FY22 Half-Year Results

AIM and Media Release 

28 February 2022

BASE RESOURCES LIMITED
Ongoing price increases and operational consistency drive strong financial performance

African mineral sands producer and developer, Base Resources Limited (ASX & AIM: BSE) (Base Resources or the Company) is pleased to present its results for the six-month period ended 31 December 2021 (H1 FY22, reporting period or half-year), which include announcement of an interim dividend of AUD 3 cents per share (unfranked), and the following extracts from the Half-Year Financial Report for the Company and its controlled entities (Group) for the same period.

1. Review of Operations
2. Market Developments and Outlook
3. Kwale Operations Extensional Opportunities
4. Toliara Project
5. Review of Financial Performance
6. After Balance Date Events
7. Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income
8. Consolidated Condensed Statement of Financial Position
9. Consolidated Condensed Statement of Changes in Equity
10. Consolidated Condensed Statement of Cash Flows

The extracts from the Half-Year Financial Report should be read in conjunction with the notes contained in the full version of that report, a copy of which is available from the Company’s website:  www.baseresources.com.au.  The full version of the Half-Year Financial Report also contains the auditor’s independence declaration, the directors’ declaration and the auditor’s review report. 

The Company has also released a presentation to accompany its Half-Year Financial Report.  The presentation contains, among other things, further details about the Company’s half-year results and details about the Company’s expected capital expenditure for the six-month period ending 30 June 2022.  A copy of the presentation is available from the Company’s website:  www.baseresources.com.au.

All references to currency ($ or US$) is United States Dollars, unless otherwise stated.

Highlights

Kwale Operations performed strongly, maintaining operational continuity throughout the period with effective controls to mitigate COVID-19 risks and impacts.  Markets for all mineral sands products saw high levels of demand over the period, supporting continued price improvement for all products.  Kwale Operations mine life was extended to late 2023 with additional initiatives to secure further mine life extensions progressed.

The Toliara Project in Madagascar continues to represent a significant and attractive growth opportunity for the Company, with discussions with the Government of Madagascar on the fiscal terms applicable to the project and the lifting of the on-the-ground suspension continuing.

Financial highlights for H1 FY22

• Record first-half revenue of US$104.6 million following increased production and an 18% increase in average realised unit sales price compared to the six-month period ended 31 December 2020 (H1 FY21comparative period).
• EBITDA of US$54.2 million.
• Net profit after tax increased to US$19.2 million, from a net loss of US$6.4 million in H1 FY21, partially due to reduced depreciation following the extension of Kwale Operations’ mine life.
• Free cashflow of US$8.8 million (operating cashflows of US$20.6 million less investing cashflows of US$11.9 million) was impacted by the previously announced US$18.8 million catch-up royalty payments to the Government of Kenya during the period.
• Net cash position of US$37.1 million at 31 December 2021.

Interim dividend of AUD 3.0 cents per share determined

The Company’s capital management policy is that cash not required to meet the Company’s near-term growth and development requirements, or to maintain requisite balance sheet strength in light of prevailing circumstances, could be expected to be returned to shareholders.  With net cash of US$37.1 million at the end of the period, continued strong financial performance and the timing of the Toliara Project final investment decision still uncertain, the Board has determined an interim dividend of AUD 3.0 cents per share (unfranked), totalling AUD$35.3 million in aggregate (approximately US$25.0 million) that will be paid wholly from conduit foreign income.  The record date for the interim dividend is 14 March 2022 and the payment date is 31 March 2022 – refer to Base Resources’ accompanying announcement “FY22 Interim Dividend – Key dates and information” for further information about the dividend. 

Upon payment of the FY22 interim dividend, dividends distributed to shareholders since October 2020 will total AUD 13.5 cents per share, equal to AUD$159.6 million in aggregate (approximately US$116.2 million).

