www.titanminerals.com.au
ANNUAL
REPORT
1
2
0
2
1/35 Richardson Street
WEST PERTH WA 6005
Phone: +61 08 6375 2700
E-mail: info@titanminerals.com.au
Focussed on the exploration and development
of the rich copper and gold deposits in the
prolifically mineralised cordilleras of Southern
Ecuador’s Andean Terrain.
CORPORATE DIRECTORY
BOARD OF DIRECTORS
Mr Peter Cook
Non-Executive Chairman
Mr Laurence Marsland Managing Director (Resigned 31/3/2022)
Mr Matthew Carr
Acting CEO and Executive Director
Mr Nicholas Rowley
Non-Executive Director
Mr Barry Bourne
Non-Executive Director
COMPANY SECRETARY
Mr Zane Lewis
REGISTERED OFFICE
1/35 Richardson Street
WEST PERTH, WA 6005
Phone: +61 8 6555 2950
Fax: +61 8 6166 0261
Email: info@titanminerals.com.au
Website: www.titanminerals.com.au
SHARE REGISTRY
Automic Share Registry
Level 2, 267 St Georges Terrace
PERTH, WA 6000
AUSTRALIAN BUSINESS NUMBER
97 117 790 897
STOCK EXCHANGE LISTING
ASX: TTM
AUDITORS
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue
West Perth Western Australia 6005
ANNUAL REPORT
CONTENTS PAGE
02
MESSAGE FROM
THE CHAIRMAN &
EXECUTIVE DIRECTOR
04
06
OUR COMPANY
OVERVIEW
BOARD OF
DIRECTORS
08
DYNASTRY
PROJECT
28
12
LINDEROS
PROJECT
34
CORPORATE
GOVERNANCE
20
26
COPPER DUKE
PROJECT
JERUSALEN GOLD
PROJECT
CORPORATE
OVERVIEW
37
CONSOLIDATED
FINANCIAL
STATEMENT
42
NOTES ON THE
CONSOLIDATED
FINANCIAL
STATEMENT
82
ADDITIONAL
INFORMATION
95
AUDITOR’S
INDEPENDENT
DECLARATION
97
INDEPENDENT
AUDITOR'S
REPORT
104
ASX ADDITIONAL
INFORMATION
1
Annual Report 2021
has joined as a Non-executive Director. Tamara
who, with her mining engineering and corporate
development background as well as Ecuadorian
experience rounds out the required skilled set on
the Board to get the best from these assets for our
shareholders.
The Company is now well equipped and positioned
to focus our exploration strategy and application
of funds toward the task of creating wealth for our
shareholders through the discovery of metals within
our fantastic group of projects as we move into the
2022 year.
I thank all our shareholders and stakeholders for their
loyalty, commitment and backing of the Titan team in
the past year. I can assure you of our best intentions
to serve and deliver upon your demands in the year
ahead.
PETER COOK
CHAIRMAN
MESSAGE
FROM THE
CHAIRMAN
Dear Shareholders,
On behalf of the board it is my pleasure to present
you the Titan Mineral Limited Annual Report for the
financial year ending December 31, 2021.
This year has been a successful one for your Company
as it put behind it the takeover of Core Gold, dealt
with the legacy issues associated with that began to
progress exploration on the Company’s exciting suite
of assets.
I joined as Chairman of the Company on 31 August
2021, replacing Mr Michael Hardy who as the
previous Chairman had overseen a legal restructuring
and corporate restructuring of the Group. I truly thank
Michael for the service he provided the Company.
My engagement signaled a shift for the group to
adjust its focus on the technical expertise required to
manage and explore for the epithermal and porphyry
copper type deposits in developing countries was
pleased to also join alongside Mr Michael Skead
who as Executive Vice President of Exploration
significantly increased the technical capacity and
capability of our in-country team in Ecuador.
I was also thrilled that for reasons driven by the
remarkable prospectively and opportunity these
prospects showed that highly regarded international
geologist and geophysicist, Mr Barry Bourne joined
the Board on October 19, 2020 as Non-Executive
Director to provide further guidance over the works
programs and the focus of our exploration dollars in
Ecuador.
Since year end the lure of success and the outstanding
prospectively has also lured two additional highly
skilled and experience professionals to the team.
We have welcomed highly experienced Latin
American geologist; Mr Pablo Morelli who joined
as Exploration Manager in early January 2022.
We also welcome Tamara Brown to the team who
2
MESSAGE
FROM THE
EXECUTIVE DIRECTOR
Dear Shareholders,
It is my pleasure to update you on progress of the
Company during the past financial year.
The first half of the year was focussed on the
organisation restructuring of the assets in Ecuador
to resolve all historic and legacy issue relating to
the previous owner. The Company completed and
successfully started to receive staged payments for the
sale of its Zaruma assets which had been the burden
on progress for the previous owner.
By mid-year Titan had re-established matters relating
to our social licence and community endorsement
and commenced our inaugural drilling program
at the Dynasty Gold Project. We had up to 6 man-
portable diamond rigs drilling away with an objective
to infill and expand upon the known mineralisation at
Dynasty with the first focus on the more extensively
tested Cerro Verde area where previous NI43-101
resource estimate was completed and had also
been validated by small-scale open pit mining and
processing.
Exploration activities were disrupted during the year
due to COVID-19 and long delays in receiving
assay results however, by the end of 2021 we had
completed nearly 22,000m of diamond drilling, the
majority in the Cerro Verde and Iguana Prospect
areas of the Dynasty Gold Project.
Under the direction of our new Chairman we have
completed a capital raising (A$18m) and with the
support of loyal shareholders converted the vast
majority of our loan funds and outstanding legacy
debts to equity. It is pleasing that so many have
aligned themselves with our exploration objectives
through owning shares in the Company.
We continued to receive deferred payments from the
Zaruma sale of the previous year with the remainder
due over the first half of 2022. A small residual
amount of loan funds will be paid out in full in the
ensuing year on receipt of further due payments
leaving the group completely un-encumbered.
The initial objective of the resource definition drilling
at Dynasty was to infill drill density and align the
previously reported NI43-101 estimate of
the
previous owner with the JORC 2012 standards. Whilst
this remains an objective, the results received from the
first half of the program suggest that the mineralisation
was more extensive at Cerro Verde. This created a
shift in strategy later in the year to first define and
understand the magnitude of the ore system before
finessing a reporting quantity.
Excellent progress was also made at the Linderos
Project, in particular the two most advanced prospects
within it, being the Meseta Gold Prospect and the
Copper Ridge Prospect. Channel sampling and other
detailed ground reconnaissance works significantly
extended the strike length of known epithermal
veining in the high sulphidation prosect at Meseta.
Intense ground reconnaissance, geophysical and
geochemical works were completed at Copper
Ridge with a well-defined text-book style porphyry
copper anomaly outlined. Extensive trench sampling
peripheral to the anomaly has returned strong copper
and gold grades from phyllic and propylitic alteration
of surrounding country rock. Our team is very excited
by this prospect, and we look forward to drill testing it
in the ensuing year.
The team at Titan continued to build up base datasets
with layers of geology, geochemistry, mapping and
geophysics over within the broader Copper Duke
Project. Just before year-end we embarked on a very
preliminary diamond drill program of two holes. The
first hole was designed with an objective to test the
gold mineralisation previously defined by the drilling
of the UN in the 1970’s. The second hole a wildcat
to orientate our thinking about what was causing the
magnetic anomalies in the area. Significant alteration
and minor-sulphidation as a broad overprint was
logged. Assays are pending.
Our in-country team has been invigorated with a
more scientific approach being adopted. We have
the technical capability and financial capacity to
make great progress in the ensuing year.
I too thank our dedicated and committed staff for
their efforts during the year and sincerely thank those
shareholders who believe in our projects and who
have continued to support our efforts.
Matthew Carr
MATTHEW CARR
ACTING CEO & EXECUTIVE DIRECTOR
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Annual Report 2021
OUR COMPANY
OVERVIEW
The Company’s main undertaking
is exploration and development
for gold and copper in Southern
Ecuador
ASSETS
The Dynasty Gold Project
The Linderos Project
The Copper Duke Project
The Jerusalen Project
The Copper Field Prospect
All the Ecuadorian titles are owned by wholly owned Ecuadorian Company’s, top-hatted by Panamanian public Company’s
enabling transactional flexibility for each asset which allow decisions about investment into each project to be made
independently of the others.
The assets lie proximal to a major flexure of the Andean Terrane where porphyry copper and epithermal gold-silver are
associated with early to late Miocene aged magmatism along the margin of the extensive Cretaceous aged Tangula Batholith.
Access to the main projects is excellent, within close proximity to Pan American and coastal highways as well as paved
regional all-weather roads. Regional airports exist approximately two hours by road from the projects with daily connections
to Ecuador’s capital city, Quito.
Topography at the projects is moderate to steep with deeply incised streams and elevations range from approximately 900m
to just over 2,200m across concession areas.
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Annual Report 2021
BOARD OF
DIRECTORS
THE PEOPLE
PETER COOK
CHAIRMAN
MATTHEW CARR
ACTING CEO AND
NON EXECUTIVE DIRECTOR
NICHOLAS ROWLEY
NON EXECUTIVE DIRECTOR
BARRY BOURNE
NON EXECUTIVE DIRECTOR
Mr Carr has over 10 years experience working in South
America and is currently a Director of Titan Minerals
Limited, having lead the hostile takeover of Coregold Inc.
Mr Carr is also a founding Director of Private Equity
and Financing Company Urban Capital Group. He has
experience across debt finance, equity markets and
restructuring, with a particular focus on Resources and
Property assets.
Mr Rowley is an experienced resource executive with
a career spanning more than 17 years in corporate
development and commercial roles specialising in M&A
transactions, corporate advisory and equities markets.
Mr Rowley has worked for a number of small to mid cap
mining and exploration companies with his most recent
role as Director – Corporate Development for Galaxy
Resources where he oversaw sales and marketing, business
development and investor relations for 7 years.
Mr Rowley currently serves as a Non-Executive Director of
Cyprium Metals Limited (ASX:CYM)
Mr Cook is a Geologist and Mineral Economist with
over 35 years of experience in the field of exploration,
project, operational and corporate management of mining
companies. Over the past two decades, Peter has founded
or served as Managing Director or Chairman for many
successful mining and resource development companies in
gold and base metals.
He is currently the Non-Executive Chairman of Castile
Resources Limited (ASX: CST) and Breaker Resources NL
(ASX: BRB). He just retired from a long career as founder
of Westgold Resources Limited (ASX:WGX) where he
had served as Managing Director, Executive and Non-
executive Chairman.
Over his distinguished career Peter has been recognised
by the industry, being awarded the GMJ Mining Executive
of the year in 2001, the Asia-Mining Executive of the year
awarded at the Mines and Money Conference in Hong
Kong in 2015, the Mining News CEO of the Year award in
2018 and the Gavin Thomas Mining Award in 2019
Mr Bourne is a Geologist and the Principal Consultant at
Terra Resources Pty Ltd which specialises in geophysical
survey design, acquisition, processing, modelling, inversion,
data integration, interpretation, and drill hole targeting.
Mr Bourne has significant exploration success and strong
leadership qualities alongside his technical abilities. Mr
Bourne worked for over 12 years with Barrick Gold which
included six years in-country experience in developing
nations (Papua New Guinea, East/West Africa, South
America) and three years working on the Carlin trend in
the USA. Prior to Barrick Gold, Mr Bourne was principal
geophysicist of Homestake Gold.
Mr Bourne was shortlisted for the Australian innovation
Awards in 2012 and was the Advance Global Australian of
the Year for Mining and Resources in 2013.
Mr Bourne holds BSc (Hons), is a Fellow of the Australian
Institute of Geoscientists, is on the technical advisory
committee for UWA Centre for Exploration Targeting, and a
member of the Australian Institute of Company Directors.
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Annual Report 2021
TITAN
DYNASTY GOLD PROJECT 100%
DYNASTY GOLD PROJECT
The Dynasty Gold Project is an advanced exploration and development prospect covering five concessions and 1 3,909
hectares of land with previous explorer Core Gold Ltd defining a Canadian NI43-101 compliant resource (“NI43-101” or
“foreign”) estimate publicly released on 6 May 2019 estimating total resource of 2.1 million oz of gold and 16.82 million
ounces of silver (refer to appendix 1 for detail). Whilst considered to be a foreign estimate and not reported in accordance
with JORC 2012 standards, it nonetheless shows the vein swarms at Dynasty to be of substantial magnitude and relevance.
For the second half of the year Titan has operated up to 6 man-portable diamond rigs methodically increasing drill density as
part of the validation process. A number of significant drill intercepts have unsurprisingly been returned and so far, all veins
vein proved to have mineralisation and continuity as predicted by the NI43-101 estimate. The new drill cores also reveal
epithermal textures evidencing multiple phases of fluid flow, and variable gold-silver ratios and coincident metal associations
which positively complicate the story.
A competent person has not done sufficient work to classify the foreign estimates as a mineral resource in accordance with
JORC. It is uncertain that following evaluation and/or further exploration work that the foreign estimates will be able to be
reported as mineral resources in accordance with the JORC Code.
The main area of drilling has been at the Cerro Verde prospect in the southern par of the known vein cluster. Only a few holes
being completed so far in the central Iguana and northern Papayal areas. The following table summarises drilling statistics for
the year.
However, this resource estimate was somewhat validated by open pit mining on upper parts of the veins with over 650,000
tonnes at 3.46 g/t being produced after processing at Core’s Zaruma plant. Compared to the resource estimate, 40% more
gold was produced than the NI43-101 estimate in this area. The resultant reconciliation of 169% of the tonnes at 85% of the
grade being explained as the result of more extensive alteration halo’s and addition veins being discovered.
Titans exploration strategy during 2021 has been a process of infill drilling to further validate the NI43-101 estimate
which was done by polygonal methods with somewhat wide spaced drilling.
Drilling / Trenching
Project
Prospect
Number of
completed drill
holes
Total metres
drilled
Number of
Trenches
Completed
Total metres
trenches
Total metres of
trench channel
sampled
Cerro Verde
93
20,161.46
Dynasty
Gold
Project
Iguana
Papayal-
Trapichillo
5
8
614.94
1,030
34
18
4
1,196
1,017
97
8.7
97
8.7
A number of excellent drill intercepts have been returned from assays with the better tabulated below. At year end assay data
for half the program was still outstanding.
As is essential in the terrain and for these outcropping veins, extensive trench and channel sampling is also an excellent tool
for defining vein geometry and assay results. This style of trenching is essentially a horizontal core of the veins as they outcrop.
The attached image shows this style of trench cutting in previous work.
Over the past year more than 1.3km of channels these trenches have been cut across the outcropping vein cluster at Dynasty.
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Annual Report 2021
TITAN
DYNASTY GOLD PROJECT 100%
DYNASTY GOLD PROJECT
The following cross section and the subsequent plan of vein swarms, drill hole traces, and new intercepts show the complexity
of the vein cluster on a field scale but also the immense potential of the ore system to contain significantly more mineralisation.
