24th Aug 2020 13:49
(Alliance News) - Base Resources Ltd on Monday declared a maiden dividend and announced a lower pretax profit for its most recently ended financial year with lower revenue, higher cost of sales, and Covid-19 response costs.
Shares in Base Resources were up 19% at 13.95 pence in London in afternoon trading.
The Australia-based mineral sands producer and developer, which has operations in Kenya and Madagascar, reported its results for the year ended June 30 in US dollars. Its annual pretax profit was USD45.6 million, down 8.6% from USD49.9 million.
This came as sales revenue fell 0.7% to USD208.0 million from USD209.5 million but cost of sales rose to USD139.3 million from USD131.8 million, giving a USD68.7 million profit from operations, down 12% from USD77.7 million.
On top of this, the firm reported USD1.1 million of Covid-19 response costs, versus no such costs in 2019.
At the moment, Base is focused on extending the mine life at its Kwale project in Kenya and has begun a pre-feasibility study for mining the North Dune, which it expects to complete in early 2021.
The company has opted to delay its final investment decision on whether proceed with Toliara project development in Madagascar due to the government shutdown, international travel restrictions, and the ongoing pandemic. A decision is not likely to be made before September 2021.
Base Resources declared a maiden dividend of 3.5 AUD cents per share.
Managing Director Tim Carstems said: "In light of the company's strong financial performance and position, and the delay to the Toliara project, and consistent with our determination to deliver concrete returns to shareholders, the board has determined to implement our maiden dividend. We believe a AUD 3.5 cent per share dividend strikes the right balance between delivering returns to shareholders, retaining balance sheet strength in uncertain times and allowing for the sensible progression of the Toliara project as uncertainty resolves."
By Anna Farley; [email protected]
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