Base Titanium clears Ksh. 2.4B outstanding project debt

Kwale-based titanium exploration and mining company Base Titanium has cleared its outstanding debt amounting to Ksh2.4 billion (USD 14.8 million) giving it greater financial flexibility to further its operations on the coastal county of Kenya.

The debt clearance in four months to December 31, 2018 aligns with the firm’s target of clearing its outstanding loan for the construction of its Kwale mineral sands project by the close of the just ended year.

Base Titanium incurred a total of Ksh.21.5 billion at the start of operations in the country and has used its cash reserves and an existing revolving credit facility (RCF) to settle the pending sum.

The improved cash flows are a result of increased productivity and growing market prices in the international market. Base Titanium for instance saw an income of Ksh2.3 billion in the four months to December as sales reached 103,859 tonnes. The firm raked in a further Ksh.5 billion in the preceding quarter against sales totaling to 139719 tons.

The firm therefore anticipates commencing expansion activities to the South dune one month earlier in June 2019 to respond to depleting ore reserves in its current central operation base which has forced a revision in production targets for the 2019 financial year to 504,000 tones.

“An Anticipated continuation of the lower ore densities than previously forecast is seen while mining the remaining fringes of the Central Dune ore body and bringing forward the move to June 2019 from July 2019 and the associated two week shut,” notes part of the latest quarterly report.

The expansion will cost an approximate Ksh.1.2 billion to include the supply and installation of 7,400 meters of slurry and water piping an 8,500 meters 11 kilo-volts (Kv) power line and a 1 megawatt (MW) water booster pump among other infrastructural undertakings.

Base Titanium has further acquired an extension to its Vanga prospecting license allowing for the expansion of the company’s Kwale operations.

With improving cash-flow, the company expects to handle its expansion internally given its reduced debt servicing costs.

“The expansion in the South Dune is being funded internally, that is, from the generated revenue. Other cash flows and operations will not be affected by this,” the firms external affairs office told Citizen Digital in response to queries on new debt.