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Titan Minerals : Destined for greater things [ASX: TTM]

titan minerals limited gold mining company review

Titan Minerals Limited (TTM, formerly Minera Gold Limited) is a gold and copper explorer with a chequered past and a more certain future.

After first listing on the ASX in 2006, raising A$15m, multiple operational issues at its small scale Southern Peru projects at San Santiago and the Torrecillas, resulted in the company entering voluntary administration in 2015.

In August 2017, after a restructuring exercise the company was renamed Titan Minerals.

But then more troubles followed.

In February 2019, TTM announced a merger with Canadian-listed Core Gold Inc (TSXV. CGLD), with a strategy to consolidate mineral properties and processing facilities in Peru and Ecuador. However, the merger stalled following discord between CGLD management and shareholders.

 After a prolonged period of uncertainty, TTM raised A$20m, recapitalised the company, consolidated the capital and finalised the takeover of CGLD in May 2020. TTM divested its Peruvian projects in August 2020 for total upfront consideration of US$6.4m (including US$5.2m cash) and additional conditional consideration based on Resource milestones.

The current market capitalisation is $138m and the company’s future now looks more prospective, with the company focused on advancing two flagship projects located in Ecuador’s southern Andean copper-gold belt.

TTM had a cash position of about US$6m as of August 2020, following a A$14.5m capital raising in June 2020 at A$0.065. Funds from the capital raising were expended on project exploration, costs of the merger with Core Gold (completed in May 2020), and general working capital. TTM has total debt of US$13m, comprising a US$3m secured loan facility at 15% pa and maturing 30 November 2020, and a US$10m unsecured loan facility with RM Hunter Pty Ltd, carrying interest at 12% pa and maturing December 2020.

The company’s main projects are the Dynasty Gold Project and the Copper Duke Porphyry Project.

 The Dynasty Gold Project is 100% owned and comprises five concessions totalling 139km2, located 25km from the Peruvian border in southern Ecuador hosting non-JORC Resources of 2.1Moz at 4.5 g/t within an underexplored epithermal vein system. The project is situated approximately 10km east of the town of Celica and is accessed through a paved highway from Celica that transects the concessions. The highway links Celica to the Pan American highway, which provides easy access to regional airports to the east or west. This project is fully permitted, having seen small-scale open pit mining under previous ownership. TTM is now focused on better defining and extending existing Resources.

Pundits consider that the Resource upside potential at Dynasty is significant. Prior exploration in the area was undertaken sporadically during the 1970-1990s by groups including BHP Exploration, the UN, before Ecuasaxan (private) discovered anomalous gold and silver in quartz-sulphide veins in what is now the main Dynasty concession area in 2001-2003. CGLD acquired the Dynasty Goldfield project in 2003 and carried out exploration until 2008, when all exploration activity in Ecuador was suspended under a moratorium from the Ecuadorian government. Following a new constitution and re-establishment of a mining code in 2009, CGLD permitted and established a small-scale open pit gold mine at Cerro Verde in 2016. Between 2018 and 2019, Cerro Verde was producing on average approximately 10t of ore per day from open pit mining of narrow quartz veins, with material then trucked 185km North to the 720ktpa Portovelo CIP plant. Gold production averaged 20kozpa up until April 2020 when mining and processing operations were suspended in response to the COVID-19 pandemic.

The Copper Duke Project is also 100% owned and is an early stage exploration project consisting of thirteen concessions covering 130km2 situated approximately 18km east of the Dynasty gold project. The project can be accessed via the Pan American highway with an approximate 70km in paved roads from the Dynasty Project to the small town of Catacocha. The project can also be accessed from La Toma (Loja’s provincial airport) located on the Pan American highway approximately 60km east of Catacocha.

Copper Duke is host to multiple mineralised porphyry intrusions associated with extensive copper-gold surface anomalism and quartz-hosted gold veining outcropping at surface. Project geology consists predominantly of multiphase igneous bodies of granodiorite, quartz diorite and diorite compositions, and younger intrusions of hornblende diorite proximal to the intersection of NE to SW and NW to SE trending structural corridors. To date, a major copper-gold porphyry complex, El Huato, and an additional four porphyry copper systems (Blanquillo, Catamoya, Barbasco, Loma Redona) have been identified.

Analysts also consider the Copper Duke project presents as a highly prospective, yet mostly unexplored opportunity, with the potential for the discovery of both Cu-Au porphyry and high-grade epithermal gold mineralisation. The project’s prospectivity can be characterised by numerous large-scale gold and copper-gold anomalies (identified through localised high-density surface sampling) over a 50km2 area

The company’s Non-Executive Chairman is a graduate of the University of Western Australia and has practised as a barrister and solicitor for 40 years and is a former Chairman and Director of Fleetwood Corporation Limited. He has over 35 years of technical experience in mining project evaluation, development and implementation

The Managing Director is a Bachelor of Applied Science in Mechanical Engineering and was also the Executive Vice President and Chief Operating Officer of Dundee Precious Metals Inc. where he transformed the Chelopech Mine in Bulgaria into a profitable asset.

The Dynasty Gold Project has significant additional Resource potential which could ultimately support mine development. while Copper Duke being a mostly unexplored opportunity, also has exploration upside.

After what this company has endured, and now having two prospective, under-explored projects in close proximity to infrastructure, with a moderately geared balance sheet and an open share register, puts it in the best position since its corporate restructure in 2015 to deliver shareholder upside.

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