Metals Finance Limited owns a significant shareholding in Australian listed base metals producer Bass Metals Ltd. ( ASX : BSM). Bass is an exciting growth company which has maintained positive cash flow and profitability through the recent global turmoil and downturn in metal prices – and which, through the purchase of a large local treatment facility at significantly below installed cost (the Hellyer Mill), has positioned itself for rapid development of other nearby polymetallic resources.
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Bass Metal's production hub over the past eighteen months has been its 100% owned Que River base and precious metals project. Production at the rate of approximately 5,000 tonnes of ore per month commenced in September 2007 as an open pit operation and continues today.
The Company increased its holding in Bass Metals Limited, through purchase of approximately 4.8 million shares in a rights issue hold in December 2009. Metals Finance now holds 26.4 million shares in Bass, which represents 15.5% of its expanded capital. The company remains extremely positive about its investment in Bass, particularly in light of its results over the past two years and its emergence as a mid tier resource company through the development of the Fossey project in Tasmania.
Bass reported in March 2010 that it had experienced a successful half-year with a robust viable new project indicated from the Fossey feasibility study, strong operating cash flows continuing from the Que River mine and several exciting exploration results including 2.4 metres at 25% zinc, 8.7% lead, 192 g/t silver, and 4.9 g/t gold, building momentum toward another discovery. During the period Bass initiated a $15.3 million capital raising, comprising a placement and rights issue, providing the Company with a robust cash position at the end of the reporting period of $16.7 million. This financing was completed in January, 2010 coincident with mandating RMB Resources Ltd to arrange a $12 million loan facility and hedging facility. This process is progressing well and on completion will ensure that the Company is sufficiently funded to undertake the development of the new Fossey Mine, the refurbishment of the Hellyer Mill and an increased exploration programme aimed at expanding the Company's resources base in Tasmania in keeping with its aim of becoming a mid-tier base metals producer.
Bass plans to be in production before the end of 2010, based on a combined Mineral Resource base of 2.3 million tonnes of high grade polymetallic massive sulphide resources located at Fossey, Hellyer and Que River , all within a 4km radius of the Hellyer Mill, which the company owns. The feasibility study has indicated a strong operating surplus of approximately $48 million from the Fossey resource alone.
