Base Resources : 03/02/2020 Cape Town conference presentation (2.2 MiB) View Document

Building a unique mineral sands company

Cape Town Conference Presentation

Arlington Pre-Daba

121 Mining Investment

February 2020

Disclaimer and Important Notices

This document has been prepared by Base Resources Limited (Base Resources). Its release has been authorised by Base Resources' Disclosure Committee. Information in this document should be read in conjunction with other announcements made by Base Resources to ASX, particularly Base Resources' announcement on 12 December 2019 "DFS reinforces Toliara Project's status as a world class mineral sands development" (DFS Announcement). Base Resources' ASX announcements are available at https://www.baseresources.com.au/investor-centre/asx-releases/.

DFS Announcement

The DFS Announcement discloses details about the material assumptions and underlying methodologies adopted for deriving the production information and forecast financial information included in this document in respect of the Toliara Project, such as the material price and operating cost assumptions, which assumptions include the currently legislated government mineral royalty of 2%. It also discloses key pre and post FID risks in respect of the Toliara Project and an NPV sensitivity analysis. Base Resources confirms that all the material assumptions underpinning the production information and forecast financial information disclosed in the DFS Announcement continue to apply and have not materially changed.

Forward-looking statements

Certain statements in or in connection with this document contain or comprise forward looking statements. Such statements include, but are not limited to, statements with regard to capital cost, capacity, future production and grades and financial performance and may be (but are not necessarily) identified by the use of phrases such as "will", "expect", "anticipate", "believe" and "envisage". By their nature, forward looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and may be outside Base Resources' control. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in product prices and exchange rates and business and operational risk management. Subject to any continuing obligations under applicable law or relevant stock exchange listing rules, Base Resources undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events.

Industry data, not advice or an offer and other

This document contains revenue-to-cost ratio information derived from TZMI's Titanium Feedstock Producers Cost Study, 2018. Base Resources has not independently verified such information.

Nothing in this document constitutes investment, legal or other advice. You must not act on the basis of any matter contained in this document but must make your own independent investigation and assessment of Base Resources and obtain any professional advice you require before making any investment decision based on your investment objectives and financial circumstances.

This document does not constitute an offer, invitation, solicitation, advice or recommendation with respect to the issue, purchase or sale of any security in any jurisdiction. In particular, this document does not constitute an offer to sell, or a solicitation of an offer to buy, securities in the United States or to any "US Person" (as defined in the US Securities Act of 1933). This document may not be distributed or released in the United States or to, or for the account of, any US Person.

No representation or warranty, express or implied, is made as to the fairness, accuracy or completeness of the information contained in this document (or any associated presentation, information or matters). To the maximum extent permitted by law, Base Resources and its related bodies corporate and affiliates, and their respective directors, officers, employees, agents and advisers, disclaim any liability (including, without limitation, any liability arising from fault, negligence or negligent misstatement) for any direct or indirect loss or damage arising from any use or reliance on this document or its contents, including any error or omission from, or otherwise in connection with, it.

All currency is presented in United States Dollars (US$), unless otherwise stated

2

Australian based, African focused, producer

The foundation

• The Kwale operation

Video available at www.basetitanium.com

4

Kwale Operation enters the next phase…

• Central Dune fully depleted in June 2019
• Mining operations transitioned to the South Dune over a 2-week period in late June 2019
• Successful ramp up of mining and processing operations following the transition
• Mining rates equivalent to 18.7Mtpa achieved to date, exceeding the 18Mtpa plan
• Total project cost of US$12m, delivered on budget, on time and safely

5

…with South Dune production levels the new normal

Annual Production Volume

600kt					9%
Mid-point
	of updated FY20
	production
	guidance
		range1
		ZIR
400kt					6%
	RUT

Ore HM grade

200kt				3%

ILM

0kt							0%
	FY15	FY16	FY17	FY18	FY19	FY20
						Guidance

1. For further information, refer to Base Resources' announcement on 13 January 2020 "FY20 production guidance increase" available at https://www.baseresources.com.au/investor-centre/asx-releases/

6

Maintaining a first quartile revenue-to-cost ratio

Industry revenue-to-cash cost curve: 2018

	3.5			1st quartile
	3.0
ratiocostcash	2.5			Kwale-
2.0
Revenueto	1.5	producerTitanomagnetite	producerTitanomagnetite	ResourcesBase
1.0
	0.5
	0.0	0%

