AIM and Media Release
27 July 2020
BASE RESOURCES LIMITED
Updated Kwale South Dune Mineral Resources and Ore Reserves
estimate
Key Points
- Mineral Resources estimate updated to reflect a 5% reduction in
material bulk density following routine reconciliations undertaken
between the resource model estimates and run-of-mine operating data
gained since mining commenced on the South Dune in July 2019.
- Mineral Resources have also been updated to reflect a reduction
in the size of the prospecting licence and depletion due to
mining.
- The Ore Reserves estimate has been updated for the new Mineral
Resources estimate.
- On the basis of current Ore Reserves, mining is scheduled on
the Kwale South Dune until October
2022.
- Mining tenure arrangements to extend the Kwale special mining
lease are progressing with the Kenyan Ministry of Petroleum and
Mining as a precursor to an anticipated updated Ore Reserves
estimate to incorporate additional Mineral Resources defined within
the Kwale prospecting licence but which are currently outside that
mining lease.
African mineral sands producer, Base Resources Limited
(ASX / AIM: BSE) (Base Resources) announces an update to the
Kwale South Dune Mineral Resources (2020 Kwale South Dune
Mineral Resources) and Ore Reserves (2020 Kwale South
Dune Ore Reserves) estimates at its 100% owned and operated
Kwale Operation in Kenya. Base Resources has a net
attributable interest of 100% in the 2020 Kwale South Dune Mineral
Resources and the 2020 Kwale South Dune Ore Reserves estimates.
The 2020 Kwale South Dune Mineral Resources are estimated at
31 March 2020 to be 88 million tonnes
(Mt) at an average heavy mineral (HM) grade of 3.1%
for 2.7Mt of contained HM, at a 1% HM cut-off grade. The 2020
Kwale South Dune Mineral Resources estimate represents a decrease
of 22% in contained HM tonnes over the previously reported 2017
Kwale South Dune Mineral Resources estimate.
Figures (graphics) referenced in this announcement have been
omitted with the exception of Figures 1 and 2. A full PDF
version of this announcement, including all figures (graphics), is
available from Base Resources’ website:
https://baseresources.com.au/investors/announcements/.
Table 1: 2020 Kwale South Dune Mineral Resources estimate
compared with the 2017 Kwale South Dune Mineral Resources
estimate.
|
2020
as at 31 March 2020 |
2017
as at 4 October 2017 |
Category |
Tonnes
(Mt) |
HM
(Mt) |
HM
(%) |
SL
(%) |
OS
(%) |
HM Assemblage |
Tonnes
(Mt) |
HM
(Mt) |
HM
(%) |
SL
(%) |
OS
(%) |
HM Assemblage |
ILM |
RUT |
ZIR |
ILM |
RUT |
ZIR |
(%) |
(%) |
(%) |
(%) |
(%) |
(%) |
Kwale South Dune
Mineral Resources |
Measured |
63 |
2 |
3.2 |
25 |
1 |
58 |
14 |
6 |
81 |
2.6 |
3.2 |
25 |
1 |
59 |
14 |
6 |
Indicated |
25 |
0.7 |
2.8 |
26 |
7 |
52 |
12 |
6 |
33 |
0.8 |
2.5 |
26 |
7 |
52 |
12 |
6 |
Total |
88 |
2.7 |
3.1 |
25 |
3 |
56 |
13 |
6 |
114 |
3.5 |
3.0 |
25 |
3 |
56 |
13 |
6 |
Table subject to rounding differences, resources estimated at
a 1% HM cut-off grade and are inclusive of the 2020 Kwale
South Dune Ore Reserves estimate.
This update is due to depletion due to mining, a 5% reduction in
estimated material bulk density, a reduction in area of the
prospecting license and minor sterilisation of sub-economic
low-grade material (see Figure 3).
The reduction in material bulk density is a result of routine
reconciliations undertaken between the resource model predictions
and run-of-mine operating data gained for ore mined since mining
commenced on the South Dune in July 2019. This has
demonstrated that the 2016 Kwale South Dune Mineral Resources
estimate1 (the basis for the 2016 Kwale South Dune Ore
Reserves estimate), and subsequently the updated 2017 Kwale South
Dune Mineral Resources estimate2, were overstating the
material bulk density by approximately 5%. Consequently, the
correction to material bulk density has resulted in the 2020 Kwale
South Dune Mineral Resources estimate being reduced by 5.7Mt of
material containing 0.17Mt of heavy mineral.
Prospecting licence 2018/0119 (PL119) was first granted
in May 2018 for a three-year term,
following conversion of the pre-existing prospecting tenure
instrument Special Prospecting licence 173 (SPL173), in
accordance with the provisions of the Mining Act 2016. The
area of PL119 is half that of SPL173, which was granted under the
previous Mining Act. Consequently, the 2018 grant of PL119
resulted in 2.2Mt of low-grade material being excluded from the
2020 Kwale South Dune Mineral Resources estimate containing 0.03Mt
of heavy mineral. This material was not considered to be
economic. The licence can be renewed for two further
three-year terms, subject to the requirement to relinquish not less
than 50% of the area upon each renewal, unless otherwise agreed by
the Cabinet Secretary of the Ministry of Petroleum and
Mining.
The 2020 Kwale South Dune Mineral Resources estimate also
includes mining depletion of 14.2Mt of material and 0.51Mt of
contained heavy mineral to 31 March
2020, when compared with the 2017 Kwale South Dune Mineral
Resources estimate.
Mining sterilisation of 3.6Mt of material and 0.06 Mt of
contained heavy minerals comprises Mineral Resources material that
was not mined as it was not considered economic to do so.
A summary of all sources of change between the 2017 and 2020
Kwale South Dune Mineral Resources estimates is shown in Figure
1.
Figure 1: Source and quantum of change between the 2017
and 2020 Kwale South Dune Mineral Resource estimates contained
heavy mineral tonnes.
Kwale South Dune Mineral Resources –
Change in contained heavy mineral (Mt)
Amount (Mt) |
3.5 |
(0.17) |
(0.03) |
(0.51) |
(0.06) |
2.7 |
Source |
2017 Mineral
Resources |
Bulk density |
SPL reduction |
Mining depletion |
Mining
sterilisation |
2020 Mineral
Resources |
Contained within the 2020 Kwale South Dune Mineral Resources
estimate are the 2020 Kwale South Dune Ore Reserves, estimated at
31 March 2020 to be 44Mt at an
average HM grade of 3.5% for 1.5Mt of contained heavy
mineral. The 2020 Kwale South Dune Ore Reserves represents a
decrease of 35% in contained HM tonnes to the previously reported
2016 Kwale South Dune Ore Reserves estimate, due to the 5% lower
material bulk density, mining depletion and changes to the
underlying resource model discussed below.
Table 2: 2020 Kwale South Dune Ore Reserves estimate
compared with the 2016 Kwale South Dune Ore Reserves estimate.
|
2020
as at 31 March 2020 |
2016
as at 11 October 2016 |
Category |
Tonnes
(Mt) |
HM
(Mt) |
HM
(%) |
SL
(%) |
OS
(%) |
HM Assemblage |
Tonnes
(Mt) |
HM
(Mt) |
HM
(%) |
SL
(%) |
OS
(%) |
HM Assemblage |
ILM |
RUT |
ZIR |
ILM |
RUT |
ZIR |
(%) |
(%) |
(%) |
(%) |
(%) |
(%) |
Kwale South Dune
Ore Reserves |
Proved |
38 |
1.4 |
3.6 |
26 |
1 |
58 |
14 |
6 |
39 |
1.6 |
4.0 |
27 |
1 |
59 |
14 |
6 |
Probable |
6 |
0.2 |
2.9 |
27 |
8 |
51 |
12 |
5 |
23 |
0.8 |
3.3 |
26 |
5 |
53 |
13 |
6 |
Total |
44 |
1.5 |
3.5 |
26 |
2 |
57 |
13 |
6 |
62 |
2.3 |
3.8 |
27 |
3 |
57 |
13 |
6 |
Table subject to rounding differences.
The basis for the previously reported 2016 Kwale South Dune Ore
Reserves estimate was the 2016 Kwale Mineral Resources estimate.
Subsequent to this, the 2017 Kwale South Dune Mineral
Resources estimate was completed. The significant change
between 2016 and 2017 Kwale South Dune Mineral Resources estimates
was the inclusion of additional drilling and updated mineralogy
into the underlying resource model. The impact of these
changes, when incorporated to the 2020 Kwale South Dune Ore
Reserves estimate, is a significant increase in the confidence of
that estimate, with 87% of material tonnes and 89% of HM tonnes now
classified as Proved Ore Reserves and a reduction of 0.2Mt of
contained HM (refer figure 2). A summary of all sources of
change between the 2016 and 2020 Kwale South Dune Ore Reserves
estimates is shown in Figure 2 below. The areas of change are
shown in Figures 4 and 5 below.
Figure 2: Source and quantum of change between the 2016
and 2020 Kwale South Dune Ore Reserves estimates contained heavy
mineral tonnes.
Kwale South Dune Ore Reserves – Change
in contained heavy mineral (Mt)
Amount (Mt) |
2.3 |
(0.2) |
(0.1) |
(0.5) |
1.5 |
Source |
2016 Ore Reserves |
Resource Model |
Bulk Density |
Mining depletion |
2020 Ore Reserves |
The 2020 Kwale South Dune Mineral Resources estimate has
approximately twice the material, and 180% of the contained
HM tonnes, compared to the 2020 Kwale South Dune Ore Reserves
estimate because the Ore Reserves are constrained within Special
Mining Lease No. 23 (SML23) whereas the Mineral Resources
are constrained within the much larger PL119. Mining tenure
arrangements are being progressed with the Kenyan Ministry of
Petroleum and Mining to extend the SML23 boundary to incorporate
some of these additional Mineral Resources as a precursor to an
anticipated updated Ore Reserves estimate (see Figure 6).
[Notes:
(1) Refer to Base Resources’ market announcement “2016
Mineral Resources and Ore Reserves Update for Kwale” released on
11 October 2016, which is available
at
https://baseresources.com.au/investors/announcements/]/.
(2) Refer to Base Resources’ market announcement “Mineral
Resources Increase for Kwale South Dune” released on
4 October 2017, which is
available at
https://baseresources.com.au/investors/announcements/.]
