Titanium Corporation Inc. (the “Company” or “Titanium”)
(TSX-V: TIC) today released its results for the three and
nine-month periods ended September 30, 2019.
The Company has continued to make progress on
commercialization of its CVW™ technology with Canadian Natural
Resources Limited (“Canadian Natural”) at its Horizon oil sands
site. Work continues with Canadian Natural on preliminary
planning and analysis for the next phase of the CVW™ project. The
Company is also meeting with government funding agencies regarding
the contracts required by each program and updates on progress
toward the next phase of the project.
"Our team is focused on achieving a joint
decision to move forward with the commercial project and associated
government funding agreements,” commented Scott Nelson, Titanium’s
President and Chief Executive Officer. “With the elections over,
there is now more clarity on government priorities and programs
including those with potential to support our project.”
Highlights for the three and nine-month periods
ended September 30, 2019 and recent months include:
- The Company continues to
investigate additional grant and financing opportunities from
government programs. In their 2020 budget, the Alberta government
recently announced the creation of the Technology Innovation and
Emissions Reduction (TIER) program whereby large industry emitters
may pay carbon levies into the TIER fund. The TIER fund will be
used, in part, to develop and implement technologies that reduce
greenhouse gas emissions over time. The budget forecasts that
funding for Innovation and Technology will amount to $228 million
in 2020 and total $808 million over the next four years.
- In the third quarter, the Company
provided minerals test samples to a number of potential customers
and is now working with these firms during their testing and
analysis including visits to customer sites. The Company is also
attending annual minerals industry conferences which include
meetings with potential customers during the third and fourth
quarters.
- On August 1, 2019, the Company
announced receipt of the final payment of $991,000 related to the
$5.0 million grant from Emissions Reduction Alberta ("ERA") for
partial funding of the FEED phase of the CVW™ Horizon Project.
The payment represents a 20% holdback by ERA which was
subject to final project reporting and completion of a third-party
audit of project costs. The $9.9 million engineering design phase
was supported by $5.0 million of grant funding from ERA with the
Company funding $1.4 million and Canadian Natural funding $3.5
million. Optimization of the project is on-going including
refining capital and operating costs to achieve the most efficient
and cost-effective implementation of CVW™ technology.
- On August 7, 2019, the Company
announced the appointment of Bruce Griffin to the Board of
Directors as an independent Director of the Company. Mr. Griffin
has also been appointed to the Company's Commercialization
Committee. Mr. Griffin is currently the Senior Vice President
Strategic Development of Lomon Billions Group, the world's third
largest producer of high performance titanium dioxide products. Mr.
Griffin brings a deep understanding of the global minerals industry
from its key markets and customers to its leading players and has
broad experience in operations, strategy, finance and capital
markets.
- In May 2019, the Company announced
the first and second closings of its non-brokered private placement
for gross proceeds of $4,262,640 resulting in the issuance of
6,089,485 common shares and 3,044,743 warrants entitling the holder
to purchase one common share of the Company at an exercise price of
$1.40 expiring on May 9 or May 30, 2022. As a result of the
transaction the Company now has 88,166,359 common shares issued and
outstanding. The net proceeds of $4,056,475 are being used to
fund ongoing efforts to commercialize the Company’s CVW™ technology
and for general operating purposes.
- On March 14, 2019, the Company
announced $50 million in government funding toward the next phase
of the CVW™ Horizon Project. The Federal Government awarded $45
million from two clean technology programs; Environment and Climate
Change Canada, through its Low Carbon Economy Fund (“LCEF”) has
committed to investing $40 million and NRCan’s Clean Growth Program
(“CGP”) has committed to investing $5 million in Titanium's first
of a kind sustainable technology designed to remediate oil sands
froth treatment tailings. Emissions Reduction Alberta (“ERA”)
awarded $5 million from their Partner Intake Program aimed at
improving environmental performance in Alberta’s oil and gas
sector. Funding from the LCEF and CGP programs are subject to
finalizing funding agreements which will outline the conditions
under which federal funding would be provided, including securing
the remaining funding necessary to complete the project, fulfilling
all applicable requirements associated with the project
environmental assessments and Indigenous consultation requirements
and finalizing the scope of the project costs eligible for program
funding.
