Annual Financial Report

ASX, AIM and Media Release

30 August 2013

BASE RESOURCES LIMITED

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2013

Base Resources Limited (ASX:BSE, AIM:BSE) ("Base") is pleased to provide the
following extracts from the Company's Annual Financial Report for the year ended 30 June
2013, being the:

 1. Review of Operations 
 2. Financial Position
 3. Consolidated Statement of Profit or Loss and Other Comprehensive Income
 4. Consolidated Statement of Financial Position
 5. Consolidated Statement of Changes in Equity
 6. Consolidated Statement of Cash Flows
   
These extracts should be read with reference to the notes contained in the full
version of the Annual Report, a copy of which is available at the Company's
website: www.baseresources.com.au.

1. REVIEW OF OPERATIONS
   
The Company has made significant progress in the development of the Kwale
Mineral Sands Project during the year with the overall development currently
approximately 95% complete. The Kwale Project is expected to commence
production of heavy mineral concentrate in Q3 2013 and finished products in Q4
2013 with first bulk shipments to commence in the 2nd half of Q4 2013.

A number of the work packages are now complete including the power line, access
road, camp and the mining fleet is commissioned and fully operational.

The Mukurimudzi dam diversion channel was closed in April ahead of the wet
season and now holds 5.9 gigalitres of water, which is more than sufficient for
the first year's production requirements. Construction of the main embankment
to the final elevation is now complete and the spillway construction is in its
final stages.

Onshore construction works of the Likoni port facility are well advanced with
the storage shed complete and administration buildings progressing. Following
construction and trial assembly in South Africa, the ship loader is undergoing
final erection on the wharf platform and is on target for completion prior to
the first planned bulk shipment in the December quarter of 2013.

The Mineral Separation Plant ("MSP") completion is expected to be delayed by
approximately 4 weeks as a consequence of slower than anticipated structural,
mechanical and pipework installation. In response, the MSP completion and
ramp-up schedule has been revised to prioritise the ilmenite and rutile
circuits ahead of the zircon circuit in order to minimise the cashflow impacts
of the delay.

Safety performance continues to be an area of intense focus and effort with
particular emphasis on system development, training and supervisor
accountability. The Lost Time Injury frequency rate for the construction
project is currently 0.2 per million man hours with over 5.6 million hours
worked since the last (and only) lost time injury in July 2012.

The short term market for titanium dioxide feedstocks showed some signs of
improvement through the later part of the 2013 financial year with some of the
major pigment producers reporting a significant reduction in final product
stocks. Continued strength in the US housing market together with improvement
in the Chinese housing sector provides support for market conditions to
continue improving through the second half of 2013. However, ilmenite and
rutile stock levels in the supply chain are considered likely to maintain
subdued pricing for the remainder of 2013.

Market conditions for zircon remained firm through the June quarter of 2013.
Demand from Chinese customers, in particular, increased significantly
throughout the first half of 2013 calendar year. Some of the major zircon
producers, including Iluka Resources Limited, managed to reduce zircon stocks
through the first half of the 2013 calendar year and have advised customers
that the availability of zircon for prompt sales is diminishing. While zircon
demand through the September quarter, and the remainder of the second half of
2013 calendar year, is expected to remain firm, a recovery in pricing will be
dependent on the pace of stock re-balancing throughout the supply chain.

The long term outlook for all mineral sands products remains very positive.
Enquiry levels for Base's products remains strong and recently Base has entered
three new, three year, take or pay offtake agreements with leading Chinese
offtakers which secure a large portion of the previously uncontracted sales
volumes for ilmenite and zircon.

In October 2012, in response to an increase in the capital cost estimate for
the Kwale Project following the completion of the detailed design, the Company
completed a A$40 million share placement and entitlement offer in order to meet
the additional funding requirements. This funding completed Base's equity
contribution for the Kwale Project and allowed Base to commence utilisation of
the Kwale Project debt facilities.

The first drawdown on the Kwale Project debt facilities was completed in
November 2012 with a further two drawdowns prior to year end. Total debt drawn
at 30 June is US$170 million, inclusive of the original US$20 million cost
overrun facility. A further US$20 million extension to the cost overrun
facility has been secured but remains undrawn, with utilisation subject to
receiving the consent of the Commissioner of Mines & Geology to the resultant
extension of security interests.

As a consequence of the anticipated delay in the start-up of the MSP, the
timing of product shipments, continued subdued product prices expected in the
December quarter of 2013 and an increased forecast capital cost of US$305
million, Base considers it prudent to increase the funding buffer available for
working capital and will be pursuing a further extension of the existing debt
facilities.