Further information about the 2020
Kwale South Dune Mineral Resources estimate
The 2020 Kwale South Dune Mineral Resources estimate is reported
in accordance with the JORC Code. The information set out
below is a summary of the information material to understanding the
2020 Kwale South Dune Mineral Resources estimate. This
information should be read in conjunction with the information
provided for the purposes of Sections 1 to 3 of Table 1 of the
JORC Code, included as Appendix 1 to this announcement.
The Kwale Operation is located on SML23, which lies within PL119
which has an area of 88.7 km2, and is located
approximately 50 kilometres south of Mombasa and approximately 10
kilometres inland from the Kenyan coast (Figure 7).
The Kwale Project comprised three areas that contain
concentrations of heavy minerals. These are the South Dune,
Central Dune (now totally depleted by mining and currently the
repository for tailings from the South Dune) and the North Dune
(currently the subject of preliminary feasibility study) deposits
(Figure 8).
The project was initially owned by Tiomin Resources Inc.
(Tiomin) which conducted drilling in 1997 and then by Base
Titanium Limited (a wholly owned subsidiary of Base Resources)
which purchased the project late in 2010 and commenced confirmatory
drilling of the Central, South and North Dune deposits within
PL119.
Mineral Resources estimation work previously carried out on the
Kwale deposits is as follows:
- 2006 by Tiomin;
- 2010 by Base Resources via a consulting company, Creative Mined
Pty Ltd, and under the direction of Base Resources Competent
Person, Scott Carruthers;
- 2014 by GNJ Consulting, and under the direction of the
Competent Person, Greg Jones;
- 2016 by Base Resources Competent Person, Scott Carruthers; and
- 2017 by Base Resources Competent Person, Richard Stockwell.
The rocks of the area are of sedimentary origin and range in age
from Upper Carboniferous to Recent. Three divisions are
recognised: the Cainozoic rocks, the Upper Mesozoic rocks (not
exposed on the area) and the Duruma Sandstone Series giving rise to
the dominant topographical feature of the area: the Shimba
Hills. The Shimba grits and Mazeras sandstone are of Upper
Triassic age and form the Upper Duruma Sandstone.
The Margarini sands form a belt of low hills running parallel to
the coast. They rest with slight unconformity on the Shimba
grits and Mazeras sandstone. This formation was deposited
during Pliocene times and consists of unconsolidated fluviatile
sediments derived from the Duruma Sandstone Series.
The Kwale deposits are an aeolian subset of the Margarini sands
and are generally poorly stratified and contain a fraction of
silt/clay of around 25 per cent. Heavy minerals, mainly
ilmenite, rutile and zircon, are locally concentrated and are
abundant in some places, giving rise to deposits such as the
Central, South and North Dunes.
The geological interpretations for each deposit considered the
data in the drill logs, HM assay results, microscopic logging of HM
sinks, detailed mineralogy, knowledge gained from mining the
Central Dune deposit and the results of pilot plant-scale test work
conducted on trial mining pits at the South Dune deposit. Two
mineralised geological domains have been identified at the South
Dune deposit. These were used and honoured during the
geological modelling. Mining at the South Dune has not
altered the geological interpretation.
The right to mine the Kwale South Dune deposit was granted to
the previous owner of the Kwale Operations by the Government of
Kenya under SML23 on 6 July
2004. SML23 was assigned to Base Titanium Limited (a wholly
owned subsidiary of Base Resources) (Base Titanium) in
July 2010, with consent from the
Commissioner of Mines and Geology of the Government of Kenya.
SML23 has a term of 21 years from 6 July
2004 and provides the right to carry out mining operations
for the production of ilmenite, rutile and zircon. Prior to
expiry of SML23, Base Titanium may apply for a new mining lease on
a priority basis pursuant to the Mining Act 2016. The
original prospecting licence, SPL173, which was granted under the
previous Mining Act, was re-granted as PL119 on 26 May 2018 under the 2016 Mining Act, for a
three-year term. It may be renewed for two further three-year
terms, with a requirement to relinquish 50% of the area on each
renewal, although this requirement may be relaxed with the consent
of the Cabinet Secretary of the Ministry of Petroleum and
Mining.
The environment and land use in Kwale County is defined as humid
and intensive subsistence agriculture/mixed farming/forestry.
The approximate population for Kwale County is 860,000 persons.
Tiomin conducted drilling in 1997 at Kwale using an open-hole,
rotary mud drilling technique. Subsequent resource drilling
by Base Titanium was completed using the reverse circulation air
core (RCAC) method. Aircore drilling has been
conducted in three campaigns: October to November 2010, January to February 2013 and November
2016 to March 2017 (Figure
9). Drilling within SML23 comprises predominantly pre 2016
holes at, generally, 100 x 100 metre spacing. Drilling from
2016 onwards is spaced at 100 x 50 metre spacing.
Predominantly 3m sample intervals
in previous RCAC drilling was replaced by sampling at 1.5m intervals from November 2016 to provide greater control on
geological boundaries. Sample size averages close to 3kg at
this sample interval when collecting 25% of the rotary splitter
cycle. Samples are dried, weighed, and screened for material
less than 45 micrometres (slimes) and +1mm (oversize).
Approximately 100 grams of the screened sample is subjected to a
HM float/sink technique using the heavy liquid, Lithium
polytungstate (LST with an SG of 2.85gcm-3). The resulting HM
concentrate is dried and weighed as are the other separated
constituent size fractions (the minus 45 micrometre material being
calculated by difference).
Mineral assemblage analyses were conducted by Base Titanium in
order to characterise the mineralogical and chemical
characteristics of specific mineral species and magnetic
fractions. These mineral assemblage samples were subjected to
magnetic separation using a Mineral Technologies, Reading,
induced-roll magnetic separator, which captures magnetic
(mag), middling (mid) and non-magnetic
(non-mag) fractions. The mid and mag fractions are
combined and, with the non-mag fraction, are subjected to XRF
analysis using a Bruker, S8 Tiger XRF. Data from the mag and
non-mag XRF analyses are processed through an algorithm
(Minmod) that runs approximately 100,000 iterations in
assigning key chemical species to a calculated mineralogy
determination.
Drill hole collar and geology data is captured by
industry-specific, field logging software with on-board
validation. Field and assay data are managed in an MS Access
database and subsequently migrated to a more secure, SQL
database. Population of the SQL database was completed in
July 2017 and was the final stage of
data validation for the 2020 Kwale South Dune Mineral Resource
estimate.
Standard samples were generated and certified for use in the
field and laboratory. Accuracy of HM and slimes (SL)
analysis was verified by standards and monitored using control
charts. Standard error greater than three standard deviations
from the mean prompted batch re-assay. A standard precision
analysis was conducted on the key assay fields: HM, SL and Oversize
(OS) for both laboratory and field duplicate samples.
Normal scatter and QQ plots were prepared for HM, SL and OS for
laboratory and field duplicates.
A twin drilling program was introduced to quantify short-range
variability in geological character and grade intersections.
A water injection versus dry drilling assessment was included in
the twin drilling analysis. Field and laboratory duplicate,
standard and twin drilling analysis show adequate level of accuracy
and precision to support resource classifications as stated.
Analysis of the twin drilling, length of geological zones and grade
distributions led to the decision to exclude the Tiomin data from
the Mineral Resource estimate.
A topographic DTM was prepared by Base Resources in Geovia
(Surpac) software format which was based on a LIDAR survey.
Construction of the geological grade model was based on coding
model cells below open wireframe surfaces, comprising topography,
geology (Ore Zones 1 & 4) and basement (Figure 10). Model
cell dimensions of 50m x 50m x 1.5m in the
XYZ orientations was applied to the 2020 Kwale South Dune Mineral
Resources estimate.
Interpolation was undertaken using various sized search ellipses
to populate the model with primary grade fields (HM, SL, OS, and
mineralogy), and index fields (hardness, Induration percent,
Composite ID). Inverse distance weighting to a power of three
was used for primary assay fields whilst nearest neighbour was used
to interpolate index fields.
The bulk density applied to the Kwale South Dune model is a
component-based algorithm, validated by Troxler density
measurements taken in the active Kwale Central Dune mine. The
character of the Kwale South Dune is sufficiently similar to that
of the Kwale Central Dune to validate this approach. However,
monthly mine reconciliations over the nine-month period since
mining commenced until 31 March 2020
have shown that at Kwale South Dune the bulk density derived from
the algorithm overstates the bulk density by approximately
5%. Reconciliations consistent with industry practice use
measured production and quality information to estimate grade and
tonnes of ore mined which showed this bias when compared to the
tonnes predicted by the resource model. Several possible
alternative sources of the bias were investigated and eliminated,
leaving ore bulk density as the only remaining logical source of
error.
The criteria used for classification was primarily the drill
spacing and sample interval, with consideration also given to the
continuity of mineral assemblage information and confidence in
post-depositional modification of mineralisation (e.g. induration
in Ore Zone 4). Generally, 100 x 100 was considered
sufficient for Measured Resources and 200 x 100 for Indicated for
Indicated Resources. A reduced level of confidence was
applied to the Ore Zone 4 material at Kwale South Dune due to the
unpredictable ironstone induration and lower density of
mineralogical information.
Modifying factors were considered during the Ore Reserves
estimation process; they were not considered during the Mineral
Resources estimation process. The mining method is hydraulic
mining.
The 2020 Kwale South Dune Mineral Resources estimate is reported
using a 1% HM bottom cut as that is close to the economic cut-off
and to allow for comparison to the previous resource figure.
Further information about the 2020
Kwale South Dune Ore Reserves estimate
The 2020 Kwale South Dune Ore Reserves estimate is reported in
accordance with the JORC Code. The information set out below
is a summary of the information material to understanding the 2020
Kwale South Dune Ore Reserves estimate. This information
should be read in conjunction with the information provided for the
purposes of Sections 1 to 4 of Table 1 of the JORC Code,
included as Appendix 1 to this announcement.
The feasibility study that led to the final investment decision
for the Kwale Project was completed in 2011 and is no longer
relevant given production commenced in late 2013.
Accordingly, data derived from actual production statistics and
financial reports were used to form the assumptions underpinning
the 2020 Kwale South Dune Ore Reserves estimate. The
operating cost, recovery and other material assumptions are
detailed in Tables 3 to 6 below and were used to create a value
model to determine economic pit limits. Then a two-stage pit
limit selection process was followed to determine the optimum raw
pit shell. This was then subject to detailed mine planning and
scheduling, with the outputs used to perform detailed financial
analysis to demonstrate the technical and economic viability of the
extraction of the Ore Reserves.
