Base Resources Regulatory News (BSE)

21 FEBRUARY 2014 INTERIM FINANCIAL REPORT Base Resources Limited (ASX:BSE, AIM:BSE) ("Base" or "the Company") is pleased to provide its Interim Financial Report for the six month period ended 31 December 2013. Please find below an extract from the Interim Financial Report (reported in Australian dollars) including; * The Directors' Report* Consolidated Condensed Statement of Profit or Loss and Other Comprehensive Income* Consolidated Condensed Statement of Financial Position* Consolidated Condensed Statement of Changes in Equity* Consolidated Condensed Statement of Cash Flows A copy of the full Interim Financial Report, including the accompanying notes to the accounts, is available from the Company's website at www.baseresources.com.au. BASE RESOURCES LIMITED CONSOLIDATED ACCOUNTS ABN 88 125 546 910 Interim Financial Report for the six month period ended 31 December 2013 DIRECTORS' REPORT Your directors submit the interim financial report of the Group, being theCompany, Base Resources Limited, and its controlled entities for the half-yearended 31 December 2013. Directors The names of the directors in office at any time during or since the end of thehalf-year are:Mr Andrew KingMr Tim CarstensMr Colin BwyeMr Winton Willesee - retired 26 November 2013Mr Samuel WillisMr Michael AndersonMr Trevor SchultzMr Mike Stirzaker - alternate for Trevor SchulzMr Malcolm Macpherson - appointed 25 July 2013 Directors have been in office since the start of the financial year to the dateof this report with the exception of Mr Malcolm Macpherson who was appointed on25 July 2013 and Mr Winton Willesee who retired on 26 November 2013. Company Secretary Mr Winton Willesee held the position of company secretary during the half-year. Principal Activities and Significant Changes in Nature of Activities The principal activity of the Group is the development and operation of theKwale Mineral Sands Project in Kenya. Operating Results The loss for the Group for the half-year after providing for income taxamounted to $5,522,393 (2012: $2,393,937). Dividends Paid or Recommended There were no dividends paid or declared for payment during the period ended 31December 2013. Review of Operations Base has made significant progress in the development of the Kwale MineralSands Project during the current period. All work packages are now complete andoperational with only minor defect list items remaining outstanding. Following commissioning of the dry mining unit ("DMU") and wet concentrator inearly October, the production of heavy mineral concentrate ("HMC") commenced.Optimisation of these circuits continued throughout the December quarterresulting in a steady increase in throughput, recoveries, availability andruntime towards design targets. The DMU proved extremely effective with the Caterpillar D11T dozers performingto expectation. Slimes separation and disposal and sand tails stacking hasproceeded and performed according to plan. Wet concentrator production andperformance has been ramping up consistently and is in line with ramp upexpectations. Commissioning of the mineral separation plant ("MSP") commenced in Decemberwith the main focus on balancing and debottlenecking in order to progress theramp-up to achieve nameplate throughput. Ilmenite production is on track interms of both tonnage and quality, with the first 25,000 tonne shipmentexported in February 2014. Ramp up of rutile production has been slower due toan initial focus on the front end ilmenite circuit as well as the rectificationof a number of plant bottlenecks. Subsequent to year end, in February 2014, the zircon circuit of the MSP wascommissioned and production of zircon product commenced. Financial Position The Group's working capital, being current assets less current liabilities, hasdecreased from $88 million at 30 June 2013 to $16 million at 31 December 2013,due to the use of funds in the development of the Kwale Project. In December 2013, the Group executed documentation to extend its existingproject finance facility agreements by a further US$25 million which has beenutilised in January 2014 to increase the working capital buffer availableduring the ramp up phase of the Project. The additional debt facility willensure that Base has the funding required to take Kwale through ramp up and topositive cash flow. In the Directors' opinion, there are reasonable grounds to believe that theGroup will be able to pay its debts as and when they become due and payable. Auditor's Declaration The lead auditor's independence declaration under section 307C of theCorporations Act 2001 is set out on page 6 for the half-year ended 31 December2013. This report is signed in accordance with a resolution of the Board ofDirectors. Andrew KingDirector Dated this 21st day of February 2014 CONSOLIDATED CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE SIX MONTHS ENDED 31 DECEMBER 2013 6 months to 6 months to 31 December 31 December 2013 2012 Note $ $ Other income 36,581 -Directors' and related fees (782,985) (1,081,949)Employee benefits expense (926,521) (419,299)Consultant fees (1,066,439) (786,867)Administrative expense (1,023,732) (761,635)Accounting, audit and related services fees (234,916) (137,952)Share based payment expense (296,015) (215,069)Community development costs (491,527) -Depreciation (73,962) (35,961)Write down of exploration costs (1,034,422) -Other expenses from ordinary activities (82,093) (42,829)Loss before financing income and income (5,976,031) (3,481,561)taxFinancing income, net 2 508,059 1,087,624Loss before income tax (5,467,972) (2,393,937)Income tax expense (54,421) -Net loss for the period (5,522,393) (2,393,937) Other comprehensive income Items that may be reclassified subsequently toprofit or loss: Foreign currency translation differences 4,172,910 (980,091) - foreign operationsTotal other comprehensive income / (loss) 4,172,910 (980,091)for the period Total comprehensive loss for the period (1,349,483) (3,374,028) Net Loss per share Cents CentsBasic profit / (loss) per share (cents per share) (0.98) (0.47)Diluted profit / (loss) per share (cents per share) (0.98) (0.47) The accompanying notes form part of these consolidated financial statements. CONDENSED STATEMENT OF FINANCIAL POSITIONAS AT 31 DECEMBER 2013 31 December 30 June 2013 2013 Note $ $ Current assetsCash and cash equivalents 3 33,285,670 98,122,682Other receivables 1,067,494 6,131,329Inventories 4 8,894,973 60,430Other 2,606,578 2,158,766Total current assets 45,854,715 106,473,207 Non-current assetsCapitalised exploration and evaluation 5 1,141,499 1,980,899Capitalised mine development 6 349,885,771 281,390,117Property, plant and equipment 7 20,107,146 12,259,327Inventories 4 1,152,881 -Restricted cash 5,641,891 5,478,394Other receivables 23,841,759 16,228,748Total non-current assets 401,770,947 317,337,485Total assets 447,625,662 423,810,692 Current liabilitiesTrade and other payables 9,734,992 17,396,187Borrowings 8 19,105,491 -Provisions 994,189 712,230Total current liabilities 29,834,672 18,108,417 Non-current liabilitiesOther payables 9 1,152,881 1,088,900Borrowings 8 189,028,148 178,850,990Provisions 4,775,419 2,162,752Deferred revenue 5,635,000 5,474,500Total non-current liabilities 200,591,448 187,577,142Total liabilities 230,426,120 205,685,559Net assets 217,199,542 218,125,133 EquityIssued capital 10 213,668,499 213,668,499Reserves 21,724,130 17,127,328Accumulated losses (18,193,087) (12,670,694)Total equity 217,199,542 218,125,133 The accompanying notes form part of these consolidated financial statements. CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN EQUITYFOR THE SIX MONTH PERIOD TO 31 DECEMBER 2013 Issued Accumulated Share Foreign Total losses based currency capital payment reserve translation reserve $ $ $ $ $ Balance at 1 July 2012 175,718,629 (6,009,529) 1,219,113 (1,098,427) 169,829,786Loss for the period - (2,393,937) - - (2,393,937)Other comprehensive loss - - - (980,091) (980,091)Total comprehensive - (2,393,937) - (980,091) (3,374,028)profit / (loss) for theperiod Transactions with owners, recognised directly in equityShares issued during the 37,725,870 - - - 37,725,870period, net of costsShare based payments - - 283,328 - 283,328Balance at 31 December 213,444,499 (8,403,466) 1,502,441 (2,078,518) 204,464,9562012 Balance at 1 July 2013 213,668,499 (12,670,694) 1,764,170 15,363,158 218,125,133Loss for the period - (5,522,393) - - (5,522,393)Other comprehensive - - - 4,172,910 4,172,910incomeTotal comprehensive - (5,522,393) - 4,172,910 (1,349,483)profit / (loss) for theperiod Transactions with owners, recognised directly in equityShares issued during the - - - - -period, net of costsShare based payments - - 423,892 - 423,892Balance at 31 December 213,668,499 (18,193,087) 2,188,062 19,536,068 217,199,5422013 The accompanying notes form part of these consolidated financial statements. CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWSFOR THE SIX MONTH PERIOD ENDED 31 DECEMBER 2013 6 months to 6 months to 31 December 31 December 2012 2013 $ $ Cash flows from operating activitiesPayments in the course of operations (5,279,331) (3,276,310)Income tax paid (Kenya) (59,669) -Net cash used in operating activities (5,339,000) (3,276,310) Cash flows from investing activitiesInterest received 269,870 2,269,632Payments for exploration and evaluation (156,680) (335,196)Purchase of property, plant and equipment (953,857) (639,005)Payments for mine development (88,636,877) (95,191,297)Research and development tax received 5,030,381 -Security deposits (280,712) (563,476)Net cash used in investing activities (84,727,875) (94,459,342) Cash flows from financing activitiesProceeds from issue of shares - 40,000,000Payment of share issue costs - (2,274,130)Proceeds from debt financing 22,540,000 50,138,400Debt finance facility fees (246,574) (728,822)Net cash provided by financing activities 22,293,426 87,135,448 Net decrease in cash held (67,773,449) (10,600,202)Cash at beginning of period 98,122,682 105,805,684Effect of exchange fluctuations on cash 2,936,437 (666,106)heldCash at end of period 33,285,670 94,539,376 The accompanying notes form part of these consolidated financial statements. A full PDF version of the announcement is available at the Company's website: www.baseresources.com.au. ENDS For further enquiries contact: Base Resources LimitedTim CarstensManaging DirectorEmail: tcarstens@baseresources.com.auPhone: +61 (0)8 9413 7400RFC Ambrian Limited (Nominated Adviser and Broker)As Nominated Adviser As BrokerAndrew Thomson or Trinity McIntyreJonathan WilliamsPhone: +61 (0)8 9480 2500Phone: +44 20 3440 6800 Africapractice (East Africa) (Kenyan Media Relations)David Maingi/ James Njuguna/Joan KimaniPhone: +254 (0)20 239 6899Email: jkimani@africapractice.com Tavistock Communications (UK Media Relations)Jos Simson / Emily Fenton / Nuala GallagherPhone: +44 (0) 207 920 3150 Cannings Purple (Australian Media Relations)Annette Ellis / Warrick HazeldineEmail: aellis@canningspurple.com.au whazeldine@canningspurple.com.auPhone: +61 (0)8 6314 6300 Corporate Details: Board of Directors:Andrew KingNon-Executive ChairmanTim CarstensManaging DirectorColin BwyeExecutive DirectorSam WillisNon-Executive DirectorMichael AndersonNon-Executive DirectorTrevor SchultzNon-Executive DirectorMichael Macpherson Non-Executive DirectorWinton WilleseeCompany Secretary Principal & Registered Office:Contacts:Level 1Email: info@baseresources.com.au50 Kings Park RoadPhone: +61 (0)8 9413 7400West PerthFax: +61 (0)8 9322 8912WA 6005