Annual Financial Report - period ended 30 June ...
AIM and Media Release
26 August 2019
BASE RESOURCES LIMITED
Annual Financial Report – period ended 30 June 2019
Base Resources Limited (ASX & AIM: BSE) (Base Resources or the Company) is pleased to provide the following extracts from the Company’s Annual Report (which includes the Annual Financial Report) for the year ended 30 June 2019.
1. Operations Summary.
2. Business Development.
3. Markets.
4. Corporate.
5. Consolidated Statement of Profit or Loss and Other Comprehensive Income.
6. Consolidated Statement of Financial Position.
7. Consolidated Statement of Changes in Equity.
8. Consolidated Statement of Cash Flows.
These extracts should be read with reference to the notes and graphics contained in the full version of the 2019 Annual Report, a copy of which is available from the Company’s website: www.baseresources.com.au. The Company has also released an Investor Presentation to accompany its Annual Report, a PDF copy of which is available from the Company’s website: www.baseresources.com.au.
All figures are reported in US dollars unless otherwise stated.
HIGHLIGHTS
Sales price increases and a focus on efficiency have resulted in record revenue, EBITDA and NPAT for the year ended 30 June 2019 (FY19) for mineral sands producer and developer, Base Resources. The Company also successful transitioned mining operations to the South Dune orebody at its Kwale Operation in Kenya and released the pre-feasibility study for its Toliara Project in Madagascar.
Operational Highlights for FY19
- Kwale production in line with updated guidance – 92,393 tonnes of rutile, 402,698 tonnes of ilmenite and 31,941 tonnes of zircon.
- Mining rate increased by 57% to 17.8Mtpa, facilitated by implementation of the Kwale Phase 2 mine optimisation project in the prior year.
- Successfully transitioned mining operations to the Kwale South Dune after fully depleting the Central Dune.
- Total Recordable Injury Frequency Rate of zero – no lost time injury since early 2014.
- US$3.8m invested in community and environment programs.
Financial Highlights for FY19
- Average price improvement for both rutile (22% increase) and zircon (28% increase) increased revenue by 5% to US$209.5m.
- EBITDA increased 4% to US$113.5m.
- NPAT increased 15% to US$39.2m.
- Net debt free, with a closing net cash position of US$19.2m.
- Financing costs lower after early retirement of the Kwale Project Debt Facility in October 2018.
- Revolving Credit Facility increased to US$75.0m on more favourable terms, increasing funding flexibility.
- Revenue to cost of sales ratio of 2.6:1 maintained Kwale Operations position in the upper quartile of mineral sands producers.
Development Highlights for FY19
- Increased the Ranobe deposit Mineral Resources estimate, on which the Toliara Project is based, to 1.3 billion tonnes at 5.1% HM, a 25% rise in contained HM tonnes[1].
- Toliara Project pre-feasibility study[2] released, confirming the Company’s view that the Toliara Project is a world-class mineral sands development.
- Toliara Project definitive feasibility study commenced and on target for completion by the end of 2019.
- Kwale North Dune Mineral Resources estimate released and feasibility study commenced.
- 136km2 Vanga exploration license, south of Kwale, granted with 8,195m drilled.
Managing Director of Base Resources, Tim Carstens, said:
“This has been a busy but rewarding year for Base Resources with our highly productive Kwale Operation in Kenya delivering a consistently strong performance and the world class Toliara Project in Madagascar progressing towards development.â€
“Strong price improvement for rutile and zircon contributed to record financial results for the Company and we ended the year net cash positive, establishing a strong platform from which to grow the business. Our focal points for FY20 are optimisation and consistent performance of the Kwale Operations on the South Dune, pursuit of mine life extension at Kwale, and continued progression of the Toliara Project towards a development decision, with delivery of the DFS and project funding the immediate priorities.â€
Outlook
As previously announced[3], Base Resources expects to produce from its Kwale Operation in FY20:
- Rutile – 64,000 to 70,000 tonnes;
- Ilmenite – 315,000 to 350,000 tonnes; and
- Zircon – 25,000 to 28,000 tonnes.
