This week’s companies are Base Resources and Tribune Resources.
For investors focused on the resource space, a good way to track companies listed in Australia is to look at the S&P/ASX 300 (INDEXASX:XKO). The index includes all S&P/ASX 200 (INDEXASX:XJO) companies as well as about 100 smaller-cap companies, and as of April 2015 accounted for 74 percent of the Australian equities market. Specifically, the S&P/ASX 300 Metal & Mining (INDEXASX:XMM) division is a great source for companies to watch.
The Investing News Network is thus profiling companies on the S&P/ASX 300 Metal & Mining index. This week’s companies are Base Resources (ASX:BSE) and Tribune Resources (ASX:TBR).
Unlike most companies listed on the S&P/ASX 300 Metal & Mining index, Base Resources is not targeting precious metals. Instead, the company’s Kenyan operations are focused on producing mineral sands, including ilmenite, rutile and zircon. The Kwale mineral sands operation is located 10 kilometers from the Kenyan coast and 50 kilometers south of Mombasa, the main port in East Africa.
On January 13, 2016, Base Resources received a force majeure notice from a counterparty to an ilmenite sales agreement. The company said in a statement, “[t]he Notice is stated to be in response to incidents that have occurred causing significant delays in commissioning the counterparty’s slag furnace. The Notice, while providing a preliminary assessment of the extent of the damage caused by the incidents, advises that repairs, further damage assessment and rectification works will be required and that therefore the potential delay is not yet known.”
Base Resources is continuing to assess the impact that the notice will have. The counterparty was slated to purchase roughly 100,000 tonnes of ilmenite by June 30, 2016 at an average price of US$116 per tonne FOB.
Tribune Resources announced a resource estimate for its East Kundana joint venture (EKJV) project in September 2015. The defined resource increased to 5.11 million tonnes at 11.4 g/t gold for 1.87 million ounces of gold — that’s an increase of 523,000 ounces from the previous June 2014 estimate.
The EKJV is located in Western Australia, 25 kilometers west northwest of Kalgoorlie and 47 kilometers east of Coolgardie. The project is a joint venture between Rand Mining (ASX:RND) (12.25 percent), Tribune Resources (36.75 percent) and Gilt-Edged Mining (51 percent), which recently became a wholly owned subsidiary of Northern Star Resources (ASX:NST).
Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article.
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