Base Resources to ship first minerals from Kwale mineral sands project
Base Resources (ASX:BSE, AIM:BSE)
has begun its first shipment this week of minerals from the Kwale
mineral sands project after being given export approval by the Kenyan
government.
Base expects to export its maiden shipment of 25,000
tonnes of ilmenite over the weekend on the bulk carrier MV African
Eagle, which docked at the Company’s Likoni marine facility on
Wednesday.
Base plans to export over 450,000 metric tonnes of titanium minerals annually.
The
Likoni marine facility was completed in December and deliveries of
finished ilmenite and rutile product are being stockpiled in the 60,000
tonne capacity port storage shed in advance of shipment.
All
work packages are now complete and operational, with the exception of
the zircon circuit of the mineral separation plant which is currently
undergoing feed commissioning, with production of zircon expected to
commence in the next couple of weeks.
"The project is historic
having taken 18 years before the realization of the first export,"
Kenya's Mining Cabinet Secretary Najib Balala said.
The products include 340,000 metric tonnes of Ilmenite, 30,000 of Zircon and 80,000 metric tonnes of rutile products.
The
consignment was loaded to the MV African ship at the company's 29
million US dollars port facilities at Likoni mainland jetty in the
coastal city of Mombasa before it was flagged off.
Base External
Affairs General Manager Joe Schwarz said the first shipment is a key
significant that Kenya is ready to venture into the mineral mining
sector.
He said the export will steadily increase of Kenya earning through foreign exchange and bolster relation among the two nations.
Base had cash and cash equivalents of A$33.3 million at December quarter end.
Market
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.
Improvement
of ilmenite and rutile pricing in 2014 is 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, with
consumption exceeding that in 2012 with the trend 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 the first quarter of 2014.
Analysis
Base Resources'
ongoing work at the Kwale mineral sands project has been brought to
fruition with the first bulk export shipment of ilmenite to occur this
weekend.
Production of zircon is expected in the next couple of weeks.
Late
last year Base received a buy recommendation and a $1 share price
target price from UK broker RFC Ambrian. Highlighting the potential
upside, Base last traded at $0.41.
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