Quarterly Activities Report

ASX, AIM and Media Release

17 April 2015

                            BASE RESOURCES LIMITED                             

                   Quarterly Activities Report - March 2015                    

HIGHLIGHTS

  * Achieved 12 months without a lost-time injury.
   
  * Above design heavy mineral concentrate production rate.
   
  * 10% lower rutile production principally as a consequence of natural
    assemblage variability and ore type in the quarter's mining zone.
   
  * Availabilities, throughputs and recoveries continued at design or
    consistent with ramp-up plans.
   
  * Testwork and engineering for a suite of key recovery improvement
    initiatives has been completed for implementation over the next two
    quarters.
   
  * Sales volumes matched production in a challenging sales environment,
    particularly for sulphate ilmenite.
   
  * Project Completion tests for the Kwale Project debt facilities commenced
    during the quarter and are on track, with some of the shorter duration
    tests already successfully completed.
   
  * The bid for World Titanium Resources Limited closed without fulfilling the
    Conditions of the Offer.
   
Base Resources Limited (ASX & AIM: BSE) ("Base" or the "Company") is pleased to
provide a quarterly production and ramp-up update at its Kwale Mineral Sands
Operations ("Kwale Operations") in Kenya, East Africa. With the consistent
achievement of design availabilities and throughputs in both the wet
concentrator plant ("WCP") and mineral separation plant ("MSP") and recoveries
in the WCP, the focus has been firmly on continuing to drive product
recoveries, as well as exploring throughput increase opportunities, in the MSP.

KWALE OPERATIONS

SUMMARY PHYSICAL    Jun 2014        Sept 2014       Dec 2014        Mar 2015    
DATA                                                                            
                     Quarter         Quarter         Quarter         Quarter    
                                                                                
Ore mined (dmt)     1,759,211       2,191,455       2,328,746       2,291,444   
                                                                                
HM%                   8.08%           8.44%           7.49%           9.33%     
                                                                                
HMC produced         141,753         172,885         165,953         206,324    
(dmt)                                                                           
                                                                                
Production (dmt)                                                                
                                                                                
Ilmenite             91,620          100,533         107,893         105,753    
                                                                                
Rutile               15,221          16,612          18,672          16,754     
                                                                                
Zircon                4,130           5,210           5,308           5,414     
                                                                                
Sales (dmt)                                                                     
                                                                                
Ilmenite             91,529          116,578         53,345*         103,736    
                                                                                
Rutile               14,005          12,923          23,328          15,168     
                                                                                
Zircon                2,704           2,601           5,883           5,178     

*Reported volume includes 22,340t which was reversed after it was determined
that the terms of the sales agreement did not satisfy revenue recognition
criteria at the time of shipment. The product will be subject to sale in future
periods.

Average mined ore grades were high at 9.3% heavy mineral ("HM") as mining
proceeded through a high grade section of the Central Dune ore body (7.5% HM
during the previous quarter and 7.8% for operations to date) and tonnage mined
remained steady at 2.3Mt in the March quarter.

A focus on debottlenecking the WCP's capacity to produce Heavy Mineral
Concentrate ("HMC") has enabled higher throughput to be sustained when mining
high grade ore, as demonstrated this quarter. This enhancement has facilitated
an increase of 24% in HMC production this quarter over the prior quarter, from
166kt to 206kt. HMC production capability now exceeds design.

Slime and sand deposition in the Tailings Storage Facility continued to operate
according to plan. The Mukurumudzi Dam volume dropped from 8.4ML to 6.9ML ahead
of the onset of the `long rains', the main wet season of the year, in the
coming weeks.

MSP throughput of 160kt was 3% below the previous quarter due to a combination
of marginally lower availability at 93% (94% in the December quarter) and the
lower number of days in the quarter. MSP feed rates remained at design levels
of 80tph. Modifications planned over the next two quarters are expected to see
this rate increase during the course of 2015.

A feature of the Central Dune orebody is that the higher HM grade sections
contain proportionally less rutile and more ilmenite than the lower grade
sections. As a consequence, with mining activity in the quarter being in a
higher HM grade section of the Central Dune, the contained rutile in the HMC
feed to the MSP was some 5% lower than in the prior quarter. Compounding this,
difficult mineralogy associated with a valley feature in the orebody impacted
MSP rutile recoveries, which reduced slightly to an average of 91%. The
combination of these two factors, together with the lower MSP availability and
shorter period noted earlier, has resulted in 10% lower rutile production at
16,754 tonnes. Rutile recoveries improved late in the quarter, with an average
of 95% achieved over the past four weeks. Testwork and engineering for a number
of recovery improvement initiatives were completed during the quarter, notably
rutile screens and additional magnet stages, with installation to be
progressively completed over the remainder of 2015. Benefits are expected to
start being realised in the June quarter.

