Base Resources draws full revolving facility to continue Kwale operations

African mineral sands producer and developer Base Resources has drawn down the full $75m available under its existing revolving credit facility, it announced on Wednesday.

The ASX and AIM-traded firm said the drawdown would secure “enhanced liquidity” and ensure flexibility as part of a prudent management strategy, given the evolving uncertainty associated with the Covid-19 coronavirus pandemic.

As at 29 February, the company had cash reserves of $37.7m and no debt.

It said that under the terms of the revolving credit facility, there were no mandatory repayments until 30 June, when the available facility reduces to $50m.

The final maturity date for the facility is 31 December 2021.

Base said that its “significant” combined cash reserves made it well-placed to emerge from the current crisis in sound financial shape, and to capitalise on appropriate emergent opportunities.

“Supported by sound customer demand, production at the company’s Kwale operation in Kenya has continued uninterrupted with broad health and safety procedures implemented to minimise the risk of Covid-19 to our personnel and surrounding communities,” the board said in its statement.

“The company is working with [the] government of Kenya authorities to adjust work arrangements as necessary to keep operations within government restrictions.”

However, Base said that in a “rapidly evolving” local and global landscape, operations were being maintained to balance the considerations of employee and community health, operational safety, community benefits, government policy and regulation, input availability, customer demand and financial prudence.

“Consequently, a halt to, or curtailment of operations at some point in the future cannot be ruled out.”