Heavy minerals miner Base Resources is aiming to maintain efficient mining at its Kwale mineral sands mining operation, in Kenya, so that it can capitalise on a strong price environment.

“Our Kwale Operation has been consistent since we began mining in 2013, and this enables us and our customers to reliably plan production and manage cash flow. We are also working to extend our life-of-mine (LoM) at Kwale so that we can continue to create value for our employees, communities, the Kenyan government and our shareholders,” enthuses Base Resources MD Tim Carstens.

Carstens adds that strong demand and limited supply is creating pricing pressure and calling forward new projects.

Globally, many large mines are nearing depletion. As there have not been many new projects developed in recent years, he highlights a risk of a short- to medium-term supply side deficit for mineral sands.

Given the supply-constrained environment, a significant challenge for the company lies in managing customer requirements, as they are struggling to secure enough feedstock and are, consequently, requesting more product than Base Resources can supply, stresses Carstens.

Fortunately, Base Resources has “strong and established” relationships with its customers, therefore enabling the company to manage expectations.

“This includes ensuring that we provide existing customers with volumes similar to those of their previous shipments, so they are at least receiving steady levels of supply. We have also been running the plant to maximise production, and closely monitoring stockpiles and adjusting shipment volumes to allow for shipping as soon as possible.”

Project Extensions

Base Resources is progressing a definitive feasibility study (DFS) on higher-grade subsets of the Bumamani and Kwale North Dune deposits to extend the Kwale operation’s LoM to July 2024.

After completing a pit optimisation study at the beginning of the year, a further Kwale North Dune pit area – referred to as P200 – has been included in the DFS.

To further secure the required mining tenure, the company has lodged an application for a variation to extend the Kwale Special Mining Lease 23 to cover these areas.

“The Bumamani DFS is expected to be released in the second quarter of this year, and now incorporates Pit 200, Pit 199 and the Bumamani mineral resources. With the addition of P200, the DFS could confirm that these orebodies will extend the Kwale LoM until late 2024. If mineral sands prices remain elevated, additional ore may become economic to mine and can further extend the operation’s life.”

Further, Base Resources is pursuing several near-mine and regional exploration opportunities, such as applications for prospecting licences in Kenya and the start of a shallow auger drill programme in Tanzania.

The company has completed 224 holes to date and is assaying the results at Kwale operations. Subject to these results, and drill rig availability, deeper drilling will be progressed.

Toliara Project

The Madagascar government required Base Resources to suspend on-the-ground activity at the Toliara mineral sands project in November 2019 while the two parties progressed discussions on the fiscal terms applying to the project.

Activity remains suspended as Base Resources continues to engage with government in relation to the country’s Large Mining Investment Law regime and the lifting of on-the-ground suspension.

The company completed an enhanced DFS, known as DFS2, for the Toliara project in September last year to incorporate and update it to the estimated Ranobe ore reserves and an increase in project scale.

The outcomes of DFS2, compared to the 2019 DFS, included substantially improved forecast financial returns for the project. This included a post-tax/pre-debt net present value of $1-billion and a 60% increase in the LoM free cash flow to $5.9-billion.

The DFS2 schedule assumes construction will start at the beginning of 2023 at a capital cost of $520-million, resulting in production starting in early 2025.

Timing of the final investment decision (FID) to proceed with construction of the Toliara project remains subject to lifting the suspension of on-the-ground activities and an agreement on acceptable fiscal terms.

Carstens notes that, once these milestones are achieved, there will be about 11 months’ worth of work to complete –such as the finalisation of funding, completion of land acquisition, conclusion of major construction contracts and entering into offtake agreements with customers – before the FID can be reached. The resumption of reasonable international travel will also be required to complete a significant portion of this work.

Base Resources maintains its readiness to accelerate progress when conditions are supportive.

“In the long term, we want to see the Toliara project cementing our reputation for excellence in the full life cycle of mining,” he concludes.