Titanium Corporation Reports Second Quarter Ended
Titanium Corporation Reports Second Quarter Ended June 30, 2020 and
Provides Project Update
CALGARY, Alberta, Aug. 26, 2020 -- Titanium Corporation Inc. (the “Company” or “Titanium”) (TSX-V: TIC ) today
released its results for the three and six-month periods ended June 30, 2020.
In 2020, the COVID-19 pandemic and the collapse of oil demand and prices has introduced unprecedented uncertainties for
Canada’s oil sands industry, the global mineral sands industry and the Canadian economy. The duration and the extent of the
impact of these events is not known but could adversely affect the progress and timing of the Project. In response, the
Company has taken measures to protect its balance sheet by reducing costs and conserving cash over the months ahead.
During the first six months of 2020, the Company and Canadian Natural’s joint project engineering team has continued work on
the Project using internal resources, performing post-FEED engineering reviews and optimization of the Project as well as
continuing on-going minerals analysis programs. The focus of the Project team in 2020 is the optimization of the concentrator
facility and the design and engineering of a tailings thickener and associated facilities. In parallel, the Company has been
providing updates to the Alberta and Federal government agencies who have awarded grant funding for the Project and are
working with them toward funding contracts for the detailed engineering phase of the Project in 2020. The internal optimization
of the concentrator facility, including updating cost estimates, is expected to be completed by the end of 2020. Optimization of
the minerals facility is expected to start in early 2021.
“Our staffs have been successfully continuing project activities under the constraints imposed by the COVID-19 pandemic and
uncertain economic conditions. Using internal engineering resources, work ramped up in the quarter with the joint project team
making very good progress optimizing the design of the concentrator facility,” commented Scott Nelson, Titanium’s President
and Chief Executive Officer. “In parallel, our minerals team has identified enhancements to the minerals facility including the
addition of circuits to produce a new L72 titanium product while continuing testing and evaluation of the minerals content in
tailings.”
Certain highlights for the three and six-month periods ended June 30, 2020 are set out in more detail below:
• Engineering optimization activities by the internal Project engineering team were planned in Q1 and are now underway
in 2020. These activities are focused on the concentrator facility with the objectives of improving operability, enhancing
environmental performance, reducing costs, and include: changes to the plot plan to increase modularization, relocate
certain equipment and reduce building sizes; the addition of a vapor recovery unit to the flotation circuit; the review of
alternate flotation technologies and the addition of a tailings thickener which will process and remediate the tailings
from the concentrator.
• Prior to the COVID-19 pandemic, the Company conducted technical marketing and testing programs including meeting
with potential minerals processors and customers, visiting their facilities and providing minerals samples for customer
testing. Based on results and feedback from these activities, the Company has adjusted its plans for the production of
minerals. The Company has identified an opportunity to produce a blended L72 titanium product for the North America
pigment industry. L72 would be an average 72 percent TiO2 product comprised of a blend of leucoxene, ilmenite and
rutile. Preliminary work is underway to redesign the minerals flowsheet to include production of this new product. This
would enable the recovery of ilmenite which was rejected in previous flowsheets. In addition, the Company is adjusting
the design of its zircon circuitry to produce a high-quality zircon concentrate to market to a growing concentrates
processing industry in Asia. A number of new minerals projects have adopted a concentrates strategy in order to
address this market and reduce the costs of constructing and operating separation facilities at their project sites. More
detailed optimization and engineering of the minerals facility is expected to start in early 2021 following the completion
of the engineering optimization of the concentrator by the end of 2020 subject to future economic and health conditions.
• The Company continued to advance the contracting with government funding agencies for grant awards for the next
phase of the Project. This has included Project updates regarding the impacts on the Project of the COVID-19
pandemic and the oil demand and price collapse. Funding from the government programs is subject to finalizing
funding agreements which will outline the conditions under which funding would be provided. Of the $50 million of grant
awards to the Company in 2019, approximately $7 million is designated for the engineering phase of the project with the
balance for the procurement and construction phases.
