Operations Update

The June quarter of 2019 saw the successful relocation of mining operations to the South Dune orebody following depletion of the Central Dune, with mining successfully recommencing after a 14-day transition shutdown. Another good safety performance with no lost time injuries (“LTI”) brings the consecutive LTI free months to 64.

June 2019 Quarter Highlights

Key Indicator Unit Q1 2019 Q2 2019 Variance
Ore Mined tonnes 4,349,984 3,644,160 (16%)
Ore Grade % HMC 3.59 3.52
HMC Produced tonnes 154,001 131,475 (15%)
HMC Treated tonnes 155,373 160,766 3.5%
Ilmenite Recovery % 104 100
Rutile Recovery % 102 104
Zircon Recovery % 78 76
Ilmenite Produced tonnes 87,179 88,789 2%
Rutile Produced tonnes 20,171 22,588 12%
Zircon Produced tonnes 6,943 7,063 2%
Zircon Low Grade Produced* tonnes 172 347 102%
Ilmenite Shipped tonnes 81,339 99,620
Rutile Shipped tonnes 14,593 31,889
Zircon Shipped tonnes 7,260 7,968

The last blocks of the Central Dune orebody were mined during the quarter before mining operations were halted in mid-June to commence the two-week transition to the South Dune. As a result of the transition, mining volume was lower than the prior quarter at 3.6Mt (4.35Mt last quarter).

Sand tails continued to be deposited into the mined-out Central Dune area, representing the first stage of rehabilitation in this area.

The mineral separation plant feed remained at 71tph for the first two months of the quarter to ensure sufficient HMC stocks were available for continued feed to the Mineral Separation Plant (“MSP”) before returning to 87tph in June. The consumption of stockpiled HMC throughout the transition period supported an increase in production of all final products in the quarter. During the quarter 161kt of HMC was treated to produce:

  • 22.6kt of rutile at a recovery of 102%.
  • 88.8kt of ilmenite at a recovery of 100%.
  • 7.1kt of zircon and 4,000t of low-grade zircon at a recovery of 76%.

Constraints on the global supply of sulphate ilmenite and rutile continued in the quarter. Chinese pigment producers are now operating at optimal capacity which has resulted in higher pigment production and a consequent high level demand for ilmenite.

Rutile prices continued to strengthen in the quarter and further improvement is expected in coming quarters.

Zircon demand consumption and prices stabilised through the quarter.

Bulk loading operations at the Likoni Port facility ran smoothly, dispatching 145kt tonnes of ilmenite, rutile and low-grade zircon during the quarter. Containerised shipments of rutile and zircon through the Port of Mombasa continued according to plan.

Mining Transition to the South Dune

The transition of mining to the South Dune orebody was completed in June 2019. Preparation for the transition primarily involved the supply and installation of 7,400m of slurry and water piping, an 8,500 11kV power line, a pipe bridge across the Mukurumudzi Dam spillway and slurry and process water booster pumps. The transition took place over a two-week period and was delivered on schedule and safely.

Exploration Update

Mining tenure arrangements continue to be progressed through the Ministry of Petroleum and Mining as a precursor to an anticipated updated Ore Reserve based on the expanded 2017 Kwale South Dune Mineral Resource as announced on 4th October 2017.

Completion of the remaining drilling programme (4,200 metres) in the North-East Sector (Kwale East) of PL/2018/0119 remains suspended pending resolution of community access issues. Drill assay results to date have shown potential for some limited extensional economic resource close to the Central Dune (Bumamani), but remains subject to a more detailed evaluation.

Extensional exploration drilling in the North-East Sector (Kwale East) of the PL/2018/0119, adjacent to the Central Dune, commenced in Q2 2018 with 274 holes for 3,835 metres of drilling completed. Completion of the remaining drilling programme in this area (4,200 metres) is suspended pending resolution of community access issues. Drill assay results to date have shown potential for some limited extensional economic resource close to the Central Dune (Bumamani), but remains subject to a more detailed evaluation.

Figure 1 illustrates drilling work completed in PL/2018/0119 during 2018.

Drilling commenced in the Vanga Prospecting License (PL/2015/0042) on 1st April 2019. Community engagement in the area is ongoing and a north eastern extension of the PL/2015/0042 has been applied for to cover further prospective ground which has since become available.

Extensional exploration drilling at Kwale Operations

Figure 1: Extensional exploration drilling completed

Download the full quarterly activities report: Base Resources Quarterly Activities Report - June 2019