22nd Feb 2021 10:09
(Alliance News) - Base Resources Ltd on Monday reported a plunge in profit for the first half of its financial year, as revenue declined on lower sales volumes, offset by a rise in the average price of products.
For the six months ended December 31, the Perth, Australia-based, Africa-focused miner posted pretax profit of USD1.0 million, down 92% from USD13.0 million a year before, on sales revenue that declined 13% year-on-year to USD72.8 million from USD83.5 million.
From its Kwale operations in Kenya, ilmenite production declined 13% to 144,363 tonnes, leading to sales dropping 22% to 129,300 tonnes from 166,653 tonnes.
Ilmenite is the main source of titanium dioxide, which is used in paints, printing inks, fabrics, plastics, paper, sunscreen, food and cosmetics.
In rutile and zircon, materials often used as whitening agents, interim production fell also fell year-on-year. In rutile, it was down 7.0% to 33,684 tonnes and in zircon down 15% to 12,677 tonnes.
As a result, rutile sales declined 13% to 23,668 tonnes, and zircon sales by 0.5% to 13,735 tonnes.
However, the average price of product sold increased to USD435 per tonne from USD399, due to higher ilmenite prices on firm demand from pigment producers.
Looking ahead, the Toliara project in Madagascar was suspended by government order in November 2019 while discussion on fiscal terms for the project were ongoing.
However, due to international travel restrictions and other consequences caused by Covid-19, the final investment decision for the project has been delayed. Once the suspension is lifted, Base Resources expects 11 months of work will be required on Toliara before a decision is made.
"Kwale Operations performance has been consistently strong throughout the half year and is on schedule to meet our annual production guidance. Outcomes for the remainder of the year are expected to be stronger again with firm market demand supporting price increases for all our products. Progress towards Kwale mine life extension remains a priority with the North Dune pre-feasibility study nearing completion and the recent resumption of our near-mine exploration program," said Managing Director Tim Carstens.
Shares in Base Resources were up 1.4% at 16.99 pence early Monday in London.
By Dayo Laniyan; [email protected]
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