Annual Financial Report

ASX, AIM and Media Release

16 September 2014

BASE RESOURCES LIMITED

ANNUAL FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2014

Base Resources Limited (ASX:BSE, AIM:BSE) ("Base") is pleased to provide the
following extracts from the Company's Annual Report for the year ended 30 June
2014, 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
   
During 2014, the Group successfully completed development of the Kwale Mineral
Sands Project at a cost of US$310 million. Mining and heavy mineral concentrate
production commenced in October 2013 followed by the first ilmenite and rutile
finished products in December 2013. Zircon production commenced in February
2014 at the same time as the first bulk shipment of 20,000 tonnes of ilmenite
was exported from our owned and operated Likoni port and ship loading facility.
Bulk rutile and containerised zircon sales began in April 2014.

Safety performance throughout the construction project was exemplary with 6.5
million manhours worked injury free and only two LTI's for the entire project.
This achievement is even greater considering that at the peak there were up to
2,400 workers on site with 1,000 of these recruited from the local community,
many of whom had never had a job before. Heading into production safety
continued to be an area of intense focus with over 26,000 hours invested in
operational readiness training prior to start up. The Lost Time Injury
frequency rate for the 12 months to June 2014, covering both the construction
project and commencement of operations, is 0.3 per million man hours, well
below Australian mining industry averages.

Ilmenite production has reached design capacity and is exceeding expectations,
whilst rutile and zircon production is consistent with a planned twelve month
ramp-up to design capacity. Further plant modifications and optimisation are
expected to increase rutile and zircon production to design output over the
balance of the 2015 financial year.

The Group completed six bulk shipments of ilmenite, totalling more than 138,000
tonnes, and two bulk shipments of rutile of approximately 14,000 tonnes during
the year. The Group completed 12 individual shipments of containerised zircon
during the year, totalling approximately 2,700 tonnes. The first container
shipment of rutile was made in July 2014 and this will be followed by a regular
container shipping schedule. All three products continue to be delivered to our
off-take partners on a regular basis as well as the occasional sale on the spot
market where surplus volume permits.

       SUMMARY OF PHYSICAL DATA                                   2014

       Ore mined (dmt)                                       4,532,154
       Heavy mineral concentrate produced (dmt)                296,750
       Production (dmt)                                                               
         Ilmenite                                              165,352
         Rutile                                                 24,216
         Zircon                                                  4,486
       Sales (dmt)                                                                    
         Ilmenite                                              138,829
         Rutile                                                 14,005
         Zircon                                                  2,704

The global titanium dioxide pigment industry continued to show signs of
improvement through the latter part of the financial year. Recent feedback from
China suggests that pigment demand had improved, and prices achieved by Chinese
pigment producers commenced a gradual uplift during the final quarter.
Inventories of titanium dioxide feedstock are being gradually worked down, but
are likely to remain at elevated levels for the remainder of the 2014 calendar
year. Pricing of high grade titanium dioxide feedstock appeared to stabilise
through the latter half of the financial year and the Group now expects prices
to remain relatively flat for the remainder of 2014. Ilmenite prices continued
to be under pressure through the financial year, but recent reports of reduced
output in some of the main ilmenite-producing regions may indicate that prices
will stabilise at, or near, current levels.

Zircon trade activity continued to firm through the financial year. Stocks of
zircon held by producers continued to be run down and prices have remained
relatively flat since the early stages of the calendar year 2014. There are
increasing signs that the zircon market has reached the bottom of the cycle and
is turning towards a firm recovery. With this expected strength in the zircon
market over the coming months there may be support for zircon price improvement
towards the beginning of 2015.

On the corporate front, Malcolm Macpherson was appointed to the Board in July
2013, 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 decreased by $15 million from $218 million at
30 June 2013 to $203 million at 30 June 2014, due to the net loss in the year.