In July 2013, Malcolm Macpherson was appointed to the Board, bringing
significant additional mineral sands, African and corporate development
experience to the company. The appointment of Mr Macpherson comes as part of
our development of a team at all levels of the organization with the requisite
capability to deliver on the significant opportunities in front of us.

2. FINANCIAL POSITION
   
The net assets of the Group have increased by A$48 million from A$170 million
at 30 June 2012 to A$218 million at 30 June 2013. This net increase is
primarily due to the A$40 million capital raising completed in October 2012 to
meet the additional funding of the development of the Kwale Project.

The Group's working capital, being current assets less current liabilities, has
decreased from A$101 million at 30 June 2012 to A$88 million at 30 June 2013,
largely due to the use of funds in the development of the Kwale Project.

In June 2013, the third drawdown of US$46 million was completed on the Kwale
Project debt facilities. Total debt drawn at 30 June is US$170 million,
inclusive of the original cost overrun facility. The Company had cash reserves
of A$98 million at 30 June. A further US$20 million extension to the cost
overrun facility which was finalised in May 2013 remains undrawn, with
utilisation subject to receiving the consent of the Commissioner of Mines and
Geology to the resultant extension of security interests.

In the 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.

3. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
   
                                                      For the Year     For the Year
                                                             Ended            Ended
                                                      30 June 2013     30 June 2012                
                                                                A$               A$
                                                                               
Other income                                                14,751                -
                                                                              
Directors' and related fees                             (2,255,816)      (1,518,476)
Employee benefits expense                               (1,135,430)        (415,213)
Consultant fees                                         (1,504,874)      (1,452,419)
Administrative expense                                  (1,639,093)      (1,056,482)
Accounting, audit and related services fees               (395,358)        (412,094)
Share based payment expense                               (462,370)        (312,610)
Depreciation                                               (96,285)         (35,627)
Write down of exploration costs                                  -         (394,114)
Other expenses from ordinary activities                   (199,988)        (142,543)
LOSS BEFORE FINANCING INCOME AND INCOME TAX             (7,674,463)      (5,739,578)
Financing income, net                                    1,017,446        6,079,031
(LOSS) / PROFIT BEFORE INCOME TAX                       (6,657,017)         339,453
Income tax benefit / (expense)                              (4,148)          (8,240)
NET (LOSS) / PROFIT FOR THE YEAR                        (6,661,165)         331,213
                                                                               
Other Comprehensive Income                                                   
Items that may be reclassified subsequently to
profit or loss: 
  Foreign currency translation differences -            16,461,585         (372,255)
  foreign operations                                                                   
TOTAL OTHER COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR    16,461,585         (372,255)
TOTAL COMPREHENSIVE INCOME/ (LOSS) FOR THE YEAR          9,800,420          (41,042)
                                                                       
NET(LOSS)/EARNINGS PER SHARE                                 Cents            Cents
Basic (loss)/earnings per share (cents per share)            (1.25)            0.08                 
Diluted (loss)/earnings per share (cents per share)          (1.25)            0.08


4. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
   
                                                      For the Year     For the Year
                                                             Ended            Ended
                                                      30 June 2013     30 June 2012                
                                                                A$               A$
                                                                                                             
CURRENT ASSETS                                                  
Cash and cash equivalents                               98,122,682      105,805,685
Other receivables                                        6,131,329        1,530,313
Other                                                    2,219,196        2,019,898
Total current assets                                   106,473,207      109,355,896
                                                                 
NON CURRENT ASSETS                                             
Capitalised exploration and evaluation                   1,980,899          653,514
Capitalised mine development                           281,390,117       62,132,204
Property, plant and equipment                           12,259,327        1,699,808
Capitalised borrowing costs                                      -        7,506,115
Restricted cash                                          5,478,394                -
Other receivables                                       16,228,748        2,292,213
Other                                                            -           36,553
Total non-current assets                               317,337,485       74,320,407
TOTAL ASSETS                                           423,810,692      183,676,303
                                                                 
CURRENT LIABILITIES                                            
Trade and other payables                                17,396,187        7,974,515
Provisions                                                 712,230          208,966
Total current liabilities                               18,108,417        8,183,481
                                                                 
NON-CURRENT LIABILITIES                                        
Other payables                                           1,088,900                -
Borrowings                                             178,850,990                -
Provisions                                               2,162,752          714,990
Deferred revenue                                         5,474,500        4,948,046
Total non-current liabilities                          187,577,142        5,663,036
TOTAL LIABILITIES                                      205,685,559       13,846,517
                                                                 
