RNS11 Mar 2013 16:23
Review of Operations
Base continues to make strong progress in the development of the Kwale Mineral Sands Project with the level of site construction activity increasing significantly in the last quarter of 2012. With the overall development 50% complete, the Kwale Project continues to be on schedule for practical completion in Q3 2013 and first shipment in Q4 2013.
In early October, the Company completed a A$40 million share placement and entitlement offer in order to meet the additional funding requirements from the revised Kwale Project capital cost estimate of US$298 million.
The Company achieved financial close on the US$170 million project debt facilities in November and the first drawdown of US$52 million was completed. This was a critical milestone in the development of the Kwale Project as Base now has access to the full funding required to complete the development of the Kwale Project and bring it to positive cash flow.
Despite the recent soft demand, the long term outlook for all mineral sands products remains very positive. In this light, Base continues to receive strong interest in all of its products from the market. Discussions continue with a number of parties in relation to the balance of Base's production not already secured by offtake agreements.
Financial Position
The Group's working capital, being current assets less current liabilities, was $86,508,469 at 31 December 2012 (30 June 2012: $101,172,415).
Achieving financial close on the US$170 million project debt facilities in November 2012 ensures Base Resources has the funding required to take Kwale through development and to positive cash flow. At 31 December 2012 the available loan balance was US$118 million.
In the Directors' opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable.
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