Base Resources net profits skyrocket 466%

Australian mineral sands producer Base Resources saw net profits soar 466% in the six months leading to 31 December thanks to increased mining volumes and grades at Kwale, its flagship project in Kenya.

Base resources posted an increased output of zircon and ilmenite, the latter of which moved ahead so much so that it was above design capacity, and a steady output of rutile throughout the half, with sales revenue from Kwale topping A$115.9m, a growth of 28% year-on-year.

Underlying costs rose slightly to A$131 per tonne sold from the A$130 seen a year earlier, but EBITDA still leapt 58% to A$69.3m, taking net profit to A$21.5m from the A$3.8m seen in the first half of the AIM-quoted firm's previous trading year.

Hydraulic mining unit capacity was boosted from 400 tonnes per hour to 800tph, resulting in an increased mining volume of 2.4m tonnes compared to the 1.4m tonnes in the previous half, thrusting production of HMC to 435,305 tonnes, against 391,953 tonnes and 316,451 tonnes posted in its last two halves.

Looking forward, Base said demand for ilmenite and rutile, mainly used as feedstock for the production of titanium dioxide pigment, used in paint, plastics and paper, remained buoyant throughout the period.

Base significantly reduced its net debt during the period, and held a cash balance of AUD 30.5m at 31 December, down from the $40.4m it had on hand at the end of 2016.

As of 1000 GMT, shares had advanced 2.14% to 14.30p.