Operational and development highlights for H1 FY22

• Production of 36,180 tonnes of rutile, 156,877 tonnes of ilmenite and 12,849 tonnes of zircon from Kwale Operations.
• Continued strengthening of demand for all products, with increases in achieved prices of 12% for rutile, 43% for ilmenite and 36% for zircon compared to H1 FY21.
• Kwale Operations mine life extended to late 2023 following finalisation of the Kwale South Dune mining lease extension.
• Bumamani pre-feasibility study (PFS) completed and concluded that higher grade subsets of the Bumamani and Kwale North Dune deposits can be economically mined, which would extend Kwale mine life to mid-2024¹.Bumamani definitive feasibility study (DFS) progressed and nearing completion.
• Three Tanzanian prospecting licences granted and exploration underway, with 231 shallow auger holes completed.
• Toliara Project enhanced DFS (DFS2) completed, with increased mining and processing scale underpinned by a significant growth in estimated Ore Reserves, increasing the project’s post-tax / pre-debt (real) NPV @ 10% discount rate to US$1.0 billion².

[Note (1):  For further information, refer to Base Resources’ announcements on 3 September 2021 “Bumamani PFS supports extension of Kwale mine life” and “Further supporting information for Bumamani PFS”.  Base Resources confirms that all the material assumptions underpinning the production information and forecast financial information in these announcements continue to apply and have not materially changed.]

[Note (2): For further information, refer to Base Resources’ announcement on 27 September 2021 “DFS2 enhances scale and economics of the Toliara Project”.  Base Resources confirms that all the material assumptions underpinning the production information and forecast financial information in this announcement continue to apply and have not materially changed.]

Managing Director of Base Resources, Tim Carstens, said:

“Operationally, we have delivered a strong first half with consistent mining at Kwale and improved ore grade lifting production.  Ongoing strong demand for all of our products is resulting in significant price increases which have contributed to increases in group revenue, EBITDA and NPAT.  This, and a disciplined approach to capital management, has enabled continuation of meaningful returns to shareholders with the determination of a fourth consecutive dividend.”

“Given the value creation lever it represents, the extension of mine life at Kwale Operations is an intense focus.  With the finalisation of a mining lease extension, we have successfully secured mine life at Kwale until late 2023.  Looking beyond this, the PFS on mining the Bumamani and higher-grade subsets of the North Dune deposits has now been completed, with the DFS well underway and on schedule for completion in the June quarter this year.  The inclusion of an additional pit area in the DFS could further extend Kwale mine life to late 2024.  We continue to pursue both near mine extension initiatives and regional exploration opportunities, with exploration commencing in northern Tanzania and prospective tenure in Kenya being progressed towards licensing.  Our stakeholders – employees, communities, governments, customers and shareholders – are aligned in a desire to extend our successful presence in East Africa.”

“The Toliara Project in Madagascar continues to represent a significant growth opportunity for Base Resources.  The release of an enhanced DFS incorporating an increased scale, supported by a substantial increase in Ore Reserves and improvement in the long-term supply-demand outlook for mineral sands, has further revealed the Toliara Project’s potential.  We are fully committed to realising that value, with the next catalyst to achieving this being securing fiscal terms with the Government of Madagascar.  Discussions with respect to the project’s fiscal terms are ongoing and we remain confident that acceptable terms will be able to be secured.”

“We are operating in a mineral sands sector that both enjoys a robust pricing environment in the short term and an attractive supply/demand outlook in the longer term.  With a Kwale operation consistently delivering significant cashflow and a development ready Toliara Project with outstanding economics, Base Resources is well positioned to capitalise on this outlook and actively considering wider growth opportunities that can further enhance that position.”

Investor and shareholder webcast

The webcast will be hosted by Base Resources’ Managing Director, Tim Carstens, Chief Financial Officer, Kevin Balloch, and General Manager - Marketing, Stephen Hay, who will each also be available to answer questions following a presentation of the Company’s results.

