Help with base template shape

[Ofnuts]

First, transform the EPS into a PNG with transparency:

1) File>Open the EPS
2) Layer>Transparency>Add alpha channel
3) Color>Color to alpha and remove the background color (white, likely)
4) File>Export (use PNG format)

To use as a cutout:

1) File>Open the image you want to cut
2) File>Open as layers the PNG you saved above
3) Move/Scale to taste
4) Layer>Transparency>Alpha to selection (you get the "marching ants")
5) Select the layer you want to cut in the Layers list
6) Select>Invert (if you want to keep the shape) and Edit>Clear (or [delete])