Base Resources posts Sh1.6bn global loss

Base Resources, the Australian company licensed to mine titanium in Kwale, has posted a Sh1.6 billion ($16 million) net loss for its global operations for the year ending June 30. PHOTO | FILE | NATION MEDIA GROUP 

In Summary

• Base is opposed to a Sh6,000 ($57) per-tonne levy imposed by the Kwale County government on the basis that it is unconstitutional.
• The company, however, managed to reduce its net loss from Kenyan operations by 79 per cent to Sh115.5 million ($1.1 million) from Sh556.5 million ($5.3 million) incurred last year.

By IMMACULATE KARAMBU
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Base Resources, the Australian company licensed to mine titanium in Kwale, has posted a Sh1.6 billion ($16 million) net loss for its global operations for the year ending June 30.

Increased operating costs and royalties were responsible for the reduction in earnings during the period.

The company incurred Sh1.1 billion ($10.5 million) in royalty expenses, up from Sh201 million ($1.9 million) last year.

Its operating costs went up from Sh1.6 billion ($15.5 million) to Sh6.8 billion ($64.7 million) during the period under review.

KENYA LOSSES

The company, however, managed to reduce its net loss from Kenyan operations by 79 per cent to Sh115.5 million ($1.1 million) from Sh556.5 million ($5.3 million) incurred last year.

“Base is currently in the process of seeking to refinance the Kwale Project Debt Facility which would deliver a repayment profile more appropriate to the cash flow forecast of the Kwale Project. Confirmations of credit approval have been received from majority lenders with remaining lenders credit approval processes in progress,” reads a statement from the company.

The Australian mining firm commenced commercial production of minerals from the Kwale project in April last year.

During the trading period, Base made a combined mineral sale worth Sh15.3 billion ($145.5 million).

The firm processes and exports three minerals (rutile, ilmenite and zircon) from the titanium ore.

TAX REFUND

Base is opposed to a Sh6,000 ($57) per tonne levy imposed by the Kwale County government on the basis that it is unconstitutional.

It is also seeking a Sh2.6 billion ($25 million) Value Added Tax refund from the Kenya Revenue Authority.

The firm secured a Sh2.1 billion ($20 million) loan facility from its major shareholder, Taurus Funds Management, to fund its operations at the Kwale Mineral Sands project that was drawn down in two tranches during 2015.

The company’s total debt as of June 30 was Sh30.7 billion ($292.6 million) compared with Sh24 billion ($232.5 million) at the same period last year