Details for the webcast are below.  Participants will be able to ask questions via the messaging function on the webcast platform or via the teleconference line.  Participants proposing to use the teleconference line will need to pre-register their details using the teleconference registration URL provided below.  Upon registering, participants will receive an email with their unique PIN and dial-in details so that they can join the call on the day without needing to speak with an operator.

• Date: Monday, 28 February 2022
• Time: 5.00pm AWST / 9.00am GMT
• Webcast URL: https://edge.media-server.com/mmc/p/5fp4rz36
• Teleconference registration URL: https://s1.c-conf.com/diamondpass/10019890-asm222d.html

Extracts from half-year Financial Report

1.  Review of Operations

Base Resources operates the 100% owned Kwale Operations in Kenya, which commenced production in late 2013.  Kwale Operations is located 50 kilometres south of Mombasa, the principal port facility for East Africa.  Mining operations continued according to plan on the South Dune orebody with approximately 8.7 million tonnes mined (comparative period: 8.5 million tonnes).  The higher ore tonnes and improved grade of ore mined in the reporting period has resulted in a 7% increase in the contained valuable heavy mineral (rutile, ilmenite and zircon) mined.

Mining, Production and Sales	Six months to Dec 2021	Six months to Dec 2020
Ore mined (tonnes)	8,680,545	8,538,666
Heavy mineral (HM) %	3.54%	3.28%
Valuable heavy mineral (VHM) %	2.71%	2.59%
Production (tonnes)
Ilmenite	156,877	144,363
Rutile	36,180	33,684
Zircon	12,489	12,677
Zircon low grade	1,062	942
Rutile low grade	970	-
Sales (tonnes)
Ilmenite	164,080	129,300
Rutile	25,383	23,668
Zircon	11,787	13,735
Zircon low grade	1,179	505
Rutile low grade	919	-

Stable recoveries in both the wet concentrator plant (WCP) and mineral separation plant (MSP) resulted in a higher production of rutile and ilmenite by 7% and 9% respectively.  Zircon production was 1% lower than the comparative period due to lower contained zircon in the mineral assemblage of ore mined and marginally lower MSP recoveries.  Heavy mineral concentrate (HMC) stocks closed the reporting period marginally higher at 23,135 tonnes (19,841 tonnes as at 30 June 2021).

Production of two streams of low-grade concentrate products (zircon and rutile) occurred in the reporting period, together they had a contained 661 tonnes of zircon and 1,337 tonnes of rutile.

There were no lost time injuries during the reporting period, at Kwale Operations or the Toliara Project, resulting in a lost time injury frequency rate (LTIFR) for Base Resources of zero. Compared to the Western Australian All Mines 2019/2020 LTIFR of 2.1, this is an exceptional performance, reflective of the ongoing focus and importance placed on safety by management.  Base Resources group employees and contractors had worked 26.9 million hours lost time injury (LTI) free, with the last LTI recorded in early 2014.  With two medical treatment injuries recorded in the last 12 months, both within the reporting period, Base Resources’ total recordable injury frequency rate is 0.50 per million hours worked.

The Company maintains a balanced portfolio of multi-year and quarterly offtake agreements with long term customers, supplemented by a small proportion of ongoing spot sales.  These agreements, with some of the world’s largest consumers of titanium dioxide feedstocks and zircon products, provide certainty for Kwale Operations by securing minimum offtake quantities. Sales prices in these agreements are typically either negotiated on a shipment-by-shipment basis or set for periods of up to six months and are derived from prevailing market prices. The strength of the mineral sands market for all products in the reporting period ensured that sales continued to closely match production, with minimal inventories being maintained.

2.  Market Developments and Outlook

Titanium Dioxide

Ilmenite and rutile are primarily used as feedstock for the production of titanium dioxide (TiO₂) pigment, with a small percentage also used in the production of titanium metal and fluxes for welding rods and wire.  TiO₂ is the most widely used white pigment because of its non-toxicity, brightness and very high refractive index.  It is an essential component of consumer products such as paint, plastics and paper.  Pigment demand is therefore the major driver of ilmenite and rutile pricing.

