- Mineral sands producer Base Resources has hit a roadblock in its Madagascar operations
- The company broke news to shareholders this week, stating the Government halted all work and training programs, attributing the standstill to local civilian protests
- The Government decision suspends work on the company's Toliara project — estimated to hold billions of tonnes of resources with a 40-year mine life
- Base Resources management says it will continue discussions with the government and update shareholders in the meantime
- The news cast a nasty hit on BSE's share price, triggering a fall of more than 12 per cent — the company is now in a trading halt at 21 cents per share
Shares in Base Resources have plummeted this week after the company hit a roadblock with the Madagascan government.
The company closed last week at 24 cents per share, now dropping 12.5 per cent to trade at 21 cents each. The company is now in a trading halt.
The share hit comes after the company encountered a big hold up with its operations in Madagascar with the Government halting its mining operations.
"An official statement has been released by the Government of Madagascar requiring the suspension of on-the-ground activity at the company’s Toliara project whilst discussions on fiscal terms applying to the project are progressed," the mineral sands producer advised in a media release.
The Toliara project is wholly owned by Base Resources. The company considers it to be one of the most valuable mineral sands projects in the world with a 40-year life span and billions of tonnes of resources to be mined out.
Base Resources asserts the halt delivered the Madagascan Government will not impact the progression of feasibility studies — stating that all on-ground work has already been completed and in line for a December release.
Unfortunately, the company says training programs for the local people will be suspended due to the Government's decision. Because of this, protests from the local community have appeared.
Base Resources believes the Madagascan Government used the local civillian actions as an excuse to suspend the company's work.
"The few more recent localised events have represented illegal actions by a small minority that were dealt with by the Malagasy legal system," the company said today
"It is therefore disappointing that the Malagasy government has now stated this as a justification for requiring a suspension."
In closing statements in a media release, Base Resources management asserted it will continue discussions with the government with insistence.
"The company will continue to engage in a transparent and respectful dialogue with Government to deepen its understanding of the significant benefits of the project to Madagascar and secure agreement on mutually beneficial fiscal terms that represent a sound and sustainable basis on which the Toliara Project may proceed to development," the statement read.
The company says shareholders will be updated in due time.
Shares in BSE remain in a halt today, last priced at 21 cents in a $275.3 million market cap.