• On July 27, 2020 the Company announced Mr. Bruce Griffin will assume the role of Chair of the Commercialization
Committee of the Board of Directors (the "Committee") of the Company. Mr. Griffin, who is currently a member of the
Committee, will be replacing Mr. David Macdonald, who has been the Chair of the Committee since 2017. Mr.
Macdonald will remain a member of the Committee.
• The Company implemented salary reductions in the range of 15 to 20% effective April 1, 2020 to preserve cash in
response to the uncertainty created by the COVID-19 pandemic and the resulting delays to the Project. The Company
is also continuing its cash conservation programs including those under which management and directors receive a
portion or all of their compensation and fees in restricted share units and deferred share units (“DSUs”), respectively.
This program was aimed to conserve cash and further align management and the Board with shareholder interests.
Since the inception of the program in 2015, the Company’s directors have been receiving 100% of their compensation in
DSUs in lieu of cash compensation.
FINANCIAL OVERVIEW
Titanium is focused on achieving long-term financial success by implementing its innovative CVW™ technologies in
commercial operations at oil sands sites. With the FEED portion of the Project completed, the Company is working with
Canadian Natural on Project activities post-FEED, including engineering optimization and planning for the potential
implementation of its technology at Canadian Natural’s Horizon site. However, until Project activities post-FEED are
completed to the satisfaction of the parties, commercial arrangements and investment decisions are made, and facilities
constructed and operating, the Company expects to continue to incur losses. Currently, quarterly (losses)/income are
comprised of research and development (“R&D”) project costs, and general and administrative (“G&A”) expenditures.
Net (Loss) Income – For the three and six-month periods ended June 30, 2020, the Company reported net loss of $0.7 and
$1.6 million, respectively. This resulted in a $0.01 loss per share for the current quarter and a $0.02 loss per share for the six-
month period ended June 30, 2020. The net loss for the three month period ended June 30, 2020 consisted of G&A ($0.4
million) and R&D ($0.3 million) expenses in the current quarter compared to net income of $52,000 for the three-month period
ended June 30, 2019 as the Company received project contributions for the FEED Project in the prior period which exceeded
Project costs incurred and G&A expenses. For the six-month period ended June 30, 2020 net loss of $1.6 million consisted
G&A ($0.7 million) and R&D ($0.9 million) expenses compared to net income of $0.5 million for the six-month period ended
June 30, 2019. As noted above the timing and receipt of project contributions in the prior period exceed G&A and R&D
expenses. For a development stage company and given the timing of Project contributions in the prior year, the net loss was
in line with expectations.
Research & Development – R&D spending in the current quarter consisted primarily of compensation for technical staff, on-
going minerals testing and evaluations, and post-FEED optimization engineering work. Compensation and deferred
compensation costs were lower due to the salary reduction initiatives implemented in April of 2020 to preserve cash as a result
of uncertainty related to COVID-19 and oil price collapse impacting the timing of the project. Project costs were higher by
$53,000 for the three-month period ended June 30, 2020 compared to the same period in 2019 due to minerals product
development and optimization work in the current quarter. Recovery of project costs was nil for the three-month period ended
June 30, 2020 compared to $1.0 million for the three-month period ended June 30, 2019. The recovery in 2019 related to the
collection of FEED contributions from ERA and Canadian Natural for the final FEED project milestones. Based on the level of
R&D post-FEED activity, R&D costs were in line with expectations.