Cerro Verde Prospect
It was a busy year of activity which significantly increased the Company’s confidence and
knowledge of the ore system within the overall Dynasty Gold Project. Whilst not a complete list, the following selected drill
intercepts returned from Diamond holes within the prospect show the continued potential of this gold-silver epithermal system:
CV19-010
9m @ 5.35g/t gold and 20g/t silver from 37m, and
25m @ 1.51g/t gold and 9g/t silver from 66m in
hole, with multiple intercepts
CV19-015
4.75m @ 5.65g/t gold and 8g/t silver from 14.6m
CV19-028
4.25m @ 6.37g/t gold and 11g/t silver from 56.85m
and 10.8m @ 2.06g/t gold and 10g/t silver from
89.5m
CV19-030
5.35m @ 2.23 g/t gold and 46g/t silver from 112.1m
CVD016
CVD014
CVD003
1.54m @ 13.5g/t gold and 21g/t silver from
131.15m within 5.68m @ 4.63g/t gold and 10g/t
silver
25m @ 1.30g/t gold and 11g/t silver from 19.44m
and 1.54m @ 4.73g/t gold and 25g/t silver from
53.16m
6.4m @ 2.29g/t gold and 9.2g/t silver within 13.29m @ 1.3g/t gold and 8.0g/t silver from 181.04m
CVD008
1.99m @ 4.24g/t gold and 15g/t silver within 10.72m @ 1.83g/t gold and 29g/t silver from 118.74m
CVD012
2.08m @ 3.9g/t gold and 39g/t silver within 7.21m @ 1.73g/t gold and 23g/t silver from 53.79m
CVD011
7.07m @ 2.60g/t gold and10g/t silver from 28.77m, 2.5m @ 7.51g/t gold and 363g/t silver from 408.8m and 2.33m
@ 4.04g/t gold and 84g/t silver from 594.12m
CVD023
5.49m @ 5.33g/t gold with 259g/t silver from 58.3m
CVD022
9.22m @ 2.46g/t gold with 11g/t silver from 169.1m
CVD027
3.12m @ 4.57g/t gold with 10g/t silver from 154.97m
43.06m @ 2.56g/t gold with 6.9g/t silver from 84.94m (including 14.14m @ 6.42g/t gold with 16g/t silver from
87.09m
CVD073
1.98m @ 51.2g/t gold with 9.1g/t silver from 135.5m
CVD033
7.27m @ 9.89g/t gold with 28g/t silver from 118.78m
CVD039
18.1m @ 3.83g/t gold with 50g/t silver and,4.39m @ 3.63g/t gold with 35g/t silver from 73.05m
CVD069
4.60m @ 5.83g/t gold with 25g/t silver from 61.9m
CVD068
6.59m @ 4.24g/t gold with 12g/t silver from 68.45m
10
CVD072
14.14m @ 6.42g/t gold with 16.4g/t silver from 87.09m (within 102.7m @ 1.48g/t gold at a lower 0.2g/t Au cut-off)
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Annual Report 2021
TITAN
DYNASTY GOLD PROJECT 100%
DYNASTY GOLD PROJECT
Iguana Prospect
Cerro Verde Trench & Channel Samples
IGD007
4.94m @ 6.28g/t gold and 16 g/t silver from 82.22m
CVC010
11.52m @ 3.32g/t gold and 11g/t silver
IGD010
2.28m @ 6.82g/t gold and 88g/t silver from 24.52m
IGD013
2.69m @ 7.54g/t gold and 38g/t silver from 125.76m
IGD015
3.80m @ 6.92g/t gold and 30g/t silver from 117.20m
CVC004
10.56m @ 4.14g/t gold and 10g/t Silver from 84.61m , 6.66m @ 4.16g/t gold and 21 g/t Silver from
37.53m and 7.38m @ 2.12g/t gold and 14 g/t silver
CVC001
2.60m @ 11.2g/t gold and 224 g/t Silver from 26.25m, 6.66m @ 4.41g/t gold and 30 g/t Silver from
53.58m and 6.32m @ 4.13g/t gold and 65 g/t silver
Coincident with the diamond drilling, over 1,300m of channels cut from which 1,123m were sampled. The breakdown
being:
CVC007
4.34m @ 3.83g/t gold and 44g/t silver
• 1,017 metres sampled from the Cerro Verde Prospect;
• 97m sampled from the Iguana Prospect and
• 9m from The Papayal-Trapichilo Prospect.
Better results returned and previously advised to the ASX up to the time of reporting include:
IGD007
4.94m @ 6.28g/t gold and 16g/t silver from 82.22m
IGD010
2.28m @ 6.82g/t gold and 88g/t silver from 24.52m
IGD013
2.69m @ 7.54g/t gold and 38g/t silver from 125.76m
IGD015
3.80m @ 6.92g/t gold and 30g/t silver from 117.20m
CVD023
5.49m @ 5.33g/t gold with 259g/t silver
CVD022
9.22m @ 2.46g/t gold with 11g/t silver
CVD027
3.12m @ 4.57g/t gold with 10g/t silver
Iguana Trench and Channels
IGC019
5.71m @ 3.95g/t gold with 15g/t Silver from 1.3m in trench channel
IGC020
3.11m @ 4.48g/t gold with 8.2 g/t Silver from 1.26m in trench channel
IGC022
4.73m @ 3.57g/t gold with 73.4 g/t Silver from 0.0m in trench
Works on vein modelling commenced in a process to further validate the previous NI43-101 estimate completed by the
previous owner at Dynasty. At year end there was a significant number of assay results outstanding which are required to
complete this process.
2022 Work Program
In the ensuing year the work programmes at Dynasty will continue with an increased technical emphasis on detailed rock
chemistry, textural and structural interpretation of the veins. More spectral works are planned to vector the drilling toward
expected alteration and boiling zone areas where metal density (grades of gold and silver) are higher. Drilling will continue
later in the year aided by these technical studies.
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Annual Report 2021
TITAN
LINDEROS PROJECT 100%
The Linderos Project covers four concessions and 14,317 hectares of area and is located near the regional centre Macara and
has good road and infrastructure access and water sourced from the Catamayo River.
The Linderos Project is located approximately 20 km southwest of the Dynasty Gold Project. The structural setting at Linderos
also sits proximal to a major flexure in Andean Terrane. The tenure straddles the Western contact of the Tangula batholith and
cretaceous volcano-sedimentary rocks. Local geology reveals outcropping multi-phase diorite intrusions considered to be of
Miocene age which appear to straddle the margin of the Batholith.
During the year Titan defined several key prospect areas as the primary focus of immediate exploration including:
The Meseta Gold Camp
The Copper Ridge Prospect
Nueva Esperanza Prospect
Capa Rosa Prospect
The Loma Alta Prospect
The Victoria Prospect
Exploration activities during 2021
included completion of 3,191.4 metres
of trenching and 294 rock chip
samples.
In addition to the prospect scale
trenching, Titan commenced a
systematic soil sampling program on
grid patterns planning the cover the
whole of the Linderos concession.
By year end 566 soil samples were
collected with sampling ongoing.
LINDEROS PROJECT
Copper Ridge Prospect
Copper Ridge is an outcropping porphyritic intrusion complex hosting copper and molybdenum anomalism in zoned phyllic
and argillic alteration associated with a porphyry copper intrusion. Surface soil geochemistry has defined a strong copper-
molybdenum (Cu-Mo-Au) anomaly centered on a quartz-diorite porphyry intrusion mapped to be approximately 1km in
diameter.
The porphyry stock hosts and is haloed by a significant footprint of quartz stockworks and typical porphyry related alteration
covering an area of approximately 3 square kilometres.
Previous drill campaigns with surface holes conveniently positioned from existing tracks have returned highly anomalous
copper results from various levels of phyllic and potassic alteration
overprinted with a later argillic alteration.
Better results from this drilling includes:
ERIKA01
99.75m @ 0.26% copper from 255m drilled depth
ERIKA02
84.85m @ 0.32% copper (from surface to end of hole)
ERIKA02A 20m @ 0.21% copper from 181mto EOH
DHW05
77.05m @ 0.19% copper (from surface to EOH)
DHW06
50.25m @ 0.33% copper (from surface to EOH)
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Annual Report 2021
TITAN
LINDEROS PROJECT 100%
The deepest of the holes was ERIKA01, revealing increasingly higher grades of copper, up to 0.4% within phyllic alteration
towards the bottom of the hole. Re-processed and re-interpreted historic geophysical data has shown a potential conducting
body deeper in the system. A 3-D Induced Polarisation (IP) survey s planned later in 2022 before drill testing this exciting
target.
Recent channel and rock chip sampling results over the Copper Ridge prospect has defined an area of significantly more
pervasive copper mineralisation in argillic alteration at Copper Ridge prospect, a great signal that indicates the erosional level
of the outcropping porphyry copper body is high in the system with scope for higher grades with depth.
Better results from initial channel sampling in un-drilled areas indicating higher grade mineralisation within the prospect
returned surface values that include:
Channel - CRC022
42m @ 0.31% copper and 0.12g/t gold including 12m @ 0.39% copper
Channel - CRC023
42m @ 0.29% copper and 0.08g/t gold including 8m @ 0.53% copper
Channel CRC003
90m @ 0.26% copper and 0.13g/t gold
LINDEROS PROJECT
Meseta Gold Camp
The Meseta Gold Camp is located approximately 2 km north of the Copper Ridge Prospect and occurs as series of sub-
parallel epithermal veins interpreted to exist in a high sulphidation environment proximal and above a postulated porphyry
copper system at Copper Ridge. The prospect has good access and moderate terrain.
Meseta Gold Prospect hosts gold mineralisation in steep to sub-vertical fault structures at the margins of the porphyry stock
and is associated with strong silicification and oxidation of the sulphides. Several features suggesting the presence of an
intermediate to high-sulphidation gold system at these areas have been observed. Including several zones of very high-grade
results, such as an area of previous trenching just southwest of hole LDH004 where trench results within a 150m x 100m zone
of sampling include a number of bonanza gold results including:
These results confirm an expanding footprint of copper mineralisation further demonstrated in channel sample results
located 500m to the northeast of hole ERIKA02, where a 360m wide zone of copper mineralisation averaging over
0.2% copper on a northwest to southeast trend is reported in channels CHRC01-02, CRC003, CRC004-007 and
CRC010-013. The extensive zone of copper mineralisation is hosted within a mapped quartz stockwork zone hosted in
the quartz-diorite stock within the multi-phase intrusion complex at Copper Ridge.
Linderos - 13
21m @ 18.5g/t gold in trench
Linderos - 16
19.95m @ 14.3g/t in trench Linderos
Linderos -14
18.2m @ 14.7g/t gold in trench Linderos
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Annual Report 2021
TITAN
LINDEROS PROJECT 100%
LINDEROS PROJECT
Peak assay results of individual samples in the channel sampled area include up to 326g/t gold with 141g/t silver, and
161g/t gold with 87g/t silver. Previous drilling confirmed mineralisation in fresh rock below the zone of channel sampling
and tested for extensions of mineralisation to the east under very thin transported cover for up to 1km under the geochemically
blind plateau. All eleven holes drilled at the Meseta Gold Prospect intersected extensive epithermal style and hydrothermal
related alteration with the main vein intercepts including:
At the surface the continuity of the outcropping veins is blanketed by what appears to be an alluvial terrace, however the new
works reveal the veins outcropping out both ends of the covered terrace indicating a blind target for epithermal veins with a
potential strike length of more than 1 kilometre. Whilst more work is required here, it is shaping up as an exciting prospect.
LDH004
5.94m @ 10.8g/t gold from 36.4m
LDH004A
8.88m @ 4.70g/t gold from 40.65m
LDH003
14.32m @ 1.43g/t gold from 45.44m
Surface reconnaissance works, channel sampling and rock chips continued to enhance the interpretation of this area during
the year.
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Annual Report 2021
TITAN
COPPER DUKE PROJECT 100%
Copper Duke is an early-stage exploration project comprised of 13 concessions located approximately 18km east of the
Company’s more advanced Dynasty Gold Project in the Loja Province of southern Ecuador. The project is located near the
regional centre of Catacocha, has good road infrastructure and water is sourced from the Catamayo River.
The Copper Duke Project is owned by Ecuadorian wholly owned subsidiary, Helles Mining Corporation which is wholly
owned by Helles Mining Corporation (Panama) and upstream to Titans Minerals Limited.
Regionally, the project lies at the northern contact of the Tangula batholith, situated adjacent to Cretaceous volcano-sediments.
Local geology comprises outcropping diorite and quartz-diorite composed rocks with small alteration zones. Outcropping
copper and gold mineralisation is hosted in veins and tectonic breccias and outcropping copper-gold bearing skarns are
located at the contact with the Tangula Batholith and Celica Formation. Exploration target deposit models are porphyry
copper gold systems, intrusion related gold and gold bearing skarns.
COPPER DUKE PROJECT
Work to date has confirmed it is host to multiple porphyritic textured intrusions associated with extensive copper-gold
anomalism and quartz hosted gold veining outcropping at surface.
The scale, geometry and extent of geophysical anomalism identified at the Copper Duke Project shows resemblance to many
major porphyry districts around the world. Magnetic surveys reveal clusters of intrusion related anomalism over an area
greater than 12km2.
Recent surface exploration has confirmed a relatively high tenor of geochemical anomalism outcropping at surface which is
exposed through several hundred metres of vertical relief across the project area.
During the year Titan has continued to build systematic exploration datasets with follow-up geochemistry surveys and channel
sampling, extending surface geochemistry coverage a further 12km2.
The field reconnaissance programme assessing the geophysical interpretation has further enhanced targeting at the El Huato
and Catamayo prospects and outlined additional clusters of intrusion centers outlined in the geophysical anomalism extending
beyond the footprint of known surface mineralisation.
To the north of the contiguous trend of prospects hosting multiple clusters of intrusion centers, the underexplored Ningomine
Prospect has the largest footprint of geophysical anomalism featuring vein hosted gold and copper mineralisation across several
scattered outcrop areas. Geophysical results are interpreted to be associated with magnetite alteration often corresponding
with broad zones of high tenor surface geochemistry.
Since 1968 the area was the subject of several non-systematic exploration campaigns completed by state-owned and private
groups. During this period different types of mineralisation have been discovered and mapped, but never been systematically
drill-tested.
20
21
Annual Report 2021
COPPER DUKE PROJECT
TITAN
COPPER DUKE PROJECT 100%
Copper Duke is currently in the early exploration stage with new systematic exploration focussed on identification of porphyry/
epithermal copper and gold targets. Exploration activities during 2021 consisted mainly of reconnaissance geological works.
Works this year also included a two-hole drilling program (540 metres) to validate a previous hole drilled in the 1970’s by the
UN and stratigraphically test the source of magnetic anomalism. In addition, 2,148 metres of trenching and three hundred
and seventy-five (375) rock chip samples were completed.
To date multi -phase outcropping porphyry targets, including porphyry copper-gold mineralisation and epithermal gold
bearing quartz-magnetite vein systems have been identified. The surface geochemistry anomalism in soil and rock sampling
is open-ended.
Titan has sharpened its focus to 8 prospect areas within the concession:
El Huato Prospect
Identified as a copper-gold epithermal/porphyry system. Most work was done on this
prospect by Core Gold
Loma Redonda Prospect
Identified as a copper-gold system in massive sulfide filled structures
Landanuma Prospect
8 channels totaling 509 metres have been completed without significant metal grade.
El Palton Prospect
Outcropping silica-pyrite-sericite alteration located close to the active mine, Chapadero
Ningomine Prospect
Not covered by mapping with quartz gold veins highlighted in historic reports
Blanquillo Prospect
Outcropping stockwork veining hosted in rhyolite porphyry. Currently, the surface rights
status is unclear
Barbasco Prospect
Yet to be explored
Rio Catamayo Prospect
Porphyry intrusions highlighted in historic reports with outcropping fresh strong magnetic
diorite dykes.
22
23
Annual Report 2021
TITAN
COPPER DUKE PROJECT 100%
COPPER DUKE PROJECT
During 2021, Titan commenced a systematic soil sampling program over the key prospect areas within Copper Duke and at
year end it was 70% complete.
Concurrently, geological mapping at scale of 1:20,000 of the main area, approximately 7,200Ha of Copper Duke
commenced. Broad scale geology is ongoing.
During the mapping programs numerous different styles of mineralised outcrop have been mapped including:
In December, Titan commenced an inaugural round of reconnaissance drilling at the Copper Duke project (ASX Announcement
13 December 2021) for a planned 540 metre campaign. The two main objectives of the programme were to validate the drill
hole results from historical drill holes completed in 1978 as follow-up work to a U.N. survey to identify strategic base metal
potential in the region and to test the magnetic anomalism highlighted in 3D inversion modelling of the high-resolution magnetic
datasets generated earlier this year. Assay results pending.
•
•
•
•
•
•
Stockwork quartz veins related to porphyritic textured intrusions
Intrusive semi-massive sulphide breccias
Copper-gold bearing skarns
Copper bearing veins/breccias
Oxidised gossanous structures
Massive sulphide filled structure
During the year 36 channel samples for a total of 1,917 metres has been completed with results outstanding at year end.
24
25
Annual Report 2021
TITAN
JERUSALEN PROJECT 100%
JERUSALEN GOLD PROJECT
The Jerusalen Project is a high-grade epithermal gold and silver discovery located on a single concession, named the Jerusalen
concession, located approximately 150km due east of the Dynasty Gold Project in south-eastern Ecuador, 400km south-east
of the capital Quito in the province of Zamora-Chinchipe, within 45km of the provincial capital Zamora, close to the border
with Peru. The single concession covers 2.25km² in a readily accessible region of southern Ecuador within 70km of the nearest
regional airport located near the city of Loja.
To date 47 diamond holes have been drilled into these veins to define an orebody with a foreign resource estimate containing
1.2 million ounces of gold at 14.5 g/t gold and 8.6 million ounces of silver grading 98g/t. Of this total foreign resource
estimate reported in accordance with Canadian NI43-101 some 423,000oz of gold and 2.86 million ounces of silver
(955,000 tonnes at 13.8g/t gold and 93 g/t silver) has been classified in the measured and indicated category (refer to
ASX release dated 21 September 2020).