The reference point for the 2020 Kwale South Dune Ore Reserve
estimate was 31 March 2020.
Table 3: Assumed mineral recoveries
Description |
Units |
Value |
Concentrate grade |
% |
90 |
HM recovery – wet
concentrator plant |
% |
83.5 |
Ilmenite recovery –
wet concentrator plant |
% |
94 |
Rutile recovery - wet
concentrator plant |
% |
90 |
Zircon recovery - wet
concentrator plant |
% |
94.5 |
Ilmenite recovery –
mineral separation plant |
% |
100 |
Rutile recovery -
mineral separation plant |
% |
99 |
Zircon recovery -
mineral separation plant |
% |
77 |
Table 4: Assumed operating costs
Description |
Units |
Value |
Waste mining |
USD / T
(Waste) |
2.7 |
Ore mining - fuel |
USD / T
(Ore) |
0.102 |
Ore mining – pumping
power |
USD /
kWhr |
0.14 |
Slime -
flocculant |
USD / T
(Slime) |
0.36 |
HMC dryer - fuel |
USD / T
(HMC) |
4.46 |
Rutile circuit
reheater - fuel |
USD / T
(HMC – Ilmenite T) |
1.77 |
Zircon circuit dryer -
fuel |
USD / T
(HMC – Ilmenite T – Rutile T) |
0.892 |
Process plant -
power |
kWhr /
HMC T |
14 |
Ilmenite product
haulage and port costs |
USD / T
(Ilmenite Product) |
6.85 |
Rutile product haulage
and port costs |
USD / T
(Rutile Product) |
9.87 |
Zircon product haulage
and port costs |
USD / T
(Zircon Product) |
31.05 |
Fixed – power |
kWhr /
Operating Hour |
9,662 |
Fixed - other |
USD /
Annum |
37,989,651 |
Table 5: Process throughput rates (used to limit assumed
feed rate during optimisation)
Description |
Units |
Rate |
Maximum HMU
throughput |
T/Hr
(Ore) |
2,400 |
Maximum process
rougher feed throughput |
T/Hr
(RHF) |
1,850 |
Maximum process tails
throughput |
T/Hr
(Tails) |
1,706 |
Maximum process
thickener throughput |
T/Hr
(Slimes) |
774 |
Maximum process HMC
throughput |
T/Hr
(HMC) |
120 |
Availability |
% |
90 |
Table 6: Product prices (FOB)
Description |
Units |
Price* |
Ilmenite revenue |
USD /
T |
180 |
Rutile revenue |
USD /
T |
1,100 |
Zircon revenue |
USD /
T |
1,800 |
*Assumed average prices over the life
of Ore Reserve at time of optimisation.
The criteria used for classification of the Ore Reserves
followed that used for the Mineral Resources classification, so
Proven Ore Reserves comprise Measured Resources and Probable Ore
Reserves comprise Indicated Resources.
The mining method is hydraulic mining, which Base Titanium has
used successfully since 2017. It is non-selective, with
hydraulic mining units (HMU) using high pressure water jets
to sluice the entire ore face, which flows as a slurry to a sump
and is then pumped, ultimately, to the concentration plant.
Due to the geometry of the deposit and the non-selective mining
method, there is no ore/waste discrimination (other than topsoil
stripping) and it is not considered appropriate to add additional
dilution factors. A 0.2 m
allowance for topsoil has been incorporated into the model and this
material is excluded from Ore Reserves reporting as
non-recoverable.
The wet concentrator plant is typical of a mineral sand
operation, using screens, spirals and cyclones to separate the
heavy minerals from the quartz sand and clay.
Heavy mineral concentrate is fed to a mineral separation plant
which uses magnetic and electrostatic separators, classifiers,
spirals and wet tables to produce ilmenite, rutile and zircon
products. Recovery factors are reported in Table 3.
Pit optimisation was undertaken using CAE NPV Scheduler software
(NPVS). A Value model was first prepared in DATAMINE
Studio 5DP Mine Planning software and revenue and cost adjustment
attributes subsequently imported into NPVS for Lerch-Grossman
optimisation. Because a value model was used to determine the
pit limits, cut-off grades were not used.
The estimation methodology comprised developing nested pit
limits (as described above) by reducing the revenue in 1 percentage
decrements, selection of the most appropriate pit shell by
comparison of several factors (including NPV, life of mine, revenue
to cost ratios, incremental cash flow etc.), mine planning and
scheduling of the selected pit shell and finally confirmation of
positive economics by feeding the scheduled tonnes into the project
financial model.
The material modifying factors impacting the deposit economics
are disclosed in the tables above. As an operating mine, the
other modifying factors, tenure status, infrastructure (power,
water, roads etc.), regulatory approvals, social considerations
etc. are all in place.
There is potential to significantly add to the Ore Reserves by
expanding the area of SML23 to include parts of the Mineral
Resources that lie outside the present SML23 boundary. Base
Resources is engaging with the Government of Kenya to expand SML23 into the areas shown in
Figure 6.
Competent Persons' Statements
2020 Kwale South Dune Mineral
Resources
The information in this announcement that relates to the 2020
Kwale South Dune Mineral Resources is based on, and fairly
represents, information and supporting documentation prepared by
Mr. Scott Carruthers. Mr.
Carruthers is a Member of The Australasian Institute of Mining and
Metallurgy. Mr. Carruthers is employed by Base Resources, he
holds equity securities in Base Resources, and is entitled to
participate in Base Resources’ long-term incentive plan and receive
equity securities under that plan. Details about that plan
are included in Base Resources’ 2019 Annual Report. Mr.
Carruthers has sufficient experience that is relevant to the style
of mineralisation and type of deposits under consideration and to
the activity which he is undertaking to qualify as a Competent
Person as defined in the JORC Code and is considered a Qualified
Person for the purposes of the AIM Rules for Companies. Mr.
Carruthers has reviewed this announcement and consents to the
inclusion in this announcement of the 2020 Kwale South Dune Mineral
Resources and supporting information in the form and context in
which the relevant information appears.
2020 Kwale South Dune Ore Reserves
The information in this announcement that relates to the 2020
Kwale South Dune Ore Reserves is based on, and fairly represents,
information and supporting documentation prepared by Mr. Per
Scrimshaw and Mr. Scott
Carruthers. Mr. Scrimshaw and Mr. Carruthers are
Members of The Australasian Institute of Mining and
Metallurgy. Mr. Scrimshaw is employed by Entech, a mining
consultancy engaged by Base Resources. Mr. Carruthers is
employed by Base Resources, he holds equity securities in Base
Resources, and is entitled to participate in Base Resources’
long-term incentive plan and receive equity securities under that
plan. Details about that plan are included in Base Resources’
2019 Annual Report. Mr. Scrimshaw and Mr. Carruthers have
sufficient experience that is relevant to the style of
mineralisation and type of deposits under consideration and to the
activity which they are each undertaking to qualify as Competent
Persons as defined in the JORC Code and both are considered a
Qualified Person for the purposes of the AIM Rules for Companies.
Mr. Scrimshaw and Mr. Carruthers have each reviewed this
announcement and consent to the inclusion in this announcement of
the 2020 Kwale South Dune Ore Reserves and supporting information
in the form and context in which the relevant information
appears.
Forward looking statements
Certain statements in or in connection with this announcement
contain or comprise forward looking statements.
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
the date of this announcement or to reflect the occurrence of
unanticipated events.
No representation or warranty, express or implied, is made as to
the fairness, accuracy or completeness of the information contained
in this announcement (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 announcement or its contents,
including any error or omission from, or otherwise in connection
with, it.
Nothing in this report constitutes investment, legal or other
advice. You must not act on the basis of any matter contained
in this announcement 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.
Appendix 1
JORC Code, 2012 Edition
Section 1 Sampling Techniques and
Data
(Criteria in this section apply to all succeeding sections.)
Criteria |
Explanation |
Comment |
Sampling
techniques |
Nature and quality of sampling (e.g. cut channels, random chips,
or specific specialised industry standard measurement tools
appropriate to the minerals under investigation, such as down hole
gamma sondes, or handheld XRF instruments, etc). These examples
should not be taken as limiting the broad meaning of
sampling.
Include reference to measures taken to ensure sample
representivity and the appropriate calibration of any measurement
tools or systems used.
Aspects of the determination of mineralisation that are Material
to the Public Report. In cases where ‘industry standard’ work has
been done this would be relatively simple (e.g. ‘reverse
circulation drilling was used to obtain 1m samples from which 3kg
was pulverised to produce a 30g charge for fire assay’). In other
cases more explanation may be required, such as where there is
coarse gold that has inherent sampling problems. Unusual
commodities or mineralisation types (e.g. submarine nodules) may
warrant disclosure of detailed information. |
The 2020
Kwale South Dune Mineral Resources drill data were collected using
the RCAC method.
Duplicate field and laboratory samples were taken at accepted
industry standard ratios of approximately 1 in 20 to 1 in 40.
Field and laboratory standard samples were inserted every 40
samples. Twin drilling analysis was completed during the
2016-17 Kwale drill program at the South Dune, which included a wet
vs. dry drilling analysis.
RCAC drilling was used to obtain 1 to 3 m samples from which
approximately 1.2-2.5 kg was collected using a rotary splitter,
mounted beneath a cyclone. Drilling completed in the 2016-17
Kwale drill program was sampled at a 1.5m interval, which produced
an average 3kg sample from a 25% split of the rotary splitter
cycle.
The sample is dried, de-slimed (material less than 45µm removed)
and then oversize (material +1mm) is removed.
Approximately 100g of the resultant sample was then subjected to a
HM float/sink technique using tetra-bromo-ethane (TBE: SG=2.92-2.96
g/cm3). Assay of the 2016-17 Kwale drill program
samples was completed at Kwale site using lithium polytungstate
(LST) with an SG of 2.85g/cm3.
The resulting HM concentrate is then dried and weighed. |
Drilling
techniques |
Drill type (e.g.
core, reverse circulation, open-hole hammer, rotary air blast,
auger, Bangka, sonic, etc) and details (e.g. core diameter, triple
or standard tube, depth of diamond tails, face-sampling bit or
other type, whether core is oriented and if so, by what method,
etc). |
RCAC
drilling utilising 71 mm diameter air-core tooling accounts for all
drill sample data applied to the 2020 Kwale South Dune Mineral
Resources estimate. All holes are drilled vertically with no
downhole surveying to confirm hole direction.
