Titanium Corporation Inc. (the “Company” or “Titanium”)
(TSX-V: TIC) today released its results for the three and
six-month periods ended June 30, 2019.
With the completion of the FEED project and
progress on post FEED activities, the Company has continued to make
excellent progress on commercialization of its CVW™ technology at
Canadian Natural’s Horizon oil sands site. The Company
continued engagement with various government agencies during the
quarter to advance the contracting of the $50 million in Government
grant funding for the next phase of the project. The FEED
project was completed on time and budget and on August 1, 2019 the
Company announced the receipt of $991,000 from ERA representing a
20% holdback of ERA’s contributions pending final project reporting
and a third-party audit of project costs now completed.
"The recent payment by ERA marks the official
completion of the FEED phase of our project,” commented Scott
Nelson, Titanium’s President and Chief Executive Officer. “We are
now focused on achieving a joint decision to move forward with the
commercial project and associated government funding
agreements.”
Highlights for the three and six-month periods
ended June 30, 2019 and recent months include:
- On August 1, 2019, the Company announced receipt of the final
payment of $991,000 related to the $5.0 million grant from
Emissions Reduction Alberta ("ERA") for partial funding of the FEED
phase of the CVW™ Horizon Project. The payment represents a
20% holdback by ERA which was subject to final project reporting
and completion of a third-party audit of project costs. The $9.9
million engineering design phase was supported by $5.0 million of
grant funding from ERA with the Company funding $1.4 million and
Canadian Natural Resources Limited funding $3.5 million. The
Company completed the FEED Project on time and on budget working
with Canadian Natural and the engineering firms of Stantec and IHC
Robbins. Third-party engineering commenced in April 2018 and was
completed in first quarter of 2019. The Company also retained
consultants and technical firms to assist with other aspects of the
engineering design and associated planning including project
management, regulatory approvals, Indigenous engagement and
minerals marketing. Optimization of the project is on-going
including refining capital and operating costs to achieve the most
efficient and cost effective implementation of CVW™
technology.
- On August 7, 2019, the Company announced the appointment of
Bruce Griffin to the Board of Directors as an independent Director
of the Company. Mr. Griffin has also been appointed to the
Company's Commercialization Committee. Mr. Griffin is currently the
Senior Vice President Strategic Development of Lomon Billions
Group, the world's third largest producer of high performance
titanium dioxide products. Mr. Griffin brings a deep understanding
of the global minerals industry from its key markets and customers
to its leading players and has broad experience in operations,
strategy, finance and capital markets.
- In May 2019, the Company announced the first and second
closings of its non-brokered private placement for gross proceeds
of $4,262,640 resulting in the issuance of 6,089,485 common shares
and 3,044,743 warrants entitling the holder to purchase one common
share of the Company at an exercise price of $1.40 expiring on May
9 or May 30, 2022. As a result of the transaction, the
Company now has 88,166,359 common shares issued and
outstanding. Legal expenses, exchange fees, and cash selling
commissions are expected to be $218,400 resulting in net proceeds
to the Company of $4,044,240. The net proceeds of the
offering will be used to fund ongoing efforts to commercialize the
Company’s CVW™ technology and for general operating purposes.
- On March 14, 2019, the Company announced $50 million in funding
toward the next phase of the CVW™ Horizon Project. The Federal
Government awarded $45 million from two clean technology programs;
Environment and Climate Change Canada, through its Low Carbon
Economy Fund (“LCEF”) has committed to investing $40 million and
NRCan’s Clean Growth Program (“CGP”) has committed to investing $5
million in Titanium's first of a kind sustainable technology
designed to remediate oil sands froth treatment tailings. Emissions
Reduction Alberta (“ERA”) awarded $5 million from their Partner
Intake Program aimed at improving environmental performance in
Alberta’s oil and gas sector. Funding from the LCEF and CGP
programs are subject to finalizing funding agreements which will
outline the conditions under which federal funding would be
provided, including securing the remaining funding necessary to
complete the project, fulfilling all applicable requirements
associated with the project environmental assessments and
Indigenous consultation requirements and finalizing the scope of
the project costs eligible for program funding.
- The Company has been meeting with other government agencies and
Canadian investment banks regarding their potential participation
in the structuring and financing of the project and their support
of the Company in financial markets.
- The Company is continuing cash conservation programs including
those under which executive officers and directors receive a
portion of their compensation and fees in RSUs and DSUs. This
program is aimed to conserve cash and further align Management and
the Board with shareholder interests.
