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Base Resources Commences Mineral Sands Mining At Kwale, Kenya

Base Resources (ASX: BSE, AIM: BSE) has commenced ore processing through the mining unit and wet concentrator at its wholly-owned Kwale mineral sands project in Kenya.

Following two weeks of water commissioning and control logic testing, first ore from the central dune has been taken through the dozer trap mining unit and wet concentrator.

Over the ensuing weeks, mining and processing rates are to be ramped up and concentrate stockpiled ahead of mineral separation plant (NYSE:MSP) commissioning.

Construction of the MSP is in its final stages, with commissioning of the ilmenite and rutile circuits, and commencement of concentrate processing, expected during November.

This will be followed by the zircon circuit in December.

While some small container shipments are planned during December, the bulk shipments of finished product are now scheduled to commence in January.

The majority of the supporting infrastructure is now complete, with the access road, 132 kilovolt power supply, tailings storage facility and Mukurumudzi dam now operational.

The Likoni marine facility is scheduled for completion in November, well ahead of the first bulk shipment.

Base's Kwale project is located 10 kilometres inland from the Kenyan coast and 50 kilometres south of Mombasa, Kenya's principal port facility; well serviced by existing physical infrastructure and a supported by the Kenyan government and the local community.

Analysis

Based on the August 2013 TZMI price outlook and refined operating cost estimates, Kwale remains a robust project with an estimated LOM cash surplus approaching US$700 million.

This has not been lost on institutions which dominate the company's register, including Pacific Road Capital (20.5%), Taurus Funds Management (13.0%), L1 Capital (8.8%) and Acorn Capital (8.2%).

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