[Note (1) For further information on the Ranobe deposit Mineral Resources, refer to Base Resources’ market announcement on 23 January 2019 “Updated Ranobe Deposit Mineral Resources (corrected)†available at https://www.baseresources.com.au/investor-centre/asx-releases/.. Base Resources confirms that it is not aware of any new information or data that materially affects the information included in the 23 January 2019 market announcement and all material assumptions and technical parameters underpinning the estimates in the 23 January 2019 market announcement continue to apply and have not materially changed.]
Note (2) For further information about the Toliara Project PFS outcomes refer to Base Resources’ market announcement on 21 March 2019 “Toliara Project PFS confirms status as a world-class mineral sands development†available at https://www.baseresources.com.au/investor-centre/asx-releases/.]
Note (3) For further information refer to Base Resources’ market announcement on 10 April 2019 “Production Guidance for FY20†available at https://www.baseresources.com.au/investor-centre/asx-releases/.]
1. OPERATIONS SUMMARY
Base Resources operates the 100% owned Kwale Operation in Kenya, which commenced production in late 2013. The Kwale Operation is located 50 kilometres south of Mombasa, the principal port facility for East Africa.
The Kwale Operation is designed to process ore to recover three main products: rutile, ilmenite and zircon. Mining operations are predominantly hydraulic mining, which has proved to be cost effective and well suited to the Kwale deposit. Ore is received at the wet concentrator plant from the mining units via a slurry pipeline. The wet concentrator plant removes slimes, concentrates the valuable heavy minerals with a number of gravity separation steps and rejects most of the non-valuable, lighter gangue minerals to produce a heavy mineral concentrate. The heavy mineral concentrate is then processed in the mineral separation plant which cleans and separates the rutile, ilmenite and zircon minerals into finished products for sale.
Mining
Mining volume increased 57% to 17.8 million tonnes in the reporting period (the year ended 30 June 2019) compared to the comparative period (the year ended 30 June 2018) following implementation of the Kwale Phase 2 (KP2) mine optimisation project in 2018. KP2 aimed to maximise heavy mineral concentrate (HMC) feed to the mineral separation plant (MSP) by increasing mining rates to counter ore grade declines. The average mined ore grade was 3.90%, lower than the comparative period (7.12%) due to mining on the remnant outer fringes of the Central Dune as the ore body was fully depleted in the reporting period. In June 2019, mining operations were successfully transitioned to the South Dune orebody.
| Mining and Wet Concentrator Plant (WCP) Performance | 2019 | 2018 |
| Ore mined (tonnes) | 17,822,324 | 11,332,668 |
| Heavy mineral (HM) % | 3.90 | 7.12 |
| WCP heavy mineral concentrate production (tonnes) | 644,180 | 748,081 |
644,180 tonnes of HMC was produced in the reporting period, lower than the comparative period (748,081 tonnes) due to the lower heavy mineral grade of ore mined. The HMC stockpile decreased to 20,010 tonnes at 30 June 2019 (comparative period: 77,912 tonnes), following the drawdown of stocks during the transition of mining operations to the South Dune orebody.
Processing
| Mineral Separation Plant (MSP) Performance | 2019 | 2018 |
| MSP feed (tonnes of heavy mineral concentrate) | 702,082 | 753,801 |
| MSP feed rate (tph) | 84 | 91 |
| MSP recovery % | ||
| Ilmenite | 102 | 100 |
| Rutile | 101 | 100 |
| Zircon | 76 | 77 |
| Production (tonnes) | ||
| Ilmenite | 402,698 | 464,988 |
| Rutile | 92,393 | 91,672 |
| Zircon | 31,941 | 37,157 |
| Zircon low grade | 519 | 1,425 |
The mineral separation plant continued to maintain high throughput rates for much of the reporting period, though the MSP feed rate was decreased from February 2019 onwards to ensure sufficient HMC stocks were available to allow a continuous feed to the MSP during the June transition of mining to the South Dune orebody. Total heavy mineral concentrate feed in the reporting period was correspondingly lower at 702,082 tonnes (comparative period: 753,801 tonnes).
