected during January.
The majority of the supporting infrastructure is now complete, with access road, power supply, tailings storage facility and Mukurumudzi dam now functionally complete.
In addition, the Likoni marine facility is scheduled for completion in early December, well ahead of the first bulk shipment.
Base's Kwale project is located 10 kilometres inland from the Kenyan coast and 50 kilometres south of Mombasa, Kenya’s principal port facility; well serviced by existing physical infrastructure and a supported by the Kenyan government and the local community.
Offtake arrangements are in place with global customers covering the first five years of production.
Following operational ramp up, the mining rate at Kwale is anticipated to be about 8 million tonnes per annum by the end of 2014 delivering expected annualised production rate of 360,000, 77,000 and 25,000 tonnes of ilmenite, rutile and zircon respectively.
The ore body offers both high grade and a high value mineral assemblage with a very low stripping ratio of 0.1:1.
A simple and cost effective dozer trap mining unit is used to carry out mining operations over the free-flowing and friable ore at Kwale.
Mine life from the Central and South dunes is estimated at 13 years.
The project will have a direct impact on Kenya’s economy by more than tripling mineral sector export earnings with projected sales of US$1.9 billion and adding 0.8% to its GDP.
It will also generate more than US$220 million in tax and royalties over 13 years.
Based on current TZMI price outlook and refined operating cost estimates, Kwale is a very robust project with an estimated NPV10 of US$400 million and Life of Mine cash surplus of about US$700 million.
This has not been lost on institutions which dominate the company's register, including Pacific Road Capital (20.5%), Taurus Funds Management (13.0%), L1 Capital (8.8%) and Acorn Capital (8.2%).
We expect the re-rating of Base to continue, today's first production of ilmenite and rutile is a milestone. There are further catalysts ahead:
- Commissioning of the zircon circuit;
- First bulk shipments of ilmenite and rutile;
- First product of zircon; and
- First bulk shipmnets of zircon.
On our calculations, Proactive Investors estimates a share price value and target of $0.54 - $0.68 within 6-9 months for Base Resources based on the above.
- Bauxite Resources公司收到大量持股通知
- ASF Group的联营公司将Dawson West热煤项目的资源储量提升至6.45亿公吨
- White Cliff Minerals公司于Aucu项目发现新的矿化带
- Bauxite Resources公司非执行董事卸任
- South Boulder Mines公司董事长购买市售股份
- Carbon Energy公司筹资500万澳元以推进天然气项目
- South Boulder Mines公司降低Colluli钾肥项目的运营开支和资本开支