Major western pigment producers typically use high grade TiO₂ feedstocks (which includes rutile) while Chinese pigment producers typically rely on sulphate ilmenite as their main feedstock.

Inventories of TiO₂ pigment throughout the supply chain have remained at very low levels since mid-way through the 2021 financial year due to demand continuing to outpace pigment production capacity across all regions.  Western pigment producers have continued to target capacity production levels and have been preferentially seeking the highest grade TiO₂ feedstocks (particularly rutile) in order to maximise yield.  During the reporting period, some major chloride pigment producers reported that, due to logistics challenges and a shortage of raw materials (including TiO₂ feedstock), they were not able to achieve capacity production rates and could not meet all of the demand from their customers, a situation likely to continue through until at least the mid-way point of the second half of financial year 2022.

The impact of the very strong demand for rutile by western pigment producers has been compounded by the strong rebound in demand from the welding and titanium metals sectors.  Demand from these sectors has continued to strengthen through the reporting period and is expected to continue into the second half of financial year 2022.  At the same time, supply of natural rutile and other high-grade feedstocks have been significantly constrained by a variety of issues at some major production plants and uncertainty remains over the ability of some of those producers to achieve steady state production going forward.  The resultant tightness in the market has led to a 12% increase in the average achieved price of Base Resources rutile from the comparative period.

Despite uncertainties in China relating to power supply, COVID-19 outbreaks, the property sector and environmental controls, the pigment market has held up well and demand for ilmenite, as the main source of TiO₂ feedstock for Chinese producers, has continued to be very strong.  Chinese pigment producers have continued to target capacity production levels through the reporting period and Chinese pigment exports remain very strong, benefiting from the shortage of supply from western pigment producers.  Overall, ilmenite supply has increased in response to the tight market conditions and high prices but this has not been sufficient to meet demand.  The supply deficit has resulted in the average achieved price for Base Resources ilmenite increasing 43% from the comparative period.

Zircon

Zircon has a range of end-uses, the predominant of which is in the production of ceramic tiles, accounting for more than 50% of global zircon consumption.  Milled zircon enables ceramic tile manufacturers to achieve brilliant opacity, whiteness and brightness in their products.  Zircon’s unique properties include heat and wear resistance, stability, opacity, hardness and strength, making it sought after for other applications such as refractories, foundries and specialty chemicals.

Demand growth for zircon is closely linked to growth in global construction and increasing urbanisation in the developing world. 

Demand for zircon in all sectors continued to strengthen through the reporting period.  European zircon ceramic millers have struggled to source sufficient zircon sand to meet their targeted capacity production levels and continue to seek more zircon than is available.  Despite the challenges and uncertainties in China referred to above, demand for zircon from Chinese users has remained firm.  The chemical zirconia and refractory sectors have been particularly strong and Chinese zircon ceramic millers have continued to target high production rates.  Low inventory levels, supply chain delays and restricted supply of zircon into China from some major zircon producers has maintained tightness in the Chinese market into the start of 2022.  These very tight market conditions have led to a 36% increase in the average achieved price for Base Resources zircon from the comparative period.

3.  Kwale Operations Extensional Opportunities

During the reporting period the Company extended the boundary of the Kwale Special Mining Lease 23 (SML 23) to incorporate previously identified additional Mineral Resources, leading to the Kwale South Dune Ore Reserves estimates increasing and extending mine life to December 2023.

In addition, Base Resources completed the Bumamani PFS in the reporting period which concluded that it was economically viable to mine the Bumamani and higher-grade subsets of the Kwale North Dune deposits, which would extend mine life at Kwale Operations to July 2024.  The Company is now progressing a DFS and an application to further extend SML 23 to cover these areas has been lodged.  The Bumamani DFS is expected to be completed in the second half of the financial year.

