Base secures $150m funding for Kwale

Perth-based Base Resources says it will commence construction at its Kwale mineral sands project in Kenya in September and begin production in the third quarter of 2013, after finalising a $US150 million finance facility.

The company said the finance facility would be combined with an equity capital raising to provide funding for the development of the Kwale project.

European investment bank WestLB's London branch has been appointed at the lead arranger for the finance, Base said in a statement.

The facility will be run in two tranches, the first a $US80 million six year term and an eight year, $70 million second tranche.

Base said the majority of lenders involved in the financing were previously involved in the Kwale project with its previous owners, Tiomin Resources.

"This pre-existing familiarity allows for a more rapid and efficient process than is usual, as well as giving a greater level of confidence in the implementation of the new facility through WestLB," Base said.

Base said it would complete its enhanced definitive feasibility study for Kwale by the end of April, while it has appointed SRK Consulting as the independent engineer for the banking syndicate.

Formal credit approvals are expected to be received in June.