NET ASSETS                                             218,125,133      169,829,786
                                                                 
EQUITY                                                           
Issued capital                                         213,668,499      175,718,629
Reserves                                                17,127,328          120,686
Accumulated losses                                     (12,670,694)      (6,009,529)
Total equity                                           218,125,133      169,829,786


5. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
   
                               Issued  Accumulated  Share based      Foreign        Total
                              capital       losses      payment     currency            
                                                        reserve  translation                      
                                                                     reserve                        
                                   A$           A$           A$           A$           A$
                                                                                   
BALANCE AT 1 JULY 2011     21,882,774   (6,340,742)     799,630    (726,172)   15,615,490
Profit for the year                 -      331,213            -           -       331,213
Other comprehensive loss            -            -            -    (372,255)     (372,255)
Total comprehensive                 -      331,213            -    (372,255)      (41,042)
profit / (loss) for the                                                            
year                                                                               
                                                                                   
Transactions with owners recognised directly in equity                           
Shares issued during the  153,835,855            -            -           -   153,835,855
period, net of costs                                                                  
Share based payments                -            -      419,483           -       419,483
BALANCE AT 30 JUNE 2012   175,718,629   (6,009,529)   1,219,113  (1,098,427)  169,829,786

BALANCE AT 1 JULY 2012    175,718,629   (6,009,529)   1,219,113  (1,098,427)  169,829,786
Loss for the year                   -   (6,661,165)           -           -    (6,661,165)
Other comprehensive loss            -            -            -  16,461,585    16,461,585
Total comprehensive                 -   (6,661,165)           -  16,461,585     9,800,420
profit / (loss) for the 
year                                   
                                                                                   
Transactions with owners recognised directly in equity
Shares issued during the   37,725,870            -            -           -    37,725,870
period, net of costs                                                               
Shares issued on exercise     224,000            -            -           -       224,000
of options                                                                         
Share based payments                -            -      545,057           -       545,057
BALANCE AT 30 JUNE 2013   213,668,499  (12,670,694)   1,764,170  15,363,158   218,125,133


6. CONSOLIDATED STATEMENT OF CASH FLOWS
                                                      For the Year     For the Year
                                                             Ended            Ended
                                                      30 June 2013     30 June 2012                
                                                                A$               A$  
CASH FLOWS FROM OPERATING ACTIVITIES                                           
Payments in the course of operations                    (6,503,805)      (5,784,659)
Deferred revenue received                                        -        4,948,046
Income tax paid (Kenya)                                          -           (8,240)
Net cash generated by/(used in) operating activities    (6,503,805)        (844,853)
                                                            
CASH FLOWS FROM INVESTING ACTIVITIES
Interest receipts                                        1,961,443        4,667,662
Payments for exploration and evaluation                 (1,239,367)      (3,436,361)
Purchase of property, plant and equipment              (11,349,156)      (1,642,214)
Proceeds on disposal of property, plant & equipment          4,028                -
Payments for mine development                         (219,044,275)     (46,109,762)
Payments to restricted cash                             (5,478,394)               -
Security deposits                                           46,808         (680,700)
Net cash used in investing activities                 (235,098,913)     (47,201,375)
                                                                               
CASH FLOWS FROM FINANCING ACTIVITIES                                          
Proceeds from issue of shares                           40,000,000      162,304,403
Payment of share issue costs                            (2,274,130)      (8,468,549)
Proceeds from exercise of share options                    126,000                -
Proceeds from debt financing                           186,133,000                -
Debt finance facility fees                              (1,872,822)      (7,434,020)
Net cash provided by financing activities              222,112,048      146,401,834
                                                                               
Net increase in cash held                              (19,490,670)      98,355,606
Cash at beginning of year                              105,805,685        7,284,459
Effect of exchange fluctuations on cash held            11,807,667          165,620
CASH AT THE END OF THE YEAR                             98,122,682      105,805,685

ENDS

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]

Tavistock Communications (UK Media Relations)
Jos Simson / Jessica Fontaine / Emily Fenton
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
Michael Macpherson, Non-Executive Director
Winton Willesee, Non-Executive Director/ Company Secretary

Principal & Registered Office:       Contacts:
Level 1                              Email: [e-mail]
50 Kings Park Road                   Phone: [phone]
West Perth WA 6005                   Fax: [phone]