Prospecting licence applications lodged for an area in the Kuranze region of Kwale county, about 70 km west of Kwale Operations), together with an area south of Lamu, remain in process towards granting.  In November 2019, the Government of Kenya imposed an industry wide moratorium on the issuance of prospecting licences which has affected the progress of all licence applications. The Company continues to work with the Government, and other mining sector stakeholders, to see the moratorium lifted to enable the recommencement of the issuance of mineral rights.

Base Resources’ wholly-owned Tanzanian subsidiary was granted three prospecting licences in Tanzania for areas adjacent to the Kuranze region in Kenya with a fourth licence pending.  A shallow auger drilling program is underway to assess geochemical anomalies and identify future air core drilling targets, with 231 holes completed in the reporting period.  Sample assaying is in progress at the Kwale Operations laboratory, with infill auger drilling and test pits planned in the second half of the financial year to better understand the more prospective areas.

4.  Toliara Project

In November 2019, the Government of Madagascar required Base Resources to suspend on-the-ground activity on the Toliara Project while discussions on fiscal terms applying to the project were progressed.  Activity remains suspended as Base Resources continues to engage the Government in relation to the country’s Large Mining Investment Law (LGIM) regime, fiscal terms applicable to the Toliara Project and the lifting of the on-the-ground suspension, with discussions continuing during the reporting period.

In September 2021, the Company completed DFS2 for the Toliara Project to incorporate an update to the estimated Ranobe Ore Reserves and an increase in project scale.  The outcomes of DFS2, compared to the earlier 2019 DFS, included substantially improved forecast financial returns for the Toliara Project, including a post-tax/pre-debt (real) NPV10 of US$1.0 billion and an average revenue to cost of sales ratio of 3.5, over an initial 38-year mine life.  Timing of a financial investment decision (FID) in respect of the Toliara Project (and therefore commencement of construction) remains subject to lifting of the suspension of on-the-ground activities and agreeing acceptable fiscal terms with the Government of Madagascar.  Once these two key milestones are achieved, there will be approximately 11 months’ work to complete prior to reaching FID, including finalisation of funding, completion of land acquisition, conclusion of major construction contracts and entering into offtake agreements with customers.  Resumption of reasonable international travel will also be required to complete a significant portion of this pre-FID work.  Following FID, there is an estimated 27 month construction and commissioning period to reach the first shipment of production.  The Company maintains readiness to accelerate progress when conditions support.

5.  Review of Financial Performance

Base Resources achieved a profit after tax of US$19.2 million for the reporting period, an increase compared with a loss of US$6.3 million in the comparative period, primarily due to higher sales revenues.

	Six months to 31 December 2021				Six months to 31 December 2020
	Kwale Operations	Toliara Project	Other	Total	Kwale Operations	Toliara Project	Other	Total
	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s
Sales Revenue	104,615	-	-	104,615	72,763	-	-	72,763
Cost of goods sold excluding depreciation & amortisation:
Operating costs	(35,919)	-	-	(35,919)	(33,376)	-	-	(33,376)
Inventory  movement	6,771	-	-	6,771	9,455	-	-	9,455
Royalties expense	(7,754)	-	-	(7,754)	(5,069)	-	-	(5,069)
Total cost of goods sold (i)	(36,902)	-	-	(36,902)	(28,990)	-	-	(28,990)
Corporate & external affairs	(1,817)	(54)	(3,947)	(5,818)	(1,854)	(38)	(3,698)	(5,590)
Community development	(2,228)	-	-	(2,228)	(2,071)	-	-	(2,071)
Selling & distribution costs	(1,461)	-	-	(1,461)	(881)	-	-	(881)
COVID-19 response costs	(102)	-	-	(102)	(975)	-	-	(975)
Net write-off of Kenyan VAT receivable and royalty payable	(3,012)	-	-	(3,012)	-	-	-	-
Other expenses	(35)	-	(823)	(858)	(28)	-	(310)	(338)
EBITDA (i)	59,058	(54)	(4,771)	54,234	37,964	(38)	(4,008)	33,918
Depreciation & amortisation	(22,404)	(94)	(198)	(22,696)	(29,224)	(101)	(161)	(29,486)
EBIT (i)	36,654	(148)	(4,968)	31,538	8,740	(139)	(4,169)	4,432
Net financing (expenses) / income	(2,783)	-	311	(2,472)	(3,320)	-	(105)	(3,425)
Income tax expense	(5,352)	-	(4,500)	(9,852)	(2,845)	-	(4,500)	(7,345)
NPAT (i)	28,519	(148)	(9,157)	19,214	2,575	(139)	(8,774)	(6,338)

