Raisebook

Heavy Minerals Sands Exploration in Sri Lanka. EV circa $5.5M, Market Cap of $11.45M on Completion of Offer.
Titanium Sands Limited
Titanium Sands Limited
ASX:TSL
  • CPS Capital was recently appointed Lead Manager of the Offer
  • Bids are expected to close earlier than anticipated due to demand
  • Minimum bid is $2,000, maximum bid is $10,000 per entity
  • Enterprise Value of the Company is circa $5.5M, market cap of $11.45M
  • Initial JORC inferred mineral resource of 10.3 Mt with total heavy mineral (THM) of 11.7%
  • It is likely that the resource tonnage will be able to be significantly upgraded by deeper and more extensive drilling
  • Iluka Resources (ASX: ILU) has completed a Scoping Study on its Puttalam Deposits in Sri Lanka, which contain 689 Mt at an average grade of 8.2% HM
Raise Amount
$6,000,000
Offer Price
$0.0200
Closes
Oct 5, 2018

Titanium Sands Limited (ASX: TSL) has entered into an option agreement under which it has obtained the sole and exclusive option to acquire 100% of the issued share capital of Srinel Holdings Limited.

Completion of the Proposed Acquisition will see the Company become a heavy mineral sands exploration company in Sri Lanka.

Srinel Holdings Limited holds exploration licenses and applications for exploration licenses in various coastal districts of Sri Lanka that are prospective for mineral sands.

Previous exploration has defined a heavy mineral sand resource in license areas EL180, EL182 and EL 372 on Mannar Island which has an initial JORC Inferred mineral resource of 10.3 Mt with total heavy mineral (THM) of 11.7%.

Following completion of the Proposed Acquisition, the primary objective of the Company will be to explore the Sri Lankan Project and deliver growth of the Company for the benefit of Shareholders, including by undertaking follow up drilling and working on exploration targets in Project areas that have not been effectively tested.

The Company’s initial plans are to increase the definition and scale of the resources at the Sri Lankan Project. This will involve evaluating the major exploration potential and then undertaking a scoping study.

THE OFFER

Titanium Sands Limited (TSL) (ACN 009 131 533) is offering 300,000,000 Shares at an issue price of $0.02 each to raise $6,000,000 before costs.

The Company recently engaged CPS Capital Group Pty Ltd as the lead manager, broker and corporate advisor to the Public Offer.

We have been advised by CPS Capital that this offer is expected to close for bids earlier than anticipated due to demand.

Raisebook is accepting minimum bids of $2,000 and maximum bids of $10,000 per entity.

The offer of the securities are made in, or accompanied by, a copy of the disclosure document which can be obtained by clicking on the "ACCESS DISCLOSURE DOCUMENT" button on this page.

The Disclosure Document for this Offer comprises a Prospectus dated 29 March 2018, a Supplementary Prospectus dated 21 June 2018, and a Second Supplementary Prospectus dated 19 September 2018. All documents should be read together.

Anyone who wants to acquire the securities will need to complete the application form that will be in or will accompany the Disclosure Document.

Before making an investment decision, potential investors should read the Disclosure Documents entirely, and seek professional financial advice.

The exploration and development of heavy mineral sands is a speculative and high-risk undertaking that may be impeded by circumstances and factors beyond the control of the Company.

There can be no assurance that exploration on the Sri Lankan Project, or any other exploration properties that may be acquired in the future, will result in the discovery of an economic mineral resource. Even if an apparently viable mineral resource is identified, there is no guarantee that it can be economically exploited.

CAPITAL STRUCTURE

Capital Structure Existing Completion
Existing Shares 172,582,782 172,582,782
Shares under the Public Offer - 300,000,000
Shares under the Seller Offer - 58,095,239
Shares in lieu of Cash Reimbursement - 22,500,000
Facilitation Shares - 20,000,000
Total Shares 172,582,782 578,212,078
Class A Options 14,285,714 14,285,714
Class B Options to Directors - 30,000,000
Class A Performance Shares - 66,666,667
Class B Performance Shares - 33,333,333
Class C Performance Shares - 133,333,333
Fully diluted share capital 186,868,496 855,831,125

Note: For further details on the Capital Structure, please refer to Section 1.7 of the Disclosure Document.

