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In November 2019, the Government of Madagascar required the Company to temporarily suspend on-the-ground activity on the Toliara Project while discussions on fiscal terms applying to the project were progressed.

Activity remains suspended as Base Resources continues to engage the Government in relation to the country’s Large Mining Investment Law (LGIM) regime, fiscal terms applicable to the Toliara Project and the lifting of the on-the-ground suspension.

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The final investment decision (FID) to proceed with development of the Toliara Project has been delayed. Once fiscal terms are agreed and the suspension is lifted, there will be approximately 11 months’ work to complete prior to FID.

This work includes finalising financing, completing the land acquisition process and concluding major construction contracts. The resumption of international travel will also be required to complete a significant portion of this work.

Key activities for Toliara during the quarter:

  • Engagement with the Government, focused on agreeing fiscal terms and resumption of on-the-ground activities.
  • Negotiations with the preferred tenderers for the marine contract packages.
  • Selection of the preferred piling contractor for the export storage shed.
  • Selection of the preferred power supply contractor and commencement of power purchase agreement negotiations.
  • Design of the haul road bridge over the Fiherenana River.
  • Discussions with prospective lenders and joint venture partners.
  • Ground water modelling work to allow drilling and borehole testing to commence shortly after lifting of the suspension.

Key activities planned for the coming quarter include:

  • Further engagement with the Government, focused on agreeing fiscal terms, lifting of the suspension and resumption of on-the-ground activity.
  • Commencing piling design at the export storage shed to allow construction to commence soon after FID.
  • Continuing power purchase agreement negotiations.
  • Progressing design of the revetment and bulk earthworks at the export facility.
  • Concluding ground water modelling work.
  • Ongoing engagement with prospective lenders and joint venture partners.
  • Total expenditure on the Toliara Project for the quarter was US$3.3 million (last quarter: US$4.0 million).