NAIROBI, KENYA, APR 18 — Australian mining company- Base Resources, parent to Kenya’s Base Titanium, has acquired an 85 per cent stake in Toliara Sands Project of Madagascar, in its latest move to increase its stake in Africa’s mining sector.
Base completed the acquisition on January 23, this year after paying a whooping US$75 million up-front.
The initial 85 per cent interest in the wholly owned Mauritian subsidiaries of World Titane Holdings Ltd, control has now been transferred to the Base Resources.
The company’s Kenyan subsidiary-Base Titanium revealed the deal on Wednesday during the release of its quarterly report (quarter one-2018).
General Manager external affairs and development-Joe Schwarz said Base Resources will acquire the remaining 15 per cent interest, with a further US$17 million payable on achievement of key milestones as the project advances to mine development.
The Toliara Sands Project is considered by Base Resources to be one of the best mineral sands development projects in the world.
It is underpinned by the Ranobe deposit which has a JORC 2012 mineral resource of 857Mt at 6.2 per cent heavy mineral, including 612Mt at 6.7 per cent heavy mineral in the Measured and Indicated Categories.
JORC is the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.
“Base Resources’ development plan is to complete a full study phase ahead of a decision to proceed to construction in the second half of 2019,” Schwarz said “This timetable could be expected to see the project in production in the second half of 2021.”
Preparations to appoint an engineering consultant to lead the pre-feasibility and definitive feasibility studies have already been initiated.
According to the firm, a number of long lead activities commenced during the first quarter of this year (January-March).
They include excavation of a 100-tonne bulk sample for a full program of wet and dry plant test work to inform process flow, sheet design and mobilization of a drill rig to site.
Drilling is expected to commence in the June quarter aimed at defining the boundaries of the mineral resource, upgrading the existing inferred resource to indicated status, and completing an ore reserve estimation.
“This is one of the best unexploited resources in the world,” Schwarz told journalists in Nairobi.
The Ranobe Mine is projected to produce 600,000 tonnes per annum of ilmenite and 65,000 tonnes per annum of zircon rich concentrate over an initial 20-year mine life.
This first phase of development utilises around 27 per cent of the 884 million tonne of mineral resource defined at Ranobe.
The project is a world class mineral sands deposit of ilmenite, and co-product zircon and rutile mineralization.
It is located some 40 kilometres north of the town of Tulear in south west Madagascar.
The project was awarded its first exploration permit in 2001, and granted two mining licences in 2012 and an environmental permit in 2015.
The Ranobe mine life is planned for an initial 20 years, utilizing approximately 30 per cent of the mineral resources, thus giving the opportunity to extend the life of the mine up to 60 years.
Mineral processing will be similar to Base Titanium’s Kenya operations which involves a primary-concentrator plant and an onsite ore-separating plant using predominantly gravity and magnetic separation techniques, and without the use of chemicals.
According to Base, the project will provide a considerable income stream for Madagascar and socio-economic development boost to the Tulear region.
As part of the current EIA licence, Toliara Sands will commit up to $1 million per annum to community programs, once the mine is operational.
Peak employment for the project will reach approximately 1,000 jobs during the construction phase and 150 jobs will be generated within ongoing social-environmental activities.
Base Resources has recently shown aggressiveness in expanding its operations in the East Africa region with exploration already having commenced in Tanzania through its subsidiary-Base Titanium.
The company is currently mining mineral ores in Kwale County, in the south coast of Kenya, where it commenced production of rutile, ilmenite and zircon from its Mineral Sands Project in late 2013.
The firm has become a key contributor to Kenya’s mining sector contribution to the Gross Domestic Product, accounting for about 60 per cent of the country’s mineral earnings.
Base has secured five prospecting licenses to conduct its activities in Tanzania, with a combined area of 475 square kilometres.
Kenya operations update
In the meantime, mineral production in Kwale mines dropped 6.0 per cent in the first quarter of 2018(January-March) to 142,430 tonnes compared to 151,576 tonnes in the December 2017 quarter.
The management has attributed the drop to a shutdown of its operations during the quarter to upgrade the mineral separation plant.
The company had a month-long shut down of its mining and wet concentrator plant in March, initiated to complete final equipment installation and piping for the Kwale Phase Two mine optimisation project.
“Production of all finished products decreased commensurately compared with the prior quarter as a result of the lower availability,” Schwarz said.
Sales of Ilmenite, Rutile and Zircon were however high in the quarter, which Schwarz attributed to a stock pileup from previous mining activities and a slow shipment process.
The company exported 176,075 tonnes of minerals in the quarter under review compared to 156,362 tonnes in the last quarter of 2017.