Methodical delivery of MRQ results by Management, page-25

Madagascan risk emerges at Base Resources’ Toliara project

• On 7 November 2019, Base (BSE AU) announced that the Government of Madagascar had issued a statement requiring suspension of on-ground activities at the 100%-owned Toliara project.

• On 8 November an environmental website (Mongabay) provided further colour suggesting the shut-down was due to opposition from local communities and unfavourable fiscal terms. This report questions the validity of the Toliara mining lease which was granted in 2012 by a transitional government which was emplaced by a coupe in 2009.

• As a reminder BSE purchased Toliara in early 2018 for a total cost of US$92m. The recently completed DFS identified a pre-production capital of US$442m. Some US$116m of this is required for the construction of the access road and port. The study delivered an IRR of 21% using “internal commodity price forecasts” for the first 8 years, and TZMI long term forecasts thereafter.

a 21 PERCENT IRR.......!!