Due to the reduced MSP feed in the reporting period, production of ilmenite and zircon was lower than the comparative period:
- Ilmenite production was 402,698 tonnes in the reporting period (comparative period: 464,988 tonnes) with production also affected by lower contained ilmenite in the feed.
- Rutile production was 92,393 tonnes in the reporting period (comparative period: 91,672 tonnes) with higher contained rutile in the feed offsetting a reduced feed rate.
- Zircon production was 31,941 tonnes for the reporting period (comparative period: 37,157 tonnes) with production also affected by lower contained zircon in the feed. Production of a low-grade zircon product re-commenced in February 2019 from a previously rejected MSP tailings stream with a contained 519 tonnes produced during the year.
Sales
Across each of its three products, the Company maintains a balance of multi-year, annual and quarterly offtake agreements with long term customers as well as a small proportion of ongoing spot sales. These agreements, in place with some of the world’s largest consumers of titanium dioxide feedstocks and zircon products, provide certainty for the Kwale Operations by securing minimum offtake quantities. Sales prices in these agreements are derived from prevailing market prices, based on agreed price indices or periodic price negotiations.
The Company continues its strong market presence in China, the world’s largest market for both ilmenite and zircon, with over 390,000 tonnes of ilmenite and over 25,000 tonnes of standard zircon products sold into the Chinese market during the reporting period. The strength of the mineral sands market for all products has ensured that sales continue to closely match production, with minimal inventories being maintained.
| Product Sales | 2019 | 2018 |
| Sales (tonnes) | ||
| Ilmenite | 395,378 | 473,549 |
| Rutile | 94,070 | 89,132 |
| Zircon | 32,992 | 36,318 |
| Zircon low grade | 334 | 3,287 |
2. BUSINESS DEVELOPMENT
Business development remained a core focus with the Toliara Project significantly progressed and opportunities to extend Kwale Operations mine life pursued.
Toliara Project
The Company completed the acquisition of the Toliara Project in January 2018 and is currently progressing the project through a full study phase. The Toliara Project is founded on the Ranobe deposit, located approximately 50 kilometres north of the regional town of Toliara in south west Madagascar.
An updated Ranobe Mineral Resources estimate was released in the reporting period increasing the contained heavy mineral by 25% to 1.3 billion tonnes at 5.1% heavy mineral.
The release of the pre-feasibility study (PFS) for the Toliara Project confirmed the Company’s view that the project is one of the best mineral sands development opportunities in the world. The PFS estimated post-tax/pre-debt (real) NPV10 of
US$671 million and a sector leading average revenue to cost of sales ratio of 3.06 over the 33-year initial mine life[4]. Other key estimated annual outputs of the PFS are:
- Production of 806kt ilmenite (sulphate, slag and chloride), 54kt zircon and 8kt rutile.
- Revenue of US$254 million.
- Operating costs of US$77 million or US$82 million incl. 2% royalties.
- EBITDA of US$165 million and NPAT of US$110 million.
- Free cash flow of US$133 million.
A definitive feasibility study (DFS) for the Toliara Project commenced in the reporting period and is on target for completion in late 2019, ahead of a planned decision to proceed to construction in 2020. On this schedule, it could be expected that the Toliara Project would be brought into production in 2022.
[Note (4) For further information about the Toliara Project PFS outcomes including key assumptions and risks, refer to Base Resources’ market announcement on 21 March 2019 “Toliara Project PFS confirms status as a world-class mineral sands development†available at baseresources.com.au/investor-centre/asx-releases.]
