1.
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TITAN MINERALS LIMITED
(ACN 117 790 897)
Annual Report
for the year ended 31 December 2019
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 19
Corporate Directory
Directors
Michael Hardy
Laurence Marsland
Matthew Carr
Nicholas Rowley
Company Secretary
Zane Lewis
Registered Office & Principal Place of Business
Auditors
Suite 1, 295 Rokeby Road
SUBIACO WA 6008
Telephone: +61 8 6555 2950
Facsimile: +61 8 6166 0261
Stantons International Audit and Consulting Pty
Ltd
Level 2, 1 Walker Avenue
West Perth
Western Australia 6005
Share Registry
Australian Company Number
Automic Share Registry
Level 2
267 St Georges Terrace
Perth WA 6000
ASX Code
TTM
ACN 117 790 897
Australian Business Number
ABN 97 117 790 897
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 19
Contents
Directors’ Report
Auditor’s Independence Declaration
Directors’ Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Independent Audit Report
Page
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14
15
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Directors’ Report
1. Directors’ Information
The directors and company secretary of Titan Minerals Limited (the “Company” or “Titan”) and its controlled
entities (together the “Group” or “Consolidated Entity”) during the financial year end until the date of this report
were as follows:
2. Directors and Company Secretary
Michael Hardy – appointed as director on 15 July 2019, current
Laurence Marsland – appointed as director on 15 July 2019, current
Matthew Carr – appointed as director on 3 February 2017, current.
Nicholas Rowley – appointed as a director on 9 August 2016, current.
Robert Sckalor – appointed as director on 7 August 2017, resigned 15 July 2019.
Cameron Henry – appointed as director on 8 August 2017, resigned 15 July 2019.
Zane Lewis – appointed as company secretary on 11 August 2016, current.
3. Directors’ Meetings
Three meetings of the directors of the Company have been held during the financial year ended 31 December
2019.
4. Principal Activities
The Group’s principal activities during the course of the financial year was minerals exploration in Peru and
Ecuador and gold toll processing in Peru.
5. Significant changes in the state of affairs and review of operations
The following significant changes in the state of affairs of the Consolidated Entity occurred during the financial
year:
The loss of the Group for the year ended 31 December 2019 amounted to $11,568,864 (31 December 2018:
$7,810,308).
2019 was a challenging year for the company.
In addition to normal business operations in Peru, Titan had pursued Core Gold Inc and entered into a binding
plan of arrangement on 25 March 2019. Titan received overwhelming support from Core Gold shareholders in
support of the proposed plan. Unfortunately, the Canadian court declined to approve the plan in July 2019.
On 1 July, the board of the company was strengthened by the addition of Michael Hardy as Chairman and
Laurie Marsland as Managing Director, both having extensive experience in public companies, mining and
business.
As a result of the scheme not proceeding, and because the directors considered the Core Gold assets to be
world-class, the company then launched a takeover bid for Core Gold, investing significant resources.
The formal takeover bid was made on 1 October 2019 and again received overwhelming support from Core
Gold shareholders, with 91.7% of the shareholders accepting the Titan offer by early February 2020. This was
a great achievement by the company - for a junior mining company to succeed in such a difficult transaction
required the support of shareholders and advisors. Our corporate advisors, Bacchus Capital and Canaccord,
did an outstanding job supporting the company through the transaction.
Closing the transaction has enabled Titan to have a suite of assets holding significant value and which the
directors believe isn’t reflected in the company's current market capitalisation. We are well positioned to take
advantage of a rising gold market in the years ahead.
In parallel to the takeover of Core Gold, Titan's Peruvian operations advanced, with the commissioning of the
Vista plant commencing in February 2019. As a result of the acquisition of Core Gold, the company was not
able to allocate the anticipated working capital to increase production at Vista. The board believed the
dedication of working capital to the takeover was y worth more to the company’s shareholders over the medium
term than increasing production in Peru. This change of approach at Vista has had the benefit of allowing the
board to methodically address routine start up issues and improve many aspects of that business.
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T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
In addition to the commissioning of the Vista plant, during 2019 the company acquired the Las Antas and
Coriorcco projects. Both projects are excellent early stage projects that the board considers are valuable
additions to the company's portfolio.
The hard work of 2019 will set Titan up for the years ahead. We now have a suite of assets that are the envy
of many ASX listed junior companies. The next step is to unlock the value and monetise some of those assets.
Corporate
Capital
On 26 June 2019, the Company completed a 10 to 1 share consolidation approved by shareholders on 14
June 2019.
In August 2019, the Company raised A$6M by the placement of 40,000,000 shares at 15 cents per share (on
a post consolidation basis).
In January 2020, the Company raised A$3.5M by the placement of 21,875,000 shares at 16 cents per share
(on a post consolidation basis).
Subsequent to year end, the Company issued 444,056,119 shares to acquire a 91.7% interest in Core Gold
Inc.
US$3 Million Debt Facility:
On 25 March 2019, Titan entered into a USD $3 million loan facility agreements with a syndicate of several
sophisticated investors. The material terms of the loan facility are:
Interest: 15% interest per annum
• Amount: US$3,000,000
•
• Security: Vista Gold S.A.C. and Core private placement shares
• Repayment: At the earlier of 21 days from completion of Titan Core Gold plan of arrangement or 6
months from the draw down date, extendable to 9 months at Titan’s election with a minimum
repayment of 5 months' interest payable if repaid prior to five months from the draw down date
In September 2019 the Company elected to extend the repayment date until 23 December 2019.
On December 24 December the Company entered into a variation to the loan facility with the lenders, by which
the repayment date was extended to 30 April 2020, for a facility fee of 5% of the loan amount provided by
each lender, and security over the company’s Vista Gold SAC subsidiary, certain promissory notes issued by
Core Gold , and certain Core shares held by Titan.
Additional US$10M Loan Facility
As announced on 2 January 2020, the company entered into an unsecured debt facility with RM Hunter Fund
Pty Ltd, an entity controlled by Mr Raymond Meadowcroft, an experienced debt funding investor.
The key terms of the loan facility are:
the amount available to be drawn is US$10 million;
•
• amounts drawn may be repaid and redrawn over the term;
•
•
the term is 12 months (with the repayment date being 31/12/2020);
the interest rate on amounts drawn is 12% per annum (no interest or fees accrue on undrawn
amounts);
• Titan can use the amounts drawn as it chooses;
• no security has been, or is required to be, provided to the lender in connection with the facility; and
• as consideration for the lender agreeing to provide the facility, Titan has agreed (subject to receiving
all required shareholder approvals) to issue to the Lender fully paid ordinary shares in Titan having an
aggregate value equal to US$500,000, which is 5% of the total loan amount. If Titan does not receive
all required shareholder approvals for those shares to be issued to the lender, Titan must pay a
US$500,000 fee to the lender.
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Operations Report
Vista Gold Plant - Peru
Titan continued to implement its development strategy for the recently acquired gold treatment arm of its
business focused in Southern Peru within the highly prospective Andean Terrane. Complementary to current
ore processing capability, Titan has an ongoing process to develop a landholding position in Southern Peru
with mine development potential to provide feed to the Vista plant.
In the 12-month period ending December 2019 the Vista plant processed 15,780 tonnes of gold bearing
material averaging 17.26g/t gold. The Company produced 7,813 oz of gold and 9,983 oz silver totalling
US$9,660,969 in metal sales with an average realised gold price of US$1,411 per oz.
During the reporting period, Titan completed the construction of the Vista plant and commenced the
commissioning process in February 2019. During the year the company developed operating capacity and
secured ore supply from licensed artisanal miners in the region.
Figures 1 to 3: Vista Gold Plant – Leach Tanks for gold recovery (left), Crushed ore stockpiles ready for grinding and
processing (upper right), and ball mill grinding circuit and conveyor feed to leach tanks (lower right)
Las Antas Gold Project – Peru
On 14 January 2019, Titan announced that it has executed a binding agreement by which Titan was granted
an exclusive option to acquire up to an 85% interest in the Las Antas project (“Las Antas Earn-In”). Under the
Las Antas Earn-In, Titan can earn-in up to 60% of the project by funding US$2,000,000 in exploration activity
within a 2 year period from completion of drill permitting.
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Figure 4 | Las Antas Project location relative to the centralised Vista plant
Las Antas Project - Highlights
Las Antas is located within the prolific epithermal gold belt of Southern Peru (Refer to Figure 4) which contains
various precious metal deposits including the Ares Mine (1.2Moz Au & 15Moz Ag) and the Antapite Mine
(600koz Au). The Las Antas project itself hosts significant exploration potential for stand alone, bulk tonnage,
disseminated style gold mineralization and provides the company with a key foothold into a broader district
containing multiple high-grade gold-silver veins.
Accessible by paved road to within 8km of the project, Las Antas is 80km east of Peru’s prominent
PanAmerican Highway and well within trucking distance of the company’s Vista plant.
The local mining district contains multiple high-grade gold and silver veins located proximal to key prospects
within the Las Antas project. Las Antas is an important step towards the company’s objective of generating
multiple opportunities with potential to provide high-grade gold ore feed to the centralized Vista plant.
Las Antas Earn-in Agreement – Key Terms
Titan, through a wholly owned Peruvian subsidiary, has executed the Earn-in Agreement to acquire up to an
85% interest in the project owned by Management Environmental Solutions S.A. (“Vendor”), a privately held
Peruvian company. The key terms of the Agreement are as follows:
• The Vendor has granted Titan an exclusive right to acquire 60% interest in the Project (“Earn-In
Option”) by completing at least US$2,000,000 in exploration expenditure within 2 years of receiving
all permitting requirements to commence undertaking of exploration activities on the project (“Earn-
in Obligation”).
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• Upon completion of the Earn-In Obligation, Titan will have a period of 60 days within which it may
elect to exercise the Earn-In Option. If Titan elects to exercise the Earn-In Option, it must deliver a
notice to the Vendor and, within 30 days of delivery of such notice, pay the Vendor an amount of
US$450,000.
• Upon Titan acquiring the initial 60% interest in the project, Titan and the Vendor will establish a
joint venture to govern the future conduct of activities in relation to the project (“Joint Venture”), with
Titan holding a 60% initial interest in the Joint Venture.
• Upon the date on which a pre-feasibility study is first delivered in relation to the project (“Pre-
Feasibility Date”), Titan’s interest in the Joint Venture and the project will be increased by 10%.
Titan will be solely responsible for funding the pre-feasibility study.
• Separately, Titan will have an option (“Buying Option”) to purchase an additional 15% interest in
the Joint Venture and the project from the Vendor in three tranches as follows:
o
o
o
Tranche 1: Titan can purchase a 5% interest in the Joint Venture and the project at any time
before the Pre-Feasibility Date by paying to the Vendor US$500,000;
Tranche 2: Titan can purchase a 5% interest in the Joint Venture and the project at any time
within 60 days following the making of a decision to mine in relation to the project by paying to
the Vendor US$1,000,000 (provided this must occur within 5 years of the Pre-Feasibility Date);
and
Tranche 3: Titan can purchase a 5% interest in the Joint Venture and the project at any time
within 60 days following the commencement of commercial production in relation to an
operating mine on the project by paying to the Vendor US$1,000,000,
with Titan’s right to exercise any tranche applying irrespective of whether it has previously exercised
any other tranche.
• The Vendor to retain a 15% non-diluted interest in the project subject to financing by the Joint
Venture subsequent to the pre-feasibility study.
• The Vendor’s contributions to the Joint Venture following the Pre-Feasibility Date will be covered
by loan funding from Titan.
• At all times following the formation of the Joint Venture, Titan will retain a first right of refusal over
the Vendor’s interest in the project.
The project features an extensive zone of intense hydrothermal alteration at surface. The broader district
contains multiple high-grade gold and silver veins located proximal to key prospects within the Las Antas
project. The surface hydrothermal and breccia footprint is host to significant potential for larger scale, bulk
tonnage, disseminated style gold mineralization.
Las Antas is hosted by the Calipuy volcanic layered stratigraphy in Southern Peru hosting andesitic flows,
ignimbrites, tuffs, volcanic breccias and agglomerate units. The volcanic stratigraphy has been intruded by
several andesitic to dacitic stocks, which comprise favourable units for mineralization and at surface are
associated with a pervasive hydrothermal alteration system in halos of intense silicification, showing vuggy
silica, alunite and illite
Specific to the Las Antas project area is two prioritized targets areas:
• Yuracmarca Target, 1.5x2.2 km of area with propylitization, argilization and silicification alterations.
• Cerro Amarillo Target, 3.5x2.3 km of area with intense silicification, in parts vuggy silica, altered
breccias, alunite and Illite, argilitization and propylitization
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Photo 1 (Left) |Cerro Amarillo Target Area, with intense silicification, localised vuggy silica, altered breccias,
alunite, Illite and pervasive argilitization. Photo 2 (Right) | Cerro Amarillo Target, alteration contact between
silicification and argilized breccias.
The Las Antas project has received early stage modern exploration techniques, with non-systematic
geophysical coverage completed in historical exploration activity from 1995 to 1998 under a joint venture
between Hochschild and Anaconda. The project area has seen only limited shallow reconnaissance RC
drilling before exploration abruptly ceased in 1998.
Torrecillas Gold Project – Peru
During the reporting period the company’s geological team did no further work on the Torrecillas gold project
in Peru.
6. Share Options
As at the date of this report there are 4,500,000 options on issue.
7.
Indemnification and Insurance of Officers
During or since the end of the financial year the Company has given an indemnity or entered into an agreement
to indemnify, or paid or agreed to pay insurance premiums as follows:
The Company has entered into agreements to indemnify all directors and provide access to documents,
against any liability arising from a claim brought by a third party against the Company. The agreement provides
for the Company to pay all damages and costs which may be awarded against the directors.
The Company has paid premiums to insure each of the directors against liabilities for costs and expenses
incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of
director of the company, other than conduct involving a wilful breach of duty in relation to the Company. The
amount of the premium was $27,815 which was paid during the financial year. No indemnity has been sought
for or paid to auditors.
8. Events Subsequent to Reporting Date
As announced on 2 January 2020, the Group entered into an unsecured debt facility with RM Hunter Fund Pty
Ltd. The key terms of the loan facility are:
the amount available to be drawn is US$10 million;
•
• amounts drawn may be repaid and redrawn over the term;
•
•
the term is 12 months (with the repayment date being 31/12/2020);
the interest rate on amounts drawn is 12% per annum (and no interest or fees accrue on undrawn
amounts);
• Titan can use the amounts drawn as it chooses;
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T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
• no security has been, or is required to be, provided to the Lenders in connection with the Loan Facility;
and
• as consideration for the Lenders agreeing to provide the Loan Facility, Titan has agreed(subject to
receiving all required shareholder approvals)to issue to the Lenders fully paid ordinary shares in Titan
having an aggregate value equal to US$500,000, which is 5% of the total loan amount. If Titan does not
receive all required shareholder approvals for those shares to be issued to the Lenders, then Titan must
instead pay a US$500,000 fee to the Lenders in cash.
On 14 January 2020 the Group was successful in its offer to purchase all of the issued and outstanding
common shares (the “Core Shares”) of Core Gold Inc for consideration of 3.1 Titan Minerals Limited shares
for each Core Gold Inc share. As at the date of this report, 91.7% of Core Gold Inc has been acquired. As a
result of the change in the shareholding base of Titan Minerals Limited from the transaction, the acquisition is
considered to be a reverse acquisition as described AASB 3, with an acquisition date of 30 January 2020.