The Jerusalen concession is held by wholly owned Ecuadorian subsidiary, Cloudstreet International Corporation which is in
turn wholly owned by Cloudstreet International Corporation (Panama) and then upstream to Titan Minerals Ltd.
The project is located on the margins of the Zamora batholith, a middle to late Jurassic age intrusion up to 100km wide and
exposed for 200km in the prolific Zamora copper-gold metallogenic belt. The belt hosts several epithermal gold deposits
including the Condor project and the 13.9Moz Fruta del Norte mine, and multiple copper to gold enriched copper porphyry
systems including Mirador and Santa Barbara projects.
The remainder is inferred and sparsely drilled. The orebody remains open at depth and to the north a series of other targets
on the small concession are identified for further work. The concession is strategically located as keyhole in neighbouring,
Luminex Resources Condor Project No active exploration was completed on the permit during the year.
Jerusalen Gold Project - Foreign Resource Estimate
The project area has been the focus of several exploration campaigns, reporting several mineral resource estimations since the
late 1990’s and host to artisanal mining activity since the early 1980’s. Several mineral resource estimations completed and
two such estimates reported under the Canadian National Instrument NI43-101, with the most recent technical report titled
“Jerusalen Gold Project, Zamora Chinchipe - Ecuador” dated 24 October 2014 and released on the SEDAR platform on 5
November 2014 (Table 9).
The information in this annual report relating to Mineral Resource Estimates for the Jerusalen Gold Project is a foreign estimate
and is not reported in accordance with the JORC Code. A competent person has not done sufficient work to classify this foreign
estimate as a mineral resource in accordance with the JORC Code and it is uncertain that following further exploration work that
this foreign estimate will be able to be reported as a mineral resource in accordance with the JORC Code.
Category
Measured
Indicated
Total Measure & Indicated
Inferred
Total
Tonnes
(000’s)
379
576
956
1775
2,731
Au
(g/t)
14.2
13.5
13.8
15.0
14.5
Ag
(g/t)
90
95
93
101
98
Contained Au
(ozs)
Contained Ag
(ozs)
(000’s)
(000’s)
173
249
422
856
1,098
1,760
2,857
5,764
1,278
8,621
The existing drill datasets for the project are reported to include 52 holes of drilling inside or intersecting the Jerusalen Gold
project. Titan has identified available files and assay logs for 47 diamond holes totalling 13,383m drilled, of which 30 holes
are collared inside the Jerusalen Gold Project area. The average length of the holes is 267m and the depth of the deepest hole
collared in Jerusalen Concession is 614.76m.
26
27
Annual Report 2021
CORPORATE
OVERVIEW
COVID-19
During the year, industry wide there were extended turn-
around times for assay results due to COVID-19 related
curfews on laboratory operating hours, shipping and
delivery delays.
Titan’s daily COVID monitoring activities, quarantine
and testing policies were effective in maintaining a good
health record for both the Company’s team and the local
communities Titan engage with.
In Ecuador, exploration and mining activities have been
defined as essential activities and were permitted under
COVID restrictions in Ecuador subject to each operation’s
development and implementation of COVID-19 related
safety policies. As required, these policies were lodged at
Federal, Provincial, and Municipal levels of government.
SALE OF ZARUMA MINE
As announced 26 July 2021, Titan has completed the
sale of the Zaruma Mine concessions and the Portovelo
Process Plant assets to Pelorus Minerals Limited (Pelorus).
The consideration of US$15.0 million is payable in staged
cash payments. Titan retains a 2% net smelter return
royalty on future copper production from the Zaruma mine
concessions (for Transaction Summary refer to Quarterly
Activities Report 30th July 2021).
Completion of the asset sale will enable Titan to resolve the
balance sheet issues it inherited following the acquisition
of Core Gold Inc. in 2020 and to focus its full attention on
the development of its flagship Dynasty Gold Project, and
exploration at the Copper Duke Project and the high-grade
Linderos Gold Project in Ecuador.
CORPORATE OVERVIEW
KEY APPOINTMENTS
During the second half of the year several key appointments were announced
that add a substantial amount of experience and technical capability to the
Company.
These include:
Mr. Michael Skead appointed as Executive Vice-
President of Exploration
Mike was appointed to oversee all exploration, development, and economic
evaluation of Titan’s exploration portfolio in Ecuador with an initial focus on
advancing the Dynasty Gold Project. Subsequent to year end Mr. Skead was
promoted to the position of In Country Manager – Ecuador.
Mr. Peter Cook appointed as Non-Executive Chairman
Mr. Cook brings a great skillset that significantly enhances the Board which
now has an impressive mix of essential skills and experience across geology,
mining, business development, operations, and capital markets.
Mr. Barry Bourne appointed as Non-Executive Director
Barry has advanced knowledge for targeting both epithermal and porphyry
mineralisation the likes of that which our prospects in Ecuador have revealed.
Resignation of Mr Laurie Marsland as Managing Director
Post year end on April 1, 2022 the Company advised that Mr. Laurie
Marsland was stepping down as a Director and Managing Director of the
Company with immediate effect by mutual agreement with the Board.
Mrs. Tamara Brown appointed as Non-Executive Director
Tamara has extensive corporate, mining and development skillsets and an
advanced knowledge of the Ecuadorian exploration and mining scene.
Tamara rounds out a board skillset to enable the advancement of the projects
in the best interests of our shareholders.
28
29
Annual Report 2021
CORPORATE OVERVIEW
CORPORATE
OVERVIEW
During the year, industry wide there were extended turn-
CAPITAL RAISING
On 7 October 2021, Titan completed an at market
placement of 180 million shares at A$0.10 per fully paid
ordinary share to raise A$18,000,000. The Placement
was strongly supported by existing and new domestic
and offshore institutional investors outside of Australia.
In addition, the expects to receive a further US$7.5m in
staged payments as proceeds of the Zaruma asset sale
(ASX release 15th April 2021), ensuring the Company is
well funded for its ensuing exploration programs.
CONVERSION OF FEES AND DEBT TO
EQUITY
Canaccord Lead Manager Services
Canaccord Genuity (Australia) Limited (“Canaccord”),
the lead manager from the Company’s recent
A$18,000,000 placement (“Placement”), has requested
to be paid a portion of its lead manager fees in fully
paid ordinary shares in the Company (“Shares”) (refer
to the Company’s ASX announcement on 14 October
2021 and accompanying Appendix 3B dated 7
October 2021 or further details on the Placement and
Canaccord’s engagement). The Company has issued
Canaccord 8,000,000 Shares at the same issue price as
Shares under the Placement, being A$0.10 per Share, in
satisfaction of A$800,000 of Canaccord’s fees for lead
manager services.
In addition certain debt holders have agreed to
convert A$3,017,148 of debt to equity, resulting in the
issue of a further 34,838,149 shares. This includes the
conversion of A$703,801 by Director Matthew Carr,
which was approved the shareholder meeting held in
on 8 December 2021.
Director Participation and Debt Conversion
In addition to the Placement, Non-Executive Director
Nick Rowley subscribed for an additional A$185,000
of new shares that were approved the shareholder
meeting held in on 8 December 2021.
Furthermore, Mr Cook purchased 10,000,000
shares for A$1,000,000 and Mr Rowley purchased
3,150,000 for A$315,000 on market purchase at the
Placement price from a debt holder who converted
their debt to equity.
The Company has now retired approximately A$6.3
million of debt and associated interest through the
debt settlement agreement with SilverStream SEZC
(refer to Quarterly Activities Report 31st October
2021) and the aforementioned issue of Shares at the
Placement issue price of A$0.10 per Share (refer to
the Company’s ASX announcement dated 7 October
2021).
RESTRUCTURE OF FINANCE TEAM
Debt for Equity Arrangements
Titan has further strengthened its balance sheet through
the issue of 15,000,000 Shares at the Placement issue
price of A$0.10 per Share in satisfaction of the principal
under the RM Hunter line of credit.
On 14 October 2021 the Company announced
the resignation of its Chief Financial Officer,
David Sadgrove. Mr Sadgrove made significant
contributions to Titan since joining in August 2020,
such as his involvement with the Core Gold Inc.
acquisition, divestment of the non-core Peruvian
operations and restructuring of the Ecuadorian
operations.
The Company made a number of significant additions to
its in-country team. As part of Titan’s focus on bolstering
management capability and capacity in Ecuador, the
finance team will now be operating out of Ecuador, with
continued independent financial consulting support that
has been present from the commencement of divestment
of the Peruvian assets and restructuring of Core Gold’s
Ecuadorian businesses.
VOX SILVERSTREAM ROYALTY
In the second quarter, Titan executed binding agreements
with Vox Royalty Corp whereby Vox acquired four
gold, silver, and copper royalties from Titan for total
cash consideration of US$1,000,000. The tenements
are non-core early-stage exploration projects located
in Peru. In addition, Titan will pay Vox US$1,000,000
in cash pursuant to the terms of a debt settlement
agreement between Vox’s subsidiary, SilverStream SEZC,
and a subsidiary of Titan, Mantle Mining Peru S.A.C,
extinguishing all debt owed by Mantle to SilverStream.
CASH
As at 31 December 2021, Titan had a reported cash
position of US$8,750,000.
In addition, the Company held US$8,600,000 of
receivables and liquid assets.
30
31
Annual Report 2021
TITAN
TENEMENTS
OUR COMPANY
TENEMENTS
CORPORATE OVERVIEW
PROJECT
LOCATION
TENEMENT
INTEREST AT END
OF YEAR
PROJECT
LOCATION
TENEMENT
INTEREST AT END
OF YEAR
Dynasty
Dynasty
Dynasty
Dynasty
Dynasty
Copper Duke
Copper Duke
Loja, Ecuador
Loja, Ecuador
Loja, Ecuador
PILO 9
ZAR
ZAR 1
Loja, Ecuador
CECILIA 1
Loja, Ecuador
Loja, Ecuador
ZAR TRES A
BARBASCO
Loja, Ecuador
BARBASCO 1
Copper Duke
Loja, Ecuador
BARBASCO 2
Copper Duke
Loja, Ecuador
BARBASCO 4
Copper Duke
Loja, Ecuador
CAROL
Copper Duke
Loja, Ecuador
CATACOCHA
Copper Duke
Loja, Ecuador
COLANGA
Copper Duke
Loja, Ecuador
COLANGA 2
Copper Duke
Loja, Ecuador
Copper Duke
Loja, Ecuador
Copper Duke
Loja, Ecuador
GLORIA
GLORIA 1
GONZA 1
Copper Duke
Loja, Ecuador
LUMAPAMBA
Copper Duke
Loja, Ecuador
LUMAPAMBA 1
Linderos
Loja, Ecuador
CHORRERA
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Linderos
Linderos
Linderos
Alce
Phoebe
Phoebe
Phoebe
Phoebe
Phoebe
Phoebe
Phoebe
Cart
Copper Field
Loja, Ecuador
Copper Field
Loja, Ecuador
Loja, Ecuador
DYNASTY 1
Loja, Ecuador
LINDEROS E
Loja, Ecuador
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
Southern Peru
NARANJO
COOPER 1
COOPER 4
ALCE
PHOEBE 1
PHOEBE 2
PHOEBE 3
PHOEBE 4
PHOEBE 5
Southern Peru
TOROLUMI
Southern Peru
TOROLUMI II
Central Peru
CART01
Colossus
Central Peru
COLOSSUS01
Jaw
Jaw
Southern Peru
Southern Peru
JAW01
JAW02
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
32
33
Annual Report 2021
CORPORATE
GOVERNANCE
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 – 4th
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.
CANADIAN SHAREHOLDERS
The Company advises that is a designated foreign issuer as that term is defined in National Instrument 71-102 –
Continuous Disclosure and other Exemptions Relation to Foreign Issuers and it is subject to the foreign regulatory
requirements of the Australian Securities Exchange.
Notes to Mineral Resource
Dynasty Gold Project
The information in this announcement relating to Mineral Resource Estimates for the Dynasty Gold Project is a foreign
estimate and is not reported in accordance with the JORC Code and it is uncertain that following further exploration
work that this foreign estimate will be able to be reported as a mineral resource in accordance with the JORC Code.
The Foreign Estimate initially reported in the document titled “Quarterly Activities Report for the Three Months Ended
31 March 2020”, dated 30 April 2020 (Initial Dynasty Announcement) is not reported in accordance with the JORC
Code and a competent person has not done sufficient work to classify the foreign estimate as mineral resources in
accordance with the JORC Code.
Titan’s intention is to continue undertaking further exploration work planned for the Dynasty Gold Project to underpin
a mineral resource estimation report in accordance with the principles of the JORC Code. The work plan outlined in
the Initial Dynasty Announcement to achieve an updated resource estimation included:
(i) Comprehensive re-logging of archived historical core available and digital photograph acquisition of core
material previously drilled on the project
(ii) Additionally drilling to define geometry of mineralisation and underpin 3D geological modelling, confirm
confidence in projected mineralisation and selective twinning of previous drilling for verification purposes
(iii) Additional metallurgical studies to underpin assumption or predictions in preliminary economic assessments
Titan has commenced the proposed comprehensive re-logging campaign, and recently completed an initial
campaign of oriented diamond core drilling to define vein orientations across most areas of foreign resource
estimation, with final assays results from drilling pending analyses and development of a 3D geological model in
progress at the time of reporting.
The foreign resource estimate is comprised of three prospect areas, Cerro Verde, Iguana, and Papayal prospects.
Initial drill tests to define vein orientations and continuity over the northernmost areas of the Cerro Verde and Papayal
area remain subject to finalising surface access agreements with local community groups and land owners.
Preliminary metallurgical study work has not yet been initiated.
In addition to the exploration activities proposed in the Initial Dynasty Announcement, the Company has also
completed a significant number of bulk density measurements within the drilled areas, and several petrographic
samples for lithologic definition and gold deportment studies have been completed.
With receipt of final assays and completion of a structural analysis and accompanying 3D geological modelling,
Titan plans to move ahead with updating the Dynasty Minerals Resource Estimate in accordance with the JORC code
during the Company’s 2022 fiscal year.
As outlined above, Titan has collected additional information and data in relation to the Dynasty Gold Project, Titan
Minerals confirms however, that exploration results to date do not appear to have a material impact on the reliability
of the Foreign Mineral Resource Estimate under the previous estimation methods for the Dynasty Gold Project or
the results from previous exploration activity included in the Initial Dynasty Announcement. Titan confirms that the
supporting information provided in the Initial Jerusalen announcement continues to apply and have not materially
changed
Jerusalen Project
The information in this announcement relating to Mineral Resource Estimates for the Jerusalen Project is a foreign
estimate and is not reported in accordance with the JORC Code and it is uncertain that following further exploration
work that this foreign estimate will be able to be reported as a mineral resource in accordance with the JORC
Code. The Foreign Estimate initially reported in the document titled “Titan Minerals Jerusalen Project Concession
in Ecuador Reinstated to 100% Ownership”, dated 21 September 2020 (Initial Jerusalen Announcement) is not
reported in accordance with the JORC Code and a competent person has not done sufficient work to classify the
foreign estimate as mineral resources in accordance with the JORC Code.
Titan’s intention is to continue undertaking further exploration work proposed for the Jerusalen Project to underpin a
mineral resource estimation report in accordance with the principles of the JORC Code. The work plan outlined in
the Initial Jerusalen Announcement to achieve an updated resource estimation included:
i.
audit, verification and re-logging program of historical diamond core stored at the Jerusalen Project site,
ii. where available, compilation of underground mine surveys to assess impact of previous mining on the foreign
resource estimate completed in 2014
in-fill drilling to define geometry of mineralisation and underpin development of a 3D geological model (to
iii.
34
35
Annual Report 2021
establish controls for geostatistical modelling techniques in resource estimation), confirm confidence in projected
mineralisation, and selective twinning of previous drilling for verification purposes, and
iv. additional metallurgical studies to underpin assumption or predictions in preliminary economic assessments
As at the time of reporting Titan had not yet initiated the proposed work program. Titan has not been able to progress the
Jerusalen Project. Artisanal and illegal mining activity has constrained access and progress but the matter is being resolved
by local authorities.
With successful access to the project area, commencement of field exploration activities will remain subject to completion of
an environmental audit of the project area following a hiatus in continuity of title on the project area and assessment of impact
by illegal mining activity on the property. Proposed field work will follow-on from community engagement, socialisation,
and environmental baseline study work in accordance with statutory requirements in Ecuador and industry best practices.