Kwale Operations extensional exploration
The Company released the Kwale North Dune Mineral Resources estimate of 171 million tonnes at an average heavy mineral grade of 1.5% in the year. With the expectation that the resource will support modest extensions to Kwale Operations, further drilling has been completed and a study phase has commenced to assess the economics of potential mine life extensions.
Base Resources was granted a prospecting licence for the 136km2 Vanga area in December 2018 and exploratory drilling commenced in April 2019. An extension of this prospecting licence was also applied for in the period. Completion of the remaining drilling program in the Kwale East area and Vanga remains suspended pending resolution of community access issues. Drill assay results to date have shown potential for some limited extensional economic resource close to the Central Dune (Bumamani), but this remains subject to more detailed evaluation.
3. MARKETS
With ongoing demand and supply constraints, Base Resources secured strong price gains for rutile and zircon in the reporting period. Ilmenite experienced a modest start to the year before supply tightness triggered solid price improvement.
Mineral sands end products are widely used in everyday life and historical demand has been tightly tied to growth in global GDP.
Ilmenite and rutile
Rutile and ilmenite are different grades of titanium dioxide (Ti02) minerals and are used predominantly to produce pigments for paint, paper, plastics, textiles and inks. Ti02 pigment is prized for its opacity, brightness and whiteness and its ability to absorb and reflect ultraviolet radiation. It is also non-toxic and inert to most chemical reagents.
High grade Ti02 minerals (which include rutile) can also be used to produce titanium metal, which is corrosion resistant and has the highest strength to weight ratio of any metal. Titanium metal is used across the aerospace and defence industries as well as in medical devices, sporting equipment and jewellery.
After a solid start to the reporting period the global pigment industry experienced a slowdown in demand in late 2018 as major pigment producers reported that pigment consumers had embarked on a period of de-stocking pigment inventory. While consumption of pigment from these end users remained at good levels, the reduction in inventories had a net negative impact on pigment demand which ultimately led to some pigment producers reducing their production rates. By the end of the reporting period major pigment producers indicated that the de-stocking process had slowed significantly or been completed. Pigment conditions for the rest of 2019 are looking positive with an expectation of ongoing growth.
Conditions within the titanium metal sector improved through the course of the year. A significant and growing backlog of orders with the major aircraft manufacturers has led to a much-improved outlook on titanium metal demand from the aerospace industry.
Supply constraints on high grade titanium feedstocks (which includes rutile) persisted through the reporting period. This is the result of some rutile deposits approaching the end of their life and ongoing production issues at some major rutile
operations. Despite the adjustments to pigment production by some western producers, demand for high grade feedstocks from all three end-user segments (pigment, Ti02 metal and welding) has continued to exceed supply which has resulted in ongoing price gains. The average price for Base Resources rutile in the reporting period was ~25% higher than in the comparative period.
Supply constraints on ilmenite emerged through the course of the year. The bans on the mining and export of mineral sands in the two major producing states in India (Tamil Nadu and Andhra Pradesh) continued and these have been more recently followed up with a separate blanket ban being imposed by the Indian national government on all private mining of mineral sands deposits in India. Vietnamese ilmenite supply has also trended strongly downwards since export quotas expired at the end of calendar year 2018.
Following subdued conditions in the first months of the reporting period, increased pigment production in China, combined with the restrictions on ilmenite supply, resulted in ilmenite prices trending upwards towards the end of the year. While the average price of Base Resources ilmenite was marginally lower than the prior year, ilmenite prices ended the reporting period ~10% higher than the comparative period average. Ongoing supply constraints and firm demand are expected to support a positive market environment for rutile and ilmenite in the coming year.
Zircon
Zircon has a range of end-uses, including in the production of ceramic tiles, which accounts 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 for zircon is closely linked to growth in global construction and increasing urbanisation in the developing world. Under normal conditions there is a close link between zircon demand growth and global GDP growth.
After a good start to the period, which saw further strong gains in pricing, the zircon market began to moderate during late 2018. Global trade tensions and economic uncertainties, combined with increased environmental inspections in some of the major zircon consuming regions in China, led to more cautious buying behaviour from consumers and an overall dampening on demand. Following a two-year period of strong quarterly gains, market conditions and prices for zircon stabilised from early 2019 onwards.