All Tiomin, open-hole drill data were excluded from the 2020 Kwale
South Dune Mineral Resources estimate. |
Drill sample
recovery |
Method of recording and assessing core and chip sample
recoveries and results assessed.
Measures taken to maximise sample recovery and ensure
representative nature of the samples.
Whether a relationship exists between sample recovery and grade
and whether sample bias may have occurred due to preferential
loss/gain of fine/coarse material. |
Ground
conditions vary and, as such, Base Resources log sample
quality/condition at the rig as either good, moderate or poor, with
‘good‘ meaning not contaminated and of an appropriate sample size
(recovery), ‘moderate’ meaning not contaminated, but sample over or
undersized, and ‘poor’ meaning contaminated or grossly
over/undersized.
For the 2016-17 Kwale drill program, the use of water injection was
also logged in the sample quality field for every sample interval
(dry, moist, injected or wet). Minor sample loss was observed, and
the splitter rectified during the first week of drilling. No
further sample loss has been recorded. The configuration of
drilling and nature of sediments encountered results in negligible
loss.
Drill penetration is halted at the end of each sample interval to
allow time for the sample to return to surface and be
collected. Drilling proceeds once sample delivery ceases.
Sampling on the drill rig is observed to ensure that rotary
splitter remains clean. Water flush and manual cleaning of
the cyclone occurs at regular intervals to ensure contamination is
minimised.
No relationship is believed to exist between grade and sample
recovery. The high percentage of clay and low hydraulic inflow of
groundwater results in a sample size that is well within the
expected size range.
Negligible fines losses were identified during twin drilling
analysis of the 2016-17 Kwale drill program. |
Logging |
Whether core and chip samples have been geologically and
geotechnically logged to a level of detail to support appropriate
Mineral Resource estimation, mining studies and metallurgical
studies.
Whether logging is qualitative or quantitative in nature. Core
(or costean, channel, etc) photography.
The total length and percentage of the relevant intersections
logged. |
Base
Resources collects detailed qualitative logging of geological
characteristics to allow a comprehensive geological interpretation
to be carried out.
Logging of HM sinks with a microscope also is used to inform the
geological interpretation.
Logging of RCAC samples recorded sample condition, estimated
slimes, washability, colour, lithology, dominant grainsize,
coarsest grainsize, sorting, induration type, hardness, estimated
rock and estimated HM.
All drill holes are logged in full and all samples with observed HM
(and designated for assay) are assayed. All drill holes were logged
in full and all samples were assayed and used in the resource
estimation exercise. |
Sub-sampling techniques and sample preparation |
If core, whether
cut or sawn and whether quarter, half or all core taken. |
All samples are
unconsolidated and comprise sand, silt, clay and rock
fragments. |
If
non-core, whether riffled, tube sampled, rotary split, etc and
whether sampled wet or dry.
For all sample types, the nature, quality and appropriateness of
the sample preparation technique.
Quality control procedures adopted for all sub-sampling stages
to maximise representivity of samples.
Measures taken to ensure that the sampling is representative of
the in-situ material collected, including for instance results for
field duplicate/second-half sampling.
Whether sample sizes are appropriate to the grain size of the
material being sampled. |
Base
Resources rotary split the samples on the drill rig as they are
delivered from drilling (wet, moist, injected or dry). Low
groundwater pressure and rotary splitting delivers a representative
sample for logging. The 25% split delivered approximately 3kg of
sample for analysis during the 2016-17 Kwale drill program.
Drill samples are dried then riffle split to produce a ~300g sample
for de-sliming and oversize removal. The resultant sand
fraction is then delivered to the laboratory for heavy liquid
(LST) separation.
Sample preparation is consistent with industry best practice.
For the 2016-17 Kwale drill program, a formal procedure and flow
sheet was developed with detailed QA/QC protocols applied.
QA/QC in the form of laboratory and rig duplicates were used to
monitor laboratory performance. Laboratory and rig duplicates were
submitted at the rate of approximately 1 in 20 each for a combined
submission rate of one in 10.
Two standard samples were created for the commencement of the
2016-17 Kwale drill program. Bulk samples of Kwale Central
Dune ore were mixed, rotary split and sent for certification
analysis. Standards were inserted at a rate of 1 in 40 in the
field and another prior to HM assay to test sample preparation and
assay accuracy.
Twin drilling analysis was introduced for the 2016-17 Kwale drill
program, which included water injected vs. dry drilling
analysis.
Analysis of sample duplicates and twin drilling data were
undertaken by standard geostatistical methodologies to test for
bias and to ensure that sample splitting was
representative.
Given that the grain size of the material being sampled is sand and
approximately 70 to 300 µm, an average sample size of 1.2 - 3 kg is
more than adequate. |
Quality of assay
data and laboratory tests |
The
nature, quality and appropriateness of the assaying and laboratory
procedures used and whether the technique is considered partial or
total.
For geophysical tools, spectrometers, handheld XRF instruments,
etc., the parameters used in determining the analysis including
instrument make and model, reading times, calibrations factors
applied and their derivation, etc.
Nature of quality control procedures adopted (e.g. standards,
blanks, duplicates, external laboratory checks) and whether
acceptable levels of accuracy (i.e. lack of bias) and precision
have been established. |
The Base
Resources laboratory flow sheet comprises a sample preparation
stage (completed by Base personnel) and an HM assay stage completed
by contracted laboratories. Assay was completed by Western
Geolabs (Perth) for previous resource drilling using a TBE heavy
liquid separation. The Kwale site lab, managed by SGS, was used for
the 2016-17 Kwale drill program samples. A LST heavy liquid
separation medium is used by SGS.
The sample analysis process produced the following assays:
- HM > 45 micrometres, < 1 mm, > 2.85 SG
- slime (SL) < 45 micrometres
- oversize (OS) > 1 mm
Sample preparation involves de-sliming the sample prior to oven
drying to prevent clay minerals being baked onto the HM grains. A
separate sample is split and dried to determine moisture content,
which is then back calculated to correct the assayed
grades.
Quality control protocols include two duplicate assaying
procedures. A duplicate sample is generated at the drill rig and
another at the sample preparation stage. Both duplicates are
included at a 1:20 ratio and are subjected to the remainder of the
sample preparation and assay process.
A field and a laboratory standard were introduced for the 2016-17
Kwale drill program. One was inserted in the field and the
other, prior to HM assay at a 1:40 ratio.
Mineralogical analysis is performed by back-calculation of XRF
results to an in-ground mineral assemblage, verified by
quantitative analysis (SEM-EDX and QEMSCAN). Both individual
sample interval XRF and composite sample XRF data are included in
resource estimates.
Assay technique and quality assurance protocols are considered
industry best practice.
No geophysical, portable XRF etc. instruments were used.
Field duplicates, sample preparation duplicates and laboratory
replicates are submitted for precision and bias analysis. Excepting
significant sample size bias as a result of poor splitter gate
construction on the RCAC drill rig observed in recent drilling,
assay results show acceptable correlation and no bias.
Audit samples were sent to alternative laboratories (Diamantina and
Independent Diamond Laboratories) to verify results from Western
Geolabs for previous resource drill samples. No blanks or standards
were submitted by Base Resources during this period. Results
returned within acceptable limits.
Standard samples were introduced for the 2016-17 Kwale drill
program. Standards were monitored by control charts and
re-assay completed when results fell outside control chart limits
(mean + 3SD). Re-assay was completed for standards failures
and all data are now corrected. |
Verification of
sampling and assaying |
The
verification of significant intersections by either independent or
alternative company personnel.
The use of twinned holes.
Documentation of primary data, data entry procedures, data
verification, data storage (physical and electronic)
protocols.
Discuss any adjustment to assay data. |
The
deposit type and consistency of mineralization leaves little room
for unexplained variance. Verification of intersections was
limited to checking for variance between logged estimates of grade
and the assayed grades. Where there was unexplained variance,
samples were re-submitted for assay.
Twinned holes were completed during the 2016-17 Kwale drill
program. These were used for statistical analysis of
short-range geological and assay field variability for the resource
estimation. Assay fields showed acceptable correlation and an
absence of bias.
A comparison of dry vs. water injection was included in the twin
drilling analysis. Negligible Slimes losses were established
by the practice of dry drilling for the 2016-17 Kwale drill
program.
Data collected by Base Resources is entered digitally in the field
and uploaded to Microsoft Access prior to being migrated to a more
secure SQL database, hosted on the Kwale site server. The SQL
database is subject to regular back-up and access is limited to the
Exploration Superintendent and business applications
administrator.
Assay data adjustments are made to convert laboratory collected
weights to assay field percentages and to account for
moisture. |
Location of data
points |
Accuracy and quality of surveys used to locate drill holes
(collar and down-hole surveys), trenches, mine workings and other
locations used in Mineral Resources estimation.
Specification of the grid system used.
Quality and adequacy of topographic control. |
Base
Resources used a real time kinematic global positioning system
(RTK GPS) to survey drill sites.
The grid system used is the Arc1960 (zone 37 South). Modelling was
conducted in a rotated local mine grid.
LIDAR surveys flown in 2013 and 2015 were joined to cover the
resource areas. Drill holes were projected to this surface
prior to resource estimation. Stated accuracy of the LIDAR
survey is 0.015m. |
Data spacing and
distribution |
Data
spacing for reporting of Exploration Results.
Whether the data spacing and distribution is sufficient to
establish the degree of geological and grade continuity appropriate
for the Mineral Resources and Ore Reserves estimation procedure(s)
and classifications applied.
Whether sample compositing has been applied. |
The
drill data spacing is nominally 100m North, 50m East, and 1.5m down
hole for the 2016-17 Kwale drill program. Previous drilling
is nominally spaced at 200m North, 100m East and has a 3m down-hole
sample interval. Variations occur when lower-density drilling is
applied to exploration areas or from line-clearing difficulties
prior to drilling and drill site survey.
Based on the experience of the competent person, the data spacing
and distribution through the drill hole programs Is considered
adequate for the assigned Mineral Resources classifications. HM
grade continuity was verified using variography of the discrete
geological domains.
No sample compositing or de-compositing has been applied to
previous resource estimates. The majority of previous sampling was
taken on 3 m intervals with some 1 m intervals drilled for
geological boundary definition on a vertical basis. Sample length
weighting was used during the interpolation process.