On 15 April 2020, Core Gold Inc announced the indefinite suspension of all of Core Gold’s production operations
and commercial activities in Ecuador due to force majeure resulting from the COVID-19 virus pandemic.
Subsequent to the end of the financial year, the COVID-19 outbreak was declared a pandemic by the World
Health Organization in March 2020. Of specific relevance, on 15 March 2020 Peru announced a country-wide
lockdown including border and travel restrictions and prohibiting non-essential business operations.
The direct effect of the COVID-19 outbreak is still being understood by the business as it continues to navigate
the uncertainties of executing on its business and exploration plans. The outbreak and the response of
Governments in dealing with the pandemic is interfering with general activity levels within the community, the
economy and the operations of our business. The scale and duration of these developments remain uncertain
as at the date of this report however they will have an impact on our earnings, cash flow and financial condition.
There has not been any other matters or circumstances that have arisen since the end of the financial year, that
has significantly affected or may significantly affect, the operations of the Group, the results of the operations, or
the state of the affairs of the Group in the future financial years.
9. Dividends
No dividends have been paid or declared since the start of the financial year by the Company.
The directors have recommended that no dividend be paid by the Company in respect of the year ended 31
December 2019.
10. Likely developments
The company will continue to pursue its principal activity of minerals exploration in Peru and now Ecuador after
the acquisition of Core Gold, and its and gold toll processing in Peru, particularly in respect to the projects outlined
under the heading ‘Significant changes in the state of affairs and review of operations’ of this report. The
Company will also continue to evaluate new business opportunities in Peru and Ecuador.
11. Environmental Issues
The company's operations comply with all relevant environmental laws and regulations and have not been subject
to any action by environmental regulators.
12. Proceedings on behalf of Company
No person has applied for leave of any court to bring proceedings on behalf of the company or intervene in
any proceedings to which the company is a party for the purpose of taking responsibility on behalf of the
company for all or any part of those proceedings. The company was not a party to any such proceedings
during the year.
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13. Information on Directors and Company Secretary
Michael Hardy
Director (Non-Executive Chairman)
Qualifications and Experience:
Mr Hardy is a graduate of the University of Western Australia with degrees in Arts and Law. He has practised as
a barrister and solicitor for 40 years, having been a partner of Robinson Cox (subsequently Clayton Utz) from
1983 to 2002 before establishing the firm Hardy Bowen in 2002. Mr Hardy is a former Chairman and Director of
Fleetwood Corporation Limited and is presently a Board member of WA Country Health Service
Directorships of other listed companies in the 3
years prior to the end of the Financial Year:
Interest in shares and options of the Company:
N/A
67,000 Ordinary Shares
Directors meetings attended:
3 of 3 held during term of directorship in financial year
Appointed:
15 July 2019
Laurence Marsland
Director (Managing Director & Chief Executive Officer)
Qualifications and Experience:
Mr Marsland is a graduate of the Western Australia Institute of Technology where he completed a Bachelor of
Applied Science in Mechanical Engineering and is a graduate of the Stanford Sloan Fellows Program at the
Stanford University Graduate School of Business where he completed a Master of Science in Management
degree. Mr Marsland is a Fellow of the Institution of Engineers Australia, a Chartered Professional Engineer and
is presently a director of Toro Gold Limited.
Directorships of other listed companies in the 3
years prior to the end of the Financial Year:
Interest in shares and options of the Company:
Directors meetings attended:
Appointed:
N/A
Nil
3 of 3 held during term of directorship in financial year
15 July 2019
Matthew Carr
Director (Executive Director)
Qualifications and Experience:
Mr Carr is a successful and experienced company director having founded Urban Capital Group. Urban Capital
Group is a private equity company with a strong focus on property backed investment and security.
Directorships of other listed companies in the 3
years prior to the end of the Financial Year:
Interest in shares and options of the Company:
N/A
7,314,493 Ordinary Shares
Directors meetings attended:
3 of 3 held during term of directorship in financial year
Appointed:
3 February 2017
Nicholas Rowley
Director (Non-Executive Director)
Qualifications and Experience:
Mr Rowley is an experienced corporate executive with a strong financial background having previously worked
in the financial services industry for over 10 years where he gained widespread experience in corporate
advisory, M&A transactions and equities markets, advising domestic and international Institutional sales and
high net worth individuals. He also advised on the equity financings of numerous ASX and TSX listed
companies predominantly in the mining and resources sector. Mr Rowley currently serves as Director of
Corporate Development for Galaxy Resources Ltd (ASX:GXY).
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Directorships of other listed companies in the 3
years prior to the end of the Financial Year:
Interest in shares and options of the Company:
Directors meetings attended:
Appointed:
Non-Executive Director of Cobalt One Ltd (ASX:CO1)
until 4 December 2017.
Non-Executive Director of ARC Exploration Limited
appoint 31 May 2018 (ASX: ARX).
2,618,999 Ordinary Shares
3 of 3 held during term of directorship in financial year
9 August 2016
Zane Lewis
Company Secretary
Qualifications and Experience:
Mr Lewis has over 20 of years corporate advisory experience with various ASX and AIM listed companies. Mr
Lewis is a fellow of Chartered Secretaries Australia and is a Non-Executive Director and Company Secretary for
a number of ASX Listed companies.
Appointed as company secretary on 11 August 2016.
14. Remuneration Report (Audited)
The Directors present the remuneration report for the Company and the Consolidated Entity for the year ended
31 December 2019. This remuneration report forms part of the Directors’ Report and has been audited in
accordance with section 300A of the Corporations Act 2001 and details the remuneration arrangements for the
key management personnel.
Key management personnel are those persons who, directly or indirectly, have authority and responsibility for
planning, directing and controlling the major activities of the Company and the Consolidated Entity.
Remuneration is based on fees approved by the Board of Directors.
There is no relationship between the performance or the impact on shareholder wealth of the Company for the
current financial year or the previous financial years and either the remuneration of directors and executives or
the issue of shares and options to directors. Remuneration is set at levels to reflect market conditions and
encourage the continued services of directors and executives.
The names and positions of key management personnel of the Company and of the Consolidated Entity who
have held office during the financial year are:
Michael Hardy
Laurence Marsland
Matthew Carr
Nicholas Rowley
Travis Schwertfeger
Robert Sckalor
Cameron Henry
Service Agreements
Non-Executive Chairman (appointed 15 July 2019)
Managing Director & Chief Executive Officer (appointed 15 July 2019)
Executive Director
Non-Executive Director
Chief Operations Manager (until 31 March 2020) / Chief Geologist (effective
1 April 2020)
Non-Executive Director (resigned 15 July 2019)
Non-Executive Director (resigned 15 July 2019)
Remuneration and other terms of employment for the Executive Directors and other officers are formalised in
a service agreement. For Non-Executive Directors these terms are set out in a Letter of Appointment. The
major provisions of the agreements relating to remuneration per year are set out below.
Name
Consulting
fees
Term of Agreement
Notice Period
Michael Hardy
$60,000 No fixed term
N/A
Laurence Marsland
$240,000 4 years
2/12 months(1)
Matthew Carr
$240,000 No fixed term
6/12 months(1)
Nicholas Rowley
$96,000 No fixed term
N/A
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Travis Schwertfeger (Chief Operations
Manager)
$180,000 No fixed term
3 months
Travis Schwertfeger (Chief Geologist)
$180,000(2) No fixed term
3 months
Robert Sckalor (resigned 15 July 2019)
$60,000 No fixed term
Cameron Henry (resigned 15 July 2019)
$60,000 No fixed term
N/A
N/A
(1) Termination benefits:
Mr Laurence Marsland:
In the case of termination without cause by the Company, the required notice period is 12 months. In the
case of termination without cause by Mr Marsland, the required notice period is 2 months.
Mr Matthew Carr:
In the case of termination without cause by the Company Mr Carr is entitled to receive 12 months’ salary on
top of the entitles mentioned below. In the case of termination without cause by Mr Carr then he is entitled to
receive 6 months’ salary on top of the entitlements outlined below. Matthew Carr is entitled to an additional 1
months’ salary on top of the notice period for each year of continuous service to the company (pro-rata up to
the date of leaving the entity).
(2) In his role as Chief Geologist, Mr Schwertfeger is entitled a minimum fee of $15,000 per month, however
his fees may be increased up to $20,000 per month based on time allocated to perform duties required.
Details of Remuneration
Compensation 12 months to 31 December 2019
Short Term
Benefits
$
Super-
annuation
$
Share
based
payments
$
Total
$
Percentage of
remuneration
that is equity
based
Compensation of key management based
on fees approved by the Board of directors.
Michael Hardy
Laurence Marsland
Matthew Carr
Nicholas Rowley
Travis Schwertfeger
Robert Sckalor
Cameron Henry
30,000
120,000
240,000
96,000
209,000
29,000
35,000
-
-
-
-
-
-
-
-
-
234,707
234,707
12,585
-
-
30,000
120,000
474,707
330,707
221,585
29,000
35,000
-
-
49%
71%
6%
-
-
TOTAL COMPENSATION – FOR KEY
MANAGEMENT PERSONNEL
75 9 ,0 0 0
-
481,999
1,240,999
39%
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Compensation 12 months to 31 December 2018
Short Term
Benefits
$
Super-
annuation
$
Share
based
payments
$
Total
$
Percentage of
remuneration
that is equity
based
Compensation of Directors based on fees
approved by the Board of directors.
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
Travis Schwertfeger
180,000
80,000
68,000
68,000
91 , 40 0
-
-
-
-
-
236,000
236,000
118,000
118,000
-
416,000
316,000
186,000
186,000
91 , 40 0
57%
75%
63%
63%
-
TOTAL COMPENSATION – FOR KEY
MANAGEMENT PERSONNEL
48 7 ,4 0 0
-
708,000
1,195,400
59%
Shares and performance rights held by Key Management Personnel
Shareholdings
Michael Hardy
Laurence Marsland
Matthew Carr
Nicholas Rowley
Robert Sckalor
Cameron Henry
Travis Schwertfeger
1 January 2019 or
Appointment
Issued as
Compensation
Net Change
Other
31 December 2019
or Resignation
Number of Ordinary Shares
-
-
6,738,493
2,348,999
-
4,237
11,000
9,102,729
-
-
-
-
-
-
-
-
67,000
-
576,000
270,000
-
-
-
67,000
-
7,314,493
2,618,999
-
4,237
11,000
913,000
10,015,729
1 January 2019 or
Number of Performance Rights
Issued as
Net Change
31 December 2019
Performance Rights
Appointment
Incentive
Other
or Resignation
Michael Hardy
Laurence Marsland
Matthew Carr
Nicholas Rowley
Travis Schwertfeger
Robert Sckalor
Cameron Henry
-
-
2,300,000
2,300,000
-
1,150,000
1,150,000
-
-
-
-
1,500,000
-
-
-
-
(2,300,000)**-
(2,300,000)**-
-
(1,150,000)*
(1,150,000)*
-
-
-
-
1,500,000
-
-
6,900,000
1,500,000
(6,900,000)
1,500,000
*As a result of Mr Sckalor and Mr Henry both resigning on 15 July 2019, under the terms and conditions of
the performance rights they are considered lapsed. As a result, any share based payment expense recognised
in relation to Mr Sckalor’s and Mr Henry’s performance rights have been reversed (total of $354,325 at the
date of resignation).
**As at 31 December 2019, the vesting conditions for these performance expired with the conditions to vest
not met.
At the General Meeting held on 18 December 2016, shareholders approved to grant 80,500,000 performance
rights (post consolidation: 8,500,000) as remuneration (Class A, B, C). The rights entitled the directors and
11
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
company secretary to shares in Titan Minerals Limited on achievement of market conditions. Under the plan,
the participant was granted performance rights which only vest if certain market conditions are met.
The amount of rights that will vest depends on the achievement of three market-based conditions. The three
conditions are market-based condition related to achieving a 10-day volume weighted average price of shares
on the ASX of greater than $0.05, $0.06 and $0.07 respectively (post consolidation: $0.50, $0.60, $0.70
respectively).
Performance rights convert to shares on the date of vesting with no exercise price or share issue price being
payable.
At the Annual General Meeting held on 30 May 2019, shareholders approved to grant 15,000,000 (1,500,000
post consolidation) performance rights to Mr Travis Schwertfeger (COO) as part of his remuneration. The
performance rights have the following terms:
Tranche
Performance
Rights
consolidation)
500,000
(post-
D
E
F
500,000
500,000
Milestone
Expiry Date
The Shares achieving a daily VWAP of greater
than $0.05 for a period of 10 consecutive Trading
Days (post consolidation: $0.50)
The Shares achieving a daily VWAP of greater
than $0.06 for a period of 10 consecutive Trading
Days (post consolidation: $0.60)
The Shares achieving a daily VWAP of greater
than $0.07 for a period of 10 consecutive Trading
Days (post consolidation: $0.70)
2 years from
the date of
issue
(i) Fair value of performance rights granted
Set out below is the assessed fair value at grant date of performance rights granted in the previous year.
Performance rights:
Fair value at grant
date
Class A – Directors – granted 18 December 2016
Class B – Directors – granted 18 December 2016
Class C – Directors – granted 18 December 2016
Class D – COO – granted 30 May 2019
Class E – COO– granted 30 May 2019
Class F – COO– granted 30 May 2019
$0.032
$0.032
$0.032
$0.005
$0.003
$0.002
There were no options held by the directors during the year.
Other Information
There were no loans made to any Key Management Personnel during the year or outstanding at year end.
Refer to Note 27 and 28 for further transactions with Key Management Personnel during the year.
During the year the Company did not engage remuneration consultants to review its remuneration policies.
End of Remuneration Report (Audited)
15. Business Risks and Uncertainties
There are a number of risks that may have a material and adverse impact on the future operating and financial
performance of the Company. These include the risks discussed in Note 29 of the consolidated financial
statements, along with risks that are widespread and associated with any form of business and specific risks
associated with the Company’s business and its involvement in the exploration and mining industry generally
and in Peru in particular. While most risk factors are largely beyond the control of the Company, the Company
will seek to mitigate the risks where possible.
12
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
16. Lead Auditor’s Independence Declaration
In accordance with the Corporations Act 2001 section 307C the auditors of the Company have provided a
signed Auditor’s Independence Declaration to the directors in relation to the year ended 31 December 2019.
A copy of this declaration appears at the end of this report.
Signed in accordance with a resolution of the directors.
________________________________
Michael Hardy
Chairman
16th day of April 2020
Perth, Western Australia
13
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
16 April 2020
Board of Directors
Titan Minerals Limited
Suite 6, 295 Rokeby Road
SUBIACO WA 6008
Dear Sirs
RE:
TITAN MINERALS LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Titan Minerals Limited.
As Audit Director for the audit of the financial statements of Titan Minerals Limited for the year ended
31 December 2019, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
Martin Michalik
Director
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Directors’ Declaration
In accordance with a resolution of the directors of Titan Minerals Limited A.C.N. 117 790 897
(“Company”), I state that:
A. In the opinion of the directors
1) As set out in Note 2, the Directors are of the opinion that the financial statements:
a) give a true and fair view of the consolidated entity’s financial position as at 31 December 2019
and of the performance for the year ended 31 December 2019; and
b) complying with Australian Accounting Standards and the Corporations Act 2001;
2)
the financial statements and notes also comply with the International Financial Reporting
Standards as disclosed in Note 2; and
3)
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
B. this declaration has been made after receiving the declarations required to be made to the directors
in accordance with section 295A of the Corporations Act 2001 for the financial year ended 31
December 2019.