In October 2013, a US$20 million extension of the existing cost overrun
facility was drawn down. Additionally, the Group extended its existing project
finance facility agreements by an additional US$25 million in order to increase
the working capital buffer during the ramp up phase of the Kwale Mineral Sands
Project. These funds were drawn down in January 2014. Total debt drawn at 30
June 2014 is US$215 million and the Group has cash reserves of $21 million.

The Group's working capital, being current assets less current liabilities, has
decreased from $88 million at 30 June 2013 to $15 million at 30 June 2014,
largely due to the use of funds to complete the development of the Kwale
Project and scheduled project debt repayments commencing from December 2014.

The Group is currently seeking to restructure the Kwale Project Finance
Facility to reflect the delay in first sales from the schedule originally
contemplated when the facility was arranged in 2011. Proposed terms for the
debt restructure have been commercially agreed with all Lenders and are
progressing through Lender credit approval processes. Under the terms of the
restructure, all principal repayments will be deferred by six months with some
re-profiling to suit future cash flows. If the restructure is implemented as
proposed, the first principal repayment will be deferred from December 2014 to
June 2015 and the current portion of borrowings will be reduced from $50
million to $12 million.

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 2014   30 June 2013
                                                      A$000s         A$000s
                                                                           
Sales revenue                                         29,115              -

Cost of sales                                       (14,831)              -
Amortisation and depreciation                        (9,031)              -
Royalties                                            (1,875)              -

Profit from operations                                 3,378              -

Corporate and external affairs                       (8,706)        (7,058)
Community development costs                          (2,298)              -
Product marketing                                      (738)          (400)
Other expenses                                       (1,261)          (217)

Loss before financing income and income tax          (9,625)        (7,675)

Financing (costs) / income                           (4,351)          1,017
Loss before income tax                              (13,976)        (6,658)

Income tax expense                                      (94)            (4)

Net loss for the year                               (14,070)        (6,662)

OTHER COMPREHENSIVE INCOME                
Items that may be reclassified subsequently    
  to profit or loss:                                                         
Foreign currency translation differences -           (2,031)         16,462
  foreign operations                                                         
Total other comprehensive (loss) / income            (2,031)         16,462
  for the year                                                               
Total comprehensive (loss) / income for the         (16,101)          9,800
  year                                                                       
                                                                           
NET (LOSS) / EARNINGS PER SHARE                       Cents          Cents
Basic (loss)/ earnings per share (cents per share)    (2.50)         (1.25)
Diluted (loss)/ earnings per share (cents per share)  (2.50)         (1.25)
                                                              


 4. CONSOLIDATED STATEMENT OF FINANCIAL POSITION
   
                                                 As at               As at
                                          30 June 2014        30 June 2013                        
                                                A$000s              A$000s
                                                                       
CURRENT ASSETS                                                        
Cash and cash equivalents                       20,945              98,123
Trade and other receivables                     33,265               6,131
Inventories                                     20,049                  60
Other current assets                             3,007               2,159
Total current assets                            77,266             106,473
                                                                       
NON CURRENT ASSETS                                                    
Capitalised exploration and evaluation           1,120               1,981
Capitalised mine development                         -             281,390
Property, plant and equipment                  386,153              12,259
Inventories                                      1,106                   -
Restricted cash                                  5,406               5,478
Other receivables                                    -              16,229
Total non-current assets                       393,785             317,337
                                                                       
TOTAL ASSETS                                   471,051             423,810
                                                                       
CURRENT LIABILITIES                                                   
Trade and other payables                        11,322              17,396
Borrowings                                      49,887                   -
Provisions                                       1,180                 712
Total current liabilities                       62,389              18,108
                                                                       
NON-CURRENT LIABILITIES                                            
Other payables                                       -               1,089
Borrowings                                     177,667             178,851
Provisions                                      21,696               2,163
Deferred revenue                                 5,181               5,474
Other liability                                  1,106                   -
Total non-current liabilities                  205,650             187,577
                                                                       