For the 2020 Kwale South Dune Mineral Resource, all historic 3m
sample intervals are de-composited to 1.5m for the
interpolation. Samples for mineralogical analysis were
composited, generally on-section, on a like-for-like basis with
reference to HM sink logs and conforming to the geological
interpretation. |
Orientation of data
in relation to geological structure |
Whether the orientation of sampling achieves unbiased sampling
of possible structures and the extent to which this is known,
considering the deposit type.
If the relationship between the drilling orientation and the
orientation of key mineralised structures is considered to have
introduced a sampling bias, this should be assessed and reported if
material. |
Sample
orientation is vertical and approximately perpendicular to the dip
and strike of the mineralisation resulting in true thickness
estimates. Drilling and sampling are carried out on a regular
rectangular grid that is broadly aligned and in a ratio consistent
with the anisotropy of the mineralisation.
There is no apparent bias arising from the orientation of the drill
holes with respect to the strike and dip of the deposit. |
Sample
security |
The measures taken
to ensure sample security. |
All samples are
numbered, with samples split and residues stored securely at the
Kwale site, along with HM sinks. |
Audits or
reviews |
The results of any
audits or reviews of sampling techniques and data. |
GNJ
Consulting Pty Ltd and IHC Robbins conducted reviews of previous
Mineral Resources estimates completed by Base Resources.
Hornet Drilling and Geological Services Pty Ltd conducted three
site visits during preparation and data collection stages relating
to the 2016-17 Kwale drill program. These were made to
establish and review drilling, sample preparation and geological
interpretation procedures and monitor adherence. Minor
recommended changes were made on each occasion.
IHC Robbins was engaged to complete peer review of the 2020 Kwale
South Dune Mineral Resource estimate. |
Section 2 Reporting of Exploration
Results
(Criteria listed in the preceding section also apply to this
section.)
Criteria |
Explanation |
Comment |
Mineral tenement
and land tenure status |
Type,
reference name/number, location and ownership including agreements
or material issues with third parties such as joint ventures,
partnerships, overriding royalties, native title interests,
historical sites, wilderness or national park and environmental
settings.
The security of the tenure held at the time of reporting along
with any known impediments to obtaining a licence to operate in the
area. |
The
resource lies within the granted Prospecting Licence
2018/0119. Mining is currently taking place on the Kwale
South Dune deposit within Special Mining Lease No.23. An ad valorem
royalty of 2% is payable to the previous owners, and a 2.5% royalty
is currently payable to the Kenyan government.
There are no known impediments to the security of tenure for the
Kwale Operations deposits. |
Exploration done by
other parties |
Acknowledgment and
appraisal of exploration by other parties. |
The previous owners of
the project (Tiomin Kenya Ltd) undertook exploration over the Kwale
Project prior to purchase by Base Resources. Analysis of
twinned holes, grade distributions and geological zone thickness
has led to Tiomin’s data being excluded from this Mineral Resource
estimation. |
Geology |
Deposit type,
geological setting and style of mineralisation. |
The Kwale South Dune
deposit is an aeolian detrital heavy mineral sand deposit. |
Drill hole
Information |
A
summary of all information material to the understanding of the
exploration results including a tabulation of the following
information for all Material drill holes:
- easting and northing of the drill hole collar
- elevation or RL (Reduced Level – elevation above sea level
in metres) of the drill hole collar
- dip and azimuth of the hole
- down hole length and interception depth
- hole length.
If the exclusion of this information is justified on the basis
that the information is not Material and this exclusion does not
detract from the understanding of the report, the Competent Person
should clearly explain why this is the case. |
There are no
particular drill hole results that are considered material to the
understanding of the exploration and resource drill out.
Identification of the wide and thick zone of mineralisation is made
via multiple intersections of drill holes and to list them all
would not give the reader any further clarification of the
distribution of mineralisation throughout the deposit. |
Data aggregation
methods |
In
reporting Exploration Results, weighting averaging techniques,
maximum and/or minimum grade truncations (e.g. cutting of high
grades) and cut-off grades are usually Material and should be
stated.
Where aggregate intercepts incorporate short lengths of
high-grade results and longer lengths of low-grade results, the
procedure used for such aggregation should be stated and some
typical examples of such aggregations should be shown in
detail.
The assumptions used for any reporting of metal equivalent
values should be clearly stated. |
No grade
cutting was undertaken, nor compositing or aggregation of grades
made prior or post the grade interpolation into the block model.
Selection of the bottom basal contacts of the mineralised domains
were made based on discrete logging and grade information collected
and assayed by Base Resources and Tiomin.
No data aggregation has been performed.
No metal equivalents were used for reporting of Mineral
Resources. |
Relationship
between mineralisation widths and intercept lengths |
These
relationships are particularly important in the reporting of
Exploration Results.
If the geometry of the mineralisation with respect to the drill
hole angle is known, its nature should be reported.
If it is not known and only the down hole lengths are reported,
there should be a clear statement to this effect (e.g. ‘down hole
length, true width not known’). |
All
drill holes are vertical and perpendicular to the dip and strike of
mineralisation and therefore all interceptions are approximately
true thickness.
|
Diagrams |
Appropriate maps
and sections (with scales) and tabulations of intercepts should be
included for any significant discovery being reported These should
include, but not be limited to a plan view of drill hole collar
locations and appropriate sectional views. |
Refer to main body of
this announcement. |
Balanced
reporting |
Where comprehensive
reporting of all Exploration Results is not practicable,
representative reporting of both low and high grades and/or widths
should be practiced to avoid misleading reporting of Exploration
Results. |
Reporting of results
is restricted to Mineral Resources and Ore Reserves estimates
generated from geological and grade block modelling. |
Other substantive
exploration data |
Other exploration
data, if meaningful and material, should be reported including (but
not limited to): geological observations; geophysical survey
results; geochemical survey results; bulk samples – size and method
of treatment; metallurgical test results; bulk density,
groundwater, geotechnical and rock characteristics; potential
deleterious or contaminating substances. |
Bulk density is
derived from algorithm. The reason for this Mineral Resource
update is the decision to reduce the algorithm derived bulk
densities by 5%. This is discussed in the main body of this
announcement and below in Section 3. |
Further
work |
The
nature and scale of planned further work (e.g. tests for lateral
extensions or depth extensions or large-scale step-out
drilling).
Diagrams clearly highlighting the areas of possible extensions,
including the main geological interpretations and future drilling
areas, provided this information is not commercially
sensitive. |
No further work is
planned at this stage. |
Section 3 Estimation and Reporting of
Mineral Resources
(Criteria listed in section 1, and where relevant in section 2,
also apply to this section.)
Criteria |
Explanation |
Comment |
Database integrity |
Measures taken to
ensure that data has not been corrupted by, for example,
transcription or keying errors, between its initial collection and
its use for Mineral Resources estimation purposes.
Data validation procedures used. |
The surveying, logging
and assay data were stored in a Microsoft Access database prior to
being imported into a more secure SQL database format.
The drill logs were recorded electronically at the rig for the Base
Resources drilling program, and the hole locations recorded by
hand-held GPS at the time of drilling. The hand-held GPS locations
were used by the RTK GPS operator to locate the holes.
Each field of the drill log database was verified against allowable
entries and any keying errors corrected.
Heavy mineral sing logs were completed against a strict set of
codes and captured digitally.
Look-up tables are employed at data capture stage on
industry-leading software equipped with on-board validation and
quarantine capability. Cross-validation between related
tables is also systematically performed by field logging software.
Data are loaded into a secure SQL database where a second
validation is performed.
Visual comparison is undertaken in cross-section using Mapinfo
software. Sanity checks of sample preparation fields were
undertaken to ensure correct procedure was followed (e.g. sample
weight pre v post-oven drying). Calculation of assay fields
were checked to ensure correct moisture adjustment and weight to
percentage adjustment.
Statistical, out-of-range, distribution, error and missing data
validation is completed on data sets before being compiled for
resource estimation. |
Site visits |
Comment on any site
visits undertaken by the Competent Person and the outcome of those
visits.
If no site visits have been undertaken indicate why this is the
case. |
Richard Stockwell established
industry-leading procedures for data capture and storage for the
2016-17 Kwale drill program. Three site visits were completed
by Mr Stockwell during data capture stages and recommendations were
made where improvements were required. There were no issues
observed that might be considered material to the Mineral Resource
under consideration. |
Geological interpretation |
Confidence in (or
conversely, the uncertainty of) the geological interpretation of
the mineral deposit.
Nature of the data used and of any assumptions made.
The effect, if any, of alternative interpretations on Mineral
Resources estimation.
The use of geology in guiding and controlling Mineral Resources
estimation.
The factors affecting continuity both of grade and
geology. |
The geological
interpretation is compiled from field geological observations
during drill sample logging, microscope investigation of heavy
mineral sinks and interpretation of sample assay data. A
strong correlation between these three sources of information was
observed and a high degree of confidence results.
The interpreted zones were used to control the wireframed zones in
the resource model. Primary data generated by Base Titanium
was used exclusively for the resource estimation. No
assumptions were made.
The weight of mutually supportive data weakens the case for
alternate geological interpretation.
The Mineral Resources estimate was controlled by the geological /
mineralised surfaces and beneath the topographic surface.
The Kwale Operation deposits sits on top of an erosional high which
is dissected by streams. The extent of geological and
mineralised zones is constrained by the erosional surface
surrounding the basement high.
Heavy mineral grade and geology is consistent within mineralised
horizons, typical of aeolian deposits. Grade and geological
continuity in the lower mineralised horizon (Ore Zone 4) is
compromised by variable induration. |
Dimensions |
The extent and variability of the
Mineral Resources expressed as length (along strike or otherwise),
plan width, and depth below surface to the upper and lower limits
of the Mineral Resources. |
The Kwale South Dune deposit is
approximately 6.5km long, 300-1,000m wide and approximately 12-20 m
thick on average. Mineralisation is present from surface over the
majority of the deposit. |
Estimation and modelling
techniques |
The nature and
appropriateness of the estimation technique(s) applied and key
assumptions, including treatment of extreme grade values,
domaining, interpolation parameters and maximum distance of
extrapolation from data points. If a computer assisted estimation
method was chosen include a description of computer software and
parameters used.
The availability of check estimates, previous estimates and/or
mine production records and whether the Mineral Resources estimate
takes appropriate account of such data.
The assumptions made regarding recovery of by-products.
Estimation of deleterious elements or other non-grade variables
of economic significance (e.g. sulphur for acid mine drainage
characterisation).
In the case of block model interpolation, the block size in
relation to the average sample spacing and the search
employed.