IMPORTANT DATES

Firm Bids Due 5 October 2018
Funds Due 10 October 2018
Expected date for resumed trading 2 November 2018

Note: The above indicative timing is based on information from the Lead Manager as of 4 October 2018. The dates are indicative only and may vary. The Company reserves the right to vary the Closing Date without prior notice, which may impact other dates.

The Sri Lankan Project

The Sri Lankan Project is located on Mannar island in Sri Lanka.

The project comprises five exploration licences covering up to 166 km2 and is prospective for heavy mineral sands.

Previous exploration has defined a heavy mineral sand resource in license areas EL180, EL182 and EL 372 on Mannar Island which has an initial JORC Inferred mineral resource of 10.3 Mt with total heavy mineral (THM) of 11.7%.

JORC Inferred mineral resource Mannar Island Project

Tonnes %THM %Silt %Oversize %Ilm. %Leuc. %Rut. %Zir
10.33Mt 11.71 2.08 8.69 5.54 1.34 0.18 0.26

This resource was based on an historical drill hole data base of 785 auger drill holes and from the 115 holes drilled in 2015.

The drilling and the defined resource envelope were largely confined to within 150m of the Mannar Island shoreline.

Exploration between 2011 and 2015 resulted in the estimation of Inferred Resources within ELs 180/182. The mineral assemblage is high value, the resources having an estimated ilmenite equivalent grade of 13.7%.

As there is a significant probability that the heavy minerals extend below the water table and, as drilling has shown that heavy mineral mineralisation extends inland from the island’s north coast for at least 2.5km, it is likely that the resource tonnage will be able to be significantly upgraded by deeper and more extensive drilling within the granted tenements.

An exploration program of drilling and sampling took place during July and August 2014. The program confirmed the presence of significant amounts of heavy mineral concentrations within the licenses.

The recently announced results from the 2016 and 2017 drilling indicate that significant mineralisation is also present within EL 370 and is likely to extend through EL 372.

TSL has received and released analytical THM% results for 372 of these holes in October 2017 and for a further 477 holes in January 2018.

Their average depth was 1.5m and the maximum hole depth was 6m. The drilled mineralisation appears to have a strike length of around 12km and to extend up to 2.5km inland.

80% of the holes returned at least 2% THM, had an average grade of 4.9% THM, and a weighted average grade of 5.2% THM. The maximum THM content was 26.6%.

Mineralisation was present from the surface.

Initial Exploration Focus

The Company intends to focus its initial exploration efforts at Mannar Island to increase the definition and scale of the resources.

This will involve evaluating the major exploration potential of the Sri Lankan Project, both adjacent to the known mineralisation and immediately underlying beneath the water table.

The evaluation will provide the basis for a scoping study which will evaluate development scenarios for the Sri Lankan Project, contemplating the resources, resource mineralogy, mining options, process metallurgy, process plant options, treatment and markets opportunities for the anticipated product stream.

SRI LANKA’S OTHER HEAVY MINERAL PROJECTS

The coastal regions of the northern portion of the island (Sri Lanka) contain recent sediments: lithified Miocene limestones and sandstones and younger largely unconsolidated Quaternary units.

These heavy minerals include the valuable heavy minerals ilmenite, rutile, zircon, monazite, and garnet. Erosion of the basement rocks, down-river transport to the coast, and longshore movement by currents and waves has led to the accumulation of heavy mineral deposits in the coastal sands.

The Pullmoddai Deposit has been mined by Lanka Mineral Sands Limited since 1959; Iluka Resources Limited (ASX: ILU) has completed a scoping study on its Puttalam Deposits, which contain 689Mt at an average grade of 8.2% Heavy Minerals; and Capital Metals Limited is developing its Oluvil Deposit, which contains 17.2Mt @ 17.6% Total Heavy minerals.

This deal closed on October 05, 2018