Driving up volumes yet keeping a rein on costs meant the company generated underlying earnings (EBITDA) of more than A$60 million, and with a revenue to cash cost ratio of 2:1, the group lies in the top few of the top quartile of mineral sands producers, Keith Spence, chairman told an AGM today.
"We have consistently achieved or exceeded plant design availabilities, concentrate production, mineral separation throughput and ilmenite, rutile and zircon recovery," he said.
Despite a challenging commodity backdrop, Base exported just short of 600,000 tonnes of products.
While all of its rutile and most zircon production is contracted, its ilmenite marketing strategy into China has been highly successful, it said, adding the group is now the largest importer of ilmenite into China.
Annual cash operating costs per tonne came in at US$89 per tonne, down from US$104/tonne in the previous year, while net debt was reduced by US$36mln to US$151mln as at the end of the 2016 financial year.
"After three years of consistently declining prices for our products, we are now seeing strong signs of the ilmenite and rutile markets returning to balance with excess inventories having been substantially worked down," Spence told the assembled.
"We have now seen prices for our ilmenite improve from the lows in the June 2016 quarter by around 90% for deliveries in December 2016. With supply also tightening in the rutile market, we are encouraged by the outlook for 2017."
Looking ahead there are plans to expand Kwale and drilling to assess some previously identified targets in pursuit of mine life extensions is expected to be completed over the coming year.
In addition, the company has recently secured exploration ground over a significant land area in northern Tanzania, it said, while the “Kwale Phase 2” project, which seeks to optimise the Kwale Central and South dunes mining tonnage and methodology, and to increase concentrate production rates, is progressing through a Definitive Feasibility Study (DFS) to be delivered in the June quarter, next year.