On behalf of the Board of Directors.
________________________________
Michael Hardy
Chairman
16th day of April 2020
Perth, Western Australia
15
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Consolidated Statement of Profit and Loss and Other Comprehensive Income
For the year ended 31 December 2019
CONTINUING OPERATIONS
Revenue from contracts with customers
Cost of sales
Gross profit
Other revenue
Depreciation and amortisation charges
Administration expenses
Foreign exchange gain/(loss)
Finance costs
Impairment expense
Share based payments
Other expenses
LOSS BEFORE INCOME TAX EXPENSE
Income tax expense
LOSS FOR THE YEAR FROM CONTINUING OPERATIONS
ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
Discontinued operations
(Loss) / Profit for the year from discontinued operations
(Loss) / Profit for the year
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss
Note
5(a)
5(b)
5(c)
5(c)
17
5(c)
30
6
Consolidated
Year ended
31-Dec-19
31-Dec-18
14,181,686
(13,087,901)
1,093,785
-
-
-
16,447
15,799
(376,468)
-
(6,652,191)
(2,700,446)
84,837
(913,231)
369,243
(4,192)
(2,790,577)
(4,838,030)
(364,178)
(1,230,532)
(460,811)
(124,564)
(10,362,387)
(8,512,722)
-
-
(10,362,387)
(8,512,722)
23
(1,206,477)
702,414
(11,568,864)
(7,810,308)
-
-
Exchange differences on translating foreign operations
Exchange differences derecognised on disposal of subsidiary
(75,844)
(40,629)
Items that will not be reclassified subsequently to profit or loss
-
Fair value loss on investments in equity instruments designated
as at FVTOCI
OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME
TAX
TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE YEAR
EARNINGS PER SHARE (cents)
Basic earnings per share
From continuing operations
Diluted earnings per share
From continuing operations
Basic earnings per share
From discontinued operations
Diluted earnings per share
From discontinued operations
298,085
-
-
15
(2,301,853)
(2,418,326)
298,085
(13,987,190)
(7,512,223)
21
21
21
21
(3.804)
(4.147)
(3.804)
(4.147)
(0.443)
0.342
(0.443)
0.342
The above Consolidated Statement of Profit of Loss and Other Comprehensive Income should be read in
conjunction with the accompanying notes.
16
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Consolidated Statement of Financial Position
As at 31 December 2019
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Current tax asset
Assets classified as held for sale
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Trade and other receivables
Property, plant and equipment
Deferred exploration and evaluation expenditure
Intangible assets
Financial assets
Other assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Borrowings
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
Note
31-Dec-19
31-Dec-18
Consolidated
25(a)
7
8
9
10
11
7
12
13
14
15
16
17
16
17
18
19
20
1,793,396
2,093,830
615,979
1,942,528
201,709
-
6,647,442
80,000
5,047,013
1,423,952
11,950,810
2,101,691
77,037
20,680,503
27,327,945
4,403,614
6,422,920
10,826,534
119,249
2,310,175
403,057
2,832,481
13,659,015
13,668,930
5,459,426
1,367,302
889,963
1,081,315
825,194
1,716,454
11,339,654
80,000
2,540,047
841,622
12,193,538
-
-
15,655,207
26,994,861
1,074,995
1,416,842
2,491,837
119,249
3,542,080
-
3,661,329
6,153,166
20,841,695
123,576,041
2,048,438
(111,955,549)
13,668,930
117,125,794
4,102,586
(100,386,685)
20,841,695
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying
notes.
17
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Balance as at 1 January 2018
Loss for the year
Other comprehensive income for the year, net of income tax
Total comprehensive Loss for the year
Issue of shares
Capital raising costs
Acquisition of treasury shares on business combination
Share based payments
Balance as at 31 December 2018
Balance as at 1 January 2019
Loss for the year
Other comprehensive income for the year, net of income tax
Total comprehensive loss for the year
Issue of shares
Capital raising costs
Disposal of treasury shares
Recognise vesting of share based payments
Reversal of share based payments
Balance at 31 December 2019
Issued
Capital
Share Based
Payment
Reserve
Foreign
Currency
Translation
Reserve
Asset
revaluation
reserve
91,050,880
2,825,527
(251,558)
-
-
-
28,973,044
(818,130)
(2,080,000)
-
-
-
-
-
-
-
1,230,532
-
298,085
298,085
-
-
-
-
117,125,794
4,056,059
46,527
117,125,794
4,056,059
46,527
-
Accumulated
Losses
Total
Equity
(92,576,377)
1,048,472
(7,810,308)
(7,810,308)
-
298,085
(7,810,308)
(7,512,223)
-
-
-
-
28,973,044
(818,130)
(2,080,000)
1,230,532
(100,386,685)
20,841,695
(100,386,685)
20,841,695
(11,568,864)
(11,568,864)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,029,412
(487,500)
908,335
-
-
-
-
-
-
718,503
-
(354,325)
(116,473)
(2,301,853)
-
(2,418,326)
(116,473)
(2,301,853)
(11,568,864)
(13,987,190)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,029,412
(487,500)
908,335
718,503
(354,325)
123,576,041
4,420,237
(69,946)
(2,301,853)
(111,955,549)
13,668,930
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes
18
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Consolidated Statement of Cash Flows
For the year ended 31 December 2019
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operating activities
Payments to suppliers and employees
Finance costs
Interest received
NET CASH USED IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant & equipment
Payments of exploration and evaluation costs
Loans provided to third party
Net cash inflow on acquisition of subsidiary
Advance payment received
Payment of financial assets
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (net of costs)
Proceeds from disposal of treasury shares
Proceeds from borrowings
Repayment of borrowings
NET CASH PROVIDED BY FINANCING ACTIVITIES
Net (decrease) / increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on the balance of cash
held in foreign currencies
CASH AND CASH EQUIVALENTS AT THE END OF
THE YEAR
Consolidated
Year ended
Note
31-Dec-19
31-Dec-18
14,286,623
(19,885,357)
(168,233)
16,447
(5,750,520)
5,760,887
(10,882,303)
-
-
(5,121,416)
25(b)
(765,880)
(412,926)
-
-
1,427,348
(7,001,193)
(6,752,651)
5,472,501
683,334
4,225,128
(1,427,349)
8,953,614
(3,549,558)
5,459,426
(1,445,775)
(497,143)
(1,114,273)
226,248
-
-
(2,830,943)
10,181,910
-
-
-
10,181,910
2,229,551
2,931,791
(116,473)
298,084
25(a)
1,793,396
5,459,426
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying
notes.
19
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
1. GENERAL INFORMATION
Corporate Information
The consolidated financial statements of Titan Minerals Limited (“Parent Entity” or “Company”) and its
controlled entities (collectively as “Consolidated Entity” or “the Group”) for the year ended 31 December
2019 were authorised for issue in accordance with a resolution of the directors on 16 April 2020. The Parent
Entity is a for-profit company limited by shares incorporated in Australia whose shares are publicly traded
on the Australian Stock Exchange.
The Group’s principal activities during the course of the financial year was minerals exploration in Peru and
Ecuador and gold toll processing in Peru.
Further information on nature of the operations and principal activities of the Group is provided in the
directors’ report. Information on the Group’s structure and other related party relationships are provided in
notes 22 and 28.
The Group’s registered office is in Suite 7, 295 Rokeby Road, Subiaco, WA 6008 Australia.
2. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
a) Statement of compliance
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting
Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in
a financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. The financial statements and notes also comply with International Financial Reporting
Standards as issued by the International Accounting Standard Board (IASB). Material accounting policies
adopted in the preparation of this financial report are presented below. They have been consistently applied
unless otherwise stated.
The financial statements were authorised for issue by the Directors’ on 16 April 2020.
b) Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost. Cost is based
on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian
Dollars unless otherwise noted.
The Group is a for-profit entity for financial reporting purposes under Australian Accounting Standards.
c) Critical accounting judgements and key sources of estimation uncertainty
In the application of AIFRS management is required to make judgements, estimates and assumptions about
carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and
associated assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstance, the results of which form the basis of making the judgements.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only that period
or in the period of the revision and future periods if the revision affects both current and future periods.
Refer to Note 3 for a discussion of critical judgements in applying the entity’s accounting policies and key
sources of estimation uncertainty.
20
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
d) New and Revised Standards that are effective for these Financial Statements
The adoption of the new or amended standards and interpretations did not result in any significant changes
to the Group’s accounting policies. In addition, the adoption of AASB 16 Leases had no material impact as
the Group had no lease contracts as at 1 January 2019. The Group has not elected to early adopt any new
accounting standards and interpretations.
Standards issued but not yet effective and not early adopted by the Company
The new and amended standards and interpretations that are issued, but not yet effective, up to the date
of issuance of the Group’s financial statements, to the extent they are considered applicable to the Group,
are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if
applicable, when they become effective.
Amendments to IFRS 3: Definition of a Business
In October 2018, the IASB issued amendments to the definition of a business in IFRS 3 Business
Combinations to help entities determine whether an acquired set of activities and assets is a business or
not. They clarify the minimum requirements for a business, remove the assessment of whether market
participants are capable of replacing any missing elements, add guidance to help entities assess whether
an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce
an optional fair value concentration test. New illustrative examples were provided along with the
amendments.
Since the amendments apply prospectively to transactions or other events that occur on or after the date
of first application, the Group will not be affected by these amendments on the date of transition.
Amendments to IAS 1 and IAS 8: Definition of Material
In October 2018, the IASB issued amendments to IAS 1 Presentation of Financial Statements and IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors to align the definition of ‘material’ across
the standards and to clarify certain aspects of the definition. The new definition states that, ’Information is
material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the
primary users of general purpose financial statements make on the basis of those financial statements,
which provide financial information about a specific reporting entity.’
The amendments to the definition of material is not expected to have a significant impact on the Group’s
consolidated financial statements.
e) Going Concern
The financial statements have been prepared on a going concern basis, which contemplates the continuity
of normal business activity, realisation of assets and the settlement of liabilities in the normal course of
business. The Consolidated Entity incurred a net loss of $11,568,864 (2018: $7,810,308), a net operating
cash outflow of $5,750,520 (2018: $5,121,416) and a net investing cash outflow of $6,752,651 (2018:
$2,830,943) for the year ended 31 December 2019.
The recent market uncertainty arising from the financial effects of the COVID-19 virus, may impact on the
Group’s ability to raise further working capital and or to commence profitable operations.
The Consolidated Entity is currently in a working capital deficit position of $4,179,092 (2018: surplus
$8,847,817).
As described in Note 26, subsequent to year end the Group was successful in its offer to acquire Core Gold
Inc (TSX: CGLD), being an offer of 3.1 Titan Minerals Limited shares for each CGLD share. Also described
in Note 26, subsequent to year end the Group entered into a US $10m loan facility which as at this date
has not been drawn down.
The Directors have prepared a cash flow forecast and are confident that the Group has sufficient cash to
fund its activities within the next 12 months from the date the financial statements are approved and will be
21
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
able to meet existing commitments as they fall due. The ability of the Consolidated Entity to continue as a
going concern is principally dependent on the following factors:
• Following the successful offer to take over Core Gold, the Group is completing corporate
consolidation and regional strategy. As part of this process, any non-core assets are being
considered for disposal;
• The Directors have an appropriate plan to raise additional funds as and when they are required;
•
If required, the Directors are able to draw down on the US $10m facility obtained subsequent to
year end; and
• The Directors have an appropriate plan to contain certain expenditure if appropriate funding is
unavailable.
Should the Group be unsuccessful in its plans detailed above, there is uncertainty as to whether the Group
would continue as a going concern and therefore whether it would realise its assets and extinguish its
liabilities in the normal course of business and at the amounts stated in the financial report.
f) Principles of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• Has power over the investee;
• Is exposed, or has rights, to variable returns from its involvement with the investee; and
• Has the ability to use its power to affect those returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control listed above.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of profit or loss and
other comprehensive income from the date the Company gains control until the date when the Company
ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income of subsidiaries is attributed to the owners
of the Company and to the non-controlling interests. Total comprehensive income of subsidiaries is
attributed to the owners of the Company and to the non-controlling interests even if this results in the non-
controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies into line with the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions
between members of the Group are eliminated in full on consolidation.
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
as the difference between (i) the aggregate of the fair value of the consideration received and the fair value
of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities
of the subsidiary and any non-controlling interests. All amounts previously recognised in other
comprehensive income in relation to that subsidiary are accounted for as if the Group had directly disposed
of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another
category of equity as specified/permitted by applicable IFRSs). The fair value of any investment retained in
the former subsidiary as the date when control is lost is regarded as the fair value on initial recognition for
subsequent accounting under AASB 139, when applicable, the cost on initial recognition of an investment
in an associate or joint venture.
g) Significant Accounting Policies
The following significant policies have been adopted in the preparation of the Financial Report:
22
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
i. Revenue recognition
The Group’s primary product is gold and silver bullion. The Group records revenue when evidence exists
that all of the following criteria are met:
• The significant risks and rewards of ownership of the product have been transferred to the
buyer;
• Neither continuing managerial involvement to the degree usually associated with ownership,
nor effective control over the goods sold, has been retained;
• The amount of revenue can be reliably measured;
•
• The costs incurred or to be incurred in respect of the sale can be reliably measured.
It is probable that the economic benefits associated with the sale will flow to the Group; and
These conditions are generally satisfied when title passes to the customer.
ii.Interest revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield
on the financial asset.
iii. Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid
investments that are readily convertible to known amounts of cash, which are subject to an insignificant
risk of changes in value and have a maturity of three months or less at the date of acquisition.
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
iv.Trade and other receivables
Trade receivable (without a significant financing component) are initially recognised at their transaction
price and all other receivables are initially measured at fair value. Receivables are measured at
amortised cost if it meets both of the following conditions and is not designated as at fair value through
profit or loss:
-
-
it is held within a business model with the objective to hold assets to collect contractual cash flows;
and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.
For the purposes of the assessment whether contractual cash flows are solely payments of principal
and interest, ‘principal’ is defined as the fair value of the financial asset on initial recognition. ‘Interest’
is defined as consideration for the time value of money and for the credit risk associated with the
principal amount outstanding during a particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as a profit margin.
In assessing whether the contractual cash flows are solely payments of principal and interest, the
Group considers the contractual terms of the instrument. This includes assessing whether the financial
asset contains a contractual term that could change the timing or amount of contractual cash flows
such that it would not meet this condition. In making this assessment, the Group considers:
-
-
-
-
contingent events that would change the amount or timing of cash flows;
terms that may adjust the contractual coupon rate, including variable rate features;
prepayment and extension features; and
terms that limit the Group’s claim to cash flows from specified assets (e.g. non recourse features).
The Group recognises an allowance for expected credit losses (“ECLs”) for all receivables not held at
fair value through profit or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group expects to receive,
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discounted at an approximation of the original effective interest rate (“EIR”).