Titan confirms that it is not in possession of any new information or data that materially impacts on the reliability of the
Foreign Mineral Resource Estimate for the Jerusalen Project or results included in the Initial Jerusalen Announcement. Titan
confirms that the supporting information provided in the Initial Jerusalen announcement continues to apply and have not
materially changed.
COMPETENT PERSON’S STATEMENT
The information in this report that relates to Exploration Results is based on information compiled by Mr Travis Schwertfeger,
who is a Member of The Australian Institute of Geoscientists. Mr Schwertfeger is Consulting Geologist for the Company and
has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration and to the
activity which he is undertaking to qualify as a Competent Person as defined in the JORC 2012 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Schwertfeger consents to their inclusion
in the report of the matters based on his information in the form and context in which it appears.
Mr. Schwertfeger confirms that the technical information in this release and information provided relating to the Mineral
Resource Estimates for the Dynasty Gold Project and Jerusalen Project have been provided under ASX Listing Rules 5.12.2 to
5.12.7 and is an accurate representation of the available data and studies for the Dynasty Gold Project located in southern
Ecuador as a Foreign Estimate.
CONSOLIDATED
FINANCIAL STATEMENTS
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
36
37
Annual Report 2021
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
For the year ended 31 December 2021
Performance rights / options
CONTINUING OPERATIONS EXPENSES
General and administration
Salary and wages
Professional fees
Note
31-Dec-21
US$000’s
Compensation
31-Dec-20
US$000’s
5(a)
(1,920)
(2,795)
(844)
(1,920)
(1,688)
(1,196)
Share based payments – directors and employees
24
(1,070)
(3,607)
As at 31 December 2021
Consolidated
CURRENT ASSETS
Cash and cash equivalents
Receivables and prepaid expenses
Inventories
Financial assets
(5,522)
(9,518)
Assets classified as held for sale
Loss from operations
Finance costs
Derivative liability gain – warrants
Impairment
Foreign exchange gain / (loss)
Fair value movements of financial assets
Other income
Gain / (loss) on extinguishment of financial liabilities
Gain on disposal of subsidiary
Corporate transaction expense
Loss before income tax from continuing operations
Income tax expense
Loss after income tax from continuing operations
DISCONTINUED OPERATIONS
Profit/(Loss) for the year from discontinued operations
Profit/(Loss) for the year
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss
- Exchange differences on translating foreign operations
Total comprehensive profit / (loss) for the year
EARNINGS PER SHARE (cents)
Basic and diluted earnings per share
From continuing operations
Basic and diluted earnings per share
From discontinued operations
5(b)
5(c)
5(d)
6
7
(816)
(55)
421
(1,073)
410
1,253
5,261
(936)
70
(2,625)
(50)
538
1,228
(3,599)
-
-
(17,677)
(121)
(32,569)
-
-
(121)
(32,569)
7,644
(3,066)
7,523
(35,635)
1,127
(414)
8,650
(36,049)
16
16
(0.01)
(2.93)
0.638
(0.28)
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Receivables and prepaid expenses
Property, plant and equipment
Exploration and evaluation expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Accounts payable and accrued liabilities
Loans payable
Lease liabilities
Liabilities classified as held for sale
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Lease liabilities
Provisions for closure and restoration
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
CONSOLIDATED FINANCIAL STATEMENT
Note
19(a)
8
9
7
8
10
11
12
13
7
14
15
31-Dec-21
US$000’s
Compensation
31-Dec-20
US$000’s
8,762
9,108
-
228
872
18,970
1,783
171
28,133
30,087
49,057
6,552
1,088
-
2,543
10,183
-
494
494
10,677
38,380
3,272
2,501
95
2,300
1,145
9,313
470
472
18,374
19,316
28,629
11,007
5,819
22
2,413
19,261
51
508
559
19,820
8,809
170,383
150,494
22,117
19,958
(154,120)
(161,643)
38,380
8,809
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction
with the accompanying notes.
38
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
39
Annual Report 2021
Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
Issued
Capital
US$000’s
Foreign
Currency
translation
reserve
US$000’s
BALANCE AT 1 JANUARY 2020 EXPENSES
110,949
Net loss for the year
Other comprehensive income
Total comprehensive loss for the year
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Issue of shares - acquisition of Core Gold Inc.
Issue of shares
Capital raising costs
Share based payments
As at 31 December 2020
BALANCE AT 1 JANUARY 2021
Net loss for the year
Other comprehensive income
Total comprehensive loss for the year
TRANSACTIONS WITH OWNERS IN THEIR
CAPACITY AS OWNERS
Issue of shares
Capital raising costs
Share based payments
-
-
-
19,834
20,300
(589)
-
150,494
150,494
-
-
-
20,578
(689)
-
-
-
(414)
(414)
-
-
-
-
(414)
(414)
-
1,127
1,127
-
-
-
Share
Based
Payment
Reserve
US$000’s
16,437
-
35
35
-
-
-
3,900
20,372
20,372
-
-
-
-
-
1,032
As at 31 December 2021 continuing
170,383
713
21,404
Convertible
Debenture
Reserve
US$000’s
Accumulated
Losses
US$000’s
Total
Equity
US$ 000’s
35
-
(35)
(35)
(126,008)
1,413
(35,635)
(35,635)
-
(414)
(35,635)
(36,049)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(161,643)
(161,643)
7,523
-
7,523
-
-
-
19,834
20,300
(589)
3,900
8,809
8,809
7,523
1,127
8,650
20,578
(689)
1,032
(154,120)
38,380
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
CONSOLIDATED FINANCIAL STATEMENT
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest and other costs of finance paid
NET CASH (USED IN) IN OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant & equipment
Proceeds from the sale of property, plant and equipment
Proceeds from the sale of financial assets
Payments of exploration and evaluation costs
Proceeds from the sale of exploration assets
Proceeds from repayments of loans provided
Net cash inflow as a result of acquisition
Net cash inflow as a result of disposal of subsidiaries
NET CASH PROVIDED BY INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares (net of capital raising costs)
Proceeds from borrowings
Repayment of borrowings
NET CASH PROVIDED BY FINANCING ACTIVITIES
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Effects of exchange rate changes on the balance of cash held in foreign currencies
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR
YEAR ENDED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
-
(8,212)
(590)
(8,802)
(133)
273
781
20,858
(29,162)
(222)
(8,526)
(36)
-
-
(9,759)
(4,053)
-
-
-
8,850
12
13,421
4,366
(3,258)
14,529
5,739
3,272
(249)
8,762
1,500
241
3,094
612
1,358
9,459
3,412
(2,813)
10,058
2,890
181
201
3,272
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
40
41
Annual Report 2021
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENTS
acquisition of 100% of the common shares in Core on 26 May 2020.
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
1.
GENERAL INFORMATION
Corporate Information
The consolidated financial statements of Titan Minerals Limited (“Parent Entity”, “Titan” or “Company”) and its
controlled entities (collectively as “Consolidated Entity” or “the Group”) for the year ended 31 December 2021
were authorised for issue in accordance with a resolution of the directors on 31 March 2022. The Parent Entity is a
for-profit company limited by shares incorporated in Australia whose shares are publicly traded on the Australian
Securities Exchange.
Further information on the 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 17 and 22.
The Group’s registered office is in Level 1, 35 Richardson Street, West Perth, WA 6005 Australia.
2.
a.
STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
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 consolidated 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 the financial statements are
presented below. They have been consistently applied unless otherwise stated.
b.
Basis of preparation
The consolidated financial statements have been prepared on the basis of historical cost, except for certain financial
assets carried at fair value. Cost is based on the fair values of the consideration given in exchange for assets. All
amounts are presented in United States 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 accounting standards 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.
d.
Reverse acquisition (comparative year)
Titan is listed on the Australian Securities Exchange. Titan Minerals Limited acquired control of greater than 50%
of the common shares and voting rights of Core Gold Inc (“Core”) on 30 January 2020 and completed the legal
42
Under the principles of AASB 3, with the previous shareholders of Core holding a larger portion of voting rights of
the combined entity than the continuing Titan shareholders and Core reflecting larger assets and revenues than Titan,
the transaction between Titan and Core is treated as a reverse acquisition. As such, the assets and liabilities of the
legal subsidiary (the accounting acquirer), being Core, are measured at their pre-combination carrying amounts.
The assets and liabilities of the legal parent (accounting acquiree), being Titan are measured at fair value on the date
of acquisition. The date of acquisition has been assessed on the basis of the change in shareholdings in Titan as a
result of the transaction between Titan and Core and has been considered to be 30 January 2020. Accordingly, the
consolidated financial statements of Titan have been prepared as a continuation of the financial statements of Core
from 30 January 2020.
The impact of the reverse acquisition on each of the primary statements is as follows:
• The consolidated statement of profit or loss and other comprehensive income:
-
-
For the year to 31 December 2021 comprises 12 months of both Core and Titan; and
For the comparative period comprises the 12 month period to 31 December 2020 of Core and the
period from 30 January 2020 to 31 December 2020 of Titan.
• The consolidated statement of financial position:
-
-
As at 31 December 2021 represents both Titan and Core as at that date; and
As at 31 December 2020 represents both Titan and Core as at that date.
•
•
The consolidated statement of changes in equity:
-
-
For the year ended 31 December 2021 comprises 12 months of both Core and Titan; and
For the year ended 31 December 2020 comprises Core’s balance sheet at 1 January 2020, its loss
for the period and transactions with equity holders for 12 months. It also comprises Titan’s transactions
within equity from 30 January 2020 to 31 December 2020 and the equity value of Core and Titan
at 31 December 2020. The number of shares on issue at year end represent those of Titan only; and
The consolidated statement of cash flows:
-
-
For the year to 31 December 2021 comprises 12 months of both Core and Titan; and
For the comparative period comprises 1 January 2020 to 31 December 2020, comprises:
The cash balance of Core as at 1 January 2020;
The cash transactions for the 12 months to 31 December 2020 of months of Core and the period
from 30 January 2020 to 31 December 2020 of Titan; and
The cash balances of Core and Titan at 31 December 2020.
e.
New and Revised Standards that are effective for these Financial Statements
The Group applied for the first-time certain standards and amendments, which are effective for annual periods
beginning on or after 1 January 2021 (unless otherwise stated). The Group has not early adopted any other standard,
interpretation or amendment that has been issued but is not yet effective.
Interest Rate Benchmark Reform – Phase 2: Amendments to AASB 9, AASB 139, AASB 7, AASB 4 and AASB 16
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered
rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following
practical expedients:
• A practical expedient to require contractual changes, or changes to cash flows that are directly required by the
reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest
• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without
the hedging relationship being discontinued
• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR
instrument is designated as a hedge of a risk component
43
Annual Report 2021
These amendments had no impact on the consolidated financial statements of the Group. The Group intends to use
the practical expedients in future periods if they become applicable.
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:
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
AASB 2021-3 Amendments to Australian Accounting Standards - Covid-19-Related Rent Concessions beyond 30
June 2021 Amendments to AASB 16.
The amendments provide relief to lessees from applying AASB 16 guidance on lease modification accounting for
rent concessions arising as a direct consequence of the Covid-19 pandemic. As a practical expedient, a lessee may
elect not to assess whether a COVID-19 related rent concession from a lessor is a lease modification. A lessee that
makes this election accounts for any change in lease payments resulting from the Covid-19 related rent concession
the same way it would account for the change under AASB 16 16, if the change were not a lease modification. The
amendment was intended to apply until 30 June 2021, but as the impact of the Covid-19 pandemic is continuing,
on 31 March 2021, the AASB extended the period of application of the practical expedient to 30 June 2022.The
amendment applies to annual reporting periods beginning on or after 1 April 2021. However, the Group has not
received Covid-19-related rent concessions, but plans to apply the practical expedient if it becomes applicable
within allowed period of application.
f.
Standards issued but not yet effective and not early adopted by the Group
Certain new accounting standards, amendments to accounting standards and interpretations have been published
that are not mandatory for 31 December 2021 reporting periods and have not been early adopted by the group.
These standards, amendments or interpretations are not expected to have a material impact on the Group in the
current or future reporting periods.
g.
Going Concern
The consolidated 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 from continuing operations for the 31 December 2021 financial
year of $121 thousand (2020: $32,569 thousand) and had a net operating cash outflow of $8,802 thousand
(2020: $8,526 thousand).
The directors have prepared a cash flow forecast, which indicates that Group will have sufficient cash flows to meet
all commitments and working capital requirements for the 12 month period from the date of signing this financial
report. Included in the forecast are receipts of consideration receivable expected to be received within the next 12
months. Should there be any delays in receiving these funds, the Company may need to raise additional capital
through debt or equity raisings.
The Directors are confident that the Group will have sufficient cash to fund its activities within the next 12 months from
the date the financial statements are approved and will be able to meet existing commitments as they fall due. The
Directors will also continue to carefully manage discretionary expenditure in line with the Group’s cashflow.
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. The consolidated financial statements do not
include any adjustments relating to the recoverability and classification of asset carrying amounts or to the amount
and classification of liabilities that might result should the Group be unable to continue as a going concern and meet
its debts as and when they fall due.
Significant Accounting Policies
The following significant policies have been adopted in the preparation of the Financial Report:
• Has power over the investee;
•
• Has the ability to use its power to affect those returns.
Is exposed, or has rights, to variable returns from its involvement with the investee; and
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.
i.
Revenue recognition
The Group’s primary product is gold and silver bullion.
Revenue is recognised at an amount that reflects the consideration to which the group is expected to be entitled
in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated
entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the
transaction price which takes into account estimates of variable consideration and the time value of money; allocates
the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of
each distinct good or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
j.
Interest revenue
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial
asset.
h.
Principles of consolidation
k.
Cash and cash equivalents
44
45
Annual Report 2021
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.
information.
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
l.
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, 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 AASB 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
m.
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, and recognised on a units of
production basis.
The following estimated useful lives / methodologies are used in the calculation of depreciation:
Plant and equipment
Computer equipment
Buildings
20 years
3 – 10 years
3 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.
n.
Exploration expenditure
46
47
Annual Report 2021
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.
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.
o.
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.
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
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.
p.
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:
•
•
•
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.
48
49
Annual Report 2021
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.
q.
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.
r.
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 closure and restoration
A provision for closure and restoration 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.
s.
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.
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
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 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.
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.
Financial assets at fair value through OCI (debt instruments)
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.
t.
Financial assets
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.
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other
50
51
Annual Report 2021
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 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.
u.
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.
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Subsequent measurement
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 13.
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.
v.
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.
w.
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 United States dollars.
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
52
53
Annual Report 2021
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 year end 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.
x.
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.
y.
Share-based payments
Equity-settled share-based payments with employees 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.
z.
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
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
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.
aa)
Leases
The Group as lessee
At inception of a contract, the Group assesses if the contract contains or is a lease. If there is a lease present, a right-
of-use asset and a corresponding lease liability are recognised by the Group where the Group is a lessee. However,
all contracts that are classified as short-term leases (ie a lease with a remaining lease term of 12 months or less) and
leases of low-value assets are recognised as an operating expenses on a straight-line basis over the term of the
lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at the commencement
date. The lease payments are discounted at the interest rate implicit in the lease. If this rate cannot be readily
determined, the Group uses the incremental borrowing rate.
Lease payments that may be included in the measurement of the lease liability are as follows:
• fixed lease payments less any lease incentives;
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
the amount expected to be payable by the lessee under residual value guarantees;
lease payments under extension options, if the lessee is reasonably certain to exercise the options; and
•
•
54
55
Annual Report 2021
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate
the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease payments
made at or before the commencement date and any initial direct costs. The subsequent measurement of the right-of-
use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset, whichever is the shortest.
Where a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group
anticipates to exercise a purchase option, the specific asset is depreciated over the useful life of the underlying asset.
Rounding of Amounts
bb)
The Parent Entity has applied the relief available to it under ASIC Corporations (Rounding in Financial/Directors’
Reports) Instrument 2016/191. Accordingly, amounts in the financial statements have been rounded off to the nearest
$1,000.
3.
UNCERTAINTY
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
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.
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
costs of abandoning sites, removing facilities and restoring the affected areas.
The provision for future restoration costs is the best estimate of the present value (including an appropriate discount
rate relevant to the time value of money plus any risk premium associated with the liability) of the expenditure
required to settle the restoration obligation at the reporting date. Future restoration costs are reviewed annually and
any changes in the estimate are reflected in the present value of the restoration provision.