Ilmenite production was in line with the prior quarter and continued above
design capacity. The higher proportion of ilmenite contained in the HMC feed to
the MSP (3% higher than last quarter) offset the reduced throughput. With some
altered ilmenite species that are not defined as "ilmenite" in the Resource
being recovered to ilmenite production, ilmenite recoveries (or yields) of over
100% are now consistently being achieved.

Zircon production improved again during the quarter, albeit slightly, and is
consistent with the planned ramp-up to design capacity. Average recoveries
increased from last quarter's 50% to 54% this quarter, but the resultant
production gains were partially offset by the reduced MSP throughput as a
consequence of lower availability and shorter period. The focus for zircon over
the next quarter is on increasing recoveries through improvements to the wet
zircon pumping systems to provide greater control and flexibility. Test work
and engineering for improvements to primary magnet separation capacity and
efficiencies are now complete and orders have been placed for the required
equipment. Installation is planned over the next two quarters, which, along
with further optimisation work, is expected to further improve zircon recovery
over the course of 2015 towards design levels of 78%.

With the aim of maximising overall zircon recoveries and revenue, Base is
progressing with plans to upgrade non-magnetic tailings streams to produce a
saleable zircon low grade product on an ongoing basis. This is expected to be
implemented in the June quarter. Sales contracts have been executed for an
existing stockpile of zircon concentrate, produced in the early stages of ramp
up, for sale and delivery next quarter.

Bulk loading at Base's Likoni Port facility continued to perform well,
dispatching more than 169,000 tonnes during the quarter. Of this, approximately
48,000 tonnes of ilmenite was shipped to Base's China warehouse. Holding stock
of ilmenite in China is part of Base's strategy for securing market share in
China by offering product for immediate delivery and in smaller volumes than
could be justified for a shipment from Kenya. By adopting this approach, Base
expects to tap into smaller scale customers not able to commit to large
shipment volumes and also offer potential large new customers sample size
volumes for testing.

A three year long term bulk shipping contract was entered during the quarter to
take advantage of the current low rates associated with low fuel and time
charter costs.

Containerised shipments of rutile and zircon proceeded according to plan.

Cash operating costs for the quarter (inclusive of royalties) were US$14.2
million or US$111 per tonne of product produced (rutile, ilmenite and zircon),
consistent with the US$14.4 million or $109 per tonne of the prior quarter.

MARKETING

The global TiO2 pigment industry remained weak through much of the March
quarter as the northern hemisphere continued its usual seasonal slowdown.
Activity picked up in the latter part of March and there are reports that some
of the leading pigment producers in China have secured price increases for
sales since the end of the Chinese New Year holidays.

Pricing of high grade titanium dioxide feedstock (including rutile) continues
to remain relatively stable and may see some improvement through the seasonally
strong June and September quarters - particularly as the major global pigment
producers continue their recovery and return to normal operating stock levels
and utilisation rates.

Pricing pressure has been maintained on ilmenite through the quarter but the
anticipated seasonal upswing in activity through the June quarter and
associated reduction of ilmenite stock levels should see the return of price
stability. This is supported by output from some of the principal ilmenite
sources for the Chinese market being further curtailed through the March
quarter, and expected to continue into the June quarter.

Zircon trade activity remained firm through the quarter with strong levels of
sales being maintained with established customers. Prices were again stable
throughout the quarter and are expected to remain stable through the June
quarter. There is potential for some zircon price improvement in the second
half of 2015 if demand maintains its upward trend and major producers continue
to manage their production output in line with market demand.

SAFETY AND TRAINING

This quarter the operation achieved a milestone of one year without a Lost Time
Injury ("LTI"), the last occurring in February 2014. There were two injuries
requiring medical treatment recorded this quarter, both employees returned to
normal duties immediately following off-site medical treatment. A series of
proactive safety training programmes were implemented during the quarter to
refresh previous learnings.

COMMUNITY AND ENVIRONMENT

Agricultural trials, run in conjunction with partners Business for Millennium
Development and DEG, have produced successful results for both potato and
cotton crops. Leveraging the existing significant agricultural activity and
experience in Kwale County, these projects have the potential to deliver
significant improvement in livelihoods in the area through increased crop
diversity, enhanced agricultural practices, output aggregation and access to
stable markets.

Utilising the knowledge gained from the trial programmes, the number of local
farmers involved in the potato program has grown from 7 to 75 for the next
phase aimed at producing commercial quantities. Further training of local
farmers for a poultry trial programme is underway with the intention of
increasing productivity and quality through modern chicken rearing techniques
focussed on bio-controls and sustainability.

Other community programmes are gaining momentum with 8 women's groups
undertaking specialised training in small enterprise development and community
health projects. In consultation with the local community and the Kenya Medical
Training College, support for 36 students was provided. Tuition fees were paid
for nursing, community health and health administration courses. This brings
Base's scholarship programme support to over 300 students at secondary and
tertiary institutions.

