BASE RESOURCES LIMITED: Quarterly Activities Report

ASX, AIM and Media Release 
30 April 2013 
BASE RESOURCES LIMITED 
QUARTERLY ACTIVITIES REPORT - March 2013 
Highlights 
* Kwale Project is 71% complete and on schedule for production to commence in 


    Q3 2013.
      * Mukurumudzi Dam wall closed ahead of the wet season as planned.
      * Second US$72 million drawdown on the Kwale Project Debt Facility completed
    in February 2013.
      * Secured US$20 million extension to the Kwale Project Debt Facility.
      * Kenyan elections concluded peacefully with an orderly government transition
    now proceeding.


Base Resources Limited (ASX:BSE) ("Base") has made further significant progress
in the development of the Kwale Project during the quarter, closing the
Makurumudzi Dam wall, completing the second drawing down on the debt facility
and advancing overall development to 71% complete. 
Kwale Project Implementation 
The March quarter has seen a significant increase in construction activity,
most notably on the process plant and port facilities. With the overall
development 71% complete, the Kwale Project continues to be on schedule for
production to commence in Q3 2013 and first bulk shipments to occur in Q4 2013. 
Project elements 
The development approach for the Kwale Project is for the project to be
separated into six discrete contract packages, as well as a number of smaller
owner's projects, with an integrated management team overseeing their execution
and integration. This approach has been adopted to ensure that "best of breed"
expertise is applied to what are technically diverse and effectively separate
project elements and risk is more effectively minimized and managed. The six
contract packages, each covered by an EPCM (or EPC for CP3) contract and their
status are: 
CP1 - Processing Plants (Ausenco) 
* Overall progress is on target with 69% complete. Delivery of this 


    construction package is on the overall project critical path and is on
    schedule for production to start during Q3 2013.
      * Civil, structural and mechanical erection works are ongoing and electrical
    installation has commenced.
    Construction and procurement progress is 66% complete.

CP2 - Marine Facilities (WSP Group)

  * The overall progress to date is 73% complete and on target for delivery
    prior to the first planned bulk shipment in Q4 2013.
      * Onshore construction works are well advanced with the storage shed
    construction nearing completion.
      * Trial assembly of the ship loader is underway in Durban prior to shipping.


Marine works are ongoing. Softer than expected ground conditions have resulted
in some increased piling work. 
CP3 - Power Line (CG Global) 
* Overall, the project is 97% complete and on schedule for completion in Q2 


    2013.
      * The overhead power line construction and commissioning activities have
    started.
      * Electrification of the substation is scheduled for May.
    CP4 - Mukurumudzi Dam (Wave)

  * Overall delivery is 76% complete.
      * The concrete river diversion channel has been sealed and the dam is ready
    for storage, as planned, at the start of the wet season.
      * Construction of the main embankment to the final elevation is scheduled for
    completion in May.
      * The spillway construction is ongoing but functional.
    CP5 - Tailings Storage Facility (Wave)

  * Overall progress at 68% complete.
      * Construction works are behind schedule but progress improved significantly
    during the past quarter.
      * The current forecast completion timing of Q2 2013 is still well in advance
    of the required date for plant commissioning in Q3 2013.
    CP-6 - Access Road, Construction Camp and Shared Facilities (Howard Humphries)

  * The road construction and A14 road junctions are essentially complete with
    only some signage and punch list items outstanding.
      * Phase two of the construction camp and associated infrastructure is nearing
    completion ahead of the CP1 SMP and E&I labour influx.
    Owners Projects

In addition, a suite of owner's projects are being managed directly by the Base
operations team. These include the procurement of the mobile fleet, the
installation of a supplementary borefield and the procurement of the dozer trap
mining unit. As part of our implementation approach, the full senior operations
management team have already been recruited and are integrated into the overall
project team to ensure operability of design and smooth transition to
operations.

Safety Performance

The total man-hours for the project to date are now over 3,700,000 with only
one Lost Time Injury recorded. A big focus in the March quarter has been on
positive performance indicators, or lead indicators. Base staff and the
contractors working on the various CP's have completed over 800 formal safety
inspections and reported over 1,000 hazards or near misses. Added to this, the
corrective action closures from these reports are well above 90%. With safety
paramount in all business activities, a continual drive to maintain and improve
these high standards will continue.

Community and Environment

The Base Labour Recruitment Centre has now registered over 10,000 job seekers
including registration of those from the Likoni area associated with our port
facility. Project contractors are required to draw their semi-skilled and
unskilled workforces, with some 800 currently employed on mine site works and
approximately 100 at the port facility. It is also from this database that Base
will recruit the majority of its operational workforce.

Community infrastructure works continued during the quarter with the completion
of the Magaoni Secondary School, close to the mine access road, where classes
have now commenced. The Kibwaga Feeder School, near the Mukurumudzi Dam, is now
in operation with 25 students currently enrolled. Discussions are underway with
local administration and the community to locate another feeder school at
Miembeni to the north of the mining lease. Construction tenders for Phase I of
the Magoni health centre were received following design amendments requested by
the Ministry of Health and the project is expected to commence in Q2 2013.
Infrastructure projects now complete include 4 schools, a community hall, 3
water schemes, a dispensary and road and access improvements. A further school
and dispensary will be constructed once the Fingirika Settlement Scheme is
established by the Government or suitable alternatives identified in
collaboration with local communities.

Community engagement continues with monthly meetings held with three district
based liaison committees and six community based committees dealing with direct
impacts related to construction of the various project infrastructure
components. Following the general election, newly elected leaders will be
inducted into these committees.

The implementation of the environmental and social management systems continued
during the quarter. Dust was a challenge toward the end of the quarter after a
prolonged dry season. Community concerns were raised about availability of
water and Base assisted by establishing three water points and rehabilitated 4
existing hand-pump boreholes to ensure water supplies continued. The recent
onset of the wet season has brought relief to the situation.