The initial estimate of the restoration and rehabilitation provision is capitalised into the cost of the related asset and
amortised on the same basis as the related asset, unless the present obligation 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.
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.
In the prior year, the Group reported two operating segments, being gold sales in Ecuador and Exploration in
Ecuador and Peru.
Following the disposal of the gold sales in Ecuador segment as described in Note 7, the Group’s principal activities
is exploration and development of gold and copper assets in Ecuador. These activities are all located in the same
geographical area being Ecuador and Peru. Given there is only one segment being in one geographical area, the
financial results from this segment are equivalent to the financial statements of the Consolidated Entity as a whole.
5.
REVENUE AND EXPENSES
The following is an analysis of the Group’s revenue for the year from continuing operations:
b.
Exploration expenditure
For the year ended 31 December 2021
The Group capitalises expenditure relating to exploration and evaluation where it is considered likely to be
recoverable or where the activities have not reached a stage that permits a reasonable assessment of the existence
of reserves. While there are certain areas of interest from which no reserves have been extracted, the directors are of
the continued belief that such expenditure should not be written off since feasibility studies in such areas have not yet
concluded. Such capitalised expenditure is carried at the end of the reporting period at $28,133 thousand.
c.
Impairment of Exploration expenditure
The future recoverability of deferred exploration and evaluation expenditure is dependent on several factors,
including whether the Group decides to exploit the related tenement/lease/concession itself or, if not, whether it
successfully recovers the related exploration and evaluation asset through sale.
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.
d.
Provision for closure and restoration costs
A provision for restoration and rehabilitation is recognised when there is a present obligation as a result of
development 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 estimated future obligations include the
56
a.
General and Administration expenses
Compliance expenses
Insurance costs
Advertising and investor relations
Travel and accommodation
Municipal taxes
Fines and penalties
Depreciation and amortisation
Other Administration costs
TOTAL
CONSOLITATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
117
104
332
32
-
-
53
1,282
1,920
288
162
754
144
202
101
17
1,127
2,795
57
Annual Report 2021
Impairment
b.
Impairment expense of totalling $55 thousand relates to the impairment of VAT in Ecuador no longer considered
recoverable.
The prior year included impairment of VAT of $2,274 thousand and impairment of property, plant and equipment of
$351 thousand.
c.
Gain / (loss) on extinguishment of financial liabilities
a.
General and Administration expenses
Loss on extinguishment – issue of Titan Mineral Shares
Gain on extinguishment – issue of financial assets
Gain on extinguishment – Silverstream liability
TOTAL
(i)
(ii)
(1,490)
(3,599)
124
2,619
1,253
-
-
(3,599)
In consideration for the settlement $4,273 thousand (2020: $2,966 thousand) of financial liabilities (being
(i)
loans and associated accrued fees and interest), Titan Minerals Limited issued 67,218,337 shares (2020: 69,521,000
shares). As a result of the settlement of these liabilities in equity, a loss on extinguishment of $1,490 thousand (2020:
$3,599 thousand) representing the difference between the fair value of the shares at settlement and the carrying
value of the loans and interest.
(ii)
During the year, the Group agreed to a Deed of Settlement with Silverstream SECZ (“Silverstream”)
whereby liabilities owed by Titan Minerals Limited of $2,619 thousand (after payment of US$1,000 thousand) were
extinguished in exchange for a gross smelter royalty over four Peru exploration concessions. The Peru exploration
concessions had no carrying value at the date of extinguishment.
Gain on disposal of subsidiary
b.
During the year the Company completed the restructuring of its Ecuadorian operations. This resulted in the disposal
of two Ecuadorian subsidiaries (refer to Note 26). The Management have determined that the operations of these
subsidiaries were within the operations of the group and not material to the group. The sale of the subsidiaries is
considered a corporate transaction. As such these have not been reported as discontinued operations.
The net gain on disposal represents the net liabilities of the subsidiaries as at 7 June 2021 of US$5,261 thousand.
58
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
6.
INCOME TAX EXPENSE
Income tax recognised in profit or loss
Tax expense comprises:
Current tax expense
Deferred tax expense
Total tax expense
CONSOLIDATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
-
-
-
-
-
-
The prima facie income tax expense on pre-tax accounting loss from continuing operations reconciles to
the income tax expense in the consolidated financial statements as follows:
(Loss) from continuing operations
Income tax benefit calculated at 30% (2020: 30% Canada)
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
(121)
36
1,886
-
(1,922)
-
(33,124)
9,937
(6,620)
(122)
(3,195)
-
The tax rate used in the above reconciliation is the tax rate of 30% (2020: 30%) payable by Australian
corporate entities on taxable profits under Australian tax law. The corporate tax rate in Peru is 29.5%,
Canada 27.0% and Ecuador 25.0%.
Deferred tax balances as at 31 December 2021 were not recognised in the consolidated statement of
financial position.
The deferred tax balances relate to the Parent entity and the Australian tax group.
The Australian deferred tax assets not recognised relate to the following accounts:
Temporary differences
Tax losses – revenue
Tax losses – capital
TOTAL
2,427
12,346
16,407
31,180
926
9,482
16,816
27,224
59
Annual Report 2021
7.
DISCONTINUED OPERATIONS
Assets and liabilities classified as held for sale
CONSOLIDATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
Assets classified as held for sale
PP&E – Land surface rights: Zaruma & Portovelo1
872
1,145
Liabilities classified as held for sale
Tax liabilities: Coriorcco and Las Antas
Tax liabilities: Zaruma & Portovelo
Provision for closure and restoration: Zaruma & Portovelo1
Net Liabilities classified as held for sale
(563)
(756)
(1,224)
(1,671)
-
-
(1,850)
(705)
(1)
These balances represent the assets and liabilities requiring the legal transfer of title to Pelorus Minerals
Limited under the Share Sale Agreement as described below. The transfer process is awaiting completion by the
relevant government authorities.
Profit / (Loss) from discontinued operations
Loss on disposal - Coriorcco and Las Antas (Peru)
Loss on disposal - Vista Gold S.A.C
Profit on disposal - Zaruma mine & Portovelo plant (Ecuador)
Gain / (Loss) from discontinued operations
CONSOLIDATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
-
-
7,644
7,644
(325)
(2,186)
(555)
(3,066)
Prior year disclosures have been restated to reflect the results of discontinuing operations.
A summary of the material terms is as follows:
Current year:
Zaruma mine & Portovel plant (Ecuador)
On 26 July 2021, the Consolidated Group competed the sale of Zaruma mine and Portovelo process plant In
Ecuador for US$15.0 million pursuant to a Share Sale Agreement with Pelorus Minerals Limited.
The schedule of staged cash payments under the Share Sale Agreement is:
•
US$2.0 million non-refundable cash deposit received on 30 April 2021
60
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
•
•
•
US$3.5 million Initial Consideration payment received in August 2021
US$2.0 million First Deferred Consideration Payment received in September 2021
$2.5 million Second Deferred Consideration Payment, due upon the earlier of:
-
-
1 December 2021; and
receipt by Pelorus of the capital raising proceeds from its IPO, which Pelorus is proposing to complete
by 31 October 2021. However, this was not received as at balance date.
• US$2.5 million Third Deferred Consideration Payment due by 1 March 2022. As at the date of this report, this
has not yet been received.US$2.5 million Fourth Deferred Consideration Payment due by 1 June 2022
As at 31 December 2021, the consideration amount receivable is US$7.5 million. No provision for impairment has
been made at the reporting date.
Loss for the period from discontinued operations
Revenue
Cost of goods sold
Gross profit
Other expenses
Loss before income tax
Sale consideration
Less: carrying value at disposal and costs to sell
Attributable income tax expense
Net gain on disposal
Profit/(Loss) for the period from discontinued operations (attributable to owners
of the company)
Cash flows from discontinued operations
Cash flows from discontinued operations
Net cash outflows from operating activities
Prior year:
Coriorcco and Las Antas:
CONSOLIDATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
-
-
-
(1,122)
(1,122)
15,000
(5,300)
(934)
8,766
7,644
6,025
(4,376)
1,649
(2,204)
(555)
-
-
-
-
(555)
CONSOLIDATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
-
(1,122)
6,025
(3,342)
Western Pacific Resources Corp (“Western Pacific”, and subsequently renamed Oro X Limited) acquired Titan’s legal
and beneficial right, title, and interest in options to acquire: (a) 100% of the legal and beneficial and interest in a
2,000-hectare concession known as the Coriorcco property pursuant to a cession and option agreement; and (b)
61
Annual Report 2021
up to 85% of the legal and beneficial and interest in a 1,400-hectare concession known as the Las Antas Property
pursuant to an earn-in agreement (together, the “Properties”) .
As consideration for the sale of the option rights over the Properties, Titan received:
a. cash consideration of US$1,500,000; and
b. 4,250,000 common shares in the capital of Western Pacific (the “Shares”).
In the event that Western Pacific exercises its option to acquire the Coriorcco property:
a. Western Pacific will grant to Titan a 1% NSR over the Coriorcco property; and
b. Western Pacific has agreed to make a conditional payment to Titan (in cash, Shares (priced at a 10-day VWAP
of Shares prior to the relevant technical report) or a combination of both, at Western Pacific’s option) on the basis
of the size of any mineral resource (in the measured and indicated category) that is established on the Coriorcco
property in a technical report prepared in accordance with National Instrument NI43-101 as follows:
i. US$1,000,000 (cash and/or shares) if a measured and indicated resource of 500,000 to 999,999 ounces
of gold is established;
ii. US$1,500,000 (cash and/or shares) if a measured and indicated resource of 1,000,000 to 1,499,000
ounces of gold is established; and
iii. US$2,000,000 (cash and/or shares) if a measured and indicated resource in excess of 1,500,000 ounces
of gold is established.
The transaction was completed during the prior year, with the Group recognising a loss on disposal of the exploration
assets after income tax of $325 thousand.
Vista Gold Plant:
The sale was completed on 24 December 2020 via the sale 100% of the Group’s shares in its wholly owned
subsidiary, Vista Gold S.A.C, to AC 081 S.A.C.
The consideration for the sale receivable by Titan is:
a. a non-refundable payment of US$300,000 in cash, received in the prior year
b. a further US$1,000,000 instalment due on 31 December 2020, of which US$500,000 was received in the
prior year and US$500,000 was received in January 2021.
c.
further instalments totalling US$1,670,000 due approximately quarterly over the coming 18 month period.
As at 31 December 2021, the consideration amount receivable is US$820 thousand.
62
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Loss for the period from discontinued operations
31-Dec-21
US$000’s
31-Dec-20
US$000’s
Revenue
Cost of goods sold
Gross profit
Other expenses
Profit before income tax
Loss on disposal
Attributable income tax expense
(Loss) for the period from discontinued operations (attributable to owners of the
company)
Cash flows from discontinued operations
Net cash inflow from operating activities
8.
RECEIVABLES AND PREPAID EXPENSES
-
-
-
-
-
-
-
-
15,074
(13,522)
1,552
(772)
780
(2,966)
-
(2,186)
31-Dec-21
US$000’s
31-Dec-20
US$000’s
-
368
Loss for the period from discontinued operations
31-Dec-21
US$000’s
31-Dec-20
US$000’s
CURRENT
Other receivables
Prepaid – taxes
Prepaid – other
Consideration receivable (refer Note 7)
Advances – suppliers
NON CURRENT
Other receivables1
Consideration receivable (refer Note 7)
(Loss) for the period from discontinued operations (attributable to owners of the
company)
697
-
91
8,320
-
9,108
-
1,783
-
1,783
293
347
80
1,700
81
2,501
-
-
470
470
63
Annual Report 2021
The Group does not hold any trade receivables as at 31 December 2021 (2020: nil). None of the receivables
disclosed above are past due or impaired, other than as described in Note 7.
(1)
Other receivables (non-current) relate to VAT recoverable from foreign taxation authorities. The recoverability
of this VAT is based on the commencement of mining operations and as such, have been classified as non-current
assets.
9.
FINANCIAL ASSETS
Net cash inflow from operating activities
31-Dec-21
US$000’s
31-Dec-20
US$000’s
228
228
2,300
2,300
The shares held as at 31 December 2021 was 1.0 million shares (2020: 4.25 million shares) in Silver X Mining Corp
(TSXV: AGX).
These shares are classified as at fair value through profit or loss. These financial assets have been valued based on
the share price at the reporting date (Level 1).
64
10. PROPERTIES, PLANT AND EQUIPMENT
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Amounts denominated in
US$000’s
Zaruma Mines
Plant and
Equipment
Dynasty
Goldfields
Land and
Buildings
Total
Cost:
Balance as at 31 December
2019
Additions
Right of use asset – head office
lease
Acquired as part of business
combination
Transferred
assets
to held
for sale
Transferred to exploration and
evaluation
Balance as at 31 December
2020
Additions
Disposed
Balance as at 31 December
2021
Accumulated Depreciation and Amortisation:
29,104
34,350
15,041
3,129
81,624
-
-
-
36
-
48
(29,104)
(34,350)
-
-
-
-
-
80
-
36
80
48
(2,791)
(66,245)
-
-
-
-
-
(15,041)
-
(15,041)
84
133
-
217
-
-
-
418
-
(418)
-
502
133
(418)
217
Balance as at 31 December
2019
Depreciation and amortisation
/ impairment
Acquired as part of business
combination
Transferred to held for sale
assets
Transferred to exploration and
evaluation
Balance as at 31 December
2020
Depreciation and amortisation
Disposed
Balance as at 31 December
2021
Net Book Value
As at 31 December 2020
As at 31 December 2021
(29,104)
(34,350)
(792)
(360)
(64,606)
-
-
(9)
(4)
29,104
34,350
-
-
-
-
-
-
-
(13)
(33)
-
(46)
71
171
(54)
(1,303)
(1,366)
-
-
846
-
-
-
-
-
-
(4)
1,646
65,100
-
(17)
(20)
37
-
401
-
846
(30)
(53)
37
(46)
472
171
65
Annual Report 2021
11.
EXPLORATION AND EVALUATION EXPENDITURE
13.
LOANS PAYABLE
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Capitalised exploration and evaluation expenditure
CONSOLIDATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
28,133
18,374
Reconciliation of the carrying amounts of exploration and evaluation assets at the beginning and end of the current
financial year:
Carrying amount at the beginning of the year
- additions
- acquisitions through business combination (Peru)
- impairment
- disposals
- transferred from property, plant and equipment
Carrying amount at the end of the year
12.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
18,374
9,814
-
(55)
-
-
28,133
248
3,719
3,492
-
(3,280)
14,195
18,374
CURRENT
Silverstream SECZ loan (i)
Sophisticated and professional investors loan – December 2020 (ii)
Sophisticated and professional investors loan – August 2021 (iii)
TOTAL
i.
Silverstream SECZ Loan
CONSOLIDATED
Notes
31-Dec-21
US$000’s
31-Dec-20
US$000’s
(i)
(ii)
(iii)
-
-
1,088
1,088
2,619
3,200
-
5,819
As described in Note 5(c)(ii), Titan completed a settlement agreement with Silverstream SEZC whose parent
company is Vox Royalty Corp. whereby Titan paid US$1.0 million in full and final settlement of the Silverstream
SEZC loan. As part of the agreement Titan received royalties in advance on four prospective tenement or
concession areas held by Titan subsidiaries in Peru. A 3% revenue royalty is payable on any production from these
four concession areas.
ii. Sophisticated and professional investors – December 2020
On 21 December 2020, the Group entered into a secured debt facility with a group of sophisticated and professional
investors.
CONSOLIDATED
The material terms of the debt facility are:
CURRENT
Trade payable
Government payable – IVA, Taxes, Royalty, Concessions
Other payables
TOTAL
31-Dec-21
US$000’s
31-Dec-20
US$000’s
5,948
249
355
6,552
9,602
202
1,203
11,007
• Amount: A$4,155,280
•
• Security: the Loan amount is secured against the Dynasty Gold, Copper Duke & Linderos assets of Titan in
Interest: 15% interest per annum payable at the repayment date.
Ecuador.
• Repayment: the Company must repay the Loan Amount it has drawn and all other amounts accrued or
outstanding by 28 February 2022 (Termination Date).
This facility was fully repaid during the year.
iii. Sophisticated and professional investors – August 2021
In August 2021, the Group entered into an unsecured debt facility with a group of sophisticated and professional
investors.
