PERTH (miningweekly.com) – Mineral sands miner Base Resources was looking at refinancing options to repay the debt facility of its $310-million Kwale project, in Kenya.
Base chairperson Keith Spence told shareholders at the company’s annual general meeting on Friday that, while the company was generating sound, positive cash flows, the current commodity market made the repayment profile on the current project debt facility challenging.
“We are well advanced in the pursuit of a refinancing of the debt facility to secure a repayment profile more appropriate to the current price environment and to ensure a robust financial footing from which to grow the business.”
Under the terms of the existing Kwale project debt facility, project completion was required to be achieved by the end of September, which has subsequently been extended by the lenders to the earlier of completion of the refinancing or the end of December 2015.
Failure to achieve project completion by this date would, unless waived or extended further by the lenders, trigger an event of default under the facility.
Base started exports from Kwale in 2014 and the mine was being ramped up to produce 80 000 t/y of rutile, 360 000 t/y of ilmenite and 30 000 t/y of zircon. An optimisation push at Kwale was expected to increase the mine’s combined ilmenite, rutile and zircon output beyond 460 000 t/y.
Spence told shareholders on Friday that, while the depressed market conditions created challenges, it also provided Base with opportunities.
“Looking to the year ahead, Base is assessing possible acquisition opportunities that have the potential to capitalise on our capabilities and create shareholder value. We are also progressing work on value-adding opportunities at Kwale, such as the Kwale Phase 2 development and exploration for new developable resources within reach of the Kwale operation.”