General & Administrative – G&A expenses for the three-month period ending June 30, 2020 were lower at $0.42 million as
compared to $0.55 million for the three-month period ended June 30, 2019. Management undertook voluntary salary
reductions effective April 1, 2020 and reduced other variable compensation in order to preserve cash and deal with the impacts
of the COVID-19 pandemic and the economic uncertainty. There was an increase in the quarter in professional fees due to
legal costs related to shareholder matters and impacts and assessments of regulatory reporting requirements due to the
COVID-19 pandemic. Investor relations costs also increased during the quarter with the changes and costs related to hosting
the annual shareholder meeting in a virtual format to comply with public health measures. G&A cash expenses were lower by
$73,000 during the period ended June 30, 2020 primarily related to compensation, noted above and travel, offset by
professional fees and regulatory costs as compared to the three-month period in the prior year. Deferred and equity-based
compensation costs were lower during the three-month period ended June 30, 2020 as the Company did not grant stock
options in the current fiscal year and voluntary reduced deferred compensation programs. These initiatives along with minor
rent reductions, group benefit premium reductions, workers compensation premiums refunds and other initiatives will reduce
G&A cash requirements throughout the balance of the year.
Cash Position – The Company had an aggregate of $3.6 million at June 30, 2020 consisting of cash and short term
investments, with $1.6 million in interest-bearing cash accounts and a $2.0 million short-term investment with a Schedule I
bank in the form of a cashable GIC as compared to $5.1 million at December 31, 2019. The decrease in cash and short-term
investments of $1.5 million is the result of funding the Company’s post-FEED Project activities, general and administrative and
public company expenditures. With the cost reduction initiatives and delayed timing of the Project, the Company expects its
current cash position will support it through the next 12-month period.
To view the Company’s management discussion and analysis and interim unaudited financial statements for the three and six-
month periods ended June 30, 2020, please visit our website at www.titaniumcorporation.com or SEDAR at www.sedar.com.
About Titanium Corporation Inc.
Titanium Corporation’s CVW™ technology provides sustainable solutions to reduce the environmental footprint of the oil
sands industry. Our technology reduces the environmental impact of oil sands froth treatment tailings while economically
recovering valuable products that would otherwise be lost. CVW™ recovers bitumen, solvents, heavy minerals and water from
tailings, preventing these commodities from entering tailings ponds and the atmosphere: volatile organic compound and
greenhouse gas emissions are materially reduced; hot tailings water is improved in quality for recycling; and residual tailings
can be thickened more readily. A new minerals industry would be created commencing with the production and export of
zircon, an essential ingredient in ceramics. The Company’s shares trade on the TSX-V under the symbol “TIC”. For more
information please visit the Company’s website at www.titaniumcorporation.com.
Disclosure regarding forward-looking information
This news release contains forward-looking statements and information within the meaning of applicable Canadian securities
laws (collectively, " forward-looking information ") that reflect the current expectations of management about the future
results, performance, achievements, prospects or opportunities for Titanium, including statements relating to the occurrence
and timing of future steps with respect to the CVW™ Horizon Project, including the Project activities post-FEED and the
factors that are expected to affect such occurrence and timing; the continued effective collaboration between the Company
and Canadian Natural; the Company's ongoing engagement with its business partners and government funding agencies; the
Company's continuing cash conservation program and expectations regarding the Company's current cash position; the
Company's ongoing evaluation of financing opportunities, including grant and financing opportunities from applicable
government programs; and the advantages of the Company's technology in assisting with the recovery of the energy industry in
Alberta and Canada. This forward-looking information generally can be identified by use of forward-looking words such as
"may", "will", "expect", "estimate", "anticipate", "believe", "project", "should" or "continue" or the negative thereof or similar
variations.
Forward-looking information is presented in this news release for the purpose of assisting investors and others in
understanding certain key elements of our financial results and business plan, as well as our objectives, strategic priorities
and business outlook, and in obtaining a better understanding of our anticipated operating environment. Readers are
cautioned that such forward-looking information may not be appropriate for other purposes.
