Base Resources completes acquisition of Kwale mineral sands project

On Aug. 2, 2010, East Africa-focused Base Resources reported that it had completed the acquisition of the Kwale mineral sands project, and that it was targeting first production from the Kenya mine in 2013.
The completion of the acquisition from TSX-listed Vaaldiam Mining followed an extensive due diligence exercise, the securing of Kenyan government consent and the completion of an A$8-million capital raising.
"We are delighted to have been able to secure the Kwale project," said Base Resources MD Tim Carstens.
At the closing of the acquisition, Base would pay $3-million in cash, as well as a further cash royalty of 1.5% on all product revenue from Kwale.
Work has already stared on the update and enhancement of the definitive feasibility study completed by Vaaldiam in 2006, and Carstens noted that in the meantime, a 7,000 m drilling programme has been initiated to further define lithology, grade and assemblage within the dunes for mining planning and process design enhancement.
The on-ground activity was scheduled to start in September.
The updated and enhanced definitive feasibility study would be completed over the balance of 2010, with off-take and financing arrangements scheduled for completion during the first half of 2011.
Base said that a realistic development time line should see the Kwale project start production in 2013.
"We have also started preliminary discussions with potential off-take partners, and are finding a significant level of interest, which we believe reflects the forecast of respected industry experts, of medium-term supply deficits in both the titanium dioxide and zircon feedstock markets."
Carstens said that the acquisition of the Kwale mineral sands project also included the option to acquire three addition exploration projects, namely Mambrui, Kilifi and Vipingo.
"The option to acquire the exploration projects provides us with an extensive development pipeline for more than 25 years of operations in Kenya," he added.