Base Resources*† has reported its 3QFY16 results. Production was slightly ahead of our forecasts, with zircon up 5% QoQ as a result of the continuing improvement in recoveries. Sales were mixed, with lower ilmenite sales, rutile sales reflecting a lumpy sales profile (with one shipment in the quarter vs. two in the last quarter) and zircon sales well ahead of production. The company increased production guidance for FY16 for ilmenite and rutile by 2% and by 5% for zircon.
We maintain our BUY recommendation, with a target price of A$0.17. Our target price reflects the dilutive effect of the increase in the share capital by 30% at A$0.06/share under the entitlement offer. A full report will follow.