- The Company has been meeting with
other government agencies and Canadian investment banks regarding
their potential participation in the structuring and financing of
the project and their support of the Company in financial
markets.
- The Company is continuing its cash
conservation programs including those under which executive
officers and directors receive a portion of their compensation and
fees in RSUs and DSUs. This program is aimed to conserve cash
and further align Management and the Board with shareholder
interests.
FINANCIAL OVERVIEW
Titanium is focused on achieving long-term
financial success by implementing its innovative CVW™ technologies
in commercial operations at oil sands sites. With the FEED
project completed, the Company is working with Canadian Natural on
the potential implementation of its technology at Canadian
Natural’s Horizon site. Until commercial arrangements and
investment decisions are made, and facilities are constructed and
operating, the Company expects to continue to incur losses.
Currently, quarterly income/losses are comprised of research and
development (“R&D”) project costs, recovery of project costs,
and general and administrative (“G&A”) expenditures.
Net (Income) Loss – For the
three-month period ended September 30, 2019 the Company reported
net income of $272,000 or $0.003 per share. The net income of
$272,000 was primarily the result of receipt of ERA’s 20% holdback
of $991,000 and to a lesser extent, the receipt of $71,000 a
SR&ED refundable tax credit. R&D recoveries of $1,062,000
exceeded the combined R&D and G&A costs of $811,000 for the
three-month period ended September 30 ,2019. For the
comparable three-month period ended September 30, 2018, the Company
recorded a loss of $1,951,000 or $0.02 per share as project costs
were being incurred and the recovery of ERA and Canadian Natural
contributions occurred in subsequent quarters. For the nine-month
period ended September 30, 2019, the Company had net income of
$750,000 compared to a loss of $6,551,000 for the comparative
period ended September 30, 2018. The recovery of FEED project
contributions of $3,475,800 for the nine-month period ended
September 30, 2019 exceeded total R&D costs of $1,247,000 and
$1,587,000 in G&A expenses. For a development stage company,
and the timing of FEED project contributions, the net income
reported was in line with expectations.
Research & Development–
R&D spending in the current quarter of $329,000 consisted
primarily of post FEED project activities related to minerals
testing and compensation for technical staff. R&D had a
net recovery of $732,000 for the three-month period ended September
30, 2019 due to the $991,000 recovery of ERA’s 20% holdback noted
above. Project costs were lower by $2,920,000 for the
three-month period ended September 30, 2019 compared with the same
period in 2018 due to the completion of the project on February 28,
2019. For the nine-month period ended September 30, 2019, a net
recovery of R&D costs was $2,300,000 compared to a net R&D
cost of $4,890,000 for the nine-month period ended September 30,
2018 where the expected project costs aligned with the higher work
volumes and contributions for those costs were collected in future
periods. The Company continues to work on commercial project
related areas including, market development and a minerals
evaluation program for the new Horizon south mining area expected
to be mined in the timeframe a potential CVW™ project would be
commissioned.
General & Administrative –
G&A expenses for the three-month period ending September 30,
2019 were $482,000 compared to $520,000 for the three-month period
ended September 30, 2018, a $38,000 decrease. The decrease
relates primarily to a reduction in investor relations and
regulatory costs offset by an increase in travel and consulting and
professional fees. The Company reduced its investor relations
cost as investor relations services were provided on an as needed
basis versus a fixed retainer in the prior fiscal period.
Increase in travel costs during the three-month period ended
September 30, 2019 related to market development work with
potential customers for future minerals off take agreements with
customers in international markets. For the nine-month period ended
September 30, 2019, G&A costs were $1,587,000 compared to
$1,701,000 for the comparative nine-month period in 2018. As
noted above, the decrease in G&A costs relate primarily to
investor relations expenses being lower.
Cash Position - The Company had
an aggregate of $5.5 million in cash consisting of $3.5 million in
interest-bearing cash accounts and a $2.0 million 30-day cashable
GIC at September 30, 2019 as compared to $0.8 million at December
31, 2018. The increase in cash related primarily to the
closing of the private placement in May of 2019 and collection of
$3.5 million in FEED project contributions during the nine-month
period ended September 30, 2019. The Company closed a private
placement in two tranches with the issuance of 6,089,485 units
($0.70 per share) for net aggregate proceeds of $4.1 million net of
share issue costs
To view the Company’s management discussion and
analysis and interim unaudited financial statements for the three
and nine month period ended September 30, 2019, please visit our
website at www.titaniumcorporation.com or SEDAR at
www.sedar.com.
