Base Resources has two routes to boost value says Peel Hunt


Base Resources Ltd offers investors two potential sources of upside, according to broker Peel Hunt.

First, if the minerals sands miner can secure fiscal terms and unlock the potential of the Toliara project in Madagascar or else through exploration in Kenya and Tanzania to extend the mine life at Kwale.

Each additional year is worth up to 2p/share says Peel, which currently has a 20p price target and ‘buy’ recommendation on the miner.

Base’s operating record at Kwale meanwhile should assure Madagascar it will be a highly responsible operator in-country.

Currently, Kwale’s reserves run to mid-2024 but additional exploration ground is being acquired in Kenya and Tanzania, with upside if ore grades are more in line with that presently being mined.

In Madagascar, the next step is to convert positive commentary from the government into firm decisions over mining fiscal terms, which the broker expects would spark a re-rating of the share price.

Peel Hunt has pencilled in site works to start in around a year’s time.

Shares today were trading at 17.75p.


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