JOHANNESBURG (miningweekly.com) – Aim- and ASX-listed Base Resources continued the ramp-up of its Kwale mineral sands project, in Kenya, in the six months to December 31.
“With the consistent achievement of design availabilities and throughputs in both the wet concentrator plant and mineral separation plant, the focus has been firmly on continuing to drive product recoveries, with considerable success achieved,” the company stated.
Ilmenite production continued at a rate exceeding design expectations, largely owing to further improvement in recoveries, while rutile and zircon production was consistent with a planned 12-month ramp-up to design capacity.
Further plant modifications and optimisations were expected to result in increased rutile and zircon production over the balance of the 2015 financial year.
In the six months to December, Base had completed nine bulk shipments of ilmenite totalling about 170 000 t and three bulk shipments of rutile of about 30 000 t.
An additional 16 shipments of containerised rutile totalling more than 6 000 t and 38 shipments of containerised zircon totalling more than 8 000 t were shipped during the period.
“To take advantage of considerable savings in freight rates, the group is increasingly shipping 50 000 t cargoes and the timing of these shipments can have a significant impact on the receivables balance,” Base said in a statement.
“The global titanium dioxide pigment industry softened towards the end of year as the northern hemisphere entered its usual seasonal slowdown, resulting in ilmenite prices coming under renewed pressure,” it added.
Base Resources said global inventories of ilmenite feedstocks were expected to remain at elevated levels until the pigment market picked up in the first half of this calendar year.
Pricing of high-grade titanium dioxide feedstock, including rutile, remained “relatively” stable throughout the six-month period, but could come under some pressure in the early months of this year, the company cautioned.
Meanwhile, the company had, in November 2014, completed the restructure of the $215-million Kwale project debt facility.
The first principal repayment was deferred from December 2014 to June 2015 and the debt repayments during the 2015 financial year were reduced from $45.9-million to $11-million.
Additionally, Base Resources would contribute $15-million in additional liquidity by June 30.
Further, in December 2014, the company had secured a $20-million unsecured debt facility with one of its major shareholders Taurus Funds Management.
The Taurus facility provided a source of additional funding for the Kwale project should it be needed, a means to satisfy the liquidity injection and $5- million in corporate funding.
“In our directors' opinion, there are reasonable grounds to believe that the group will be able to pay its debts as and when they become due and payable,” the company noted.