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
For trade receivables and other receivables due in less than 12 months, the Group applies the
simplified approach in calculating ECLs, as permitted by IFRS 9. Therefore, the Group does not track
changes in credit risk, but instead, recognises a loss allowance based on the financial asset’s lifetime
ECL at each reporting date. The Group has established a provision matrix that is based on its historical
credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment. For any other financial assets carried at amortised cost (which are due in more than 12
months), the ECL is based on the 12-month ECL. The 12-month ECL is the proportion of lifetime ECLs
that results from default events on a financial instrument that are possible within 12 months after the
reporting date. However, when there has been a significant increase in credit risk since origination,
the allowance will be based on the lifetime ECL. When determining whether the credit risk of a financial
asset has increased significantly since initial recognition and when estimating ECLs, the Group
considers reasonable and supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information and analysis, based on the Group’s
historical experience and informed credit assessment including forward-looking information.
v. Inventory
Inventories are valued at the lower of cost and net realisable value. Cost includes expenditure incurred
in acquiring and bringing the inventories to their existing condition and location but excludes overheads.
Cost is accounted for as follows:
• Bullion - average fixed direct costs and variable direct costs.
• Gold in circuit - average cost.
• Stores - purchase cost on a first in first out cost method.
• Ore stockpiles - cost of mining on an average cost method.
• Work in progress - cost of mining and processing at an average cost method.
vi. Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation and impairment. Cost includes
expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all
or part of the purchase consideration is deferred, cost is determined by discounting the amounts
payable in the future to their present value as at the date of acquisition.
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding
land. Depreciation is calculated on a straight line basis so as to write off the net cost of each asset
over its expected useful life to its estimated residual value commencing from the date the asset is
available for use. The estimated useful lives, residual values and depreciation method are reviewed
at the end of each annual reporting period.
Depreciation on assets utilised in exploration, evaluation and mine development during the pre-
production phase is included in the carrying value of Deferred Exploration Expenditure and Mine
Assets reflected on the balance sheet. On commencement of production, depreciation is expensed to
the Income Statement.
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The following estimated useful lives are used in the calculation of depreciation:
Facilities
Vehicles
Furniture and fixtures
Computer and other equipment
Other plant and equipment
10 years
5 years
10 years
4 years
3 – 10 years
Impairment of assets
At each reporting date, the Consolidated Entity reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows
that are independent from other assets, the Consolidated Entity estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs of disposal and value in use.
In assessing fair value less costs of disposal, the Consolidated entity considers any relevant quoted
market prices and/or subsequent arms-length transactions between two willing parties in determining
fair value less costs of disposal.
In assessing value in use, the estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount.
An impairment loss is recognised in profit or loss immediately.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating
unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal
of an impairment loss is recognised in profit or loss immediately.
vii. Deferred exploration expenditure
Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided
that one of the following conditions is met:
•
Such costs are expected to be recouped through successful development and exploitation of the
area of interest or, alternatively, by its sale; or
Exploration activities in the area of interest have not yet reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves, and
active and significant operations in relation to the area are continuing.
•
Exploration and evaluation expenditure, which fails to meet at least one of the conditions outlined
above, is written off.
Identifiable exploration assets acquired from another mining company are carried as assets at their
cost of acquisition. Exploration assets acquired are reassessed on a regular basis and these costs
are carried forward provided that at least one of the conditions outlined above are met. Exploration
and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset
acquired, is accounted for in accordance with the policy outlined above for exploration incurred by or
on behalf of the entity. Exploration and evaluation expenditure assets are assessed for impairment
when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset
may exceed its recoverable amount.
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The recoverable amount of the exploration and evaluation asset is estimated to determine the extent
of the impairment loss (if any). Where an impairment loss subsequently reverses, the carrying amount
of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that
the increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset in previous years. Where a decision is made to
proceed with development in respect of a particular area of interest, the relevant exploration and
evaluation asset is tested for impairment and the balance is then reclassified to mine assets.
viii. Investments in associates and joint ventures
An associate is an entity over which the Group has significant influence. Significant influence is the
power to participate in the financial and operating policy decisions of the investee but is not control or
joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing
of control of an arrangement, which exists only when decisions about the relevant activities require
unanimous consent of the parties sharing control.
The results and assets and liabilities of associates or joint ventures are incorporated in these
consolidated financial statements using the equity method of accounting, except with the investment,
or a portion thereof, is classified as held for sale, in which case it is accounted for in accordance with
AASB 5. Under the equity method, an investment in an associate or joint venture is initially recognised
in the consolidated statements of financial position at cost and adjusted thereafter to recognise the
Group’s share of the profit or loss and other comprehensive income of the associate or joint venture.
When the Group share of losses of an associate or a joint venture exceeds the Group’s interest in that
associate or joint venture, the Group discontinue recognising its share of further losses. Additional
losses are recognised only to the extent that the Group has incurred legal or constructive obligations
or made payments on behalf of the associate or joint venture.
An investment in an associate or a joint venture is accounted for using the equity method from the date
on which the investee becomes an associate or a joint venture. On acquisition of the investment in an
associate or a joint venture, any excess of the cost of the investment over the Group’s share of the net
fair value of the identifiable assets and liabilities of the investee is recognised as goodwill, which is
included within the carrying amount of the investment. Any excess of the Group’s share of the net fair
value of the identifiable assets and liabilities over the cost of the investment, after reassessment, is
recognised immediately in profit or loss in the period in which the investment is acquired.
The Group discontinues the use of the equity method from the date when the investment ceases to be
an associate or a joint venture, or when the investment is classified as held for sale.
When a group entity transacts with an associate or a joint venture of the Group, profits and losses
resulting from the transactions with the associate or joint venture are recognised in the Group’s
consolidated financial statements only to the extent of interest in the associate or joint venture that are
not related to the Group.
ix. Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration
transferred in a business combination is measured at fair value which is calculated as the sum of the
acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the
former owners of the acquire and the equity instruments issued by the Group in exchange for control
of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at
their fair value, except that:
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• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements
are recognised and measured in accordance with AASB 112 ‘Income Taxes’ and AASB 119
‘Employee Benefits’ respectively;
•
liabilities or equity instruments related to share-based payment arrangements of the acquiree or
share-based payment arrangements of the Group entered into to replace share-based payment
arrangements of the acquiree are measured in accordance with AASB 2 ‘Share-based Payment’
at the acquisition date; and
• assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-
current Assets Held for Sale and Discontinued Operations’ are measured in accordance with that
Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any
non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity
interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets
acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of
the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration
transferred, the amount of any non-controlling interests in the acquiree and the fair value of the
acquirer’s previously held interest in the acquiree (if any), the excess is recognised immediately in profit
or loss as a bargain purchase gain.
Where the consideration transferred by the Group in a business combination includes assets or
liabilities resulting from a contingent consideration arrangement, the contingent consideration is
measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration
that qualify as measurement period adjustments are adjusted retrospectively, with corresponding
adjustments against goodwill. Measurement period adjustments are adjustments that arise from
additional information obtained during the ‘measurement period’ (which cannot exceed one year from
the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of contingent consideration that do not qualify
as measurement period adjustments depends on how the contingent consideration is classified.
Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates
and its subsequent settlement is accounted for within equity. Contingent consideration that is classified
as an asset or liability is remeasured at subsequent reporting dates in accordance with AASB 139
‘Financial Instruments: Recognition and Measurement; or AASB 137 ‘Provisions, Contingent Liabilities
and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in profit
or loss.
Where a business combination is achieved in stages, the Group’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date (i.e. the date when the Group attains control)
and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in
the acquiree prior to the acquisition date that have previously been recognised in other comprehensive
income are reclassified to profit or loss where such treatment would be appropriate if that interest were
disposed of.
If the initial accounting for a business combination is incomplete by the end of the reporting period in
which the combination occurs, the Group reports provisional amounts for the items for which the
accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see
above), or additional assets or liabilities are recognised, to reflect new information obtained about facts
and circumstances that existed as of the acquisition date that, if known, would have affected the
amounts recognised as of that date.
x. Trade and other payables
Trade payables and other accounts payable are recognised when the Consolidated Entity becomes
obliged to make future payments resulting from the purchase of goods and services.
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xi. Provisions
Provisions are recognised when the Consolidated Entity has a present obligation, the future sacrifice
of economic benefits is probable, and the amount of the provision can be measured reliably. The
amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at reporting date, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present
obligation, its carrying amount is the present value of those cash flows.
Provision for restoration and rehabilitation
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result
of exploration, development, production, transportation or storage activities undertaken, it is probable
that an outflow of economic benefits will be required to settle the obligation and the amount of the
provision can be measured reliably.
The provision for future restoration costs is the best estimate of the present value of the expenditure
required to settle the restoration obligation as at the reporting date. Future restoration costs are
reviewed annually and any change in the estimates are reflected in the present value of the restoration
provision at reporting date.
The initial estimate of the restoration and rehabilitation provision relating to exploration, development
and production facilities is capitalised into the cost of the related asset and amortised on the same
basis as the related asset, unless the present value arises from the production of inventory in the
period, in which case the amount is included in the cost of production for the period. Changes in the
estimate of the provision for restoration and rehabilitation are treated in the same manner, except that
the unwinding of the effect of discounting on the provision is recognised as a finance cost rather than
being capitalised into the cost of the related asset.
xii. Employee benefits
Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave
and long service leave when it is probable that settlement will be required and they are capable of
being measured reliably.
Provisions made in respect of employee benefits expected to be settled wholly within twelve months,
are measured at their nominal values using the remuneration rate expected to apply at the time of
settlement.
Provisions made in respect of employee benefits which are not expected to be settled within twelve
months are measured as the present value of the estimated future cash outflows to be made in respect
of services provided by employees up to the reporting date.
Defined contribution plans
Contributions to defined contribution superannuation plans are expensed when incurred.
xiii. Financial assets
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair
value through other comprehensive income (OCI), and fair value through profit or loss.
The classification of financial assets at initial recognition depends on the financial asset’s contractual
cash flow characteristics and the Group’s business model for managing them. With the exception of
trade receivables that do not contain a significant financing component or for which the Group has
applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI,
it needs to give rise to cash flows that are ‘solely payments of principal and interest (SPPI)’ on the
28
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principal amount outstanding. This assessment is referred to as the SPPI test and is performed at an
instrument level. Financial assets with cash flows that are not SPPI are classified and measured at fair
value through profit or loss, irrespective of the business model.
The Group’s business model for managing financial assets refers to how it manages its financial assets
in order to generate cash flows. The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both. Financial assets classified and
measured at amortised cost are held within a business model with the objective to hold financial assets
in order to collect contractual cash flows while financial assets classified and measured at fair value
through OCI are held within a business model with the objective of both holding to collect contractual
cash flows and selling.
Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Group commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
• Financial assets at amortised cost (debt instruments)
• Financial assets at fair value through OCI with recycling of cumulative gains and losses (debt
instruments)
• Financial assets designated at fair value through OCI with no recycling of cumulative gains and
losses upon derecognition (equity instruments)
• Financial assets at fair value through profit or loss
•
Financial assets at amortised cost (debt instruments)
Financial assets at amortised cost are subsequently measured using the effective interest (EIR)
method and are subject to impairment. Gains and losses are recognised in profit or loss when the
asset is derecognised, modified or impaired.
The Group’s financial assets at amortised cost includes trade receivables and loans receivable.
Financial assets at fair value through OCI (debt instruments)
For debt instruments at fair value through OCI, interest income, foreign exchange revaluation and
impairment losses or reversals are recognised in the statement of profit or loss and computed in the
same manner as for financial assets measured at amortised cost. The remaining fair value changes
are recognised in OCI. Upon derecognition, the cumulative fair value change recognised in OCI is
recycled to profit or loss.
Financial assets designated at fair value through OCI (equity instruments)
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity
instruments designated at fair value through OCI when they meet the definition of equity under AASB
132 Financial Instruments: Presentation and are not held for trading. The classification is determined
on an instrument-by instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are
recognised as other income in the statement of profit or loss when the right of payment has been
established, except when the Group benefits from such proceeds as a recovery of part of the cost of
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the financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at
fair value through OCI are not subject to impairment assessment.
The Group’s financial assets carried at fair value through OCI are listed equity instruments.
Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss are carried in the statement of financial position at
fair value with net changes in fair value recognised in the statement of profit or loss.
This category includes derivative instruments and listed equity investments which the Group had not
irrevocably elected to classify at fair value through OCI. Dividends on listed equity investments are
recognised as other income in the statement of profit or loss when the right of payment has been
established.
A derivative embedded in a hybrid contract, with a financial liability or non-financial host, is separated
from the host and accounted for as a separate derivative if: the economic characteristics and risks are
not closely related to the host; a separate instrument with the same terms as the embedded derivative
would meet the definition of a derivative; and the hybrid contract is not measured at fair value through
profit or loss. Embedded derivatives are measured at fair value with changes in fair value recognised
in profit or loss. Reassessment only occurs if there is either a change in the terms of the contract that
significantly modifies the cash flows that would otherwise be required or a reclassification of a financial
asset out of the fair value through profit or loss category.
Impairment
The Group recognises an allowance for expected credit losses (ECLs) for all debt instruments not held
at fair value through profit or loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that the Group expects to receive,
discounted at an approximation of the original effective interest rate. The expected cash flows will
include cash flows from the sale of collateral held or other credit enhancements that are integral to the
contractual terms.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant
increase in credit risk since initial recognition, ECLs are provided for credit losses that result from
default events that are possible within the next 12-months (a 12-month ECL). For those credit
exposures for which there has been a significant increase in credit risk since initial recognition, a loss
allowance is required for credit losses expected over the remaining life of the exposure, irrespective
of the timing of the default (a lifetime ECL).
For trade receivables and contract assets, the Group applies a simplified approach in calculating ECLs.
Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance
based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is
based on its historical credit loss experience, adjusted for forward-looking factors specific to the
debtors and the economic environment.
xiv. Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit
or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an
effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and
payables, net of directly attributable transaction costs.
The Group’s financial liabilities include trade and other payables and loans and borrowings. The
Group has no hedging instruments.
Subsequent measurement
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For purposes of subsequent measurement, financial liabilities are classified in two categories:
• Financial liabilities at fair value through profit or loss
• Financial liabilities at amortised cost (loans and borrowings)
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and
financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing
in the near term. This category also includes derivative financial instruments entered into by the Group
that are not designated as hedging instruments in hedge relationships as defined by AASB 9.
Separated embedded derivatives are also classified as held for trading unless they are designated as
effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the statement of profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated
at the initial date of recognition, and only if the criteria in AASB 9 are satisfied. The Group has not
designated any financial liability as at fair value through profit or loss.
Financial liabilities at amortised cost (loans and borrowings)
This is the category most relevant to the Group. After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised cost using the EIR method. Gains and losses
are recognised in profit or loss when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the
statement of profit or loss.
This category generally applies to interest-bearing loans and borrowings. For more information, refer
to Note 17.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled
or expires. When an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as the derecognition of the original liability and the recognition of
a new liability. The difference in the respective carrying amounts is recognised in the statement of
profit or loss.
xv. Issued Capital
Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any
transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction
of the share proceeds received.
xvi. Treasury Shares
Own equity instruments that are reacquired (treasury shares) are recognised at cost and deducted from
equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the
Group’s own equity instruments. Any difference between the carrying amount and the consideration, if
reissued, is recognised in the share premium.
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xvii. Foreign currency
Foreign currency transactions
The individual financial statements of each group entity are presented in its functional currency being
the currency of the primary economic environment in which the entity operates. For the purpose of the
consolidated financial statements, the results and financial position of each entity are expressed in
Australian dollars, which is the functional currency of Titan Minerals Limited and the presentation
currency for the consolidated financial statements.