FINANCIAL OVERVIEW
Titanium is focused on achieving long-term
financial success by implementing its innovative CVW™ technologies
in commercial operations at oil sands sites. With the FEED
project completed, the Company is working with Canadian Natural on
the potential implementation of its technology at Canadian
Natural’s Horizon site. However, until commercial
arrangements and investment decisions are made, and facilities are
constructed and operating, the Company expects to continue to incur
losses. Currently, quarterly income/losses are comprised of
research and development (“R&D”) project costs, recovery of
project costs, and general and administrative (“G&A”)
expenditures.
Net (Income) Loss – For the
three-month period ended June 30, 2019, the Company reported net
income of $52,000 or $0.001 per share. The net income of
$52,000 was the result of the receipt during the quarter of ERA and
Canadian Natural project contributions for costs incurred by the
Company in previous fiscal periods. The Company received
$965,000 in April 2019 from ERA and Canadian Natural for project
costs incurred for the fifth and final milestone of the project.
The recovery of FEED project costs of $965,000 exceeded total
R&D costs of $375,000 and $550,000 in G&A expenses.
For the three-month period ended June 30, 2018, the Company
recorded a loss of $3,045,000 or $0.04 per share as project costs
were being incurred and the recovery of ERA and Canadian Natural
costs occurred in subsequent quarters. For the six-month period
ended June 30, 2019, the Company had net income of $478,000
compared to a loss of $4,599,000 for the comparative period ended
June 30, 2018. The recovery of FEED project costs of
$2,485,000 for the six-month period ended June 30, 2019 exceeded
total R&D costs of $917,000 and $1,105,000 in G&A expenses.
For a development stage company, and given the commitments under
the FEED project, the net income reported was in line with
expectations.
Research & Development–
R&D spending in the current quarter of $375,000 consisted
primarily of post FEED project costs related and compensation for
technical staff. R&D had a net recovery of $590,000 for
the three-month period ended June 30, 2019 due to the $965,000
recovery of FEED project costs noted above from the prior fiscal
period. Project costs were lower by $2,536,000 for the
three-month period ended June 30, 2019 compared with the same
period in 2018 due to the completion of the project on February 28,
2019. For the six-month period ended June 30, 2019, a net recovery
of R&D costs was $1.6 million compared to a net R&D
cost of $3.4 million for the six-month period ended June 30, 2018
where the expected project costs aligned with the higher work
volumes and contributions for those costs were collected in future
periods. The Company continues to work on commercial project
related areas including, market development and a minerals
evaluation program for the new Horizon south mining area expected
to be mined in the timeframe a potential CVW™ project would be
commissioned.
General & Administrative –
G&A expenses for the three-month period ending June 30, 2019
were $550,000 compared to $581,000 for the three-month period ended
June 30, 2018, a $31,000 decrease. The decrease relates
primarily to a reduction in investor relations and regulatory costs
offset by an increase in travel. The Company reduced its
investor relations cost as investor relations services were
provided on an as needed basis versus a fixed retainer in the prior
fiscal period. Increase in travel costs during the
three-month period ended June 30, 2019 related to market
development work with potential customers for future minerals off
take agreements with customers in international markets. For the
six-month period ended June 30, 2019, G&A costs were $1.1
million compared to $1.2 million for the comparative six-month
period in 2018. As noted above, the decrease in G&A costs
relate primarily to investor relations expenses being lower.
Cash Position - The Company had
$4.8 million of cash consisting of interest-bearing cash accounts
at June 30, 2019 as compared to $0.8 million at December 31,
2018. The increase in cash related primarily to the closing
of the private placement in May of 2019 and collection of $2.5
million in FEED project cost contributions during the six-month
period ended June 30, 2019. The Company closed the private
placement in two tranches with the issuance of 6,089,485 units
($0.70 per share) for net aggregate proceeds of $4.1 million net of
share issue costs. With the completion of the FEED project,
collection of partner contributions, receipt of the holdback of
$1.0 million in July 2019, and the closing of the private
placement, the Company’s cash position was $5.6 million as of July
31, 2019.
To view the Company’s management discussion and
analysis and interim unaudited financial statements for the three
and six month period ended June 30, 2019, please visit our website
at www.titaniumcorporation.com or SEDAR at www.sedar.com.
About Titanium Corporation
Inc.