2nd quartile

3rd quartile

4th quartile

December 2019 quarter: 2.5

			Industry weighted average: 2018
25%	50%	75%	100%
	Cumulative TiO2 units

Source: Titanium Feedstock Producers Cost Study 2018, TZMI (which is the latest available cost study from TZMI), and Company data

7

Outstanding safety outcomes indicative of performance culture

19.1	70		9.4
Million	Months	Million
Hours worked with	Since last Lost-Time	Hours worked
zero Lost-Time	Injury	without a medical
Injuries			treatment injury

Presentation title	8

Multiple mine life extension opportunities being explored

PL/2015/0042

Extends to SW

9

As well as Kenyan opportunities further afield

10

Toliara - a world class development project

Project video available at www.baseresources.com.au

11

Mineral Resources afford long mine life…

RNF

USU

LSU

ICSU

LST

Mining Lease Boundary

Ore Reserve Boundary

RNF = Ranobe Formation

USU = Upper Sand Unit

ICSU = Intermediate Clay Sand Unit

LSU = Lower Sand Unit

LST = Limestone

Stylised cross section

33 year mine life

Ranobe

Mineral Resource2

1,293Mt

@ 5.1% HM

45% of 2019 Mineral Resources

Average annual production1:

Ilmenite 780kt

Zircon 53kt

Rutile 7kt

Toliara Project DFS Ore Reserves2 mined 586Mt

@ 6.5% HM

1. The anticipated annual production information is derived from the Toliara Project Definitive Feasibility Study and excludes the first and last partial operating years. For further information about that study, refer to Base

Resources' announcement on 12 December 2019 "DFS reinforces Toliara Project's status as a world-class mineral sands development" available at https://www.baseresources.com.au/investor-centre/asx-releases/.	12
2. For further information about the Ranobe Mineral Resources and Ranobe Ore Reserves, refer to the Appendices to this document.

…with significant expansion potential

• 2018/19 drilling program - 29,753m in 770 holes
• Assay results received to date show material heavy mineral intercepts - particularly in the lower sand unit
• Further drilling targeting high-grade lower sand unit zones to be planned once assaying of remaining samples is complete

Notable drill results:

• Hole R2076 - 81m @ 15.7% HM, with LSU of 67.5m @ 18.3% HM
• Hole R2074 - 87m @ 13.9% HM, with LSU of 69m @ 16.4% HM
• Hole R2084 - 71.5m @12.2% HM, with LSU of 41.5m @ 17.6% HM
• Hole R1507A - 72m @11.6% HM, with LSU of 43.5m @ 16.5% HM
• Hole R2022 - 87m @ 9.1% HM, with LSU of 52.5m @ 13.8% HM

1. For further information in relation to these drill results, refer to Base Resources' announcement on 21 January 2020 "Toliara Project drill assays reveal significant high-grade mineralisation" available at	13
https://www.baseresources.com.au/investor-centre/asx-releases. Base Resources confirms that it is not aware of any new information or data that materially affects the information included in that announcement.

Toliara DFS confirms a world-class mineral sands development

• NPV10 post tax, pre-debt, real US$652m & IRR of 21.4%
• Revenue to cost of sales ratio of 3.15
• Stage 1 capex US$442m for 13Mtpa
• Stage 2 capex US$69m to increase to 19Mtpa
• LOM average annual revenue of US$248m
• • 65% ilmenite, 32% zircon, 3% rutile
• LOM average annual EBITDA of US$164m
• LOM average annual free cash flow of US$132m

The forecast financial information is derived from the Toliara Project Definitive Feasibility Study. In the case of the LOM forecast financial information, that information excludes the first and last partial operating years. For further
information about that study, refer to Base Resources' announcement on 12 December 2019 "DFS reinforces Toliara Project's status as a world-class mineral sands development" available at	14
https://www.baseresources.com.au/investor-centre/asx-releases/.