⁽ⁱ⁾ Base Resources’ financial results are reported under International Financial Reporting Standards (IFRS). These Financial Statements include certain non-IFRS measures including EBITDA, EBIT and NPAT. These measures are presented to enable understanding of the underlying performance of the Group and have not been audited/reviewed.

Sales revenue increased 44% to US$104.6 million for the reporting period (comparative period: US$72.8 million) due to higher sales volumes and an 18% increase in the average price of product sold to US$514 per tonne (comparative period: US$435 per tonne), with higher prices achieved across all products.

Total operating costs of US$35.9 million were 8% higher than the comparative period (US$33.4 million), due to a 9% increase in production volume, with operating costs per tonne produced remaining stable at US$171 per tonne (comparative period: US$174 per tonne).

Cost of goods sold (operating costs, adjusted for stockpile movements, and royalties), was US$185 per tonne of product sold, 4% lower than the comparative period (US$192 per tonne) due to lower unit operating costs and product sales mix.

With a margin of US$329 per tonne sold for the reporting period (comparative period: US$243 per tonne) and an achieved revenue to cost of sales ratio of 2.8 in the reporting period (comparative period: 2.3), Base Resources remains well positioned amongst mineral sands producers.

The increased sales volume together with higher product prices have delivered an increased Kwale Operations EBITDA for the reporting period of US$59.1 million (comparative period: US$38.0 million) and a Group EBITDA of US$54.2 million (comparative period: US$33.9 million).

The majority of Kwale Operations assets are depreciated on a straight-line basis over the remaining mine life. During the reporting period the Kwale South Dune Ore Reserves estimate was increased, allowing depreciation and amortisation charges to be spread over a longer remaining mine life.  Accordingly, depreciation and amortisation in the reporting period decreased 24% to US$22.7 million (comparative period: US$29.5 million).

Due to increased EBITDA and reduced depreciation and amortisation, Kwale operations recorded a net profit after tax of US$28.5 million (comparative period: US$2.6 million). During the reporting period, the Group’s Kenyan subsidiary, Base Titanium Limited (Base Titanium), distributed US$30.0 million of surplus cash, via dividend, to the Group’s ultimate parent entity, Base Resources Limited.  The dividend distribution by Base Titanium incurred 15% Kenyan dividend withholding tax of US$4.5 million, which has been recorded as an income tax expense, thus contributing to a profit after tax of US$19.2 million for the Group (comparative period: loss of US$6.3 million).

Cash flow from operations was US$20.6 million for the reporting period (comparative period: US$31.1 million), lower than Group EBITDA due to Base Titanium settling previously provided for increased royalties³ totalling US$18.8 million upon reaching agreement with the Government of Kenya. Base Titanium also paid corporate tax instalments of US$8.1 million and Kenyan dividend withholding tax of US$9.0 million to the Government of Kenya (US$4.5m payable from 30 June 2021) on the distribution of surplus cash to Base Resources.  Operating cashflows were used to fund capital expenditure at Kwale Operations, Toliara Project progression and dividend distribution.

Total capital expenditure for the Group was US$12.0 million in the reporting period (comparative period: US$13.0 million) comprised of US$5.8 million at Kwale Operations (comparative period: US$5.1 million), primarily for extending mining further south and land compensation for SML 23 extension, and US$4.1 million on the progression of the Toliara Project (comparative period: US$7.5 million).