Any assumptions behind modelling of selective mining
units.
Any assumptions about correlation between variables.
Description of how the geological interpretation was used to
control the resource estimates.
Discussion of basis for using or not using grade cutting or
capping.
The process of validation, the checking process used, the
comparison of model data to drill hole data, and use of
reconciliation data if available. |
Geovia Surpac software
was used to estimate the Mineral Resource. Inverse distance
weighting techniques were used to interpolate assay grades from
drill hole samples into the block model and nearest neighbour
techniques were used to interpolate index values into the block
model. The regular dimensions of the drill grid and the
anisotropy of the drilling and sampling grid allowed for the use of
inverse distance methodologies as no de-clustering of samples was
required.
Appropriate and industry standard search ellipses were used to
search for data for the interpolation and suitable limitations on
the number of samples and the impact of those samples was
maintained. An inverse distance weighting of three was used
so as not to over smooth the grade interpolations.
Hard domain boundaries were used and these were defined by the
geological surfaces that were interpreted.
The resource estimate was checked against previous resource
estimates and these are detailed in the report. The 2020
Kwale South Dune Mineral Resource estimate accurately reflects
additional resource discovery in addition to the previously
reported resource estimate.
Reconciliation of current mining operations revealed that the
algorithm derived bulk density was too great by about 5%.
No assumptions were made during the resource estimation as to the
recovery of by-products.
All potentially deleterious elements were included as part of the
mineral composite analysis and were included in the modelling
report. There is no significant sulphide mineralisation.
The average parent cell size used for the 2020 Kwale South Dune
Mineral Resource estimate is approximately half that for the
average drill hole spacing over the bulk of the deposit (100m*100m)
and equal to the dominant sample spacing down-hole employed by the
2016-17 Kwale drill program (1.5m). This resulted in a parent
cell size of 50m*50m*1.5m for the volume model.
No assumptions were made regarding the modelling of selective
mining units however hydraulic mining will be undertaken and the
cell size and the sub cell splitting will allow for an appropriate
ore reserve to be prepared.
No assumptions were made about correlation between variables.
Interpolation was constrained by hard boundaries (domains) that
result from the geological interpretation.
Grade cutting or capping was not used during the interpolation
because of the regular nature of sample spacing and the fact that
samples were not clustered nor wide spaced to an extent where
elevated samples could have a deleterious impact on the resource
estimation.
Sample distributions were reviewed and no extreme outliers were
identified either high or low that necessitated any grade cutting
or capping.
Validation of grade interpolations were done visually In Surpac by
loading model and drill hole files and annotating and colouring and
using filtering to check for the appropriateness of interpolations.
Statistical distributions were prepared for model zones from both
drill holes and the model to compare the effectiveness of the
interpolation. Along strike distributions of section line averages
(swath plots) for drill holes and models were also prepared for
comparison purposes. |
Moisture |
Whether the tonnages are
estimated on a dry basis or with natural moisture, and the method
of determination of the moisture content. |
Tonnages were estimated on a dry
basis. This is based on test work carried out on the bulk density
which was determined on a dry weight basis. |
Cut-off parameters |
The basis of the adopted cut-off
grade(s) or quality parameters applied. |
A 1% HM bottom cut has been applied
to the Mineral Resources estimate. This cut-off is used on a
sub-economic basis in consideration of the valuable heavy mineral
content indicated by mineral assemblage analysis. |
Mining factors or
assumptions |
Assumptions made regarding
possible mining methods, minimum mining dimensions and internal
(or, if applicable, external) mining dilution. It is always
necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider potential
mining methods, but the assumptions made regarding mining methods
and parameters when estimating Mineral Resources may not always be
rigorous. Where this is the case, this should be reported with an
explanation of the basis of the mining assumptions made. |
The mining method is
assumed to be high pressure hydraulic mining, which blends the ore
from top of the face to the bottom.
Hydraulic mining is not selective, which suits the generally thick
and homogenous depositional style of the mineralisation.
Given the thickness of the Kwale South deposit and proposed mining
method, dilution is not considered to be an issue. |
Metallurgical factors or
assumptions |
The basis for assumptions or
predictions regarding metallurgical amenability. It is always
necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider potential
metallurgical methods, but the assumptions regarding metallurgical
treatment processes and parameters made when reporting Mineral
Resources may not always be rigorous. Where this is the case, this
should be reported with an explanation of the basis of the
metallurgical assumptions made. |
The metallurgical
recovery and separability factors are similar to other mineral sand
operations. There are no fine grained lower shoreface
sediments. The level of kyanite is greater than at other
deposits, and the mineral separation plant has been designed to
cater for this.
Metallurgical recoveries have not been considered at the Mineral
Resource estimation stage, and reported tonnes and grade are
therefore in situ. Metallurgical recoveries were applied
during the Ore Reserves estimation process. |
Environmental factors or
assumptions |
Assumptions made regarding
possible waste and process residue disposal options. It is always
necessary as part of the process of determining reasonable
prospects for eventual economic extraction to consider the
potential environmental impacts of the mining and processing
operation. While at this stage the determination of potential
environmental impacts, particularly for a greenfields project, may
not always be well advanced, the status of early consideration of
these potential environmental impacts should be reported. Where
these aspects have not been considered this should be reported with
an explanation of the environmental assumptions made. |
Thickened clay tailings are being
disposed inside a tailing storage facility that was constructed
from sand tailings. The construction of the facility was
completed in 2018. Since then sand tailing has taken place in
the Kwale Central mined void. Mineral separation plant
tailing is disposed with the sand tails. |
Bulk density |
Whether assumed or
determined. If assumed, the basis for the assumptions. If
determined, the method used, whether wet or dry, the frequency of
the measurements, the nature, size and representativeness of the
samples.
The bulk density for bulk material must have been measured by
methods that adequately account for void spaces (vugs, porosity,
etc.), moisture and differences between rock and alteration zones
within the deposit.
Discuss assumptions for bulk density estimates used in the
evaluation process of the different materials. |
An extensive program of
test work was designed by GNJ Consulting and implemented by Base
Resources utilising a procedure to collect Troxler nuclear density
meter measurements and HM and SL assays. These were used in the
development of an algorithm to estimate the bulk density of in situ
material within the deposit based on variable HM and clay (SL).
This sampling was undertaken within the mineralised ore zones of
the Kwale Central Dune deposit during mining operations and
representative sampling was undertaken for those domains.
The style of mining has since changed from bulldozers to hydraulic
mining, making it impossible to collect similar troxler data from
the floor of the pit. It was considered appropriate to
utilise the new bulk density algorithm for the Kwale South Dune
deposit given that the geological units are closely related and
part of the same sequence (given the close local proximity this was
also a reasonable assumption).
Assumptions were made regarding packing factor of sand, bulk
density of HM, sand and clay in the development of the bulk density
algorithm. The algorithm was refined using nuclear density
meter measurement of the soil profile being sampled.
The use of a bulk density algorithm is considered industry standard
practice for the estimation of mineral sands Mineral Resources.
However, the algorithm derived for Kwale Central has been
found by monthly mine reconciliations to be exaggerating the bulk
density by approximately 5%. Therefore, the decision was made
to cut the algorithm derived bulk densities by 5% and re-estimate
the resource, which is the subject of this report. |
Classification |
The basis for the
classification of the Mineral Resources into varying confidence
categories.
Whether appropriate account has been taken of all relevant
factors (i.e. relative confidence in tonnage/grade estimations,
reliability of input data, confidence in continuity of geology and
metal values, quality, quantity and distribution of the
data).
Whether the result appropriately reflects the Competent Person’s
view of the deposit. |
The classification for
the 2020 Kwale South Dune Mineral Resources estimate was based on
the following criteria: drill hole spacing; experimental
semi-variograms; the quality of QA/QC processes; post-depositional
modification and the distribution of mineral assemblage
samples.
The classification of the Measured and Indicated Mineral Resources
for the 2020 Kwale South Dune Mineral Resources estimate were
supported by all of the criteria as noted above.
The Competent Person considers that the result appropriately
reflects a reasonable view of the deposit categorisation. |
Audits or reviews. |
The results of any audits or
reviews of Mineral Resources estimate. |
SRK undertook an audit of the
resource estimate and found it to be suitable for reserve
optimisation. |
Discussion of relative accuracy/
confidence |
Where appropriate a
statement of the relative accuracy and confidence level in the
Mineral Resources estimate using an approach or procedure deemed
appropriate by the Competent Person. For example, the application
of statistical or geostatistical procedures to quantify the
relative accuracy of the resource within stated confidence limits,
or, if such an approach is not deemed appropriate, a qualitative
discussion of the factors that could affect the relative accuracy
and confidence of the estimate.
The statement should specify whether it relates to global or
local estimates, and, if local, state the relevant tonnages, which
should be relevant to technical and economic evaluation.
Documentation should include assumptions made and the procedures
used.
These statements of relative accuracy and confidence of the
estimate should be compared with production data, where
available. |
Variography was
completed for the 2020 Kwale South Dune Mineral Resource
estimate. Results of variography, qualitative assessment of
the Mineral Resource estimate and comparison with previous resource
estimates indicates the robustness of this particular resource
estimation exercise.
The estimates are global.
Trial mining and pilot plant-scale mineral processing of Kwale
South Dune ore has shown it to be similar to the Kwale Central Dune
Ore Zone 1 material currently being mined and fed to the MSP.
No alteration to the MSP is recommended for treatment of the South
Dune ore. |
Section 4 Estimation and Reporting of
Ore Reserves
Criteria |
Explanation |
Comment |
Mineral Resource estimate for
conversion to Ore Reserves |
Description of the
Mineral Resource estimate used as a basis for the conversion to an
Ore Reserve.
Clear statement as to whether the Mineral Resources are reported
additional to, or inclusive of, the Ore Reserves. |
The 2020 Kwale South
Dune Mineral Resources estimate by Base Resources, reported at 31
March 2020, was used as the basis for this Ore Reserve.
This Mineral Resource estimate was based on that disclosed to the
market on 4 October 2017 but with adjustment to bulk density,
adjustments for boundary change to the Prospecting Licence
2018/0119 and adjustments for mining to the period ended 31 March
2020 (depletion and sterilisation).
Mineral Resources are reported inclusive of the Ore Reserves. |
Site visits |
Comment on any site
visits undertaken by the Competent Person and the outcome of those
visits.