Budget

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).

Financing

In February, the second drawdown of US$72 million was completed on the Kwale
Project debt facilities. Total debt drawn at 31 March is US$126 million. Under
the terms of the debt facility, drawdowns will be made on a quarterly basis
with the next scheduled for June 2013.

Subsequent to the end of the quarter, Base secured a US$20 million extension to
the existing US$20 million cost overrun facility, bringing the total Kwale
Project debt facilities to US$190 million. The additional US$20 million is not
required to meet forecast project commitments but Base believes it prudent to
have sufficient funding in place to meet any unforseen costs or delays.
Utilisation of the additional US$20 million is subject to execution of the
security documentation, including consent of the Commissioner of Mines &
Geology to the security interests.

Marketing

The market for titanium dioxide feed stocks remained subdued through the March
quarter. Low pigment plant utilisation and pigment de-stocking continued
through the quarter. There is an expectation of a pick-up in pigment activity
through the June quarter as the northern hemisphere painting season commences.
Continued strength in the US housing market together with a recent re-bound of
the Chinese housing market supports the expectation of a market recovery by the
second half of 2013.

Market conditions for zircon improved during the quarter with an increase in
trade activity. While end markets for zircon based products remain sluggish,
some zircon users have begun re-stocking raw materials. This supports the view
that zircon prices may have bottomed and that thrifting and substitution
activity has now effectively worked its way through the supply chain. Some of
the major producers, including Iluka Resources Limited, continued their
strategy of adjusting supply to align with demand. However, overall producer
stocks remain high and conditions for the zircon supply chain are likely to
remain subdued well into 2013.

The long term outlook for all mineral sands products remains very positive.
Enquiry levels for Base's products are strong and discussions are progressing
well with customers wishing to enter off-take agreements for the share of
Base's products that are not yet contracted. Terms have been agreed with
customers for most of the remaining ilmenite production over the first 5 years
with contracts now being prepared.

Kenyan Exploration Projects

As part of the Kwale Project acquisition, Base acquired an option to purchase
three further exploration projects - Kilifi, Mambrui and Vipingo. 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 not as yet received formal
notification from the Department of Mines & Geology or any explanation of the
rationale for this action. Base believes it is in full compliance with the
terms of these licenses and has submitted all required quarterly activity
reports. Furthermore, the Company successfully had these three licenses renewed
in 2011 and 2012 as such, Base can see no legal basis for the gazette notice
purporting to now cancel them. Consequently, the Company has taken the
appropriate legal action to protect the rights and has received a court order
staying the cancellation pending a hearing. Scheduled court hearings during the
quarter have been postponed but 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 3,231 meters in 65 holes to
test depth, grade, geo-metallurgical domains and assemblage. Analysis of the
results is progressing and an updated resource estimate is scheduled for
completion in the September quarter. The North Dune is not currently included
in the Kwale Project.

Corporate

In summary, at 31 March 2013:

  * Cash and cash equivalents were A$108.7 million.
      * Debt drawn of US$126.0 million.
      * 560,440,029 shares on issue.
      * 18,000,000 unlisted options.


A full PDF of the announcement including recent images depicting the
significant progress achieved at the Kwale Project is available at the
Company's website: www.baseresources.com.au. 
ENDS 
For further enquiries contact: 
Contacts: 
Base Resources Limited
Tim Carstens
Managing Director
Email: tcarstens@baseresources.com.au
Phone: +61 (8) 9413 7400 
RFC Ambrian Limited (Nominated Adviser and Broker) 
As Nominated Adviser                      As Broker
Andrew Thomson or Trinity McIntyre        Caspar Shand-Kydd
Phone: +61 (8) 9480 2500                  Phone: +44 20 3440 6800 
Tavistock Communications (UK Media Relations)
Jos Simson / Jessica Fontaine / Emily Fenton
Phone: +44 20 7920 3157 
Cannings Purple (Australian Media Relations)
Annette Ellis / Warrick Hazeldine
Email: aellis@canningspurple.com.au
whazeldine@canningspurple.com.au
Phone: +61 (8) 6314 6300 
Corporate Details: 
Board of Directors:
Andrew King Non-Executive Chairman
Tim Carstens Managing Director 
Colin Bwye Executive Director
Sam Willis Non-Executive Director
Michael Anderson Non-Executive Director
Trevor Schultz Non-Executive Director
Winton Willesee Non-Executive Director/ Company Secretary 
Principal & Registered Office:               Contacts:
Level 1                                      Email: info@baseresources.com.au
50 Kings Park Road                           Phone: (08) 9413 7400
West Perth                                   Fax: (08) 9322 8912
WA 6005 
About Base Resources 
Base Resources Limited (ASX:BSE AIM:BSE) is developing the world-class Kwale
Mineral Sands Project in Kenya, East Africa. Kwale is an advanced and highly
competitive project in a sector with a significant forecast supply shortfall
widely expected to emerge in the medium term. 
The Kwale Project represents an advanced development opportunity with all
material project approvals, permits and licenses required for development
currently in place, funding in place and construction of all project elements
heading towards completion. 
The Project enjoys a high level of support from the Government of Kenya as well
as the local community and, located just 50km from Mombasa, Kenya's principal
port facility, is well serviced by existing physical infrastructure. 
Importantly, two pilot plant operations at Kwale provide confidence in
processing behaviour and indicate a suite of readily marketable products. The
Project's high value mineral assemblage and low stripping ratio result in a
projected revenue to cash cost ratio that would place Kwale in the top quartile
of world producers. 
A realistic development time line should see the Kwale Project in production in
the second half of 2013. 
END 
-0- Apr/30/2013 06:00 GMT