Member Info for Rocka999

Looks like trouble at mill now with the local workforce

Forgot to add that it was only deals arranged during the first 5 months of this year, the Kenyan goverment is looking to reform the whole mining sector top to bottom from increased royalties, additional payments on drilling depths and a whole raft of other procedures

It was Kenya's mining commissioner who was suspended, too many deals done in secret!

Looks like the guy handing out the new licences may not have been all that honest allegedly and has been removed pending a review, I would imagine IMO that everything will be fine but you never know

New government in Kenya but the same old back stabbing

The long term outlook for all mineral sands products remains very positive. Enquiry levels for Base's products remains strong and Base is now well advanced in finalising additional off-take contracts for both ilmenite and zircon. Kenyan Exploration Projects As part of the Kwale Project acquisition, Base acquired an option to purchase three further exploration projects - Kilifi, Mambrui and Vipingo. As reported previously, on 28 December 2012, the then Kenyan Minister of Environment & Mineral Resources published a gazette notice purporting to cancel the three exploration licenses covering these projects. The Company has taken the appropriate legal action to protect the rights and has received a court order staying the cancellation pending a hearing. Base continues to pursue the matter and is confident of a positive outcome. Exploration activity during the quarter was focused on enhancing the Kwale North Dune resource estimate. Drilling comprised 5,474 meters in 111 holes to test depth, grade, geo-metallurgical domains and assemblage. Analysis of the results is nearing completion and an updated resource estimate is scheduled for completion in the September quarter .The North Dune is not currently included in the Kwale Project.

These were the predicted prices for Sept 2013

Rutile expected to be $2199.15 per metric tonne, Ilmenite $260.08 per metric tonne and Zircon $2249.10 per metric tonne, prices are predicted to be lower due to reduced demand globally

Commissioning is due to start next month as planned, I'd expect to see a steady rise in the SP as we progress into production, as posted previously 1 billion cash surplus over the next 13 years

And back to 14p

Tread carefully, been here before

Kwale is fully funded and with construction nearing completion, with the project on schedule to commence production and shipment of a high-value assemblage of rutile, ilmenite and zircon minerals in the latter half of 2013. The total approved project development budget is US$298 million, including contingencies. To 31 March, US$192 million has been incurred and a further US$87 million has been committed (ordered). Kwale is expected to generate a cash surplus of more than US$1 billion over its 13‐year mine life.

Base Resources (ASX: BSE) is focused on the Kwale Mineral Sands Project in Kenya, with the company adding further experience to its board. Base has now appointed Malcolm Macpherson to the board, with Macpherson bringing significant additional mineral sands, African and corporate development experience to the company. Macpherson spent 25 years at the world’s largest mineral sands company, Iluka Resources (ASX: ILU), starting in 1978, and has also been the Senior Vice President of the Minerals Council of Australia, President of the Western Australian Chamber of Minerals & Energy, and a member of Senate at Murdoch University. Macpherson has had active roles in research and innovation, including an advisory role to CSIRO.

Looks like a good addition to the BOD at this crucial point in time

http://www.livemint.com/Politics/jGxhixD4w5e1xx3ywrXJ3N/Kenya-to-form-state-company-to-own-stakes-in-mining-projects.html

No problem, by the end of November this year the first payment should have been received following the initial shipment then fingers crossed, happy days for the next 7 years !

This project appears to have been well managed and so far on time and on budget. A working capital has been built in and easy payment terms to help with early cash flows. The project does not involve dredging which reduces some of the project risk – the rutile and ilmenite circuits are said to be straightforward with the zircon circuit expected to be more challenging because of the closeness of the density of zircon with other elements. New supply from the mineral sands industry will result in a relatively muted outlook for prices with long term ilmenite prices expected to be back at $145/t from the levels of $200-$250/t. The new Kenyan government is said to be business friendly with statements unwinding previous comments on greater ownership. Overall this looks like an attractive project which is close to completion with all the funding in place to take it to first cash flows. Commissioning risk remains and given the recent history of juniors bringing projects on stream there will remain some investor concern. The price outlook in the short term is not as buoyant with the market being relatively well supplied. The 40% discount to NPV should start narrowing once they get through the commissioning phase but for now the shares are likely to trade sideways.

Base Resource (LON:BSE) – Analyst Briefing • The company updated analysts on progress of the Kwale mineral sands project where they are at the tail end of development. • The project is 88% complete of the project which had budgeted US$298m to be developed including contingencies. • US$192m has been incurred so far and a further US$87m has been committed. • The project is targeting the production of rutile, ilmenite and zircon over a 13 year LOM with 79 rutile kt, 330 ilmenite kt and 30 kt zircon for the first 7 years falling to 55kt, 200 kt and 19 kt respectively. • This is based on mining high grade material at the top of the resource and production declining with grades with in Year 7 the concentrator becoming a constraint. • Mining will be through dozer/track mining and not dredging using conventional mineral separation technology. • The rutile circuit will use electrostatic separation, ilmenite should also separate out relatively easily, the main risk lies with the zircon circuit a result of the closeness in density with elements that need to be separated out. • The post tax NPV of the project is US$510m and 33.2% IRR is based on TZMI price outlook which is based on short term forecasts before reverting to LT prices post 2016 of $1,000/t for rutile, $1,750 for zircon and $145/t for ilmenite. • 70% of revenues has been contracted for the first 5 years of production with all rutile production contracted which is 50% of revenues and partially contracted on ilmenite (23% of revenues) and zircon (27% of revenues). • There are a spread of buyers – 8 customers across the portfolio with Dupont accounting for 30% of revenues. • Contracts are based on a flat market price with no penalties for late delivery. • The company have factored in $30m of working capital during ramp up but they have negotiated good payment terms of 2 weeks from shipment which should help cash flows. • The project which is to be commissioned at the end of October is targeting first bulk shipment in the middle of November. • $100m of debt becomes repayable in 4 years time with the balance repayable over 6 years – the company is targeting to pay down debt with most of the debt expected to be paid off by 2016. • The new Kenyan government is said to be more business friendly with a new mining law to be in place by the end of this year. • The 35% ownership rule muted by the previous government has been repealed. • Royalties are likely to be 3% with scope for it to go up to 5% in year 5. • The corporate tax rate is 30% with all capex deductible up front.

Well after 6 long years I'm out of here, patience only stretches so far and I can do better elsewhere with the money GL to all still here

Somethings going on, just wish I knew what !