If no site visits have been undertaken indicate why this is the
case. |
One of the competent persons works
on site and visits frequently during the operational phase. |
Study status |
The type and level
of study undertaken to enable Mineral Resources to be converted to
Ore Reserves.
The Code requires that a study to at least Pre-Feasibility Study
level has been undertaken to convert Mineral Resources to Ore
Reserves. Such studies will have been carried out and will have
determined a mine plan that is technically achievable and
economically viable, and that material Modifying Factors have been
considered. |
The most recent study
prior to operations commencing was a detailed feasibility study
(DFS).
The project is now operational and study inputs are based on
operational costs, design, and mine plan.
The mine has been operating as a solely HMU operation since July
2018. |
Cut-off parameters |
The basis of the cut-off grade(s)
or quality parameters applied. |
Cut-off is economic by
maximum cash flow method. A value model is constructed that assigns
costs and revenue after application of appropriate process
recoveries.
There is no ore/waste delineation within the pit design due to the
mining method employed (non-selective) and dunal
mineralization. |
Mining factors or
assumptions |
The method and
assumptions used as reported in the Pre-Feasibility or Feasibility
Study to convert the Mineral Resource to an Ore Reserve (i.e.
either by application of appropriate factors by optimisation or by
preliminary or detailed design).
The choice, nature and appropriateness of the selected mining
method(s) and other mining parameters including associated design
issues such as pre-strip, access, etc.
The assumptions made regarding geotechnical parameters (e.g. pit
slopes, stope sizes, etc.), grade control and pre-production
drilling.
The major assumptions made and Mineral Resource model used for
pit and stope optimisation (if appropriate).
The mining dilution factors used.
The mining recovery factors used.
Any minimum mining widths used.
The manner in which Inferred Mineral Resources are utilised in
mining studies and the sensitivity of the outcome to their
inclusion.
The infrastructure requirements of the selected mining
methods. |
Mineral Resources are
converted to Ore Reserves by pit optimization as a guide for
detailed design and scheduling. Potential pit shells were
created by decreasing the revenue by 1% decrements and scheduled at
a high level. These were short listed by analysis of various
factors including NPV, IRR, revenue:cost ratio, marginal cashflow,
product output production rates etc. The schedules for the
short-listed shells were input to the project financial model and
the ultimate shell for detailed mine planning and scheduling
selected.
Schedule physicals have then been incorporated into the Base
operating financial model and assessed against up to date
inputs.
Mining of the Kwale South dune is undertaken solely by HMU methods.
The HMU mining method has achieved all design throughput rates
since commencement of operations at Kwale South.
The Resource model used throughout the study mine planning work was
kwsth_171001.mdl.
The pit slopes are currently about 50 degrees in Ore 1 and Ore 4 at
the South Dune. The study uses more conservative slope angles of 35
degrees for South Dune.
The ore is scheduled to be mined in a radial extraction centered on
proposed HMU sump locations. Sump locations have been estimated by
considering low points in the economic mineralization, constrained
to larger mining blocks defined by watershed analysis of the lower
ore surface. These larger blocks vary in dimension due to the
surface undulation, however the smallest of those remaining to be
mined is 31 Ha in plan area. The size of these blocks is not
considered to represent any concerns with respect to minimum mining
width and the proposed HMU method demonstrates the selectivity
required to mine to the pit extents even at the boundaries of the
dune mineralization where the depth of pit is low.
No inferred material is included in the study.
There is no ore/waste discrimination and sub-economic material that
cannot be selectively mined is included as planned dilution in the
ore feed.
Mining Recovery of Hardness > 2 material is largely discounted
by raising pit floor to exclude from design. Small amounts of this
material (representing less than 1% of the pit inventory) report
fully inside the pit design on a localized basis, however these
have been excluded from the process feed and Ore Reserve estimate
as being unrecoverable using a HMU mining method.
Mining Recovery makes provision for a 0.2 m topsoil profile which
is excluded from reported ore material.
All infrastructure is in place and operational. |
Metallurgical factors or
assumptions |
The metallurgical
process proposed and the appropriateness of that process to the
style of mineralisation.
Whether the metallurgical process is well-tested technology or
novel in nature.
The nature, amount and representativeness of metallurgical test
work undertaken, the nature of the metallurgical domaining applied
and the corresponding metallurgical recovery factors
applied.
Any assumptions or allowances made for deleterious
elements.
The existence of any bulk sample or pilot scale test work and
the degree to which such samples are considered representative of
the orebody as a whole.
For minerals that are defined by a specification, has the ore
reserve estimation been based on the appropriate mineralogy to meet
the specifications? |
The ore is processed
via screens, thickeners, and spirals, as in almost every other
mineral sands operation to produce a concentrate. This is
processed using magnetic and conductor separators to produce
ilmenite and rutile products. The remaining material is
further processed using classifiers, wet tables and cleaned with
conductor separators to produce zircon and recover some more
rutile. This is not an unusual process for mineral sands but
has been tailored to suit the higher than normal proportion of
kyanite, which has similar physical properties to zircon.
The plant design was based on the results of metallurgical test
work conducted as part of the definitive feasibility study.
Test work on site is ongoing to find ways to improve zircon and
rutile recovery.
Wet Plant Recovery used is 94%, 90%, and 94.5% for Ilmenite, Rutile
and Zircon respectively.
Dry Plant Recovery used is 100%, 99%, and 77% for Ilmenite, Rutile
and Zircon respectively.
Plant recoveries used are supported by actual operating recoveries
currently achieved by the operation, with wet plant recoveries
discounted due to projected reduced feed HM grade associated with
the lower grade South Dune Resource. Actual MSP mineral recoveries
are currently higher than the study inputs as separation efficiency
has improved since feeding the Kwale South ore. |
Environmental |
The status of studies of
potential environmental impacts of the mining and processing
operation. Details of waste rock characterisation and the
consideration of potential sites, status of design options
considered and, where applicable, the status of approvals for
process residue storage and waste dumps should be
reported. |
All environmental approvals are in
place and there is also a monitoring and reporting process.
There is no waste material. There are two tailings streams:
sand and clay. The sand tails are clean sand having been washed in
concentrator. The clay tails are flocculated and thickened prior to
pumping. There is an approved tailing storage facility, which is a
dam with walls constructed from sand tails to contain the clay
tails. |
Infrastructure |
The existence of appropriate
infrastructure: availability of land for plant development, power,
water, transportation (particularly for bulk commodities), labour,
accommodation; or the ease with which the infrastructure can be
provided, or accessed. |
The plant has been
constructed. A 132 kV power line has been erected and
supplies electricity to the site. An 8 km bitumen access road
from the highway has been constructed. There is a camp that
was built to house construction employees that is being used to
house operational shift workers. The ship loading facility
has loaded several ships thus far. An 8 Gl dam on the
Mukurumudzi River has been constructed that will supply most of the
water for the project, supplemented by a bore field. |
Costs |
The derivation of,
or assumptions made, regarding projected capital costs in the
study.
The methodology used to estimate operating costs.
Allowances made for the content of deleterious elements.
The source of exchange rates used in the study.
Derivation of transportation charges.
The basis for forecasting or source of treatment and refining
charges, penalties for failure to meet specification, etc.
The allowances made for royalties payable, both Government and
private. |
Capital has been
expended and is sunk.
Operating costs were collated and supplied by the site from the
latest operating budget.
Deleterious minerals kyanite and monazite are present. A
large section of the plant is devoted to separating kyanite from
zircon. Monazite is present in small amounts and it is mixed
with the slime tails and disposed of.
All Revenue and Costs inputs are in USD.
The cost of transportation from the plant to the port is in
accordance with the transport contract.
Royalties of 2.5% and 2% are payable to the Kenyan government and
the previous owners respectively, though for this study a more
conservative 7.05% has been used (incorporating increased Kenyan
government royalty and custom duty). |
Revenue factors |
The derivation of,
or assumptions made regarding revenue factors including head grade,
metal or commodity price(s) exchange rates, transportation and
treatment charges, penalties, net smelter returns, etc.
The derivation of assumptions made of metal or commodity
price(s), for the principal metals, minerals and
co-products. |
Product price forecasts
are based on Base internal price deck assumptions over the period
for which Kwale South is projected to be mined.
Straight line product prices have been used for mine planning
studies (optimization, value modelling) and a variable price deck
used for final economic modelling. Both revenue models reconcile
well in totality, though there is a reduction in the Zircon pricing
assumption between the initial and final value models due to easing
market conditions in the intervening period. |
Market assessment |
The demand, supply
and stock situation for the particular commodity, consumption
trends and factors likely to affect supply and demand into the
future.
A customer and competitor analysis along with the identification
of likely market windows for the product.
Price and volume forecasts and the basis for these
forecasts.
For industrial minerals the customer specification, testing and
acceptance requirements prior to a supply contract. |
Ilmenite and rutile are
primarily used as feedstock to produce titanium dioxide (TiO2)
pigment, with a small percentage also used in the production of
titanium metal and fluxes for welding rods and wire. TiO2 is
the most widely used white pigment because of its non-toxicity,
brightness, and very high refractive index. It is an
essential component of consumer products such as paint, plastics,
and paper. Pigment demand is therefore the major driver of
ilmenite and rutile pricing.
Demand for mineral sands products has generally been closely linked
to growth in global GDP. Historically demand has grown on
average at 3% per annum. This become more volatile in recent
years due to very large swings in re-stocking and de-stocking
events throughout the supply chains during and following the global
financial crisis. Demand had begun re-aligning with GDP in
recent years but a short-term departure of the relationship with
GDP is likely to re-occur to some extent during the economic
volatility caused by Covid-19.
Base Resources performs its own internal assessment of the market
and also subscribes to the various market outlook and commentaries
provided by TZMI and other independent sources. The latest
consensus indicates prices for ilmenite, rutile and zircon being
under pressure over the next 12-18 months followed by a recovery
from 2022. |
Economic |
The inputs to the
economic analysis to produce the net present value (NPV) in the
study, the source and confidence of these economic inputs including
estimated inflation, discount rate, etc.
NPV ranges and sensitivity to variations in the significant
assumptions and inputs. |
As an operating mine
with sunk construction cost, optimisation inputs are based on
actual operating costs, design and mine plan, together with Base
Resources’ internal price forecasts. Economic analysis has been
conducted by incorporating these inputs into the Kwale Operations
life of mine financial model.