Consistent with Base Resources’ strategy, the Group seeks to provide returns to shareholders through both long-term growth in the Base Resources share price and appropriate cash distributions.  Cash not required to meet the Group’s near-term growth and development requirements, or to maintain requisite balance sheet strength in light of prevailing circumstances could be expected to be returned to shareholders.

Applying this capital management policy, the Board determined to pay an interim dividend of AUD 3 cents per share, unfranked, with a record date of 14 March 2022 and payment date of 31 March 2022. The interim dividend will be paid wholly from conduit foreign income.  The financial impact of the interim dividend, estimated to be approximately US$25.0 million (based on the prevailing AUD:USD exchange rate), has not been recognised in the Consolidated Interim Financial Statements for the reporting period.

[Note (3): Refer to Base Resources’ market announcement “Kwale mining lease extension secured and royalty discussions finalised” released on 30 September 2021 for further information, which is available at https://baseresources.com.au/investors/announcements/.]

6.  After Balance Date Events

Other than the interim dividend determined by the Board, there have been no other significant events since the reporting period.

7.  Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income

		6 months to 31 December 2021	6 months to 31 December 2020
	Note	US$000s	US$000s
Sales revenue	2	104,615	72,763
Cost of sales	3	(59,307)	(58,214)
Profit from operations		45,308	14,549
Corporate and external affairs		(6,109)	(5,852)
Community development costs		(2,228)	(2,071)
Selling and distribution costs		(1,461)	(881)
COVID-19 response costs		(102)	(975)
Net write-off of Kenyan VAT receivable and royalty over accrual	4	(3,012)	-
Other expenses		(858)	(338)
Profit before financing costs and income tax		31,538	4,432
Financing costs		(2,472)	(3,425)
Profit before income tax		29,066	1,007
Income tax expense	5	(9,852)	(7,345)
Net profit / (loss) after tax for the period		19,214	(6,338)
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation differences - foreign operations		(1,166)	5,671
Total other comprehensive income for the period		(1,166)	5,671
Total comprehensive income for the period		18,049	(667)
Net earnings / (loss) per share		Cents	Cents
Basic earnings / (loss) per share (US cents per share)		1.64	(0.54)
Diluted earnings / (loss) per share (US cents per share)		1.60	(0.54)

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au .

8.  Consolidated Condensed Statement of Financial Position

		31 December 2021	30 June 2021
	Note	US$000s	US$000s
Current assets
Cash and cash equivalents		37,066	64,925
Trade and other receivables	6	40,852	62,635
Inventories	7	25,051	18,355
Other current assets		7,083	8,208
Total current assets		110,052	154,123
Non-current assets
Capitalised exploration and evaluation	8	160,012	157,909
Property, plant and equipment	9	90,362	104,917
Total non-current assets		250,374	262,826
Total assets		360,426	416,949
Current liabilities
Trade and other payables		15,717	21,618
Provisions	10	6,804	38,687
Income tax payable		123	-
Deferred revenue	11	1,500	-
Deferred consideration		7,000	7,000
Finance lease liabilities		155	41
Total current liabilities		31,299	88,259
Non-current liabilities
Provisions	10	13,235	15,088
Deferred tax liability		1,465	4,615
Deferred consideration		10,000	10,000
Finance lease liabilities		635	-
Total non-current liabilities		25,335	29,703
Total liabilities		56,634	97,049
Net assets		303,792	319,900
Equity
Issued capital	12	307,811	307,811
Treasury shares	13	(1,660)	(2,273)
Reserves		(15,828)	(14,201)
Retained earnings		13,469	28,563
Total equity		303,792	319,900

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au.