All foreign currency transactions during the financial year are brought to account using the exchange
rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are
translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried
at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date
when the fair value was determined. Exchange differences are recognised in profit or loss in the year
in which they arise except that exchange differences on monetary items receivable from or payable to
a foreign operation for which settlement is neither planned or likely to occur, which form part of the net
investment in a foreign operation, are recognised in the foreign currency translation reserve in the
consolidated financial statements and recognised in consolidated profit or loss on disposal of the net
investment.
Foreign operations
On consolidation, the assets and liabilities of the Consolidated Entity’s overseas operations are
translated at exchange rates prevailing at the yearend closing rate. Income and expense items are
translated at the average exchange rates for the year unless exchange rates fluctuate significantly.
Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and
recognised in profit or loss on disposal of the foreign operation.
xviii. Goods and services tax
Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST),
except:
(i) where the amount of GST incurred is not recoverable from the taxation authority, it is recognised
as part of the cost of acquisition of an asset or as part of an item of expense; or
(ii)
for receivables and payables which are recognised inclusive of GST.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The
GST component of cash flows arising from investing and financing activities which is recoverable from,
or payable to, the taxation authority is classified as operating cash flows.
xix. Share-based payments
Equity-settled share-based payments with employees and others providing similar services are
measured at the fair value of the equity instrument at the grant date. The expected life used in the
model has been adjusted, based on management’s best estimate, for the effects of non-transferability,
exercise restrictions, and behavioural considerations.
The fair value determined at the grant date of the equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will
eventually vest.
Equity-settled share-based payment transactions with other parties are measured at the fair value of
the goods and services received, except where the fair value cannot be estimated reliably, in which
case they are measured at the fair value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the service.
For cash-settled share-based payments, a liability equal to the portion of the goods or services
received is recognised at the current fair value determined at each reporting date.
32
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
xx. Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
Current tax currently payable is based on taxable profit for the year. Taxable profit differs from profit
as reported in the consolidated statement of comprehensive income because of items of income or
expense that are taxable or deductible in other periods and items that are never taxable or deductible.
The company’s liability for current tax is calculated using tax rates that have been enacted or
substantively enacted by the end of the reporting year.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all deductible temporary differences to the extent that
it is probable that taxable profits will be available against which those deductible temporary differences
can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference
arises from goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments
in subsidiaries and associates, and interests in joint ventures, except where the company is able to
control the reversal of the temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences
associated with such investments and interests are only recognised to the extent that it is probable
that there will be sufficient taxable profits against which to utilise the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced
to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period
in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax
liabilities and assets reflects the tax consequences that would follow from the manner in which the
company expects, at the end of the reporting period, to recover or settle the carrying amount of its
assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they relate to income taxes levied by the same
taxation authority and the company intends to settle its current tax assets and liabilities on a net
basis.
Current and deferred tax for the period
Current and deferred tax are recognised as an expense or income in profit or loss, except when they
relate to items that are recognised outside profit or loss (whether in other comprehensive income or
directly in equity), in which case the tax is also recognised outside profit or loss, or where they arise
from the initial accounting for a business combination. In the case of a business combination, the tax
effect is included in the accounting for the business combination.
33
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY
The following are the key estimates that management has made in the process of applying the Group’s
accounting policies and that have the most significant effects on the amounts recognised in the
financial statements.
(a) Impairment of property, plant and equipment
The Group reviews for impairment of property, plant and equipment, in accordance with its
accounting policy. The recoverable amount of these assets has been determined based on the
higher of the assets’ fair value less costs to sell and value in use. These calculations require the
use of estimates and judgements.
In estimating the fair value of an asset or a liability, the Group uses market-observable data to the
extent it is available. The Group may engage the assistance of third parties to establish the
appropriate valuation techniques and inputs to the valuation model.
(b) Impairment of deferred exploration expenditure
The future recoverability of deferred exploration and evaluation expenditure is dependent on
related
several
tenement/lease/concession itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale.
the Group decides
including whether
to exploit
factors,
the
Factors that could impact the future recoverability include the level of reserves and resources,
future technological changes, costs of drilling and production, production rates, future legal
changes (including changes to environmental restoration obligations) and changes to commodity
prices.
(c) Impairment of Goodwill
The Group reviews for impairment on goodwill at each reporting date. In determining the
recoverable amount of relevant cash generating units, in the absence of quoted market prices or
other evidence demonstrating fair value less costs to sell, estimations are made regarding the
present value of future cash flows. For goodwill, expected future cash flow estimation is based on
future production profiles, commodity prices and costs. These estimates and assumptions are
subject to risk and uncertainty. Therefore, there is a possibility that changes in circumstances will
impact these projections, which may impact the recoverable amount of the goodwill.
4. SEGMENT INFORMATION
Identification of Reportable Segments
The Group has identified its operating segments based on the internal reports that are reviewed and used
by the Board (the chief operating decision-maker) in assessing performance and in determining the
allocation of resources. The operating segments are identified by the Board based on reporting lines and
the nature of services provided. Discrete financial information about each of these operating segments is
reported to the Board on a monthly basis. The Group operates predominately in Peru. The reportable
segments are based on aggregated operating segments determined by the similarity of the services
provided and other factors.
Segments
The Group has one reportable operating segment, which is the gold toll processing operation in Peru. The
information is further analysed based on the mineral sold within the region.
34
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Segment result represents the profit or loss earned by each segment without allocation of corporate
administration costs, investment revenue and finance costs or income tax expense. This is the measure
reported to the chief operating decision maker for the purposes of resource allocation and assessment of
segment performance.
Holding Company
Holding Company costs (or unallocated costs, assets and liabilities) are those costs which are managed
on a Group basis and not allocated to business segments. They include costs associated with executive
management, strategic planning and compliance costs.
Accounting Policies
The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in Note 2. Segment profit represents the profit earned by each segment without allocation of
central administration costs and directors’ salaries, share of profits of associates, gain recognised on
disposal of interest in former associate, investment income, gains and losses, finance costs and income
tax expense. This is the measure reported to the chief operating decision maker for the purposes of
resource allocation and assessment of segment performance.
Intersegment Transfers
There have been no intersegment sales during the year.
The following is an analysis of the Group’s revenue and results by reportable operating segment for the
year under review:
Revenue
Year ended
31-Dec-19
31-Dec-18
31-Dec-19
Segment Result
Year ended
31-Dec-18
Continuing operations
Segment result before income tax – Peru
Gold Toll Treatment Processing
14,181,686
14,181,686
Other revenue
Central administration costs and director
salaries and depreciation
Foreign exchange gain / (loss)
Finance costs
Impairment expense
Share Based Payments
(Loss) / profit before income tax
expense
Income tax expense
Loss) / profit for the year from continuing operations
-
-
1,093,785
1,093,785
16,447
-
-
15,799
(7,489,470)
(2,825,010)
84,837
(913,231)
(2,790,577)
(364,178)
369,243
(4,192)
(4,838,030)
(1,230,532)
(10,362,387)
(8,512,722)
-
(10,362,387)
-
(8,512,722)
The revenue reported above represents revenue generated from processed gold sales, toll treatment
revenues and concentrate sales to external customers.
The following is an analysis of the Group’s assets by reportable operating segment:
Assets
Peru Gold Toll Treatment Processing
Unallocated assets
Consolidated total assets
31-Dec-19
31-Dec-18
22,767,156
4,560,789
27,327,945
16,988,800
10,006,061
26,994,861
35
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
The following is an analysis of the Group’s liabilities by reportable operating segment:
Liabilities
Peru Gold Toll Treatment Processing
Unallocated liabilities
Consolidated total liabilities
5. REVENUE AND EXPENSES
31-Dec-19
31-Dec-18
(6,714,246)
(6,944,769)
(13,659,015)
(5,882,362)
(270,804)
(6,153,166)
The following is an analysis of the Group’s revenue for the year from continuing operations:
(a) Revenue
Revenue from toll processing
(b) Cost of sales
Cost of sales from toll processing
(c) Expenses
(i) Depreciation
Plant and equipment
(ii) Administration expenses
Compliance expenses
Legal costs
Professional fees and consultants
Director fees
Advertising and investor relations
Travel and accommodation
Employee benefits expense
Other Administration costs
(iii) Impairment expense
Impairment – Core Gold Notes
Impairment – San Santiago1
Impairment – Deferred exploration and evaluation expenditure
assets and mine assets2
15
Consolidated
31-Dec-19
31-Dec-18
14,181,686
(13,087,901)
(376,468)
-
-
-
Consolidated
31-Dec-19
31-Dec-18
(449,434)
(613,496)
(3,850,656)
(550,000)
(91,390)
(475,735)
(598,244)
(23,236)
(6,652,191)
(509,556)
(81,444)
(1,081,149)
(331,000)
(51,968)
(276,318)
(156,218)
(212,793)
(2,700,446)
(2,790,577)
-
-
-
(1,000,000)
(3,838,030)
(2,790,577)
(4,838,030)
1In the 2018 financial year, with the successful acquisition of Andina Resources Limited (including the Vista Gold
Plant), the Company decided that the gold circuit at San Santiago would not be restarted. The San Santiago
plant remains in care and maintenance while the Company assesses future options for the asset. As a result,
the Company has fully impaired the San Santiago plant in the 2018 financial year.
36
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
2In the 2018 financial year, as a result of the acquisition of Andina Resources Limited, the Company acquired
the full rights to the Torrecillas concession, recognising the fair value of the asset acquired of $5.4 million.
While the Company still continues it’s exploration plans for this asset, as the asset currently remains as an early
stage exploration project, the Company decided to impair the value of the Torrecillas asset down to Group costs
incurred on the project. The impairment is made up of impairment of Deferred exploration and evaluation
expenditure assets $5,228,298 net of the derecognition of the deferred tax liability of $1,390,268 recognised as
a result of business combination.
6.
INCOME TAXES
Income tax recognised in profit or loss
Tax expense comprises:
Current tax expense
Deferred tax expense
Total tax expense
Consolidated
31-Dec-19
31-Dec-18
-
-
-
-
-
-
The prima facie income tax expense on pre-tax accounting loss / profit from continuing operations reconciles to
the income tax expense in the financial statements as follows:
(Loss) / Profit from continuing operations
Income tax calculated at 30% (2018: 27.5%)
Expenses that are not deductible / (income that is exempt) in
determining taxable profit
Effect of different tax rates of subsidiaries operating in other
jurisdictions
Tax benefit not recognised as recovery not probable
(10,362,387)
(8,512,722)
(3,108,716)
(2,340,999)
1,091,906
2,326,532
(10,519)
2,027,329
-
57,087
(42,620)
-
The tax rate used in the above reconciliation is the tax rate of 30% (2018: 27.5%) payable by Australian
corporate entities on taxable profits under Australian tax law. The corporate tax rate in Peru is 29.5%.
Deferred tax balances as at 31 December 2019 were not recognised in the statement of financial position.
These relate to the deferred tax assets from the following accounts:
Temporary differences
Tax losses – revenue
Tax losses – capital
7. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
GST/VAT receivable
Other receivables
At the reporting date no trade receivables were past due but not impaired.
37
1,608,629
8,915,266
168,239
1,665,551
21,753,149
21,753,149
32,277,044
23,586,939
31-Dec-19
31-Dec-18
-
1,748,215
345,615
2,093,830
14,850
1,010,683
341,769
1,367,302
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Non-Current
Deposits
8. PREPAYMENTS
Current
Advances to suppliers(1)
Other prepayments
31-Dec-19
31-Dec-18
80,000
80,000
80,000
80,000
31-Dec-19
31-Dec-18
576,000
39,979
615,979
868,381
21,582
889,963
(1) This balance primarily relates to advances given to mineral suppliers to secure goods in the ordinary
course of business.
9.
INVENTORIES
Raw materials in stockpile
In process ore
Auxilliary materials
10. CURRENT TAX ASSET
Current tax receivable
31-Dec-19
31-Dec-18
-
1,432,049
510,479
1,942,528
865,778
208,791
6,746
1,081,315
31-Dec-19
31-Dec-18
201,709
201,709
825,194
825,194
The balance reflects tax that are eligible for a refund from the Peruvian tax authorities as a result of income
tax prepayments.
11. ASSETS CLASSIFIED AS HELD FOR SALE
Property, plant and equipment
31-Dec-19
31-Dec-18
-
-
1,716,454
1,716,454
38
Notes to the Consolidated Financial Statements
12. PROPERTY, PLANT AND EQUIPMENT
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Assets at Cost
Balance at 31 December 2017
Acquisition of subsidiary
Additions
Disposals
Transferred to held for sale
Exchange differences
Balance at 31 December 2018
Additions
Disposals
Transfers
Exchange differences
Balance at 31 December 2019
Accumulated depreciation and
impairment
Balance at 31 December 2017
Acquisition of subsidiary
Depreciation
Disposals
Transferred to held for sale
Impairment
Exchange differences
Balance at 31 December 2018
Depreciation
Disposals
Exchange differences
Balance at 31 December 2019
Net book value
As at 31 December 2018
As at 31 December 2019
San
Santiago
Plant
1,000,000
-
-
-
-
-
1,000,000
-
-
-
-
1,000,000
-
-
-
-
-
(1,000,000)
-
(1,000,000)
-
-
-
(1,000,000)
Land
Facilities
Exploitation
Machinery
Dump
development
Vehicles
Computer
Equipment
Furniture
and
fixtures
Other plant
and
equipment
Work in
progress
Total
-
1,025,474
120,322
-
-
54,534
1,200,330
50,348
-
-
8,518
1,259,196
-
88,506
-
-
(17,895)
3,022
73,633
944,500
(843)
447,460
(9,416)
1,455,334
-
-
-
-
-
-
-
1,168,061
-
278,636
(11,230)
1,435,467
-
-
-
-
-
-
-
374,063
-
-
(2,904)
371,159
-
453,455
441,606
(185,658)
-
(185,658)
36,193
745,596
190,964
(283,386)
-
6,252
659,426
-
-
22,027
-
-
1,312
23,339
5,766
-
-
129
29,234
-
44,842
4,962
-
-
2,367
52,171
-
(12,931)
-
487
39,727
-
944,813
32,394
-
1,805,284
527,281
-
-
(211,811)
32,950
798,346
238,877
(142,226)
80,945
4,548
980,490
(1,554,908)
22,160
799,817
9,828
-
(807,041)
12,125
14,729
1,000,000
4,362,374
1,148,592
(185,658)
(1,784,614)
152,538
4,693,232
2,982,407
(439,386)
-
8,509
7,244,762
-
-
-
-
-
-
-
-
-
-
-
-
-
(34,996)
(20,416)
16,501
-
(31,800)
(2,657)
(73,368)
(61,172)
583
(991)
(134,948)
-
-
-
-
-
-
-
-
-
-
-
(356,502)
(30,783)
-
-
-
-
-
(157,379)
-
400
(156,979)
-
-
-
(26,203)
-
66
(26,137)
31,398
(4,975)
(360,862)
(99,595)
253,137
(14,441)
(221,761)
-
-
(328)
-
(26,835)
(2,079)
-
(519,877)
(33,596)
-
-
-
(3)
(331)
(6,458)
-
15
(6,774)
-
-
(10,306)
(1,860)
(41,080)
(548)
7,044
(369)
(34,953)
-
164,672
(249,741)
(39,002)
(677,544)
(24,890)
82,254
4,205
(615,975)
-
-
-
-
-
-
(938,210)
(87,202)
16,501
164,672
- (1,260,449)
-
(48,497)
- (2,153,185)
(376,468)
343,018
(11,114)
(2,197,749)
(223)
-
1
(222)
-
-
1,200,330
1,259,196
265
1,320,386
-
1,278,488
-
345,022
384,734
437,665
23,008
22,460
11,091
4,774
120,802
364,515
799,817
14,507
2,540,047
5,047,013
39
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
13. DEFERRED EXPLORATION AND EVALUATION EXPENDITURE
Deferred exploration expenditure
Consolidated
31-Dec-19
31-Dec-18
1,423,952
841,622
Reconciliation of the carrying amounts of mine assets at the beginning and end of the current financial year:
Carrying amount at beginning of the year
- additions
combinations
- acquisitions through business combination
combinations
- impairment
- impact of foreign exchange
14. INTANGIBLES
Goodwill(1)
Other intangibles
841,622
578,475
-
-
3,855
1,423,952
-
453,811
5,400,000
(5,055,521)
43,332
841,622
Consolidated
31-Dec-19
31-Dec-18
11,872,056
78,754
11,950,810
12,110,496
83,042
12,193,538
(1) Goodwill relates to the acquisition of Andina Resources Limited completed in the 2018 financial year. The
Group has finalised its assessment and determined that no further changes to the accounting of the
acquisition of Andina Resources Limited is required – refer Note 32.