Indicative timeline

OCT-22 First product from MSP

SEP-20FID

JUN-22 Mining & WCP commences

2019	2020	2021	2022
	FID		Construction

LGIM	Commissioning

Land Acquisition

Offtake	Progressive commissioning and ramp-up
	of mining, WCP, MSP and export facility

Funding

Early Works & FEED

DEC-22 First shipment

Material Contracts,

Commence camp early works

and FEED

15

Building a unique mineral sands company

• Team with a track record of delivery in Africa
• Consistent, high cash flow Kwale Operations, with extension potential
• Reputation for excellence in safety, community and environment
• A sound financial platform from which to grow the business
• Improving markets are supporting a need for new supply
• A world class development in the Toliara Project

16

1. Level 1, 50 Kings Park Road, West Perth WA 6005 PO Box 928, West Perth BC 6872, Australia

Ph. [phone]

1. [phone]

1. [e-mail]

baseresources.com.au

For further information contact:

James Fuller, Manager - Communications and Investor Relations Ph. [phone]

M. [phone]

1. [e-mail]

17 17

Appendices

Kwale Ore Reserves and Mineral Resources

Category	Material	In Situ HM	HM	SL	OS		HM Assemblage
						ILM	RUT	ZIR
	(Mt)	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)
			Mineral Resources 1 as at 30 June 2019
Measured	81	2.6	3.2	25	1	59	14	6
Indicated	169	2.9	1.7	36	3	47	12	5
Inferred	34	0.5	1.4	36	3	46	13	6
Total	285	6.0	2.1	33	2	52	13	6
			Ore Reserves as at 30 June 2019
Proved	39	1.6	4.0	27	1	59	14	6
Probable	23	0.8	3.3	26	5	53	13	6
Total	62	2.3	3.8	27	3	57	13	6

Notes:

1. Mineral Resources estimated at a 1% HM cut-off grade.
2. Table subject to rounding differences.
3. Mineral Resources are reported inclusive of the Ore Reserves.

For further information on the Kwale Deposit Mineral Resources and Ore Reserves, for the Kwale South Dune Deposit, refer to Base Resources' announcement on 9 October 2017 "2017 Kwale Mineral Resources and Ore Reserves Statement" and, for the Kwale North Dune Deposit, refer to Base Resources' announcement on 1 May 2019 "Mineral Resource for Kwale North Dune Deposit", each of which is available at https://www.baseresources.com.au/investor-centre/asx-releases/. Base Resources confirms that it is not aware of any new information or data that materially affects the information included in the 9 October 2017 and the 1 May 2019 announcements and all material assumptions and technical parameters underpinning the estimates in the 9 October 2017 and the 1 May 2019 announcements continue to apply and have not materially changed. For further information on the depleted Kwale Deposit Mineral Resources and Ore Reserves as at 30 June 2019, refer to Base Resources' announcement on 21 August 2019 "2019 Mineral Resources and Ore Reserves Statement" available at https://www.baseresources.com.au/investor-centre/asx-releases/.

19

Ranobe Ore Reserves and Mineral Resources

Category	Material	In Situ HM	HM	SL	OS		HM Assemblage
						ILM	RUT*	LEUC**	ZIR
	(Mt)	(Mt)	(%)	(%)	(%)	(%)	(%)	(%)	(%)
			Mineral Resources1 at 30 June 2019
Measured	419	28	6.6	4	0	75	2	-*	6
Indicated	375	18	4.9	8	1	72	2	-*	6
Inferred	499	20	3.9	7	1	70	2	-*	5
Total	1,293	66	5.1	6	0	72	2	-*	6
			Ore Reserves at 6 December 2019
Proved	347	24	7.0	3.8	0.1	75	1.0	1.0	5.9
Probable	239	14	5.8	4.2	0.2	73	1.3	0.8	5.7
Total	586	38	6.5	3.9	0.1	74	1.1	0.9	5.9

Notes:

• Rutile reported in the Mineral Resources table is rutile + leucoxene mineral species
• Recovered Leucoxene will be split between Rutile and Chloride Ilmenite products depending on product specification requirements.

1. Mineral Resources estimated at a 1.5% HM cut-off grade.
2. Table subject to rounding differences.
3. Mineral Resources are reported inclusive of the Ore Reserves.

For further information on the Ranobe Deposit Mineral Resources and Ore Reserves, refer to Base Resources' announcement on 23 January 2019 "Updated Ranobe Deposit Mineral Resources (corrected)" and the announcement on 6 December 2019 "Maiden Ranobe Ore Reserves estimate", each of which is available at https://www.baseresources.com.au/investor-centre/asx-releases/. Base Resources confirms that it is not aware of any new information or data that materially affects the information included in the 23 January 2019 and 6 December 2019 announcements and all material assumptions and technical parameters underpinning the estimates in the 23 January 2019 and 6 December 2019 market announcements continue to apply and have not materially changed.

20