The material terms of the debt facility are:
• Amount: A$1,500,000
• Repayment date: 1 April 2022
•
• Facility establishment fee: 5%
Interest: 15% per annum payable at repayment date
Finance costs:
Sophisticated and professional investors – December 2020
66
67
Annual Report 2021
During the year, interest of A$412 thousand (US$309 thousand) was repaid at settlement.
RM Hunter Fund Pty Ltd
On 2 January 2020 Titan 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;
repayment date has been extended to 31 December 2021;
•
•
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 issued 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. These shares were issued on 24 August 2020.
During the year, the Company drew down US$1.1 million of this loan, and repaid during the year via the issue of
15,000,000 shares in Titan Minerals Limited. Interest of US$82 thousand was paid in cash as part of settlement.
Director loan
During the year, the Group received a loan from Director Matthew Carr of A$660,000, under the following terms:
•
• Unsecured; and
• Repayment date: within 10 business day of 1 December 2021
Interest of 12% per annum;
Following obtaining shareholder approval on 8 December 2021, the loan and accrued interest was settled via the
issue of 7,157,723 shares (valued at A$751,561) in Titan Minerals Limited. The interest component on this amount
was A$62 thousand (US$47 thousand).
Sophisticated and professional investors – August 2021
As at 31 December 2021, A$76 thousand (US$55 thousand) of interest was accrued in relation to the current loan
from sophisticated and professional investors and recognised as finance costs. Facility establishment fees of A$75
thousand (US$56 thousand) were paid during the year and recognised as finance costs.
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
14.
ISSUED CAPITAL
(a)
Issued capital reconciliation
Issued capital
Ordinary shares fully paid
Movements in shares on issue
31 DECEMBER 2021
NUMBER
31-Dec-20
US$000’s
1,409,720,582
170,383
249
202
Balance at the beginning of the financial year
1,139,452,483
150,494
Shares issued 26 July 2021 to lenders and suppliers in lieu of cash
Shares issued 8 October 2021 to lenders in lieu of cash
Shares issued 13 October 2021 for share placement
Shares issued 14 October 2021 to lenders and suppliers in lieu of cash
Shares issued 22 December 2021 to suppliers in lieu of cash
Shares issued 31 December 2021 for Director participation in share placement
Shares issued 31 December 2021 to lenders in lieu of cash
Less: capital raising costs
Balance at end of the year
Terms and conditions of contributed equity
21,060,927
27,800,137
180,000,000
23,000,000
9,399,762
1,850,000
7,157,273
-
1,861
2,346
13,212
1,810
670
134
545
(689)
1,409,720,582
170,383
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
Canaccord Genuity (Australia) Limited
Canaccord Genuity (Australia) Limited
Number
of shares
under
option
10,000,000
10,000,000
Canaccord Genuity (Australia) Limited
14,000,000
$0.15
31 Dec 2023
Directors, Management and Consultants
57,120,000
$0.0001
24 August 2024
Exercise
Expiry Date
Vested
$0.125
$0.175
31 Dec 2023
31 Dec 2023
100%
100%
100%
0%
68
69
As at 31 December 2021, there are 34,000,000 unlisted options issued to corporate advisors, and 57,120,000
incentive options issued to Directors, Managements and Consultants (refer Note 24 for further details).
Annual Report 2021
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:
Recipient
Total number of options outstanding as at 1 January 2021
Share options issued
Share options cancelled
Share options expired
Total number of options outstanding as at 31 December 2021
No options were exercised during the year.
Total number of performance rights outstanding as at 1 January 2021
Performance rights expired
Total number of performance rights outstanding as at 31 December 2021
15. RESERVES
Share based payments reserve
Foreign currency translation reserve
Movements in Share based payments reserve
At the beginning of the financial year
Share based payments for the year
Transfer from convertible debenture reserve
Number of Options
(Unlisted)
75,620,000
21,500,000
(1,500,000)
(4,500,000)
91,120,000
Number of
Performance Rights
15,000,000
(15,000,000)
-
CONSOLIDATED
31-Dec-21
31-Dec-20
21,404
713
22,117
20,372
1,032
-
20,372
(414)
19,958
16,437
3,900
35
21,404
20,372
The share based payments reserve is used to accumulate the fair value of share based payments issued, including
options and performance rights.
70
Movements in Foreign currency translation reserve
At the beginning of the financial year
Movement
16.
EARNINGS PER SHARE
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
CONSOLIDATED
31-Dec-21
31-Dec-20
(414)
1,127
713
-
(414)
(414)
CONSOLIDATED
31-Dec-21
Cents
31-Dec-20
Cents
Basic and diluted earnings per share from continuing operations
(0.01)
(2.934)
US$000’s
US$000’s
Cents
Loss from Continuing Operations Attributable to Equity Holders of Titan Minerals Ltd
(121)
(32,569)
Weighted average number of ordinary shares used in the calculation of basic EPS
1,199,032,047
1,110,085,798
Potential ordinary shares not considered to be dilutive at year end
-
-
No.
No. Cents
Basic and diluted earnings / (loss) per share from discontinued operations
Cents
0.638
Cents
(0.276)
US$000’s
US$000’s
Cents
Profit / (Loss) from Discontinued Operations Attributable to Equity Holders
7,644
(3,066)
of Titan Minerals
Weighted average number of ordinary shares used in the calculation of basic EPS
1,199,032,047
1,110,085,798
No.
No. Cents
Potential ordinary shares not considered to be dilutive at year end
-
There were no potential ordinary shares considered to be dilutive at year end.
-
71
Annual Report 2021
17. SUBSIDIARIES
Name of entity
Country of
incorporation
Ownership
interest
2021
Ownership
interest
2020
Principal Activity
a.
Reconciliation of cash and cash equivalents
19.
NOTES TO THE CASH FLOW STATEMENT
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Mundo Minerals USA Inc
Compañía Minera Aus-trandina S.A.C
Compañía Minera Santa Raquel S.A.C
Compañía Minera Santa Carmela S.A.C
USA
Peru
Peru
Peru
Andina Resources Limited
Australia
Mantle Mining S.A.C
Andean Metals S.A.C
Porphyry Assets S.A.C
Core Gold Inc.
1165412 B.C. Ltd
GV Gold Holdings Limited
Empire Sun Investment Limited
Elipe S.A
Green Valley Resources – GVR S.A
Golden Valley Planta S.A.
Greentrade Ecuador Overseas Inc.
Minsupport S.A.(in administration)
Helles Mining Corp
Mooro Mining Inc.
Black Flag Minerals Inc.
Cloudstreet International Corp.
Titan Minerals S.A.S.
Peru
Peru
Peru
Canada
Canada
British Virgin
Islands
Ecuador
Ecuador
Ecuador
Panama
Ecuador
Ecuador
Ecuador
Ecuador
Ecuador
Ecuador
100%
100%
100%
100%
100%
100%
100%
100%
100%
-%
-%
100%
-
-
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
Administrative holding company
Administrative holding company
Administrative holding company
Administrative holding company
Administrative holding company
Administrative holding company
Administrative holding company
Administrative holding company
Holding company
Holding company
Holding company
Holding company
Mineral exploration and
concession holder
Plant operator and producer
Plant owner
Holding company
General and administration
Mineral concession holder
Mineral concession holder
Mineral concession holder
Mineral concession holder
100%
Operating company
for exploration service
NEK Development Corp.
Panama
100%
100%
Mineral concession holder
18.
CONTINGENCIES AND COMMITMENTS
All contingent liabilities as previously disclosed in the annual financial statement as at 31 December 2020, were
disposed of with the relinquishment of control over certain Ecuadorian subsidiaries. The Ecuadorian restructuring is
detailed in Note 26 below.
The Group has no other significant commitments or contingent liabilities as at 31 December 2021.
72
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
Cash in transit
b.
Reconciliation of loss for the year to net cash flows used in operating
Profit / (Loss) for the year
Adjustments for:
Depreciation and amortisation of non-current assets
Share based payments
Foreign exchange
Finance costs
Finance costs – Asset Retirement Obligations
Impairment
Gain/Loss on extinguishment of financial liabilities
Fair value movement of financial assets
Derivative liability gain – warrants
Corporate Transaction Expense
Profit on disposal of property, plant and equipment
Gain on disposal of subsidiaries
(Increase)/decrease in assets:
CONSOLIDATED
31-Dec-21
US$000’s
31-Dec-20
US$000’s
7,377
1,385
8,762
2,772
500
3,272
Parent
31-Dec-21
US$000’s
31-Dec-20
US$000’s
7,523
(35,635)
53
1,070
(421)
190
-
55
(1,253)
1,073
-
-
(399)
(5,261)
1,175
3,607
50
936
136
2,625
3,599
(538)
(70)
17,677
-
-
Trade and other receivables, prepaid expenses and long-term assets
(7,920)
(818)
73
Annual Report 2021
Inventories
Increase/(decrease) in liabilities:
Trade and other payables
Current tax liability
Net cash used in operating activities
95
1,048
(4,363)
(2,882)
756
564
(8,802)
(8,526)
c.
Non-cash financing and investing activities
During the year, a total of US$4,272 thousand of financial liabilities, fees and interest was settled in
equity. As a result of the settlement of these liabilities in equity, the Company recognised a loss on
extinguishment of US$1,491 thousand.
Other liabilities of US$320 thousand were paid with investments in listed entities. As a result of the
settlement of these liabilities in financial assets, the Company recognised a gain on extinguishment of
US$105 thousand.
As part of the deed of settlement with Silverstream SECZ as described in Note 5(c), the Company
extinguished liabilities of US$2,619 thousand in exchange for a gross smelter return royalty over four
Peru exploration concessions.
There were no other non-cash financing activities.
20.
EVENTS AFTER THE REPORTING PERIOD
There have not been any matters or circumstances that have arisen since the end of the financial year, that have
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.
21.
KEY MANAGEMENT PERSONNEL
Remuneration of key management personnel
Short term employee benefits
Post-employment benefits
Share based payments
Termination benefits
31-Dec-21
US$000’s
31-Dec-20
US$000’s
746,652
24,447
672,023
13,087
955,066
1,611,760
67,030
-
1,793,195
2,296,870
The disclosure above represents the full financial years ending 31 December 2021 and 31 December 2020 for the
key management personnel of Titan Minerals Limited.
Other transactions:
As described in Note 13, during the year, the Group received a loan from Director Matthew Carr of A$660,000.
Following obtaining shareholder approval on 8 December 2021, the loan and accrued interest was settled via
the issue of 7,157,723 shares in Titan Minerals Limited. The interest component on this amount was A$62 thousand
(US$47 thousand).
74
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Refer to the Remuneration Report on pages 7 to 10 of the Directors Report for further details.
22.
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 17 to the Consolidated 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:
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
Parent
31-Dec-21
US$000’s
31-Dec-20
US$000’s
7,772
228
8,000
1,929
14,374
16,303
(8,303)
181,810
7,789
2,259
2,458
4,717
6,473
4,701
11,174
(6,457)
161,920
5,668
(197,902)
(174,045)
(8,303)
(6,457)
Parent
31-Dec-21
US$000’s
31-Dec-20
US$000’s
7,772
2,259
(23,857)
(83,356)
75
Annual Report 2021
c)
Expenditure commitments by the parent entity:
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Total comprehensive loss
-
-
-
-
-
-
There are no material guarantees by the Parent Company to its subsidiaries.
23.
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.
Trade and other receivables;
The material financial instruments to which the Group has exposure include:
i. Cash and short-term deposits;
ii.
iii. Financial assets
iv. Accounts payable
v. 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
Receivables
Financial assets
Total Financial Assets
Financial Liabilities
Trade and other payables
Borrowings
Total Financial Liabilities
Net Exposure
Parent
31-Dec-21
US$000’s
31-Dec-20
US$000’s
8,762
9,1081
228
18,098
5,948
1,088
7,036
11,062
3,272
2,463
2,300
8,035
11,007
5,892
16,899
(8,864)
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
31-Dec-21
US$000’s
31-Dec-20
US$000’s
Receivables and prepaid expenses 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
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
9,108
1,993
-
-
-
470
-
9,108
2,463
5,948
11,007
-
-
-
-
-
-
5,948
11,007
1,088
5,830
-
-
-
11
51
-
1,088
5,892
The Group operates internationally and is exposed to foreign exchange risk arising primarily from its parent
company operating in Australian dollars and raising equity on the ASX in Australian dollars while its principal
operations are all denominated in US dollars.
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 of US dollars.
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-21
US$000’s
31-Dec-20
US$ 000’s
31-Dec-21
US$000’s
31-Dec-20
US$000’s
(1)
Excludes VAT receivable of US$1,783 thousand.
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.
Australian
(AUD)
Canadian
(CAD)
dollars
dollars
1,992
1
2,463
23
(1,566)
(2,019)
76
(4,570)
(2,699)
77
Annual Report 2021
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 2021 was 0.05% (31 December 2020: 0.05%). All trade
and other receivables, other financial assets and trade payables are non-interest bearing.
Interest bearing liabilities include short term loans. The interest rate on short term loans payable is currently 15.0%
(2020:15%), refer Note 13. A change in interest rate on short term loans of +/- 1.0% would result in an increase
(decrease) in interest expenses of US$11 thousand.
Credit Risk
b.
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 group is exposed to credit risk with regard to the consideration receivable from the Zaruma/Portovelo sale
and the Vista Gold SAC sale (refer Notes 7 and 8) totalling US$8.3 million. Titan has assessed the credit risk of the
purchaser and concluded that there is no impairment of the receivable as at 31 December 2021.
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 Ecuador is held with Banco Pichincha Quito Ecuador which is an appropriate
financial institution with an external credit rating of B-.
Liquidity Risk
c.
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 practice and limits set by the Group.
Capital Risk management
d.
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern, so that the Group can continue to maintain a suitable capital structure and fulfil the objectives of the
Group.
24.
SHARE-BASED PAYMENTS
Incentive Options
Incentive Options
Share options cancelled
31 December 2021
Number
57,120,000
57,120,000
During the year, the Company issued incentive options with the following terms to Directors and staff.
Movements in incentive options
Balance at the beginning of the year
Issued on 8 December 2021 – Directors and staff
Cancelled during the year
Balance at the end of the year
78
37,120,000
21,500,000
(1,500,000)
57,120,000
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
Vesting
Category
Vesting Condition
Options
Exercise
Price (AUD)
Expiry Date
A
B
C
D
The Company announcing on its ASX Market
Announcements Platform a minimum 2,000,000 ounces of
gold (Au) or gold equivalent (in accordance with clause
50 of the JORC code) at the Dynasty Gold Project in
Ecuador.
The Company announcing on its ASX Market
Announcements Platform a minimum 2,500,000 ounces of
gold (Au) or gold equivalent (in accordance with clause
50 of the JORC code) at the Dynasty Gold Project in
Ecuador.
5,375,000
$0.0001
24 August
2024
5,375,000
$0.0001
The VWAP of Company Shares is at least $0.15 for 10
consecutive trading days
5,375,000
$0.0001
The VWAP of Company Shares is at least $0.30 for 10
consecutive trading days or at 24 months after the issue of
the Incentive Options.
5,375,000
$0.0001
24 August
2024
24 August
2024
24 August
2024
Below is a summary of the key inputs and valuation methodology of the incentive options issued:
Directors, Key Management Personnel and Consultants – granted on 8 December 2021
Vesting Category
A
B
C
D
Valuation model
Black-Scholes
Black-Scholes
Hoadleys Hybrid
ESO Model
24 August 2024
Options exercisable at (AUD):
$0.0001
$0.0001
$0.0001
24 August 2024
Grant date
Expiry date
Estimated volatility
Risk-free interest rate
Fair value (AUD):
8 December 2021
8 December 2021
8 December 2021
8 December 2021
24 August 2024
24 August 2024
24 August 2024
24 August 2024
90%
1.16%
$0.099
90%
1.16%
$0.099
90%
1.16%
$0.0677
90%
1.16%
$0.05
79
Annual Report 2021
NOTES ON THE CONSOLIDATED FINANCIAL STATEMENT
• Round House Mining Inc. – Zone 1
• Third Ridge Corp. – Zone 3
• Block Minerals Corp. – Los Cipreces
• Bulla Resources Corp. – Machay
Wholly owned Ecuadorian subsidiaries (of Titan Minerals Limited) – entities sold as part of the Zaruma mine &
Portovelo plant sale (refer Note 7):
Lone Pine S.A.S. – Zone 2
•
• Hartog S.A.S. – Zone 4
• Sugarloaf S.A.S. – Malvas 1
• Sandlewood AU25 S.A.S. – Portovelo plant and related assets (being transferred)
Wholly owned Ecuadorian subsidiary (of Titan Minerals Limited) – the main operating and service company in
Ecuador, which employs the majority of the local staff:
• Titan Minerals S.A.S.