As described in Note 26, subsequent to year end the Group was successful in its bid to acquire Core Gold
Inc. Under the terms of the bid, the acquisition of Core Gold Inc was assessed by management to be a
reverse acquisition as described in AASB 3. Under this treatment for accounting purposes, Core Gold Inc
is the acquirer and Titan Minerals Limited is the acquiree.
Management have assessed the estimated impact of the reverse acquisition accounting, and the
accounting acquisition of Titan Minerals Limited by Core Gold Inc is expected to result in an attributable
goodwill balance considerably in excess of the existing goodwill carrying amount.
The transaction with Core Gold Inc was considered as appropriate evidence demonstrating that the
goodwill as at 31 December 2019 was not impaired.
Reconciliation of movement in goodwill:
Balance at the beginning of the financial year
Acquisition of Andina Resources Limited (refer Note 32)
Adjustments
combination during the provisional accounting period
Balance at the end of the financial year
to
the Andina Resources Limited business
Consolidated
31-Dec-19
31-Dec-18
12,110,496
-
(238,440)
-
12,110,496
-
11,872,056
12,110,496
40
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
15. FINANCIAL ASSETS
Shares in listed entities
Notes receivable
Consolidated
31-Dec-19
31-Dec-18
(1)
(2)
2,101,691
-
2,101,691
-
-
-
(1) During the period the Group acquired 9,151,363 shares in Core Gold Inc (TSXV: CGLD) for AUD
$4,210,616. These shares are recognised as fair value through other comprehensive income, the
fair value movement for the period was a loss of $2,301,853, of which $192,928 relates to foreign
currency movements.
(2) During the period the Group acquired all of the outstanding interest bearing secured (i) promissory
notes issued by Core Gold in the aggregate principal amount of US$1.5 million (the “Promissory
Notes”) and (ii) convertible promissory notes issued by Core Gold in the aggregate principal amount
of US$1 million (the “Convertible Notes”), plus all accrued interest (together referred to as the
“Notes”). The Promissory Notes and Convertible Notes incurred interest at 12% per annum and
matured on 31 March 2019.
On 21 August 2019 Core Gold announced that Core Gold and the former holder of the Promissory
Notes and Convertible Notes have agreed to amend the Promissory Notes and Convertible Notes
and bring them current on the following terms (the “Amendments”):
(i)
the maturity date of the Promissory Notes will be changed from 31 March 2019 to 31 March
2021;
the maturity date of the Convertible Notes will be changed from 31 March 2019 to 31 March
2020;
the conversion price of the Convertible Notes will be reduced from CAD$0.30 per share to
CAD$0.18 per share; and (iv) certain restrictions on the transfer of the Promissory Notes
will be removed.
(ii)
(iii)
Subsequent to the end of the year, on 6 January 2020, Titan and Core Gold entered into
agreements which terminated and cancelled the amendments to the Promissory and Convertible
Notes in August 2019, and the debt has been amended as follows:
• The maturity date of the Promissory Notes has been extended from March 31, 2019 to March 31,
2020;
• The maturity date of the Convertible Notes has been extended from March 31, 2019 to March 31,
2020;
• The conversion option of the Convertible Notes expired on March 31, 2019, as a result the
previously convertible Convertible Notes are now straight loans without any conversion features
attached; and
• The restrictions on transfer of the Promissory Notes have been removed.
The Convertible Notes are no longer convertible as a result of the January 2020 Amendments.
Accordingly TSXV approval of the January 2020 Amendments is not required.
The Notes are classified as financial assets at amortised cost. The Group has recognised
impairment of the total Notes receivable of $2,790,577.
These Notes have been assigned as security for the loans from sophisticated and professional
investors described in Note 17.
41
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
16. TRADE AND OTHER PAYABLES
Current Liabilities
Trade and other payables
Advance received
Application funds received in advance
Non- Current Liabilities
Trade and other payables
Consolidated
31-Dec-19
31-Dec-18
(1)
2,876,066
1,427,348
100,200
4,403,614
1,074,995
-
-
1,074,995
119,249
119,249
119,249
119,249
(1)
The Group received a payment in advance of USD $1,000,000 for the sale of royalty rights on a
concession currently under application by the Group.
17. BORROWINGS
CURRENT
Secured at amortised cost
Loan – Silverstream SECZ (i)
Loan – Sophisticated and professional investors (ii)
NON CURRENT
Secured at amortised cost
Loan – Silverstream SECZ (ii)
TOTAL BORROWINGS
(i) Silverstream SECZ Loan
Consolidated
31-Dec-19
31-Dec-18
1,427,348
4,995,572
6,422,920
2,310,175
2,310,175
8,733,095
1,416,842
-
1,416,842
3,542,080
3,542,080
4,958,922
The loan is interest free, and requires the total payment of US$3,700,000 over 15 instalments commencing
on 1 July 2018 and ending on 30 June 2022. The current amount outstanding as at 31 December 2019 is
USD $2,500,000.
The Silverstream agreement is secured over the Torrecillas concessions and mining operations that the
Titan group had with Silverstream SECZ.
(ii) Sophisticated and professional investors
As announced on March 25, 2019, the Group entered into a secured debt facility with a group of
sophisticated and professional investors. The Loan Facility makes available to Titan up to US$3,000,000
of financing and Titan has drawn down the full amount in order to purchase 9,151,363 common shares of
Core Gold on a private placement basis at a price of C$0.44 per share as previously announced on March
12, 2019.
The material terms of the loan facility are:
• Amount: US$3,000,000
•
• Security: Vista Gold S.A.C. and Core Private Placement shares
Interest: 15% interest per annum payable at the repayment date.
42
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
• Repayment: earlier of 21 days from completion of Titan Core Gold plan of arrangement or 6 months
from the draw down date, extendable to 9 months at Titans election with a minimum repayment of 5
months interest payable if repaid prior to five months from the draw down date.
• Covenants: Titan Minerals Limited must ensure that Vista Gold S.A.C conducts its business in the
ordinary and usual course of business, and must procure that Vista Gold S.A.C must not, without the
Lender’s approval:
o grant any Security Interest over any of the assets or undertaking of Vista Gold S.A.C;
o enter into any capital expenditure commitments in excess of US250,000 (in aggregate);
o
incur any liability other than trade creditors in the ordinary course of business up to a
maximum amount of US500,000;
incur indebtedness in excess of US$750,000 (in aggregate);
issue, or agree to issue, any shares, options or any other security which will convert into
shares in Vista Gold S.A.C;
o
o
o dispose of or procure, approach or enter into any discussions or negotiations with any third
party to dispose of the Vista Gold Plant;
o distribute or return any capital to its members;
o alter their constitution or articles of association;
o pay any dividend to its members or pay any management fee, or similar amount;
o Enter into any contract which could effect the balance sheet negatively or require further debt
to service that contract.
On 24 December 2019, Titan announced the following changes to this facility:
the repayment date under the Loan Facility has been extended to 30 April 2020;
•
• as consideration for the extension to the repayment date, Titan has agreed to pay a fee to each
Lender which is equal to 5% of the loan amount provided by that Lender, being an aggregate of
US$150,000 (which at each Lender's election may be paid in cash or satisfied through the issue of
fully paid ordinary shares in Titan); and
the security to be provided by Titan to the Lenders in connection with the Loan Facility will also include
Titan's rights and interests in certain promissory notes issued by Core Gold Inc in addition to the
existing security of Vista Gold S.A.C. and Core Private Placement shares. (refer to announcement
dated 25 March 2019) – refer to Note 15.
•
Finance costs:
As at 31 December 2019, $713,527 of interest and extensions fees was accrued in relation to loan from
sophisticated and professional investors and disclosed as finance costs. Also included in finance costs are
other various costs incurred in obtaining financing.
18. PROVISIONS
NON CURRENT
Provision for rehabilitation
Consolidated
31-Dec-19
31-Dec-18
403,057
403,057
-
-
A provision for rehabilitation has been recognised for costs to remediate spaces used as tailings dumps to
meet laws and regulations for the protection of the environment as described by the relevant Government
regulator in Peru.
43
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
19. ISSUED CAPITAL
(a)
Issued capital reconciliation
Issued capital
Ordinary shares fully paid
Treasury shares(1)
Total Issued Capital
31 December 2019
$
123,576,041
-
123,576,041
Number
296,566,687
-
296,566,687
31 December 2018
$
119,205,794
(2,080,000)
117,125,794
Number
2,563,706,065
-
2,563,706,065
Movements in shares on issue
Balance at the beginning of the financial year
2,563,706,065
119,205,794
1,635,381,023
91,050,880
Consolidation on a 10:1 basis
(2,307,335,458)
-
40,196,080
6,029,412
(1,171,665)
-
-
-
-
-
-
Shares issued 7 August 2019, at $0.15, for
Share Placement
Disposal of treasury shares
Shares issued 28 May 2018, at $0.03 under
Tranche 1 of Share Placement
Shares issued 16 July 2018, at $0.03 under
Tranche 2 of Share Placement
Shares issued 10 August 2018, at $0.032 for
the acquisition of Andina Resources Limited
Shares issued 26 September 2018, at $0.032
for the acquisition of Andina
Capital Raising Costs
-
-
-
-
-
-
-
-
-
-
233,334,333
7,000,030
133,334,333
4,000,010
545,263,978
17,448,447
16,392,398
524,557
(487,500)
-
(818,130)
Balance at end of financial year
296,566,687
123,576,041
2,563,706,065
119,205,794
(1) Treasury shares
During the year the Group disposed of 65,000,000 treasury shares for cash of $683,335 and $225,000 in
lieu of cash for settlement of creditors. There are no treasury shares held as at 31 December 2019.
Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the
Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of
and amounts paid up on shares held. Ordinary shares entitle their holder to one vote, either in person or
by proxy, at a meeting of the Company.
(b)
Shares under option – unlisted
Recipient
Number of
shares under
option
Exercise
price
Expiry
date
Vested
Canaccord Genuity (Australia) Limited
1,200,000
$0.05
1 July 2021
100%
Canaccord Genuity (Australia) Limited
1,500,000
$0.06
1 July 2021
100%
Canaccord Genuity (Australia) Limited
1,800,000
$0.07
1 July 2021
100%
As at 31 December 2019, there are 4,500,000 unlisted share options issued to corporate advisors.
Unquoted share options granted carry no rights to dividends and no voting rights and details of the
movement in unissued shares or interests under option as at the date of this report are:
44
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Total number of options outstanding as at 1 January 2018
Issue of options
Share options lapsed
Total number of options outstanding as at 31 December 2018
Share consolidation
Total number of options outstanding as at 31 December 2019
No options were exercised during the year.
20. RESERVES
Share based payments reserve
Foreign currency translation reserve
Asset revaluation reserve
Movements in Share based payments reserve
At the beginning of the financial year
Additions
Reversal of share based payments
Number of Options
(Unlisted)
209,357
45,000,000
(209,357)
45,000,000
(40,500,000)
4,500,000
Consolidated
31-Dec-19
4,420,237
(69,946)
(2,301,853)
2,048,438
4,056,059
718,503
(354,325)
4,420,237
31-Dec-18
4,056,059
46,527
-
4,102,586
2,825,527
1,230,532
-
4,056,059
The share based payments reserve is used to accumulate the fair value of share based payments issued,
including options and performance rights.
Movements in Foreign currency translation reserve
At the beginning of the financial year
Disposal of subsidiary
Movement
46,527
(75,844)
(40,629)
(69,946)
(251,558)
298,085
46,527
The foreign currency translation reserve is used to record exchange differences arising from the translation
of subsidiaries from the functional currency (US dollars for Peru) to the presentation currency (AUD).
Movements in the Asset revaluation reserve
At the beginning of the financial year
Movement
-
(2,301,853)
(2,301,853)
-
-
-
The asset revaluation reserve is used to record fair value movements in financial assets carried at fair value
through other comprehensive income
45
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
21. LOSS PER SHARE
Basic and diluted loss per share from continuing operations
Consolidated
31-Dec-19
Cents
(3.804)
$
31-Dec-18
Cents
(4.147)
$
Loss from Continuing Operations Attributable to Equity Holders of
Titan Minerals Ltd
(10,362,387)
(10,742,570)
Weighted average number of ordinary shares used in the
calculation of basic EPS
Potential ordinary shares not considered to be dilutive at year end
Basic and diluted loss per share from discontinued operations
(Loss) / Profit from Discontinued Operations Attributable to Equity
Holders of Titan Minerals Ltd
Weighted average number of ordinary shares used in the
calculation of basic EPS
Potential ordinary shares not considered to be dilutive at year end
No.
272,438,031
-
Cents
(0.443)
$
(1,206,477)
No.
272,438,031
-
No.
2,052,757,028
-
Cents
0.342
$
702,414
No.
2,052,757,028
-
There were no potential ordinary shares considered to be dilutive at year end.
22. SUBSIDIARIES
Name of entity
Mundo Minerals USA Inc
Empresa Minera
Cobrepampa S.A.C
Grupo Cobrepampa
S.A.C
Korisumaq S.A.C
Compañía Minera
Austrandina S.A.C
(formerly Hogans Heros
S.A.C)
Compañía Minera Santa
Raquel (formerly Hogans
Hotel California S.A.C)
Compañía Minera Santa
Carmela (formerly Little
Twiggy S.A.C)
Andina Resources
Limited
Tulin Gold S.A.C
Vista Gold S.A.C
Mantle Mining S.A.C
Andean Metals S.A.C
Porphyry Assets Pty Ltd
Porphyry Assets S.A.C
Country of
incorporation
USA
Peru
Ownership
interest
2019
100%
100%1
Ownership
interest
2018
100%
100%1
Principal Activity
Administrative holding company
Copper exploration
Peru
Peru
Peru
100%1
100%1
100%
100%1
100%1
100%
Copper exploration
Copper exploration
Administrative holding company
Peru
100%
100%
Administrative holding company
Peru
100%
100%
Administrative holding company
Australia
100%
100%
Administrative holding company
100%
100%
100%
100%
100%
100%
Processing plant operator
Processing plant operator
Gold exploration
Administrative holding company
Administrative holding company
Administrative holding company
Peru
Peru
Peru
Peru
Australia
Peru
0%2
100%
100%
100%
100%
100%
46
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Note 1: Empresa Minera Cobrepampa S.A.C, Grupo Cobrepampa S.A.C and Korisumaq S.A.C were
placed in liquidation during the year, with the process ongoing as at 31 December 2019.