Forward-looking information, by its very nature, is subject to inherent risks and uncertainties and is based on many
assumptions, both general and specific, which give rise to the possibility that actual results or events could differ materially
from our expectations expressed in or implied by such forward-looking information and that our business outlook, objectives,
plans and strategic priorities may not be achieved. Macro-economic conditions, including public health concerns (including
the impact of the COVID-19 pandemic) and other geopolitical risks, the condition of the global economy and, specifically, the
condition of the crude oil and natural gas industry including the collapse of global crude oil demand and prices and other
commodity prices and demand in 2020, and the ongoing volatility in world markets may adversely impact oil sands producers'
program plans, including proceeding with an investment decision in further Project activities post-FEED or any final investment
decision with respect to commercialization, which could materially adversely impact the Company. In addition to other factors
and assumptions which may be identified in this news release, assumptions have been made regarding, among other things:
the condition of the global economy, including trade, public health (including the impact of the COVID-19 pandemic) and other
geopolitical risks, including the fact that any estimates of Project next steps post-FEED, as well as the detailed engineering
and construction period may be affected by the COVID-19 pandemic, condition of the global economy and commodity prices,
in particular crude oil prices; the stability of the economic and political environment in which the Company operates; the
success of the Project activities post-FEED, including the expected assessment of post-FEED engineering reviews for next
steps as part of the Project activities post-FEED; the focus of the post-FEED project on optimization of the concentrator
facility and design and engineering of a tailings thickener and associated facilities, including the expected timing of
completion thereof and commencement of optimization of the minerals facility; the ability of the Company to produce and sell
a blended L72 titanium product and a high quality zircon concentrate, including the ability of the Company to redesign its
minerals flowsheet and zircon circuitry to include production of these products; the ability of the Company to enter into
commercial contracts with oil sands producers and to achieve commercialization of the CVW™ technology, including the
anticipated scope of such commercial contracts; the ability of the Company to enter into commercial contracts with other
strategic partners in relation to building and operating facilities, as required; the ability of the Company to continue with its
cost reduction initiatives and to be supported by its current cash position; the ability of the Company to retain qualified staff;
the ability of the Company to obtain financing on acceptable terms, including available grant and financing opportunities from
government programs and finalizing funding agreements for such government programs; the translation of the results from the
Company's research, pilot programs, Project activities during the FEED, Project activities post-FEED and studies into the
results expected on a commercial scale; the belief that the Company's technology will provide important environmental and
economic benefits that will assist with the recovery of a resilient and sustainable energy industry in Alberta and Canada; the
anticipated timing for the completion of detailed engineering and construction once all Project activities post-FEED are
completed and a final decision to proceed has been made; future crude oil and zircon prices and the impact of lower prices on
activity levels and cost savings of oil sands producers; the impact of increasing competition; the ability to protect and
maintain the Company's intellectual property; currency, exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in which the Company operates; and the ability of the Company
to successfully market its CVW™ technology. The Company has not commercially demonstrated its technologies and there
can be no assurance that our research, pilot programs, Project activities during the FEED, Project activities post-FEED and
related studies will prove to be accurate nor that such commercialization efforts will be successful, as actual results and
future events could differ materially from those expected or estimated in such forward-looking information. As a result, we
cannot guarantee that any forward-looking information will materialize and we caution you against relying on any of this forward-
looking information. Accordingly, readers should not place undue reliance on forward-looking information.
Additional information on these and other factors are disclosed in our most recently filed management's discussion and
analysis, including under the heading “Discussion of Risks”, and in other reports filed with the securities regulatory authorities
in Canada from time to time and available on SEDAR (sedar.com).
The forward-looking information contained in this news release describes our expectations as of August 26, 2020 and,
accordingly, is subject to change after such date. Except as may be required by Canadian securities laws, we do not
undertake any obligation to update or revise any forward-looking information contained in this news release, whether as a
result of new information, future events or otherwise.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information, contact:
Scott Nelson
President & CEO
Tel: (403) 561-0439
Email: [email protected]
Jennifer Kaufield
Vice President Finance & CFO
Tel: (403) 874-9498