Previous wholly owned Ecuadorian subsidiaries, per the acquisition of Core Gold consolidated group. Control
was relinquished on the transfer of concessions and completion of the business reorganisation* :
• Green Valley Resources GVR S.A. (in administration)
• Elipe S.A. (in administration)
* the intermediate Canadian holding companies., 1165412 B.C. Ltd and GV Gold Holdings Limited were also
disposed of.
Expenses Arising from Share-based Payment Transactions
Total expenses arising from share-based payment transactions recognised during the year were as follows:
Performance rights
Incentive options
Options
Total share-based payments expense
Impact of foreign exchange translation
Total share based payments impact on the share based payment re-serve
31-Dec-21
US$000’s
31-Dec-20
US$000’s
20
1,050
-
1,070
(38)
1,032
16
1,671
1,920
3,607
293
3,900
During the year, the Company issued shares to the lead manager and consultants for services rendered. The fair
value of these shares amounted to US$1,640 thousand, which have been allocated to:
•
US$1,049 thousand
•
Professional fees:
Capital raising costs:
US$591 thousand
25.
REMUNERATION OF AUDITORS
Auditor of the consolidated entity
Audit and review of the annual and half year financial report
Audit and review of other financial reports
Other auditors
Audit or review of the financial report
26.
BUSINESS REORGANISATION & SUBSIDIARIES
31-Dec-21
US$000’s
31-Dec-20
US$000’s
107
-
107
92
125
-
125
182
On 9 June 2021 the Company announced it had completed a restructuring of its Ecuadorian operations as part of
it’s strategic review. The following key subsidiary companies of the Titan consolidated group were impacted:
Wholly owned Panamanian subsidiaries with Ecuadorian branches – entities which now hold Ecuadorian projects
and mining concessions which are being retained by Titan:
• NEK Development Corp. – Dynasty Gold project
• Helles Mining Corp. – Copper Duke project
• Mooro Mining Inc. – Linderos project
• Black Flag Minerals Inc. – Copperfield project
• Cloudstreet International Corp. – Jerusalen Gold project
Wholly owned Panamanian subsidiaries (of NEK Development Corp.) with Ecuadorian branches – entities sold as
part of the Zaruma mine sale (refer Note 7):
80
81
Annual Report 2021
ADDITIONAL
INFORMATION
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
Peter Cook - appointed as director on 31 August 2021, current
Laurence Marsland – appointed as director on 15 July 2019, resigned 31 March 2022
Matthew Carr – appointed as director on 3 February 2017, current
Barry Bourne – appointed as director on 19 October 2021, current
Nicholas Rowley – appointed as a director on 9 August 2016, current
Michael Hardy – appointed as director on 15 July 2019, resigned 31August 2021
Zane Lewis – appointed as company secretary on 11 August 2016, current
3.
DIRECTORS’ MEETINGS
Five meetings of the directors of the Company have been held during the financial year ended 31 December 2021.
4.
PRINCIPAL ACTIVITIES
The Company’s main undertaking is exploration and development of gold and copper assets in Southern Ecuador.
The Company’s main are assets are:
1.
2.
3.
4.
5.
The Dynasty Gold Project
The Linderos Project
The Copper Duke Project
The Jerusalen Project
The Copper Field Prospect
ADDITIONAL INFORMATION
The assets lie proximal to a major flexure of the Andean Terrane where porphyry copper and epithermal gold -silver
are associated with early to late Miocene aged magmatism along the margin of the extensive Cretaceous aged
Tangula Batholith.
Access to the main projects is excellent. all within close proximity to the Pan American and costal highways. Well
paved regional all-weather roads enable access to the projects. Regional airports exist approximately two hours by
road from the projects with daily connections to Ecuador’s capital city, Quito.
Over the past year the Company re-invigorated the activity within its key projects following the completion of the
takeover of Core Gold Ltd and the divestment of the troubled Zaruma Project. The Zaruma sale was completed on
26 July 2021 with Titan to receive staged payments of US$15 million in cash and hold a 2% NSR royalty on copper
production from the Zaruma concessions. During the year US$7.5million of funds had been received which enabled
Titan to deal with many of the legacy debts owed by Core Gold.
A number of other legacy issues were attended to and the Company’s social licence to operate in the tenure, it’s
Government standing and support were re-established enabling exploration works to again recommence.
Along with significant corporate enhancements, a new technical team of highly gifted explorers was injected toward
the end of the year enabling a very strong technical focus to endure into future developments at the projects.
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 profit of the Consolidated Entity for the year ended 31 December 2021 amounted to US$7,523 thousand (31
December 2020: US$35,635 thousand loss).
DYNASTY GOLD PROJECT (100%)
The Dynasty Gold Project was the main focus of the Company during the past year. After receiving the requisite
statutory and community approvals drilling recommenced with a focus on infill and extensional drilling of the
previously defined mineralisation. By year end the Company had completed 22,400m of diamond drilling using
man-portable diamond rigs. The majority of this was at Cerro Verde Prospect in the southern part of the Dynasty
Gold Project with minor amounts of drilling completed at Iguana Prospect (615m) and Papayal-Trapichillo (1,030m).
Assay results from the drilling have been slowly filtering through due to long delays at international laboratories due
to Covid impacts.
By year-end approximately half of the results from the program were received returning typical high-grade gold and
silver assays which verify, validate and expand upon results from previous drill programs.
Coincident with the drilling over 1,300m of channels were cut from which 1,123m were sampled. The breakdown
being: 1,017 metres sampled from the Cerro Verde Prospect; 97m sampled from the Iguana Prospect and 9m from
the Papayal-Trapichilo Prospect. Simar to the drilling, this trench channel sampling has returned excellent high-grade
gold and silver assays from the epithermal veins and their alteration halo’s.
LINDEROS PROJECT (100%)
All the Ecuadorian concessions are owned by wholly owned Ecuadorian Company’s top-hatted by Panamanian
public Company’s and enabling transactional flexibility for each asset allowing decisions about investment into each
project to be made independently of the others.
Works at Linderos started again with the collation and aggregation of layer geochemical, mapping and geophysical
datasets as a baseline in conjunction with dataset validation as part of a systematic process of exploration of
porphyry (copper, gold) and epithermal (gold, silver) targets.
A significant campaign of surface reconnaissance works was initiated at Linderos in the second half of the year with
82
83
Annual Report 2021
a key focus on the advanced Copper Ridge Prospect and Meseta Gold Prospects within the concessions.
Exploration activities during 2021 included completion of three thousand one hundred and ninety-one (3,191.4)
metres of trenching and two hundred and ninety-four (294) rock chip samples mainly on the Copper Ridge prospect.
COPPER RIDGE PROSPECT
Copper Ridge is a postulated outcropping porphyritic intrusion complex manifested by strongly coincident copper,
gold and molybdenum anomalism all surrounded by distal base metal anomalism. Surface work has revealed strong
zonation of phyllic and argillic alteration of country rock around and within a mapped quartz-diorite porphyry
intrusion of approximately 1km in diameter.
Previous drill campaigns proximal to the intrusion has returned highly anomalous copper results which are considered
to be peripheral to a main body of copper mineralisation.
The re-processing and interpretation of historic geophysical data has revealed a conducting body deeper in the
system at a postulated 250-300m depth. A detailed airborne magnetic survey is planned for early 2022 along with
an additional 3-D Induced Polarisation (IP) survey before drill testing this exciting target.
Additional reconnaissance works by channel and rock chip sampling over the Copper Ridge prospect continues to
refine an area of significantly more pervasive and higher tenor copper mineralisation in argillic alteration. Indications
suggest the erosional level of the outcropping porphyry copper body is high in the system with scope for higher
grades with depth.
Better results from initial channels sampling in un-drilled areas indicating higher grade mineralisation within the
prospect returned surface values that include:
• 2m @ 0.31% copper and 0.12g/t gold including 12m @ 0.39% copper (Channel - CRC022)
• 42m @ 0.29% copper and 0.08g/t gold including 8m @ 0.53% copper (Channel - CRC023)
• 90m @ 0.26% copper and 0.13g/t gold (Channel - CRC003)
ADDITIONAL INFORMATION
Copper Duke is an early-stage exploration project comprised of thirteen (13) concessions located approximately
18km east of the Company’s more advanced Dynasty Gold Project in the Loja Province of southern Ecuador. The
scale, geometry and extent of geophysical anomalism identified at the Copper Duke Project is like many major
porphyry districts.
Results of the geophysical survey results show clusters of intrusion related anomalism over an area greater than
12km2, on par with many tier-one deposits around the world. Recent surface exploration has confirmed a relatively
high tenor of geochemical anomalism outcropping at surface which is exposed through several hundred metres of
vertical relief across the project area.
Regionally, the project lies at the northern contact of the Tengula batholith, which comprise Cretaceous volcano-
sediments. Local geology comprises outcropping diorite and quartz-diorite composed rocks with small alteration
zones. Outcropping copper and gold mineralisation is hosted in veins and tectonic breccias and outcropping copper-
gold bearing scans are located at the contact with the Batholite/Celica Formation. Exploration target deposit models
are porphyry copper gold systems, intrusion related gold and gold bearing skarns.
During the year Titan has continued to build systematic exploration datasets with follow-up geochemistry surveys
and channel sampling, extending surface geochemistry coverage a further 12km2. Toward the end of the year two
reconnaissance holes (total of 540 metres) were drilled to oreitate and validate results from two previous diamond
holes drilled by the United Nations in the 1970’s and assays are still pending. Elsewhere on the concessions some
two thousand one hundred and forty-eight (2,148) metres of trenching and three hundred and seventy-five (375)
rock chip samples were collected with many showing elevated gold and copper mineralisation. A systematic soil
sampling program over the key areas was approximately 60% complete by year end.
JERUSALEN PROJECT (100%)
Only desktop works were completed on the Jerusalen Prospect during the year. The area is currently subject to illegal
mining activity by organised artisanal networks. The Company is working with the Government to re-gain access to
the concessions for addition exploration and mining studies.
MESETA GOLD PROSPECT
COPPER FIELD PROJECT (100%)
Meseta Gold Prospect hosts gold mineralisation in steep to sub-vertical epithermal veins at the margins of the
porphyry stock. Several features at the prospect suggest the presence of an intermediate to high-sulphidation gold
system. Numerous zones of very high-grade gold exists. One specific area was prepared by previous owners for
small scale mining which didn’t eventuate. In this area intense channel sampling over a 150m x 100m zone revealed
a number of bonanza grade veins. During the year Titan continued with surface reconnaissance works including
mapping, channel and rock chip sampling returning excellent high-grade gold and silver results. Previous drilling has
confirmed mineralisation extending into fresh rock. A thin transported cover over the main veins persists for about
1km and makes for a geochemically blind plateau but with predicted veins continuing at each end.
Better peak assay results from the rock chip results on outcropping veins collected during 2021 included:
• 64g/t gold with >1,500 g/t silver and 26.9g/t gold with 715g/t silver located 500m east of the nearest drilling.
• 61g/t gold with 103g/t silver and 42g/t gold with 9g/t silver located on the western margin of the Meseta
Prospect, confirming presence of grade at location of 2017 channel sampling
• 3g/t gold with 16g/t silver and 7.3g/t gold with 11g/t silver on new veining identified 2.3 kilometre southeast
of the 2017 channel sampling.
Further work is required to follow-up results of the rock chips received to date that show the gold system at Meseta
is clearly far more extensive than what has been previously defined. Drilling is planned for the ensuing year along
with baseline water studies to determine the background levels of metal associated with the known high sulphidation
mineralisation.
COPPER DUKE PROJECT (100%)
84
Initial desk top study and prelim surface reconnaissance work to locate the prospect is all that occurred during the
year.
6.
SHARE OPTIONS AND PERFORMANCE RIGHTS
As at the date of this report there are 34,000,000 unquoted options to corporate advisors and 57,120,000 incentive
options to Directors and employees on issue. Refer Note 24 to the financial statements for further details.
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 US$42,996 which was paid during the financial year. No indemnity has been sought for or paid to
auditors.
85
Annual Report 2021
8.
Events Subsequent to Reporting Date
There have not been any matters or circumstances that have arisen since the end of the financial year, that have
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 2021.
10.
LIKELY DEVELOPMENTS
ADDITIONAL INFORMATION
Directors meetings attended (where
eligible):
1 of 1 held during the financial year
Appointed:
31 August 2021
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.
The Group will continue to pursue its principal activity of minerals exploration in Ecuador, particularly in respect to its
key projects being the Dynasty Gold project, Copper Duke project and the Linderos Gold project plus the divestment
of non-core assets. The Company will also continue to evaluate new business opportunities in South America.
Directorships of other listed companies in the
3 years prior to the end of the Financial Year:
N/A
11.
ENVIRONMENTAL ISSUES
The Group’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 ultimate parent 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.
All contingent liabilities as previously disclosed in the annual financial statemen as at 31 December 2020, were
disposed of with the relinquishment of control over certain Ecuadorian subsidiaries. The Ecuadorian restructuring is
detailed in Note 26 of the financial statements.
13.
INFORMATION ON DIRECTORS AND COMPANY SECRETARY
Peter Cook
Director (Non-Executive Chairman)
Qualifications and Experience:
Peter Cook is a geologist (B Sc Applied Geology – Ballarat 1983) and a mineral economist (MSc Min. Econ
WASM 1995), MAusIMM with more than 35 years experience in mineral exploration, mine development, mining
operations and corporate management or resource entities.
Directorships of other listed companies
in the 3 years prior to the end of the
Financial Year:
Non-Executive Chairman of Westgold Resources
(AS:WGX)
Non-Executive Chairman of Castile Resources Ltd (ASX:CST)
Non-Executive Chairman of Breaker Resources NL
Limited
Interest in shares and options of the
Company as at the date of resignation:
13,100,962 Fully Paid Ordinary Shares
9,000,000 Incentive Options
Interest in shares and options of the Company
as at the date of resignation:
5,696,154 Ordinary Shares
10,000,000 options
Directors meetings attended (where eligible):
5 of 5 held during the financial year
Appointed:
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:
N/A
Interest in shares and options of the Company
21,051,774 Ordinary Shares
7,000,000 options
Directors meetings attended (where eligible):
5 of 5 held during the 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 most recently served as Director of Corporate Development for Galaxy
Resources Ltd (ASX:GXY).
86
87
Annual Report 2021
Directorships of other listed companies in
the 3 years prior to the end of the Financial
Year:
Non-Executive Director of Cyprium Metals Limited appoint
31 May 2018 (ASX: CYP).
Non-Executive Director of Oro X Mining Corp (TSV:OROX)
appoint 8 October 2020 – resigned 28 February 2022
Interest in shares and options of the
Company
10,157,460 Ordinary Shares
5,000,000 options
Directors meetings attended
eligible):
(where
5 of 5 held during the financial year
Appointed:
9 August 2016
Barry Bourne
Director (Non-Executive Director)
Qualifications and Experience:
Mr. Bourne is an innovator, who has designed, proposed and implemented a full range of initiatives via his experience
gained whilst working within the mining industry. He was shortlisted for the Australian Innovation Awards in 2012 and
was the Advance Global Australian of the Year for Mining and Resources in 2013. He is a Fellow of the Australian
Institute of Geoscientists and is on the technical advisory committee for UWA Centre for Exploration Targeting.
Directorships of other listed companies in the 3 years
prior to the end of the Financial Year:
N/A
Interest in shares and options of the Company
5,000,000 options
Directors meetings attended (where eligible):
1 of 1 held during the financial year
Appointed:
19 October 2021
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 practiced 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.