Note 2: As disclosed in Note 23, Tulin Gold S.A.C was disposed during the 2019 financial year.
23. DISCONTINUED OPERATIONS
The profit or loss attributable to discontinued operations relate to the disposal of the below entities.
Tulin Gold Co S.A.C
Derivado Y Concentrados S.A.C
Compañía Minera Cobrepampa S.A.C
Total Profit / (loss) for the year from discontinued
operations (attributable to owners of the company)
The details of the disposal’s are outlined below.
Disposal of Tulin Gold Co S.A.C
31 Dec 2019
31 Dec 2018
(1,206,477)
-
-
(2,229,848)
2,468,159
464,103
(1,206,477)
702,414
In July 2019, the Group disposed of its 100% owned subsidiary Tulin Gold Co S.A.C for consideration of
US $1.
(a) Financial performance
Profit for the period from discontinued operations
Revenue
Cost of goods sold
Gross profit
Other expenses
Impairment
Loss for the year from discontinued operations for
the year or until date of disposal
Gain on disposal
Loss before income tax
Attributable income tax expense
Loss for the year from discontinued operations
(attributable to owners of the company)
Cash flows from discontinued operations
Net cash inflow / (outflow) from operating activities
31 Dec 2019
31 Dec 2018
130,065
(144,501)
(14,436)
(247,148)
5,802,384
(5,211,220)
591,164
(592,163)
(1,090,290)
(2,228,849)
(1,351,874)
145,397
(1,206,477)
-
(2,229,848)
-
(2,229,848)
-
(1,206,477)
(2,229,848)
31 Dec 2019
31 Dec 2018
344,336
(1,106,530)
47
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
(b) Details of the sale of Tulin Gold Co S.A.C
Consideration received in cash and cash equivalents
Analysis of extracted assets and liabilities over which
control was lost
Cash and cash equivalents
Trade and other payables
Derecognition of foreign currency reserve
Gain on disposal of subsidiary
July 2019
1
(10,685)
196,710
(40,629)
145,397
The above gain on disposal of subsidiary is included in the loss for the period from discontinued
operations.
Disposal of Derivado Y Concentrados S.A.C
On 15 June 2018, the Group disposed of its 100% owned subsidiary Derivado Y Concentrados S.A.C for
3,500 Soles (AUD $1,068).
(c) Financial performance
Profit for the period from discontinued operations
Revenue
Cost of goods sold
Gross profit
Other expenses
(Loss) / profit for the year from discontinued
operations for the year or until date of disposal
Gain on disposal
Profit before income tax
Attributable income tax expense
Profit for the year from discontinued operations
(attributable to owners of the company)
31 Dec 2019
31 Dec 2018
-
-
-
-
-
-
-
-
-
-
-
-
(777,136)
(777,136)
3,245,287
2,468,151
-
2,468,151
Cash flows from discontinued operations
Net cash outflow from operating activities
(d) Details of the sale of Derivado Y Concentrados S.A.C
31 Dec 2019
31 Dec 2018
-
(205,608)
Consideration received in cash and cash equivalents
Analysis of assets and liabilities over which control was
lost
Trade and other payables
Derecognition of foreign currency reserve
Gain on disposal of subsidiary
48
15 June 2018
1,068
2,985,309
258,910
3,245,287
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
The above gain on disposal of subsidiary is included in the profit for the period from discontinued
operations.
Disposal of Compañía Minera Cobrepampa SAC
On 29 August 2018, the Group disposed of its 100% owned subsidiary Compañía Minera Cobrepampa
SAC for no consideration.
(a) Financial performance and cash flow information
Profit for the period from discontinued operations
Revenue
Cost of goods sold
Gross profit
Other expenses
Profit for the year from discontinued operations for
the year or until date of disposal
Gain on disposal
Profit before income tax
Attributable income tax expense
Profit for the year from discontinued operations
(attributable to owners of the company)
Cash flows from discontinued operations
Net cash outflow from operating activities
(b) Details of the sale of Compañía Minera Cobrepampa SAC
Consideration received in cash and cash equivalents
Analysis of assets and liabilities over which control was
lost
Trade and other payables
Gain on disposal of subsidiary
31 Dec 2019
31 Dec 2018
-
-
-
-
-
-
-
-
-
-
-
-
-
-
464,103
464,103
-
464,103
31 Dec 2019
31 Dec 2018
-
-
29 August 2018
-
464,103
464,103
The above gain on disposal of subsidiary is included in the profit for the period from discontinued
operations.
49
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
24. CONTINGENCIES AND COMMITMENTS
As at reporting date, the Group had no outstanding commitments under non-cancellable operating leases.
The outstanding commitments in relation to the prior period fell due as follows:
Within one year
In the second to fifth years inclusive
After 5 years
Consolidated
31-Dec-19
31-Dec-18
-
-
-
37,404
144,234
181,638
At the reporting date the Group is not part of any office rental agreement.
The Group has no other commitments or contingent liabilities as at 31 December 2019.
25. NOTES TO THE CASH FLOW STATEMENT
(a) Reconciliation of cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents includes cash on hand and in
banks and investments in money markets instruments. Cash and cash equivalents at the end of the
financial year as shown in the cash flow statement is reconciled to the related items in the balance sheet
as follows:
Cash at bank and deposits at call
Consolidated
31-Dec-19
31-Dec-18
1,793,396
5,459,426
(b) Reconciliation of loss for the year to net cash flows used in operating
Profit / (Loss) for the year
Adjustments for:
activities
(11,568,864)
(7,810,308)
87,202
1,230,532
(297,248)
-
7,066,878
(2,932,262)
376,468
364,178
(84,837)
713,527
2,790,577
-
-
1,053,133
(741,378)
273,984
(861,212)
623,486
380,386
(429,926)
(42,310)
(449,371)
2,348,702
(5,750,520)
(2,978,122)
(5,121,416)
Depreciation and amortisation of non-current assets
Share based payments
Foreign exchange
Finance costs
Impairment / (reversal) of impairment
Gain on disposal of subsidiary
Non-cash financing activities:
- Assumption of financial liability
(Increase)/decrease in assets:
Trade and other receivables
Prepayments
Inventories
Current tax assets
Increase/(decrease) in liabilities:
Trade and other payables
Net cash used in operating activities
50
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
(c) Non-cash financing activities
As disclosed in Note 17, a total of $713,527 of interest and extension fees was accrued in relation to loan
from sophisticated and professional investors and disclosed as finance costs.
There were no other non-cash financing activities.
26. EVENTS AFTER THE REPORTING PERIOD
As announced on 2 January 2020, the Group entered into an unsecured debt facility with RM Hunter Fund
Pty Ltd. The key terms of the loan facility are:
the amount available to be drawn is US$10 million;
•
• amounts drawn may be repaid and redrawn over the term;
•
•
the term is 12 months (with the repayment date being 31/12/2020);
the interest rate on amounts drawn is 12% per annum (and no interest or fees accrue on undrawn
amounts);
• Titan can use the amounts drawn as it chooses;
• no security has been, or is required to be, provided to the Lenders in connection with the Loan Facility;
and
• as consideration for the Lenders agreeing to provide the Loan Facility, Titan has agreed(subject to
receiving all required shareholder approvals)to issue to the Lenders fully paid ordinary shares in Titan
having an aggregate value equal to US$500,000, which is 5% of the total loan amount. If Titan does
not receive all required shareholder approvals for those shares to be issued to the Lenders, then
Titan must instead pay a US$500,000 fee to the Lenders in cash.
On 14 January 2020 the Group was successful in its offer to purchase all of the issued and outstanding
common shares (the “Core Shares”) of Core Gold Inc for consideration of 3.1 Titan Minerals Limited shares
for each Core Gold Inc share. As at the date of this report, 91.7% of Core Gold Inc has been acquired. As
a result of the change in the shareholding base of Titan Minerals Limited from the transaction, the
acquisition is considered to be a reverse acquisition as described AASB 3, with an acquisition date of 30
January 2020.
On 15 April 2020, Core Gold Inc announced the indefinite suspension of all of Core Gold’s production
operations and commercial activities in Ecuador due to force majeure resulting from the COVID-19 virus
pandemic.
Subsequent to the end of the financial year, the COVID-19 outbreak was declared a pandemic by the World
Health Organization in March 2020. Of specific relevance, on 15 March 2020 Peru announced a country-wide
lockdown including border and travel restrictions and prohibiting non-essential business operations.
The direct effect of the COVID-19 outbreak is still being understood by the business as it continues to navigate
the uncertainties of executing on its business and exploration plans. The outbreak and the response of
Governments in dealing with the pandemic is interfering with general activity levels within the community, the
economy and the operations of our business. The scale and duration of these developments remain uncertain
as at the date of this report however they will have an impact on our earnings, cash flow and financial condition.
There has not been any other matters or circumstances that have arisen since the end of the financial
year, that has significantly affected or may significantly affect, the operations of the Group, the results of
the operations, or the state of the affairs of the Group in the future financial years.
51
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
27. KEY MANAGEMENT PERSONNEL
Remuneration of key management personnel
Short term employee benefits
Post-employment benefits
Share based payments
Termination benefits
31-Dec-19
31-Dec-18
759,000
-
481,999
-
487,400
-
708,000
-
1,240,999
1,195,400
Refer to the Remuneration Report on pages 9-12 of the Directors Report for further details.
28. RELATED PARTY TRANSACTIONS
a) Subsidiaries
The ultimate parent entity of the group is Titan Minerals Limited. Details of the ownership of ordinary
shares held in subsidiaries are disclosed in Note 22 to the Financial Statements. Balances and
transactions between the Company and its subsidiaries, which are related parties of the Company,
have been eliminated on consolidation and are not disclosed in the Note. Details of transactions
between the Group and other related parties, if any, are disclosed below.
Transactions and balances between the Company and its subsidiaries were eliminated in the
preparation of consolidated financial statements of the Group.
b)
Parent entity
The ultimate parent entity of the Group is Titan Minerals Limited.
The Statement of Comprehensive Income and Financial position on the parent entity are summarised
below:
(i)
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Shareholder Equity
Statement of Comprehensive Income
Loss after tax
Total comprehensive loss
52
Parent
31-Dec-19
31-Dec-18
867,092
2,181,691
3,048,783
6,798,985
-
6,798,985
(3,750,202)
5,396,859
80,000
5,476,859
158,100
-
158,100
5,318,759
123,576,041
2,118,385
(129,444,628)
(3,750,202)
117,125,794
4,056,060
(115,863,095)
5,318,759
(13,581,533)
(13,581,533)
(24,883,356)
(24,883,356)
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
c)
Expenditure commitments by the parent entity:
Not longer than 1 year
Longer than 1 year and not longer than 5 years
31-Dec-19
31-Dec-18
-
-
-
-
-
-
29. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
The Group's overall risk management program focuses on the unpredictability of financial markets and
seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses
different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate, price and foreign exchange risks and ageing analysis for
credit and liquidity risk.
Risk management is carried out by senior management under direction of the Board of Directors. The
Board provides principles for overall risk management, as well as policies covering specific areas. The
consolidated entity is not materially exposed to changes in interest rates in its activities.
Cash and short-term deposits;
Trade and other receivables;
The material financial instruments to which the Group has exposure include:
(i)
(ii)
(iii) Accounts payable; and
(iv) Borrowings
The carrying values of these financial instruments approximate their fair values. The carrying values of the
Group’s financial instruments are as follows:
Financial Assets
Cash and Cash Equivalents
Trade and Other Receivables
Financial assets
Total Financial Assets
Financial Liabilities
Trade and other payables
Borrowings
Total Financial Liabilities
Net Exposure
31-Dec-19
31-Dec-18
1,793,396
2,173,830
2,101,691
6,068,917
5,459,426
1,447,302
-
6,906,728
4,296,129
8,733,095
13,029,224
(6,960,307)
1,137,182
4,958,922
6,096,104
810,624
The table reflects the undiscounted contractual settlement terms for financial instruments of a fixed period
of maturity as well as management’s expectations of settlement period for all other financial instruments.
Trade and other receivables maturing as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not longer than 5 years
Over 5 years
31-Dec-19
31-Dec-18
2,093,830
-
80,000
-
2,173,830
1,367,302
-
80,000
-
1,447,302
53
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Trade and other payables maturing as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not longer than 5 years
Over 5 years
Borrowings maturing as follows:
Less than 6 months
6 months to 1 year
Later than 1 year but not longer than 5 years
Over 5 years
(a) Market Risk
Foreign Exchange Risk
4,176,880
-
119,249
-
4,296,129
1,017,933
-
119,249
-
1,137,182
5,709,246
713,674
2,310,175
-
8,733,095
708,416
708,416
3,542,090
-
4,958,922
The Group operates internationally and is exposed to foreign exchange risk arising primarily from its
subsidiaries, primarily with respect to the US dollar.
Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities
denominated in a currency that is not the entity’s functional currency.
The carrying amounts of the Group’s foreign currency denominated assets and monetary liabilities at the
end of the reporting year are as follows:
Assets
Liabilities
31-Dec-19
$
31-Dec-18
$
31-Dec-19
$
31-Dec-18
$
US dollars
7,765,964
6,808,428
10,250,841
4,265,073
Interest Rate Risk
All the consolidated entity’s financial instruments that are exposed to interest rate risk are either non-
interest bearing, bear interest at commercial interest rates or at fixed rates. The weighted average interest
rate on cash and short-term deposits at 31 December 2019 was 0.45% (31 December 2018: 1.15%). All
receivables, other financial assets and payables are non-interest bearing.
Price risk
The Group is exposed to commodity price risk through its gold sales from the Toll processing operations.
The Group does not currently hedge the price at which it sells gold.
(b) Credit Risk
Financial instruments, which potentially subject the consolidated entity to credit risk, consist primarily of
cash and short-term deposits. Credit risk on cash, short term deposits and trade receivables is largely
minimised by dealing with companies with acceptable credit ratings.
The consolidated entity has no reason to believe credit losses will arise from any of the above financial
instruments. However, the maximum amount of loss, which may possibly be realised, is the carrying
amount of the financial instrument.
Cash in Australia is held with National Australia Bank Limited which is an appropriate financial institution
with an external credit rating of AA-. Cash in Peru is held with Banco De Credito Del Peru which is an
appropriate financial institution with an external credit rating of BBB+.
54
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
(c) Liquidity Risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or
otherwise meeting its obligations related to financial liabilities. Management monitors the rolling forecasts
of the Group’s cash and fair value assets based on expected cash flows. This is generally carried out at a
local level in the operating companies of the Group in accordance with the practise and limits set by the
Group.
(d) Capital Risk management
The Group’s objectives when managing capital are to safeguard their ability to continue as a going
concern, so that they can continue to maintain a suitable capital structure and fulfil the objectives of the
Group.