9.  Consolidated Condensed Statement of Changes in Equity

	Issued capital	Retained earnings	Share based payment reserve	Foreign currency translation reserve	Treasury shares reserve	Total
	US$000s	US$000s	US$000s	US$000s	US$000s	US$000s
Balance at 1 July 2020	307,063	72,898	5,038	(22,265)	-	362,734
Loss for the period	-	(6,338)	-	-	-	(6,338)
Other comprehensive income	-	-	-	5,671	-	5,671
Total comprehensive income for the period	-	(6,338)	-	5,671	-	(667)
Transactions with owners, recognised directly in equity
Dividends	-	(29,765)	-	-	-	(29,765)
Purchase of treasury shares	-	-	-	-	(1,143)	(1,143)
Share based payments	748	1,169	(1,238)	-	448	1,127
Balance at 31 December 2020	307,811	37,964	3,800	(16,594)	(695)	332,286
Balance at 1 July 2021	307,811	28,563	4,465	(18,666)	(2,273)	319,900
Profit for the period	-	19,214	-		-	19,214
Other comprehensive income	-	-	-	(1,166)	-	(1,166)
Total comprehensive income for the period	-	19,214	-	(1,166)	-	18,048
Transactions with owners, recognised directly in equity
Dividends	-	(34,838)	-	-	-	(34,838)
Purchase of treasury shares	-	-	-	-	(537)	(537)
Share based payments	-	529	(460)	-	1,150	1,219
Balance at 31 December 2021	307,811	13,469	4,005	(19,832)	(1,660)	303,792

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au.

10.  Consolidated Condensed Statement of Cash Flows

		6 months to 31 December 2021	6 months to 31 December 2020
		US$000s	US$000s
Cash flows from operating activities
Receipts from customers		115,276	85,283
Payments in the course of operations		(77,522)	(49,542)
Income tax paid		(17,118)	(4,644)
Net cash from operating activities		20,636	31,097
Cash flows from investing activities
Purchase of property, plant and equipment		(6,806)	(5,145)
Payments for exploration and evaluation		(5,163)	(7,812)
Other		93	128
Net cash used in investing activities		(11,877)	(12,829)
Cash flows from financing activities
Repayment of borrowings		-	(50,000)
Dividends paid		(34,838)	(29,765)
Purchase of treasury shares		(537)	(1,143)
Payments for debt service costs		(55)	(2,329)
Net cash used in financing activities		(35,430)	(83,237)
Net decrease in cash held		(26,671)	(64,969)
Cash at beginning of period		64,925	162,559
Effect of exchange fluctuations on cash held		(1,188)	2,012
Cash at end of period		37,066	99,602

The notes contained in the full version of the Half-Year Financial Report form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au.

FORWARD LOOKING STATEMENTS

Certain statements in or in connection with this release contain or comprise forward looking statements.  Such statements may include, but are not limited to, statements with regard to capital cost, capacity, future production and grades, sales projections and financial performance and may be (but are not necessarily) identified by the use of phrases such as “will”, “expect”, “anticipate”, “believe” and “envisage”.  By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and may be outside Base Resources’ control.  Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in product prices and exchange rates and business and operational risk management.  Subject to any continuing obligations under applicable law or relevant stock exchange listing rules, Base Resources undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events.

ENDS.

For further information contact:

James Fuller, Manager Communications and Investor Relations	UK Media Relations
Base Resources	Tavistock Communications
Tel: [phone]	Jos Simson and Gareth Tredway
Mobile: [phone]	Tel: [phone]
Email: [e-mail]

About Base Resources

Base Resources is an Australian based, African focused, mineral sands producer and developer with a track record of project delivery and operational performance.  The Company operates the established Kwale Operations in Kenya and is developing the Toliara Project in Madagascar.  Base Resources is an ASX and AIM listed company.  Further details about Base Resources are available at www.baseresources.com.au

PRINCIPAL & REGISTERED OFFICE
Level 3, 46 Colin Street
West Perth, Western Australia, 6005
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NOMINATED ADVISOR
RFC Ambrian Limited
Stephen Allen
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JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: [phone]

JOINT BROKER
Canaccord Genuity
Raj Khatri / James Asensio / Patrick Dolaghan
Phone: [phone]