Directorships of other listed companies in
the 3 years prior to the end of the Financial
Year:
N/A
Interest in shares and options of the
Company as at the date of resignation:
835,531 Ordinary Shares
5,000,000 options
ADDITIONAL INFORMATION
Directors meetings attended
eligible):
(where
4 of 4 held during the financial year
Appointed:
Resigned
Zane Lewis
Company Secretary
15 July 2019
31 August 2021
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 2021. 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 excluding the remuneration of directors and executives or the issue of
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:
Peter Cook
Non-Executive Chairman (appointed 31 August 2021)
Laurence Marsland
Managing Director & Chief Executive Officer
Matthew Carr
Executive Director
Nicholas Rowley
Non-Executive Director
Barry Bourne
Non-Executive Director (appointed 19 October 2021)
Michael Hardy
Non-Executive Chairman (resigned 31 August 2021)
Michael Skead
Executive Vice-President of Exploration (appointed 1 October 2021)
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Annual Report 2021
Travis Schwertfeger
Chief Geologist (resigned 8 June 2021
David Sadgrove
Chief Financial Officer (resigned 11 October 2021)
SERVICE AGREEMENTS
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
Peter Cook
Laurence Marsland
Matthew Carr
Nicholas Rowley
Barry Bourne
Michael Hardy (resigned 31
August 2021)
Michael Skead
Travis Schwertfeger (resigned 8
June 2021)
David Sadgrove (resigned 11
October 2021)
(1) Termination benefits:
CONSULTING FEES / SALARY
2018
$120,000
No fixed term
2109
N/A
$240,000
4 years
2/12 months(1)
$180,000
No fixed term
6/12 months(1)
$72,000
No fixed term
$72,000
No fixed term
$108,000 plus superannuation
No fixed term
N/A
N/A
N/A
$250,000 CAD per annum
2 years
2 months
$240,000
No fixed term
3 months
$275,000 plus superannuation
No fixed term
3 months
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. 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).
Mr David Sadgrove:
In the case of termination without cause by the Company, the required notice period is 3 months. In the case of
termination without cause by Mr Sadgrove, the required notice period is 3 months.
ADDITIONAL INFORMATION
Details of Remuneration
Compensation 12 months to 31 December 2021
Compensation of key
management based on
fees approved by the
Board of directors
Peter Cook
(appointed 31 August 2021)
Laurence Marsland
Matthew Carr
Nicholas Rowley
Barry Bourne
(appointed 19 October
2021)
Michael Hardy
(resigned 31 August 2021)
Michael Skead
(appointed 1 October
2021)
Travis Schwertfeger
(resigned 8 June 2021)
David Sadgrove
(resigned 11 October 2021)
TOTAL COMPENSATION –
FOR KEY MANAGEMENT
PERSONNEL
Short Term
Benefits
$ USD
Super-
annuation
$ USD
Share based
payments
$ USD
Total
$ USD
Percentage of
remuneration
that is equity
based
30,058
180,348
135,261
54,104
4,590
-
-
-
-
-
283,847
313,905
102,949
283,297
72,064
207,325
51,474
105,578
157,693
162,283
54,104
5,207
34,316
93,627
50,000
83,185
-
-
236,637
286,637
16,086
99,271
222,0321
19,240
-2
241,272
90%
36%
35%
49%
97%
37%
83%
16%
-
813,682
24,447
955,066
1,793,195
53%
Included in Mr Sadgrove’s Short Term Benefits are termination benefits totalling $67,030.
During the year, as a result of the cancellation of incentive options, $43,716 was recognised in the profit or
(1)
(2)
loss as a result of the cancellation.
90
91
Annual Report 2021
Compensation 12 months to 31 December 2020
Compensation of key
management based on
fees approved by the Board
of directors
Short Term
Benefits
$USD
Super-
annuation
$USD
Share
based
payments
$USD
Total
$USD
Percentage of
remuneration
that is equity
based $USD
Michael Hardy
69,060
5,905
251,750
326,715
Laurence Marsland
Matthew Carr
Nicholas Rowley
Travis Schwertfeger
165,744
145,026
48,342
164,708
-
-
-
-
503,499
669,243
352,449
497,475
251,750
300,092
176,084
340,792
David Sadgrove
79,143
7,182
76,228
162,553
TOTAL COMPENSATION –
FOR KEY MANAGEMENT
PERSONNEL
672,023
13,087
1,611,760
2,296,870
77%
75%
71%
84%
52%
47%
70%
Shares and performance rights held by Key Management Personnel
Shareholdings
1 January 2021 or
Appointment
Issued as
compensation
Net change
other
31 December
2021
ADDITIONAL INFORMATION
(1)
(2)
Number of shares held as at date of appointment.
Number of shares held at date of resignation / date of ceasing to be a key management personnel.
Number of Performance Rights / Options
Performance rights /
options
1 January 2021 or
Appointment
Number of
Performance
Issued as
Compensation
Rights / Options
Net Change
31 December
2021
Peter Cook
-
9,000,000
Laurence Marsland
10,000,000
-
-
-
7,000,000
5,000,000
-
5,000,000
-
-
-
-
-
9,000,000
10,000,000
7,000,000
5,000,000
5,000,000
5,000,000
-
(5,000,000)1
-
-
7,500,000
-
7,500,000
4,500,000
3,000,000
-
-
(4,500,000) 1
(3,000,000)1
-
-
Matthew Carr
Nicholas Rowley
Barry Bourne
Michael Hardy
Michael Skead
Travis Schwertfeger
David Sadgrove
Peter Cook
Laurence Marsland
Matthew Carr
Nicholas Rowley
Barry Bourne
Michael Hardy
Michael Skead
Travis Schwertfeger
David Sadgrove
3,100,9621
5,696,154
9,314,493
5,157,460
-1
836,231
-1
11,000
-
TOTAL
24,116,300
-
-
-
-
-
-
-
-
-
-
10,000,000
13,100,962
-
5,696,154
11,737,281
21,051,774
TOTAL
34,500,000
21,500,000
(12,500,000)
43,500,000
(1)
These amounts represent performance rights held as at the date of resignation.
For further details on Performance rights and options please refer to Note 24 to the financial statements “Share
based payments”.
5,000,000
10,157,460
Other Information
-
(836,231)2
-
(11,000)2
-2
-
-
-
-
-
During the year, the Group received a loan from Director Matthew Carr of $660,000 AUD. Following obtaining
shareholder approval on 8 December 2021, the loan and accrued interest was settled via the issue of 7,157,723
shares in Titan Minerals Limited. The interest component on this amount was A$62 thousand (US$47 thousand).
Refer Note 13 for further information regarding this loan.
There were no other loans made to any Key Management Personnel during the year or outstanding at year end.
Refer to Notes 21 and 22 for further detail regarding transactions with Key Management Personnel during the year.
During the year the Company did not engage remuneration consultants to review its remuneration policies.
25,890,050
50,006,350
End of Remuneration Report (Audited)
92
93
Annual Report 2021
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 23 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. While most risk factors are
largely beyond the control of the Company, the Company will seek to mitigate the risks where possible.
16. NON-AUDIT SERVICES
The Board of Directors is satisfied that the provision of any non-audit services is compatible with the general standard
of independence for auditors imposed by the Corporations Act 2001. All non-audit services are reviewed and
approved by the Board prior to commencement to ensure they do not adversely affect the integrity and objectivity
of the auditor; and the nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting
Professional and Ethical Standards Board
17.
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 2021. A copy of this
declaration appears on page 51.
Signed in accordance with a resolution of the directors.
Matthew Carr
Executive Director
31st day of March 2022
Perth, Western Australia
AUDITORS INDEPENDENCE DECLARATION
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
31 March 2022
Board of Directors
Titan Minerals Limited
Level 1, 35 Richardson Street
WEST PERTH WA 6005
Dear Directors
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 2021, 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
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
94
95
Annual Report 2021
DIRECTORS’ DECLARATION
In accordance with a resolution of the directors of Titan Minerals Limited A.C.N. 117 790 897 (“Company”),
In the opinion of the directors
As set out in Note 2, the Directors are of the opinion that the consolidated financial statements:
1)
give a true and fair view of the consolidated entity’s financial position as at 31 December 2021 and of its
performance for the year ended 31 December 2021; and complying with Australian Accounting Standards and the
Corporations Act 2001;
The consolidated financial statements and notes also comply with the International Financial Reporting
2)
Standards as disclosed in Note 2; and
3)
become due and payable.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
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 2021.
On behalf of the Board of Directors.
Matthew Carr
Executive Director
31st day of March 2022
Perth, Western Australia
INDEPENDENT
AUDITOR’S REPORT
96
97
Annual Report 2021
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
TITAN MINERALS LIMITED
Report on the Audit of the Financial Report
Opinion
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 2021, 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)
(ii)
giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its
financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report
section of our report. We are independent of the Company in accordance with the auditor independence
requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional
and Ethical Standards Board's APES 110: Code of Ethics for Professional Accountants (the Code) that are
relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical
responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Material Uncertainty Relating to Going Concern
Without modifying our audit opinion expressed above, attention is drawn to the following matter.
As referred to in Note 2(g) to the financial statements, the consolidated financial statements have been
prepared on the going concern basis. At 31 December 2021, the Group had cash and cash equivalents
of US$8,762,000, and incurred a loss from continuing operations after income tax of US$121,000 and had
net operating cash outflows of US$8,802,000. These events or conditions, along with other matters as set
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
INDEPENDENT AUDITOR’S REPORT
forth in Note 2(g) indicate that a material uncertainty exists that may cast significant doubt on the Group’s
ability to continue as a going concern.
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 receiving the outstanding balances from the sale of
Projects amounting to US$8,320,000, raising further working capital, successfully recommencing
profitable operations and/or exploiting the Group’s 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 receiving the outstanding balances from the sale of Projects,
raising further equity or successfully recommencing profitable operations and /or exploiting the Group’s
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.
Key Audit Matters
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matter described below to be Key Audit Matter to be communicated in our report.
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 Exploration and Evaluation
Assets
The Group has capitalised exploration and
evaluation expenditure totalling US$28,133,000
(refer to Note 11) in terms of the application of
the Group’s accounting policy for exploration
and evaluation expenditure, as set out in Note
2(n).
The carrying value of Capitalised Exploration and
Evaluation expenditure is a key audit matter due
to:
•
•
•
The significance of the total balance (54% of
total assets);
The necessity to assess management’s
application of the requirements of the
accounting standard Exploration for and
Evaluation of Mineral Resources (“AASB
6”), in light of any indicators of impairment
that may be present;
The assessment of significant judgements
made by management in relation to the
Capitalised Exploration and Evaluation
Expenditure.
Inter alia, our audit procedures included the following:
i. Assessing the Group’s right to tenure over
exploration areas of interest by corroborating
the ownership of the relevant licences for
mineral resources to government registries
and relevant third party documentation;
ii. We
tested
the additions
to capitalised
exploration and evaluation expenditure by
evaluating a sample of recorded expenditure
for consistency to the underlying records, the
capitalisation requirements of the Group’s
accounting policy and requirements of AASB
6;
iii. Reviewing the directors’ assessment of the
carrying value of
the exploration and
evaluation expenditure, ensuring the veracity
of the data presented and that management
has considered
the effect of potential
impairment indicators, commodity prices and
the stage of the Group’s projects against
AASB 6;
98
99
Annual Report 2021
iv. Evaluation
intentions
of Group
documents
for
for
consistency with
the
the
continuing of exploration and evaluation
activities in certain areas of interest and
corroborated with enquiries of management.
Inter alia,
the documents we evaluated
included:
▪ Minutes of meetings of the board and
management;
▪ Announcements made by the Company to
the Australian Securities Exchange;
▪ Cash forecasts; and
▪ Agreements entered into by the Company
in relation to disposal of exploration and
evaluation assets.
v. Consideration of
requirements of
the
accounting standard AASB 6. We assessed
the financial statements in relation to AASB 6
to ensure appropriate disclosures are made.
Inter alia, our audit procedures included the following:
i. Reviewing the relevant agreements to obtain
an understanding of the contractual nature
and terms and conditions of the share-based
payment arrangements;
ii. Reviewing management’s determination of
the fair value of the share-based payments
granted, considering the appropriateness of
the valuation models used and assessing the
valuation inputs, the underlying assumptions
used and discussed with management the
justification for inputs used (share price of
the underlying equity, risk free rate and
volatility);
iii. Assessing the allocation of the share-based
payment expense over the relevant vesting
period;
iv. We assessed the accounting treatment and
its application in accordance with AASB 2;
and
Valuation of Share Based Payments
As disclosed in Note 24, during the year the
Company granted a number of share options and
performance rights to employees, directors, and
consultants to conserve cash and provide them
with long-term incentives. Certain share options
were cancelled during the year.
The Company and an independent consultant of
the Company prepared the valuation of the
options and expensed the related share-based
payment expense
its
accounting policy and with AASB 2 Share Based
the consolidated
Payment
in
loss and other
statement of profit or
comprehensive income.
in accordance with
(“AASB 2”)
Accounting
for share-based payments was
identified as a key audit matter due to the
complexity and judgemental estimates used in
determining the fair value of the share-based
payments.
v. We
assessed whether
disclosures met
accounting standards.
the
the Group’s
requirements of
Issued Capital
As disclosed in Note 14, the Group’s Issued
Capital amounted to US$170,383,000. During
the reporting period, 270,286,099 ordinary
shares were issued resulting in an increase in
Issued Capital of US$19,889,000 (net of capital
raising costs). The shares issued during the year
included a share placement, shares issued to
settle liabilities (including repayment of Debt
Facilities) and for consulting services.
Contributed Equity is a key audit matter due to:
•
•
the quantum of share capital issued during
the year; and
the varied nature of the movements during
the year.
We spent significant audit effort on ensuring the
Issued Capital was appropriately accounted for
and disclosed.
INDEPENDENT AUDITOR’S REPORT
Inter alia, our audit procedures included the following:
i. Obtaining an understanding of the underlying
transactions;
ii. Verifying all issued capital movements to the
relevant ASX announcements;
iii. Vouching proceeds from capital raisings to bank
relevant supporting
statements and other
documentation;
iv. Verifying underlying capital raising costs and
appropriately
costs were
these
ensuring
recorded;
v. Ensuring consideration for services provided were
measured in accordance with AASB 2 Share-
Based Payments and agreed the related costs to
relevant supporting documentation;
vi. Ensuring that the ordinary shares issued to
extinguish financial liabilities were accounted for
in accordance with the AASB Interpretation 19
Extinguishing Financial Liabilities with Equity
Instruments and agreed to relevant supporting
documentation; and
vii. Ensuring
the
relevant
requirements of
accounting standards and disclosures achieve fair
presentation
financial
statements to ensure appropriate disclosures are
made.
reviewing
and
the
the
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 2021 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.
100
101
Annual Report 2021
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.
INDEPENDENT AUDITOR’S REPORT
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 7 to 10 of the directors’ report for the year
ended 31 December 2021.
In our opinion, the Remuneration Report of Titan Minerals Limited for the year ended 31 December 2021
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
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
31 March 2022
102
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Annual Report 2021
ASX
ADDITIONAL INFORMATION
NUMBER OF HOLDERS
ORDINARY
SHARES
1 — 1,000
1,001 — 5,000
5,001 — 10,000
10,001 — 100,000
100,001 — and over
TOTAL
159
304
366
1055
631
2,515
Holdings of less than a marketable parcel
469
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
1 / 35 Richardson St
West Perth, Western Australia 6005
Tel:
Fax:
+61 (8) 6555 2950
+61 (8) 6166 0261
There are no current on market buy back arrangements
for the Company.
104
CONVERSION OF FEES AND DEBT TO
EQUITY
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.
TOP TWENTY HOLDERS OF ORDINARY SHARES
The information set out below was current as at 6 April 2022
ASX ADDITIONAL INFORMATION
1
2
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HOLDER NAME
HOLDING
CITICORP NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
UBS NOMINEES PTY LTD
BUTTONWOOD NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MRS JENNY MARY BAGULEY &
MR JOHN RICHARD BAGULEY
174,388,217
75,067,983
56,313,241
38,082,435
37,779,053
35,964,110
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
35,308,761
TAZGA TWO PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
BNP PARIBAS NOMS PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
CS THIRD NOMINEES PTY LIMITED
SYNERGY METALS AND MINING FUND I LP
SAMALUCA HOLDINGS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
BACCHUS CAPITAL ADVISERS LIMITED
BRISPOT NOMINEES PTY LTD
MCNEIL NOMINEES PTY LIMITED
ROSA MARIA DE LA CAMPA MARQUEZ
LUIS RICARDO REYES DE LA CAMPA
Total
35,017,129
33,269,228
28,944,867
27,862,737
27,198,804
26,314,844
25,000,000
25,000,000
24,854,185
24,136,491
20,671,409
20,000,000
18,792,200
18,135,000
808,100,694
Total issued capital - selected security class(es)
1,409,720,533
% IC
12.37%
5.33%
3.99%
2.70%
2.68%
2.55%
2.50%
2.48%
2.36%
2.05%
1.98%
1.93%
1.87%
1.77%
1.77%
1.76%
1.71%
1.47%
1.42%
1.33%
1.29%
57.32%
100.00%
105
Annual Report 2021
1/35 Richardson Street
WEST PERTH WA 6005
Phone: +61 08 6375 2700
E-mail: info@titanminerals.com.au