Environmental training at local schools commenced this quarter with Base's
partner, Little Sports Organisation, who provide after-school sports programmes
in 22 primary schools in the region. Team coaches are now teaching
environmental awareness as well as life skills education to approximately
15,000 children.

CORPORATE

TAKEOVER OFFER FOR WORLD TITANIUM RESOURCES LIMITED

On 23rd December 2014, Base launched an off-market takeover offer (the "Offer")
for World Titanium Resources Limited ("World Titanium") with the Bidder's
Statement being dispatched to World Titanium shareholders, and the Offer
formally opening, on 6th January 2015.

On 5th January 2015, World Titanium announced that it had secured binding
undertakings to not accept the Offer from World Titanium shareholders with
combined holdings exceeding 60%. Following discussions with key World Titanium
shareholders, Base concluded that the Offer was unlikely to succeed unless
there was a significant change in circumstances.

The Offer closed at 7.00pm (WST) on 6th February 2015, with the Conditions of
the Offer not fulfilled.

DRAWDOWN ON TAURUS FACILITY

In December 2014, Base executed a US$20 million unsecured debt facility with
one of its major shareholders, Taurus Funds Management ("Taurus Facility"). The
Taurus Facility provides a source of additional funding for the Kwale Project
should it be needed, the means to satisfy the US$15 million liquidity injection
required under the terms of the Kwale Project Debt Facility restructure, and
US$5 million in corporate funding.

On 27th January 2015, the first drawdown of US$3 million was completed to
provide funds for parent corporate working capital.

KWALE COUNTY MINERAL LEVY

Base is continuing to work with both the Kwale County Government and the Kenyan
National Government to have the export levy purported to be imposed by the
Kwale County withdrawn or rescinded (see ASX and AIM Release dated 5 June 2014)
on the basis that it is unconstitutional. There have been no invoices issued
beyond the one in June 2014. Base remains comfortable with its legal position
and expects to have the matter resolved in the near future.

KENYAN VAT RECEIVABLE

Base has a refund claim of approximately US$25 million for VAT paid in Kenya,
most of which relates to the construction of the Kwale Project. This claim is
currently proceeding through the Kenya Revenue Authority process. The Kenyan
Cabinet Secretary to the National Treasury has previously announced the
Government of Kenya's intention to settle all outstanding VAT claims by the end
of April 2015. Base is engaging with Treasury, seeking to expedite the refund.

KWALE PROJECT DEBT FACILITY - PROJECT COMPLETION TESTS

Under the terms of the Kwale Project Debt Facility, Base is required to achieve
"Project Completion" in order for surplus cash from the Kwale Project to be
distributed from the Kenya project company up to Base Resources Limited as the
parent. The requirements for achieving Project Completion includes a number of
physical and economic tests over a continuous 90 day test period. The first
attempt at satisfaction of these physical and economic tests commenced during
the quarter, with performance currently on track.

In summary, at 31 March 2015:

• Cash and cash equivalents (unrestricted) were A$23.4 million.

• Debt drawn of US$218.0 million, undrawn debt of US$17.0 million.

• 563,902,771 shares on issue.

• 47,312,531 unlisted options.

A full PDF version of this announcement is available at the Company's website: 
www.baseresources.com.au.

ENDS

For further enquiries contact:

Base Resources Limited
Tim Carstens
Managing Director
Phone: [phone]

RFC Ambrian Limited (Nominated Adviser and Broker)
As Nominated Adviser        As Broker
Andrew Thomson              Jonathan Williams and John van Eeghen
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)
Michael Vaughan / 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
Mike Stirzaker       Non-Executive Director
Malcolm Macpherson   Non-Executive Director
Keith Spence         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

Share Details:

As at 31 March 2015, there were 563,902,771 ordinary shares on issue.

Substantial Shareholders:

Pacific Road Capital 20.4%
Taurus Funds Management 14.9%
Sustainable Capital 12.5%
L1 Capital 7.8%
Aterra Investments 7.7%
Acorn Capital 7.6%
Genesis Asset Managers 5.0%

Unlisted Share Options:

7,100,000 Options expiring July 2015 ex A$0.09
9,500,000 Options expiring July 2015 ex A$0.25
30,712,531 Options expiring December 2018 ex A$0.40

Share Registry:

ASX
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
PERTH WA 6000

Enquiries: 1300 850 505 / [phone]
www.computershare.com.au

AIM
Computershare Investor Services PL C
The Pavilions
Bridgwater Road
BRISTOL BS99 6ZZ

Enquiries: [phone]
www.computershare.co.uk

Tenement Schedule:

Special Mining Licence 23, 100% interest, Kwale, Kenya
Exploration Licence 173, 100% interest, Kwale, Kenya