Economic analysis is based on discounted operating surplus (at 10%
discount rate) and sensitivities +/- 30% have been conducted on
individual product Revenues and operating costs. The project
returns a positive operating NPV under the range of sensitivity
factors assessed.
A ‘stressed’ low product price deck has also been considered in the
schedule model economic analysis (reflecting total revenue at 60%
of study base case assumptions) and the project remains
operationally cash positive under this model. |
Social |
The status of agreements with key
stakeholders and matters leading to social licence to
operate. |
Base Resources has all agreements in
place to allow ongoing mining and processing. The company
operates a comprehensive Stakeholder Engagement Plan in concert
with a Community Development Plan. Close liaison with stakeholders
is maintained through the operation of series of liaison committees
representing those affected by the mine’s presence. |
Other |
To the extent
relevant, the impact of the following on the project and/or on the
estimation and classification of the Ore Reserves:
Any identified material naturally occurring risks.
The status of material legal agreements and marketing
arrangements.
The status of governmental agreements and approvals critical to
the viability of the project, such as mineral tenement status, and
government and statutory approvals. There must be reasonable
grounds to expect that all necessary Government approvals will be
received within the timeframes anticipated in the Pre-Feasibility
or Feasibility study. Highlight and discuss the materiality of any
unresolved matter that is dependent on a third party on which
extraction of the reserve is contingent. |
The material legal
agreements relating to the Kwale Operation are the Special Mining
Lease No.23 and Investment Agreement with the Government of
Kenya. Both legal instruments remain valid, legally binding,
and enforceable as warranted by the Government most recently in
September 2012 in a direct agreement with Base Resources and its
lenders.
A portion of the Mineral Resource will require an extension of the
existing SML 23 boundary to the south of the current approved area
in order to be extracted. The process to obtain this boundary
extension is underway however at the date of this estimate that
process is still ongoing and there remains an element of
uncertainty that such approvals will be granted. Due to this
material uncertainty, Ore Reserve estimation conducted for this
update has been restricted to considering only the Mineral Resource
wholly contained within the existing SML 23 Mining Lease
boundary. |
Classification |
The basis for the
classification of the Ore Reserves into varying confidence
categories.
Whether the result appropriately reflects the Competent Person’s
view of the deposit.
The proportion of Probable Ore Reserves that have been derived
from Measured Mineral Resources (if any). |
Based on the geological
resource estimation categories: Measured = Proved, Indicated =
Probable, Inferred = excluded from Ore Reserve estimation.
The classification appropriately reflects the Competent Person’s
view of the deposit.
No Probable Ore Reserves have been derived from Measured Mineral
Resources. |
Audits or reviews |
The results of any audits or
reviews of Ore Reserve estimates. |
No audit or review of this Ore
Reserve estimate has been undertaken. |
Discussion of relative accuracy/
confidence |
Where appropriate a
statement of the relative accuracy and confidence level in the Ore
Reserve estimate using an approach or procedure deemed appropriate
by the Competent Person. For example, the application of
statistical or geostatistical procedures to quantify the relative
accuracy of the reserve within stated confidence limits, or, if
such an approach is not deemed appropriate, a qualitative
discussion of the factors which could affect the relative accuracy
and confidence of the estimate.
The statement should specify whether it relates to global or
local estimates, and, if local, state the relevant tonnages, which
should be relevant to technical and economic evaluation.
Documentation should include assumptions made and the procedures
used.
Accuracy and confidence discussions should extend to specific
discussions of any applied Modifying Factors that may have a
material impact on Ore Reserve viability, or for which there are
remaining areas of uncertainty at the current study stage.
It is recognised that this may not be possible or appropriate in
all circumstances. These statements of relative accuracy and
confidence of the estimate should be compared with production data,
where available. |
There are no
assumptions used in this Ore Reserve estimate that differ from
current operating practice and hence subject to a greater degree of
uncertainty. Considerable experience and confidence with the
HMU mining method has been gained through the successful
implementation and upgrade of the first HMU on site at the Central
Dune and subsequent increase to 2400 tph production rates used
in this estimate at Kwale South.
The statement refers to global estimates.
There is a 110% rutile reconciliation factor that is the subject of
ongoing investigation. All potential sources of error in
estimation of the rutile grades found in the resource model are
under scrutiny, from sample preparation bias through mineralogical
data generation and grade interpolation. A large number of
samples have been re-submitted for assay, but results are not
available yet. Depending on the outcome of the investigation,
a further ASX announcement may be made.
Review of actual individual HMU feed rates has highlighted that
target production rates can be negatively impacted whilst mining in
areas of low face height, Despite this, in the three reporting
quarters since operations commenced at Kwale South, combined HMU
production has averaged 4.6Mt per quarter, achieving the target
design combined feed rate of 2400 tph as the operation has achieved
runtimes exceeding budgeted targets. Future mining is anticipated
to advance to areas of greater face height as mining progresses
southwards and individual HMU feed rates are expected to return to
levels experienced in the first quarter of mining operations.
For the current financial year to 31 March 2020 actual ore tonnes
mined was 95.1% of the Ore Reserve model depleted ore tonnes and HM
tonnes 102.4% on the same basis. |
Glossary
Competent Person |
The JORC Code requires
that a Competent Person must be a Member or Fellow of The
Australasian Institute of Mining and Metallurgy, or of the
Australian Institute of Geoscientists, or of a ‘Recognised
Professional Organisation’. A Competent Person must have a
minimum of five years’ experience working with the style of
mineralisation or type of deposit under consideration and relevant
to the activity which that person is undertaking. |
DTM |
Digital Terrain
Model. |
Indicated Resource |
An Indicated Mineral
Resource is that part of a Mineral Resource for which quantity,
grade (or quality), densities, shape and physical characteristics
are estimated with sufficient confidence to allow the application
of Modifying Factors in sufficient detail to support mine planning
and evaluation of the economic viability of the deposit. |
Inferred Resource |
An Inferred Mineral
Resource is that part of a Mineral Resource for which quantity and
grade (or quality) are estimated on the basis of limited geological
evidence and sampling. Geological evidence is sufficient to imply
but not verify geological and grade (or quality) continuity. It is
based on exploration, sampling and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. |
Inverse distance weighting |
A statistical
interpolation method whereby the influence of data points within a
defined neighbourhood around an interpolated point decreases as a
function of distance. |
JORC |
The Joint Ore Reserves
Committee: The Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves (‘the JORC Code’), as
published by the Joint Ore Reserves Committee of The Australasian
Institute of Mining and Metallurgy, Australian Institute of
Geoscientists and Minerals Council of Australia. |
LIDAR survey |
LIDAR is a remote
sensing technology that measures distance by illuminating a target
with a laser and analysing the reflected light to produce a
DTM. |
Measured Resources |
A Measured Mineral
Resource is that part of a Mineral Resource for which quantity,
grade (or quality), densities, shape, and physical characteristics
are estimated with confidence sufficient to allow the application
of Modifying Factors to support detailed mine planning and final
evaluation of the economic viability of the deposit. |
Mineral Resources |
Mineral Resources are a
concentration or occurrence of solid material of economic interest
in or on the Earth’s crust in such form, grade (or quality), and
quantity that there are reasonable prospects for eventual economic
extraction. The location, quantity, grade (or quality), continuity
and other geological characteristics of a Mineral Resource are
known, estimated or interpreted from specific geological evidence
and knowledge, including sampling. Mineral Resources are
sub-divided, in order of increasing geological confidence, into
Inferred, Indicated and Measured categories. |
Mining Sterilisation |
Material or Ore that is depleted
from Mineral Resources or Ore Reserves, but which was not
mined. This material still remains in ground but mining has
passed by and, in the competent person’s opinion, it has no
reasonable prospects for eventual economic extraction. |
|
Minmod |
A company developed
mineralogy modelling technique, it comprises an XRF analysis of the
magnetic and non-magnetic fractions of each composite or sample,
the results from which are then back-calculated to determine
in-ground mineralogy. |
Ore Reserves |
Ore Reserves are the
economically mineable part of Measured and/or Indicated Mineral
Resources. |
QEMSCAN |
Is an acronym for
Quantitative Evaluation of Materials by Scanning Electron
Microscopy, an integrated automated mineralogy and petrography
solution providing quantitative analysis of minerals and
rocks. |
QQ plot |
Quantile quantile
plot. Used to graphically compare data distributions. |
RL |
The term Reduced Level
is denoted shortly by 'RL'. National survey departments of each
country determine RL's of significantly important locations or
points. RL is used to describe the relative vertical position
of drill collars. |
RTK |
Real time kinematic DGPS
uses a base station GPS at a known point that communicates via
radio with a roving unit so that the random position error
introduced by the satellite owners may be corrected in real
time. |
SEM, SEM EDX |
A Scanning Electron
Microscope is a type of electron microscope that produces images of
a sample or minerals by scanning the surface with a focused beam of
electrons. EDX is short for energy dispersive X-ray and is
commonly used in conjunction with SEM. |
Variography |
A
geostatistical method that investigates the spatial variability and
dependence of grade within a deposit. This may also include a
directional analysis. |
XRF analysis |
A
spectroscopic method used to determine the chemical composition of
a material through analysis of secondary X-ray emissions, generated
by excitation of a sample with primary X-rays that are
characteristic of a particular element. |
ENDS.
For further information contact:
James Fuller, Manager Communications
and Investor Relations |
UK Media Relations |
Base Resources |
Tavistock Communications |
Tel: +61 (8) 9413 7426 |
Jos Simson and Barnaby Hayward |
Mobile: +61 (0) 488 093 763 |
Tel: +44 (0) 207 920 3150 |
Email:
jfuller@baseresources.com.au |
|
This release has been authorised by Base Resources’ Disclosure
Committee.
About Base Resources
Base Resources is an Australian based, African focused, mineral
sands producer and developer with a track record of project
delivery and operational performance. The company operates
the established Kwale Operations in Kenya and is developing the Toliara Project in
Madagascar. Base Resources is an ASX and AIM listed
company. Further details about Base Resources are available
at www.baseresources.com.au
PRINCIPAL & REGISTERED
OFFICE
Level 1, 50 Kings Park Road
West Perth, Western Australia, 6005
Email: info@baseresources.com.au
Phone: +61 (0)8 9413 7400
Fax: +61 (0)8 9322 8912
NOMINATED ADVISOR
RFC Ambrian Limited
Stephen Allen
Phone: +61 (0)8 9480 2500
BROKER
Berenberg
Matthew Armitt / Detlir Elezi
Phone: +44 20 3207 7800