30. SHARE-BASED PAYMENTS
Performance Rights
At the General Meeting held on 18 December 2016, shareholders approved to grant 80,500,000
performance rights (post consolidation: 8,500,000) as remuneration (Class A, B, C). The rights entitled the
directors and company secretary to shares in Titan Minerals Limited on achievement of market conditions.
Under the plan, the participant was granted performance rights which only vest if certain market conditions
are met.
The amount of rights that will vest depends on the achievement of three market-based conditions. The
three conditions are market-based condition related to achieving a 10-day volume weighted average price
of shares on the ASX of greater than $0.05, $0.06 and $0.07 respectively (post consolidation: $0.50, $0.60,
$0.70 respectively).
Performance rights convert to shares on the date of vesting with no exercise price or share issue price
being payable.
At the Annual General Meeting held on 30 May 2019, shareholders approved to grant 15,000,000
(1,500,000 post consolidation) performance rights to Mr Travis Schwertfeger (COO) as part of his
remuneration. The performance rights have the following terms:
Tranche
Performance
Rights
consolidation)
500,000
(post-
D
E
F
500,000
500,000
Milestone
Expiry Date
The Shares achieving a daily VWAP of greater
than $0.05 for a period of 10 consecutive Trading
Days (post consolidation: $0.50)
The Shares achieving a daily VWAP of greater
than $0.06 for a period of 10 consecutive Trading
Days (post consolidation: $0.60)
The Shares achieving a daily VWAP of greater
than $0.07 for a period of 10 consecutive Trading
Days (post consolidation: $0.70)
2 years from
the date of
issue
(i) Fair value of performance rights granted
Set out below is the assessed fair value at grant date of performance rights granted:
Class A – Directors – granted 18 December 2016
Class B – Directors – granted 18 December 2016
Class C – Directors – granted 18 December 2016
$0.032
$0.032
$0.032
Fair value at grant
date
55
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
Class D – COO – granted 30 May 2019
Class E – COO– granted 30 May 2019
Class F – COO– granted 30 May 2019
$0.005
$0.003
$0.002
The fair value of the performance rights is being expensed over the vesting period.
As a result of Mr Sckalor and Mr Henry both resigning on 15 July 2019, under the terms and conditions of
the performance rights there are considered lapsed. As a result, any share based payment expense
recognised in relation to Mr Sckalor’s and Mr Henry’s performance rights have been reversed (total of
$354,325 at the date of resignation).
As at 31 December 2019, the vesting conditions on the performance rights expired with the conditions to
vest not met.
Options
On 10 August 2018 the Company issued the following 45,000,000 (post consolidation: 4,500,000) options to
Canaccord Genuity (Australia) Limited, comprised of:
- 12,000,000 (post consolidation: 1,200,000) unquoted options exercisable at $0.05 (post
consolidation: $0.50) each on or before 1 July 2021;
- 15,000,000 (post consolidation: 1,500,000) unquoted options exercisable at $0.06 (post
consolidation: $0.60) each on or before 1 July 2021; and
- 18,000,000 (post consolidation: 1,800,000) unquoted options exercisable at $0.07 (post
consolidation: $0.70) each on or before 1 July 2021.
The options were valued using a Black Scholes valuation model. The key inputs into the valuation were:
Options exercisable at:
Grant date
Expiry date
Estimated volatility
Risk-free interest rate
Fair value
$0.05
(post consol: $0.50)
10 August 2018
$0.06
(post consol: $0.60)
10 August 2018
$0.07
(post consol: $0.70)
10 August 2018
1 July 2021
1 July 2021
1 July 2021
75.93%
1.82%
$0.01
75.93%
1.82%
$0.009
75.93%
1.82%
$0.008
Expenses Arising from Share-based Payment Transactions
Total expenses arising from share-based payment transactions recognised during the year were as
follows:
31-Dec-19
$
31-Dec-18
$
(718,503)
354,325
-
(826,000)
-
(404,532)
(364,178)
(1,230,532)
Share based payments issued to directors and staff
Share based payment reversal
Options issued to Canaccord Genuity (Australia) Limited
Total share-based payments
56
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
31. REMUNERATION OF AUDITORS
Auditor of the parent entity
Audit and review of the annual and half year financial report
Audit and review of other financial reports
Other auditors – associate firms of the auditor of the parent entity in Peru
Audit or review of the financial report
31-Dec-19
$
31-Dec-18
$
103,606
20,700
124,306
74,985
-
74,985
52,655
22,732
32. BUSINESS COMBINATION
Acquisition of Andina Resources Limited
On 26 March 2018 the Group announced that it had entered into a bid implementation agreement with
Andina Resources Limited (“Andina”), by which Titan would acquire all of the issued capital in Andina via
an off-market takeover bid. Under the bid, Andina shareholders will receive 1 fully paid ordinary share in
the capital of Titan Minerals Limited for every 1.18 Andina shares held.
On 12 July 2018, the Group’s acquisition of Andina became unconditional upon the completion of the key
conditions of the takeover bid.
The accounting of the business combination had been determined provisionally as at the 31 December
2018 annual report. As at the date of this report, the Group has finalised the business combination
accounting of the acquisition of Andina.
(a) Consideration transferred
Issued capital (561,656,376 shares)
$
17,973,004
57
Notes to the Consolidated Financial Statements
T I T A N M I N E R A L S L I M I T E D – Y E A R E N D E D 3 1 D E C E M B E R 2 0 1 9
(b) Assets acquired and liabilities recognised at the date of acquisition
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Inventories
Financial assets*
Current tax asset
Non-current assets
Property, plant and equipment
Deferred exploration and evaluation expenditure
Deferred tax asset
Current liabilities
Trade and other payables
Financial liabilities
Non-current liabilities
Financial liabilities
Other financial liabilities**
Deferred tax liabilities
Total assets acquired and liabilities recognised at the date of
acquisition
$
226,248
1,439,816
460,038
1,039,005
2,080,000
375,823
3,140,477
5,400,000
95,922
526,606
1,015,710
4,109,524
1,114,273
1,390,268
6,100,948
*Andina Resources Limited held in its shares in Titan Minerals Limited as at the date of the acquisition
with a value of $2,080,000. Upon acquisition of these shares, they were recognised by the Group as
treasury shares in Equity.
**Other financial liabilities relates to the loan owing from Mantle Mining S.A.C (a subsidiary of Andina
Resources Limited), to Hogan’s Heros S.A.C (a subsidiary of Titan Minerals Limited). Upon acquisition of
Andina, this loan eliminates upon consolidation.
Goodwill arising on acquisition
Consideration transferred
Less: Fair value of identifiable net assets and liabilities acquired
Goodwill (Note 14)
$
17,973,004
(6,100,948)
11,872,056
58
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
TITAN MINERALS LIMITED
Report on the Audit of the Financial Report
Opinion
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
We have audited the financial report of Titan Minerals Limited the Company and its subsidiaries (“the Group”), which
comprises the consolidated statement of financial position as at 31 December 2019, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement
of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting
policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2019 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Material Uncertainty Related to Going Concern
Without qualifying our audit opinion, attention is drawn to the following matter.
As referred to in Note 2 to the financial statements, the consolidated financial statements have been prepared on the
going concern basis. At 31 December 2019, the Group had cash and cash equivalents of $1,793,396, and incurred a loss
after income tax from continuing operations of $10,362,387.
The ability of the Group to continue as a going concern and meet its planned exploration, administration and other
commitments is dependent upon the Group raising further working capital and/or successfully recommencing profitable
operations and/or exploiting its mineral and other assets. The recent market uncertainty arising from the financial effects
of the COVID-19 virus, may impact on the Group’s ability to raise further working capital and or to commence profitable
operations.
In the event that the Group is not successful in raising further equity or successfully recommencing profitable operations
and /or exploiting its mineral and other assets, the Group may not be able to meet its liabilities as and when they fall due
and the realisable value of the Group’s current and non-current assets may be significantly less than book values.
Emphasis of Matter Relating to Carrying Value of Property, Plant and Equipment
Without qualifying our audit opinion, attention is drawn to the following matter.
As referred to in Note 12 to the financial statements, the Group had Property, Plant and Equipment of $5,047,013 as at
31 December 2019. The recoverability of the Group’s carrying value of Property, Plant and Equipment is dependent
on the successful commercial exploitation of the assets and/or sale of the assets to generate sufficient funds to at
least that of their carrying values. In the event that the Group is not successful in commercial exploitation and/or
sale of these assets, the realisable value of the Group’s assets may be significantly less than their current carrying
values.
Liability limited by a scheme approved
under Professional Standards Legislation
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial report of the current period. These matters were addressed in the context of our audit of the financial report as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters
How the matter was addressed in the audit
Carrying Value of Goodwill
During the prior year, the Company acquired 100%
of the issued capital of Andina Resources Limited
(“Andina”). As a result, an adjusted goodwill balance
totalling $11,872,056 as at 31 December 2019 was
recognised.
The carrying value of the goodwill was considered a
key audit matter due to:
•
•
The significance of the balance, being
approximately 44% of total assets; and
The high level of judgment required from
the management in applying the standard
AASB 136 Impairment of Assets (”AASB
136”).
Inter alia, our audit procedures
following:
included
the
i. Reviewing the audit work performed by the
component auditor of Andina’s wholly owned
trading subsidiary Vista Gold SAC;
the
regarding
ii. Obtaining and challenging management’s
assessment
impairment of
goodwill in relation to the acquisition of Andina.
This was also considered particularly in light of
the additional acquisition of Core Gold Inc.
transaction concluded in the 2020 financial
year;
iii. Reviewed minutes of the Board of Directors
discussions with
held
and
meetings
management; and
iv. Considering the adequacy of the financial
report disclosures contained in Notes 14 and 23
in relation to AASB 136 and AASB 3 Business
Combinations (in relation to prior period).
Other Information
The directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 31 December 2019, but does not include the financial report and our auditor’s
report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any form of
assurance opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free
from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and maintain
professional scepticism throughout the audit. An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers
internal control relevant to the entity's preparation of the financial report that gives a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor's report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether
the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements. We also
provide the Directors with a statement that we have complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in the audit
of the financial report of the current period and are therefore key audit matters. We describe these matters in our auditor's
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 9 to 12 of the directors’ report for the year ended 31
December 2019.
In our opinion, the Remuneration Report of Titan Minerals Limited for the year ended 31 December 2019 complies with
section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in
accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Martin Michalik
Director
West Perth, Western Australia
16 April 2020
ADDITIONAL INFORMATION AS AT 14 APRIL 2020
ANALYSIS OF HOLDINGS OF LISTED SHARES AND OPTIONS IN THE COMPANY
1 — 1,000
1,001 — 5,000
5,001 — 10,000
10,001 — 100,000
100,001 — and over
Total number of holders
Ordinary
Shares
136
220
136
461
372
1,325
Holdings of less than a marketable parcel
416
Voting Rights
For all ordinary shares, voting rights are one vote
per member on a show of hands and one vote per
share in a poll.
There are no current on-market buy-back
arrangements for the Company.
REGISTERED OFFICE OF THE COMPANY
Suite 1, 295 Rokeby Road
Subiaco Western Australia 6005
Tel:
Fax:
+61 (8) 6555 2950
+61 (8) 6166 0261
SHARE REGISTRY
The registers of shares and options of the
Company are maintained by:-
Automic Share Registry
Level 2
267 St Georges Terrace
Perth WA 6000
Telephone (within Australia): 1300 992 916
Telephone (outside Australia): +61 3 9315 2333
COMPANY SECRETARY
The name of the Company Secretary is Zane
Lewis.
TAXATION STATUS
Titan Minerals Limited is taxed as a public
company.
63
ADDITIONAL INFORMATION AS AT 14 APRIL 2020
TWENTY LARGEST HOLDERS OF ORDINARY SHARES
Rank
Holder Name
Securities
%
1
2
3
4
5
6
7
8
9
10
10
11
12
13
14
15
16
17
18
19
20
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY
LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED
TAZGA TWO PTY LTD
MEADOWCROFT INVESTMENTS PTY LTD
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA)
LIMITED-GSCO ECA
BLOCK CAPITAL GROUP LIMITED
J STIMPSON PTY LTD
MR REEGAN BUSWELL
ROCKFORD INVESTMENT FUND P/L
BETTINA MARIA JESUS CAPORICCI &
ALFREDO ALBERTO RAMON CAPORICCI
VONROSS NOMINEES PTY LTD
TEXBRIDGE HOLDINGS PTY LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY
LIMITED
SAMALUCA HOLDINGS PTY LTD
ALITIME NOMINEES PTY LTD
FERNLAND HOLDINGS PTY LTD
MEADOWCROFT INVESTMENTS P/L
RICHSHAM NOMINEES PTY LTD
Total
192,492,734
106,000,753
25.25%
13.90%
88,344,109
11.59%
17,533,333
2.30%
15,532,514
2.04%
13,070,864
1.71%
11,213,174
10,244,955
8,740,882
7,500,000
1.47%
1.34%
1.15%
0.98%
7,500,000
0.98%
7,480,000
0.98%
7,045,435
0.92%
5,567,254
5,441,667
5,230,515
5,037,500
4,701,994
0.73%
0.71%
0.69%
0.66%
0.62%
4,030,000
0.53%
4,000,000
0.52%
3,825,034
530,532,717
0.50%
69.58%
SUBSTANTIAL SHAREHOLDERS
Holder Name
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
Securities
192,492,734
106,000,753
88,344,109
%
25.25%
13.90%
11.59%
64
ADDITIONAL INFORMATION AS AT 14 APRIL 2020
TENEMENTS
Project
Location
Tenement
Interest held
Coriorcco
Coriorcco
Las Antas
Las Antas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
Torrecillas
San Santiago
San Santiago
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Anta 17
ASC105
Anta 7
Anta 9
Retorno-I
Retorno-II
Retorno-III
Retorno-IV
Retorno-V
Retorno-VI
Retorno-VII
Retorno-IX
RetornoXIV
RetornoXV
RetornoX
Retorno XX
Retorno XXXIV
Retorno XXXII
San Santiago De Acari
Virgen Del Carmen 2004P
100%
100%
0%(1)
0%(1)
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
(1) Titan has been granted an exclusive option to acquire up to an 85% interest in the Las Antas Project
(“Las Antas Earn-In”). Under the Las Antas Earn-In, Titan can earn-in to 60% of the Las Antas Project
by funding US$2,000,000 in exploration activity within a 2-year period from completion of drill
permitting.
CORPORATE GOVERNANCE STATEMENT
The directors of Titan Minerals support and adhere to the principles of corporate governance, recognising
the need for the highest standard of corporate behaviour and accountability. Please refer to the corporate
governance statement and the appendix 4G released to ASX and posted on the Company website at
www.titanminerals.com.au.
The directors are focused on fulfilling their responsibilities individually, and as a Board, for the benefit of all
the Company’s stakeholders. That involves recognition of, and a need to adopt, principles of good corporate
governance. The Board supports the guidelines on the “Principles of Good Corporate Governance and
Recommendations – 3rd Edition” established by the ASX Corporate Governance Council.
Given the size and structure of the Company, the nature of its business activities, the stage of its
development and the cost of strict and detailed compliance with all of the recommendations, it has adopted
a range of modified systems, procedures and practices which enables it to meet the principles of good
corporate governance.
The Company’s practices are mainly consistent with those of the guidelines and where they do not correlate
with the recommendations in the guidelines the Company considers that its adopted practices are
appropriate to it.
65