The management of supply to suit the conditions from at least one of the major zircon suppliers, and a move to six monthly fixed pricing contracts from a number of major suppliers, provide a solid foundation for ongoing stability in the zircon market. Any return to normal levels of demand growth would likely result in further price improvement as ongoing constrained supply may not be able to keep pace with demand.
Zircon demand from Base Resources’ customers remains firm and continues to exceed the Company’s ability to supply. The recent trend in market preference for standard zircon compared with premium zircon suits Base Resources’ production profile which is currently set at ~85% standard grade and ~15% premium. The average price for Base Resources’ standard zircon in the reporting period was ~30% higher than the comparative period.
4. CORPORATE
Base Resources achieved a record profit after tax of US$39.2 million for the reporting period compared to US$34.0 million in the comparative period, driven primarily by higher sales revenues and reduced debt servicing expenses.
| 2019 | 2018 | |||||||
| Kwale Operation US$000s | Toliara Project US$000s | Other US$000s | Total US$000s | Kwale Operation US$000s | Toliara Project US$000s | Other US$000s |
Total US$000s |
|
Sales Revenue |
209,456 |
- |
- |
209,456 |
198,810 |
- |
- |
198,810 |
| Cost of goods sold excluding | ||||||||
| Depreciation & amortisation: | ||||||||
| Operating costs | (63,234) | - | - | (63,234) | (56,658) | - | - | (56,658) |
| Inventory movement | (2,075) | - | - | (2,075) | (2,114) | - | - | (2,114) |
| Royalties expense | (14,597) | - | - | (14,597) | (13,678) | - | - | (13,678) |
| Total cost of goods sold (i) | (79,906) | - | - | (79,906) | (72,450) | - | - | (72,450) |
Corporate & external affairs |
(4,024) |
(249) |
(5,859) |
(10,132) |
(4,312) |
(87) |
(4,855) |
(9,254) |
| Community development | (3,607) | - | - | (3,607) | (3,000) | - | - | (3,000) |
| Selling & distribution costs | (2,501) | - | - | (2,501) | (4,056) | - | - | (4,056) |
| Other income / (expenses) | 850 | - | (649) | 201 | 28 | (704) | (89) | (765) |
| EBITDA (i) | 120,268 | (249) | (6,508) | 113,511 | 115,020 | (791) | (4,944) | 109,285 |
Depreciation & amortisation |
(51,885) |
(183) |
(52,068) |
(47,349) |
(84) |
(47,433) |
||
| EBIT (i) | 68,383 | (249) | (6,691) | 61,443 | 67,671 | (791) | (5,028) | 61,852 |
Net financing expenses |
(9,729) |
(1,826) |
(11,555) |
(15,929) |
(2,560) |
(18,489) |
||
| Income tax expense | (10,735) | - | - | (10,735) | (9,389) | - | - | (9,389) |
| NPAT (i) | 47,919 | (249) | (8,517) | 39,153 | 42,353 | (791) | (7,588) | 33,974 |
(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.
Sales revenue increased 5% to US$209.5 million for the reporting period (comparative period: US$198.8 million), achieving an average price of product sold (rutile, ilmenite, zircon and zircon low grade) of US$401 per tonne (comparative period: US$330 per tonne), with higher average realised prices for rutile and zircon, offset by lower prices for ilmenite. Operating cost per tonne produced was 28% higher at US$120 per tonne for the reporting period (comparative period: US$95 per tonne), due to increased volumes mined following the implementation of the Kwale Phase 2 mine optimisation project. In addition, increased flocculant use on the lower grade ore and increased mine clearing and preparation associated with the higher mining rate following the Kwale Phase 2 upgrade have contributed to the increase in operating costs. Total cost of goods sold, excluding depreciation and amortisation, was US$79.9 million for the reporting period, 10% higher than the comparative period (US$72.5 million) at an average cost of US$153 per tonne of product sold (comparative period: US$120 per tonne), due to higher operating costs and higher royalties associated with increased sales revenue.
