Base Resources Limited (AIM:BSE, ASX:BSE)’s latest quarterly output was “better than expected” for independent broker Peel Hunt, with analysts responding well to grades of valuable heavy minerals at 3.1%, well ahead analysts’ 2.8% estimates.
Overall Ilmenite output of 71 kilotonnes was well over Peel Hunt’s 64kt estimate, despite slightly lower ore tonnes mined, due to slightly larger interruptions as the tie-in to the North Dune happened in the latest quarter.
Similarly, rutile at 16.6kt was slightly ahead of the broker’s 15.5kt estimate, and zircon too exceeded expectations at 6.4kt versus 5.7kt estimates.
“The strong unit revenues, despite the bias away from the higher value rutile in the actual sales mix, does confirm that pricing for minerals sands products across ilmenite, rutile and zircon does continue to be strong,” noted Peel Hunt.
The broker continued: “Positively, access to additional exploration ground near Kwale has been secured and drill rigs are now turning on the area. This provides the potential for further near-mine resource to be identified, something that may allow life extension beyond December 2024.”
Peel Hunt gave Base Resources a buy recommendation with a target price of 22p, representing 2x potential against the current share price of 10.9p as of 12.30pm, April 26.