Madagascar move for Base

A PERTH company driving Africa’s mineral sands industry says it expects a Definitive Feasibility Study to be completed by December this year on proposals to expand its current output in Kenya.

The Base Resource DFS covers the proposed $439m Stage 1 work on the Toliara mineral sands project in Madagascar, and at a deposit the miner describes as one of the best mineral sands development projects in the world.

Speaking at the Paydirt 2019 Africa Downunder mining conference, Base Resources managing director Tim Carstens said the planned expansion came at a time the company was experiencing high demand from its customers, and a tightening in supply generally in the market for mineral sands products.

“Following two years of pricing gains, demand stabilised in FY19 due to global trade tensions and economic uncertainty,” Mr Carstsens said.

“Current zircon supply is tightly managed by major producers, and this is providing a solid foundation for ongoing market stability – but longer term supply remains constrained.

“Even demand for Base Resources’ zircon from current customers exceeds our ability to supply all of it.”

The market dynamics come after a strong year’s performance by Base Resources at its Kwale mine in Kenya in which it recorded favourable prices (28pc higher for zircon), higher output and a lift in full year profits.

The company is currently expanding its future mining resource and capability at its Kenyan operations.

But it is in Madagascar that Base is looking to add a second long life production stream with the DFS now underway.

“We are currently establishing early capability and capacity building programs at Toliara, advancing land acquisition and initiating the debt funding process,” Mr Carstens said.

“This is a truly world-class mineral sands development project with a long mine life.”

Situated 40km north of the southwest regional town and port of Toliara, the site is underpinned by the large, high grade Ranobe deposit, containing a JORC 2012 compliant Mineral Resource of 1,293Mt at 5.1pc heavy mineral (HM), with 794Mt at 5.8pc HM in the Measured and Indicated categories.

Mr Carstens says this is sufficient to support a 40-plus year mine life at a scale similar to the company’s Kwale operations in Kenya.

Base is targeting a Toliara final investment decision in 2020 for a planned start-up in 2022.

The mine will offer more than 1000 permanent job opportunities when in production.

WA Premier Mark McGowan formally opened the conference. He said WA served as Australia’s gateway to Africa, not simply because of geographical proximity, but through an already developed relationship that was stronger links with the east coast.