With a margin of US$248 per tonne sold for the reporting period, 18% higher than the comparative period (US$210 per tonne) and an achieved revenue to cost of sales ratio of 2.6 (comparative period: 2.8), the Company remains well positioned high in the upper quartile of mineral sands producers.
Improved commodity prices and a continued focus on cost management has delivered a Kwale Operations EBITDA for the reporting period of US$120.3 million, a 5% increase over the comparative period (US$115.0 million) and a Group EBITDA of US$113.5 million, a 4% increase over the comparative period (US$109.3 million).
The majority of Kwale Operation assets are depreciated on a straight-line basis over the remaining mine life. Since the implementation of the Kwale Phase 2 mine optimisation project in March 2018, mining rates have significantly increased to offset declining ore grades and thus the remaining mine life is correspondingly shorter. As a result, depreciation and amortisation has increased 10% in the reporting period to US$52.1 million (comparative period: US$47.4 million). Should the extensional exploration currently underway at Kwale Operations be successful, there is the potential to increase ore reserves and extend mine life, thereby reducing future annual depreciation and amortisation charges.
A 13% increase in net profit after tax of US$47.9 million was recorded by Kwale Operations (comparative period: US$42.4 million) and Group net profit after tax increased by 15% to US$39.2 million (comparative period: US$34.0 million). Basic earnings per share for the Group was 3.39 cents per share (comparative period: 3.66 cents).
Cash flow from operations was US$96.6 million for the reporting period (comparative period: US$117.1 million), lower than Group EBITDA due to working capital movements. The operating cashflows were used to fund capital expenditure at Kwale Operations, Toliara Project progression, as well as debt servicing and repayment.
Total capital expenditure for the Group was US$36.1 million in the reporting period (comparative period: US$35.9 million excluding Toliara Project acquisition costs), including US$11.7 million for the transition of mining operations to the South Dune deposit and US$17.3 million on the progression of the Toliara Project.
Net debt reduction
In October 2018, the US$80.0 million outstanding balance of the Kwale Project Debt Facility was repaid from a combination of cash reserves and utilisation of the Revolving Credit Facility (RCF) following a concurrent increase in the RCF to US$75.0 million. The drawn balance of the RCF increased by $US7.5 million to US$20.0 million in the reporting period. Early retirement of the Kwale Project Debt Facility demonstrates the continued strong performance of Kwale Operations and, together with the increased RCF, provides the Group with additional funding flexibility and reduced debt servicing costs.
During the reporting period, the Group became net cash positive for the first time following a US$52.4 million reduction in net debt from US$33.2 million at 30 June 2018, to a net cash position of US$19.2 million at 30 June 2019. The Group’s cash positive position is comprised of cash reserves of US$39.2 million, with the RCF drawn to US$20.0 million. Future cash generation will now be available to contribute to the progression of the Toliara Project.
Kenyan VAT receivable
Base Resources has refund claims for VAT paid in Kenya, relating to both the construction of the Kwale Project and the period since operations commenced, totalling approximately US$24.2 million at 30 June 2019. These claims are proceeding through the Kenya Revenue Authority process, with a number of operational period claims, totalling approximately US$3.5 million, settled during the reporting period. Base Resources is continuing to engage with the Kenyan Treasury and the Kenya Revenue Authority, seeking to expedite the remainder of the refunds.
Significant changes in state of affairs
There were no other significant changes in the state of affairs of the Group during the reporting period.
After balance date events
There have been no significant events since the reporting date.
Future developments, prospects and business strategies
Base Resources’ strategy is to continue to pursue mine life extension at the Kwale Operation through exploration and develop the Toliara Project ahead of a decision to proceed with construction in 2020.
5. CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2019
Note |
2019 US$000s |
2018 US$000s |
|
| Sales revenue Cost of sales |
3 |
209,456 (131,791) |
198,810 (119,799) |
| Profit from operations | 77,665 | 79,011 | |
Corporate and external affairs |
(10,315) |
(9,338) |
|
| Community development costs | (3,607) | (3,000) | |
| Selling and distribution costs | (2,501) | (4,056) | |
| Other income/(expenses) | 201 | (765) | |
| Profit before financing costs and income tax | 61,443 | 61,852 | |
| Financing costs | 5 | (11,555) | (18,489) |
| Profit before income tax | 49,888 | 43,363 | |
| Income tax expense | 7 | (10,735) | (9,389) |
| Net profit for the year | 39,153 | 33,974 | |
Other comprehensive income |
|||
| Items that may be reclassified subsequently to profit or loss: | |||
| Foreign currency translation differences - foreign operations | (1,915) | (1,197) | |
| Total other comprehensive (loss)/income for the year | (1,915) | (1,197) | |
| Total comprehensive income for the year | 37,238 | 32,777 | |
Net Earnings per share |
Cents |
Cents |
|
| Basic earnings per share (US cents per share) | 6 | 3.39 | 3.66 |
| Diluted earnings per share (US cents per share) | 6 | 3.34 | 3.44 |
The notes contained in the full version of the Annual Financial Report (contained within the 2019 Annual Report) form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au.
6. Consolidated Statement of Financial Position as at 30 June 2019
Note |
30 June 2019 US$000s |
30 June 2018 (i) US$000s |
|
| Current assets | |||
| Cash and cash equivalents | 39,242 | 29,686 | |
| Restricted cash | - | 29,591 | |
| Trade and other receivables | 9 | 62,397 | 38,726 |
| Inventories | 10 | 19,574 | 19,789 |
| Other current assets | 6,313 | 5,993 | |
| Total current assets | 127,526 | 123,785 | |
Non-current assets |
|||
| Capitalised exploration and evaluation | 11 | 115,891 | 97,115 |
| Property, plant and equipment | 12 | 205,586 | 240,509 |
| Total non-current assets | 321,477 | 337,624 | |
| Total assets | 449,003 | 461,409 | |
Current liabilities |
|||
| Trade and other payables | 13 | 33,138 | 27,865 |
| Borrowings | 14 | 19 | 53,266 |
| Provisions | 15 | 3,398 | 1,506 |
| Income tax payable | 14,463 | 75 | |
| Deferred consideration | 16 | 17,000 | 7,000 |
| Other liabilities | 625 | 891 | |
| Total current liabilities | 68,643 | 90,603 | |
Non-current liabilities |
|||
| Borrowings | 14 | 18,913 | 35,532 |
| Provisions | 15 | 24,355 | 22,458 |
| Deferred tax liability | 7 | 16,500 | 20,969 |
| Deferred revenue | - | 625 | |
| Deferred consideration | 16 | - | 10,000 |
| Total non-current liabilities | 59,768 | 89,584 | |
| Total liabilities | 128,411 | 180,187 | |
| Net assets | 320,592 | 281,222 | |
Equity |
|||
| Issued capital | 17 | 306,512 | 305,277 |
| Reserves | (19,230) | (16,384) | |
| Retained earnings/accumulated losses | 33,310 | (7,671) | |
| Total equity | 320,592 | 281,222 | |
(i) Restated, refer to Note 24.
The notes contained in the full version of the Annual Financial Report (contained within the 2019 Annual Report) form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au.
7. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2019
| Issued capital | Retained earnings / (Accumulated losses) | 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 2017 as previously reported | 231,079 | (36,341) | 5,250 | (19,517) | - | 180,471 |
| Impact of prior year error (i) | - | (5,863) | - | - | - | (5,863) |
| Restated balance at 1 July 2017 | 231,079 | (42,204) | 5,250 | (19,517) | - | 174,608 |
| Profit for the year | - | 33,974 | - | - | - | 33,974 |
| Other comprehensive income | - | - | - | (1,197) | - | (1,197) |
| Total comprehensive income for the year | - | 33,974 | - | (1,197) | - | 32,777 |
Transactions with owners, ecognized directly in equity |
||||||
| Shares issued during the year, net of costs | 73,669 | - | - | - | - | 73,669 |
| Own shares acquired | - | - | - | - | (1,476) | (1,476) |
| Share based payments | 529 | 559 | 556 | - | - | 1,644 |
| Balance at 30 June 2018 | 305,277 | (7,671) | 5,806 | (20,714) | (1,476) | 281,222 |
| Restated balance at 1 July 2018 (i) | 305,277 | (7,671) | 5,806 | (20,714) | (1,476) | 281,222 |
Profit for the year |
- | 39,153 | - | - | - | 39,153 |
| Other comprehensive income | - | - | - | (1,915) | - | (1,915) |
| Total comprehensive income for the year | - | 39,153 | - | (1,915) | - | 37,238 |
| Transactions with owners, ecognized directly in equity | ||||||
| Share based payments | 1,235 | 1,828 | (2,407) | - | 1,476 | 2,132 |
| Balance at 30 June 2019 | 306,512 | 33,310 | 3,399 | (22,629) | - | 320,592 |
(i) Restated, refer to Note 24.
The notes contained in the full version of the Annual Financial Report (contained within the 2019 Annual 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 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2019
Note |
2019 US$000s |
2018 US$000s |
|
Cash flows from operating activities |
|||
| Receipts from customers | 188,493 | 205,807 | |
| Payments in the course of operations | (91,146) | (88,623) | |
| Other | (704) | (42) | |
| Net cash from operating activities | 8 | 96,643 | 117,142 |
Cash flows from investing activities |
|||
| Purchase of property, plant and equipment | (17,493) | (32,862) | |
| Payments for exploration and evaluation | (18,557) | (78,077) | |
| Other | 661 | 621 | |
| Net cash used in investing activities | (35,389) | (110,318) | |
Cash flows from financing activities |
|||
| Proceeds from issue of shares | - | 76,133 | |
| Payment of share issue costs | - | (2,464) | |
| Purchase of treasury shares | - | (1,476) | |
| Proceeds from borrowings | 48,180 | 12,500 | |
| Repayment of borrowings | (120,653) | (72,553) | |
| Receipts from/(transfers to) restricted cash | 29,591 | (3,425) | |
| Payments for debt service costs and re-scheduling fees | (8,060) | (13,611) | |
| Net cash used in financing activities | (50,942) | (4,896) | |
Net increase in cash held |
10,312 |
1,928 |
|
| Cash at beginning of year | 29,686 | 28,278 | |
| Effect of exchange fluctuations on cash held | (756) | (520) | |
| Cash at end of year | 39,242 | 29,686 | |
The notes contained in the full version of the Annual Financial Report (contained within the 2019 Annual Report) form part of these consolidated financial statements, a copy of which is available from the Company’s website: www.baseresources.com.au.
ENDS.
For further information contact:
| James Fuller, Manager - Communications and Investor Relations | UK Media Relations |
| Base Resources | Tavistock Communications |
| Tel: +61 (8) 9413 7426 | Jos Simson and Barnaby Hayward |
| Mobile: +61 (0) 488 093 763 | Tel: +44 (0) 207 920 3150 |
| Email: jfuller@baseresources.com.au |
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 1, 50 Kings Park Road
West Perth, Western Australia, 6005
Email: info@baseresources.com.au
Phone: +61 (0)8 9413 7400
Fax: +61 (0)8 9322 8912
NOMINATED ADVISOR
RFC Ambrian Limited
Andrew Thomson / Stephen Allen
Phone: +61 (0)8 9480 2500
JOINT BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44 20 3207 7800
JOINT BROKER
Numis Securities Limited
John Prior / James Black / Paul Gillam
Phone: +44 20 7260 1000
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