Titanium Corporation’s CVW™ technology provides
sustainable solutions to reduce the environmental footprint of the
oil sands industry. Our technology reduces the environmental impact
of oil sands froth treatment tailings while economically recovering
valuable products that would otherwise be lost. CVW™ recovers
bitumen, solvents, heavy minerals and water from tailings,
preventing these commodities from entering tailings ponds and the
atmosphere: volatile organic compound and greenhouse gas emissions
are materially reduced; hot tailings water is improved in quality
for recycling; and residual tailings can be thickened more readily.
A new minerals industry would be created commencing with the
production and export of zircon, an essential ingredient in
ceramics. The Company’s shares trade on the TSX-V under the symbol
“TIC”. For more information, please visit the Company’s website at
www.titaniumcorporation.com.
Disclosure regarding forward-looking
informationThis news release contains forward-looking
statements and information within the meaning of applicable
Canadian securities laws (collectively, "forward-looking
information") that reflect the current expectations of
management about the future results, performance, achievements,
prospects or opportunities for Titanium, including statements
relating to overall project economics; the advantages of the
Company's technology and the creation of a mineral sands industry;
the timing and expectations for completion of the post-FEED project
activities; the scope of activities that will be undertaken in the
post-FEED project; the Company's ongoing engagement with indigenous
communities and other stakeholders; the use of proceeds from the
private placement; and the expected next steps for the Company as
described in this news release. These statements generally can be
identified by use of forward-looking words such as "may", "will",
"expect", "estimate", "anticipate", "believe", "project", "should"
or "continue" or the negative thereof or similar variations.
Forward-looking information is presented in this
news release for the purpose of assisting investors and others in
understanding certain key elements of our commercialization
progress and business plan, as well as our objectives, strategic
priorities and business outlook, and in obtaining a better
understanding of our anticipated operating environment. Readers are
cautioned that such information may not be appropriate for other
purposes.
Forward-looking information, by its very nature,
is subject to inherent risks and uncertainties and is based on many
assumptions, both general and specific, which give rise to the
possibility that actual results or events could differ materially
from our expectations expressed in or implied by such
forward-looking information and that our business outlook,
objectives, plans and strategic priorities may not be achieved. In
addition to other factors and assumptions which may be identified
in this news release, assumptions have been made regarding, among
other things: the success of the post-FEED study project
activities; Canadian Natural’s support for the Company’s current
optimization plans and potential refinements of the project scope;
the economic viability of the Company’s current optimization plans
and potential refinements to the project scope; the ability of the
Company to enter into commercial contracts with oil sands producers
and to achieve commercialization of the CVW™ technology, including
the anticipated scope of such commercial contracts; the ability of
the Company to retain qualified staff; the translation of the
results from the Company's research, pilot programs, FEED project
activities, post-FEED study project activities and studies into the
results expected on a commercial scale; future oil and zircon
prices and the impact of lower prices on activity levels and cost
savings of oil sands producers; the impact of increasing
competition; the general stability of the economic and political
environment in which the Company operates; the ability to obtain
and maintain the Company's intellectual property; currency,
exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in
which the Company operates; and the ability of the Company to
successfully market its CVW™ technology. The forward-looking
information contained in this news release is based on the results
of our research, pilot programs, FEED project activities, post-FEED
project activities and related studies and commercialization
efforts. The Company has not commercially demonstrated its
technologies and there can be no assurance that such research,
pilot programs, FEED project activities, post-FEED project
activities and related studies will prove to be accurate nor that
such commercialization efforts will be successful, as actual
results and future events could differ materially from those
expected or estimated in such forward-looking statements. As a
result, we cannot guarantee that any forward-looking information
will materialize and we caution you against relying on any of this
forward-looking information. Accordingly, readers should not place
undue reliance on forward-looking information.
Additional information on these and other
factors are disclosed in our MD&A, including under the heading
“Discussion of Risks”, and in other reports filed with the
securities regulatory authorities in Canada from time to time and
available on SEDAR (sedar.com).
The forward-looking information contained in
this news release describes our expectations as of August 27, 2019
and, accordingly, are subject to change after such date.
Except as may be required by Canadian securities laws, we do not
undertake any obligation to update or revise any forward-looking
information contained in this news release, whether as a result of
new information, future events or otherwise.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information, contact:
Scott Nelson |
Jennifer Kaufield |
President & CEO |
Vice President Finance & CFO |
Tel: (403) 561-0439 |
Tel: (403) 874-9498 |
Email: snelson@titaniumcorporation.com |
jkaufield@titaniumcorporation.com |
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