TOTAL LIABILITIES                              268,039             205,685
                                                                       
NET ASSETS                                     203,012             218,125
                                                                       
EQUITY                                                             
Issued capital                                 213,669             213,669
Reserves                                        16,085              17,128
Accumulated losses                             (26,742)            (12,672)
Total equity                                   203,012             218,125

 5. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
   
                               Issued Accumulated    Share     Foreign     Total
                                           losses    based    currency          
                              capital              payment                      
                                                   reserve translation          
                                                               reserve          
                                                                                
                               A$000s      A$000s   A$000s      A$000s    A$000s
                                                                                
Balance at 1 July 2012        175,719     (6,010)    1,219     (1,098)   169,830
Loss for the year                   -     (6,662)        -           -   (6,662)
Other comprehensive profit          -           -        -      16,462    16,462
Total comprehensive profit          -     (6,662)        -      16,462     9,800
/ (loss) for the year                                                           
                                                                                
Transactions with owners, recognised directly in equity                         

Shares issued during the       37,726           -        -           -    37,726
  period, net of costs                                                            
Shares issued on exercise         224           -        -           -       224
  of options                                                                      
Share based payments                -           -      545           -       545
Balance at 30 June 2013       213,669    (12,672)    1,764      15,364   218,125
                                                                                
Balance at 1 July 2013        213,669    (12,672)    1,764      15,364   218,125
Loss for the year                   -    (14,070)        -           -  (14,070)
Other comprehensive loss            -           -        -     (2,031)   (2,031)
Total comprehensive loss            -    (14,070)        -     (2,031)  (16,101)
  for the year                                                                    
                                                                                
Transactions with owners, recognised directly in equity                         
                                                                                

Share based payments                -           -      988           -       988
Balance at 30 June 2014       213,669    (26,742)    2,752      13,333   203,012


 6. CONSOLIDATED STATEMENT OF CASH FLOWS
                                                  For the Year     For the Year
                                                         Ended            Ended 
                                                  30 June 2014     30 June 2013
                                                        A$000s           A$000s
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers                                 22,442                -
Payments in the course of operations                   (26,087)          (6,504)
Other                                                       12                -
Net cash used in operating activities                   (3,633)          (6,504)
                                                                               
CASH FLOWS FROM INVESTING ACTIVITIES                                           
Interest receipts                                          355            1,961
Payments for exploration and evaluation                   (199)          (1,239)
Purchase of property, plant and equipment               (5,137)         (11,349)
Proceeds on disposal of property, plant                      -                4
  and equipment                                                                  
Payments for mine development                         (111,673)        (219,044)
Research and development incentive claim                 5,030                -
  received                                                                       
Payments to restricted cash                                  -           (5,478)
Security deposits                                         (348)              47
Net cash used in investing activities                 (111,972)        (235,098)
                                                                               
CASH FLOWS FROM FINANCING ACTIVITIES                                           
Proceeds from issue of shares                                -           40,000
Payment of share issue costs                                 -           (2,274)
Proceeds from exercise of share options                      -              126
Proceeds from debt financing                            48,654          186,133
Debt finance service costs and facility                 (9,991)          (1,873)
  fees                                                                           
Net cash provided by financing activities               38,663          222,112
                                                                               
NET INCREASE (DECREASE IN CASH HELD)                   (76,942)         (19,490)
                                                                               
Cash at beginning of year                               98,123          105,806
Effect of exchange fluctuations on cash held              (236)          11,807
Cash at end of year                                     20,945           98,123

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]

Africapractice (East Africa) (Kenyan Media Relations)
David Maingi/ James Njuguna/Joan Kimani
Phone: [phone]
Email: [e-mail]

Tavistock Communications (UK Media Relations)
Jos Simson / Emily Fenton / Nuala Gallagher
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
Malcolm Macpherson   Non-Executive Director
Winton Willesee      Company Secretary

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