About Titanium Corporation
Inc.
Titanium Corporation’s CVW™ technology provides
sustainable solutions to reduce the environmental footprint of the
oil sands industry. Our technology reduces the environmental impact
of oil sands froth treatment tailings while economically recovering
valuable products that would otherwise be lost. CVW™ recovers
bitumen, solvents, heavy minerals and water from tailings,
preventing these commodities from entering tailings ponds and the
atmosphere: volatile organic compound and greenhouse gas emissions
are materially reduced; hot tailings water is improved in quality
for recycling; and residual tailings can be thickened more readily.
A new minerals industry would be created commencing with the
production and export of zircon, an essential ingredient in
ceramics. The Company’s shares trade on the TSX-V under the symbol
“TIC”. For more information please visit the Company’s website at
www.titaniumcorporation.com.
Disclosure regarding forward-looking
informationThis news release contains forward-looking
statements and information within the meaning of applicable
Canadian securities laws (collectively, "forward-looking
information") that reflect the current expectations of
management about the future results, performance, achievements,
prospects or opportunities for Titanium, including statements
relating to overall project economics; the advantages of the
Company's technology and the creation of a mineral sands industry;
the timing and expectations for completion of the post-FEED project
activities; the scope of activities that will be undertaken in the
post-FEED project; the Company's ongoing engagement with indigenous
communities and other stakeholders; the use of proceeds from the
private placement; meetings with government funding agencies
regarding grant and financing opportunities and entering into
funding agreements related thereto; and the expected next steps for
the Company as described in this news release. These statements
generally can be identified by use of forward-looking words such as
"may", "will", "expect", "estimate", "anticipate", "believe",
"project", "should" or "continue" or the negative thereof or
similar variations.
Forward-looking information is presented in this
news release for the purpose of assisting investors and others in
understanding certain key elements of our commercialization
progress and business plan, as well as our objectives, strategic
priorities and business outlook, and in obtaining a better
understanding of our anticipated operating environment. Readers are
cautioned that such information may not be appropriate for other
purposes.
Forward-looking information, by its very nature,
is subject to inherent risks and uncertainties and is based on many
assumptions, both general and specific, which give rise to the
possibility that actual results or events could differ materially
from our expectations expressed in or implied by such
forward-looking information and that our business outlook,
objectives, plans and strategic priorities may not be achieved. In
addition to other factors and assumptions which may be identified
in this news release, assumptions have been made regarding, among
other things: the success of the post-FEED study project
activities; Canadian Natural’s support for the Company’s current
optimization plans and potential refinements of the project scope;
the economic viability of the Company’s current optimization plans
and potential refinements to the project scope; the ability of the
Company to enter into commercial contracts with oil sands producers
and to achieve commercialization of the CVW™ technology, including
the anticipated scope of such commercial contracts; the ability of
the Company to retain qualified staff; the 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, FEED
project activities, post-FEED study project activities and studies
into the results expected on a commercial scale; future oil and
zircon prices and the impact of lower prices on activity levels and
cost savings of oil sands producers; the impact of increasing
competition; the general stability of the economic and political
environment in which the Company operates; the ability to obtain
and maintain the Company's intellectual property; currency,
exchange and interest rates; the regulatory framework regarding
royalties, taxes and environmental matters in the jurisdictions in
which the Company operates; and the ability of the Company to
successfully market its CVW™ technology. The forward-looking
information contained in this news release is based on the results
of our research, pilot programs, FEED project activities, post-FEED
project activities and related studies and commercialization
efforts. The Company has not commercially demonstrated its
technologies and there can be no assurance that such research,
pilot programs, FEED project activities, post-FEED project
activities and related studies will prove to be accurate nor that
such commercialization efforts will be successful, as actual
results and future events could differ materially from those
expected or estimated in such forward-looking statements. As a
result, we cannot guarantee that any forward-looking information
will materialize and we caution you against relying on any of this
forward-looking information. Accordingly, readers should not place
undue reliance on forward-looking information.
Additional information on these and other
factors are disclosed in our MD&A, including under the heading
“Discussion of Risks”, and in other reports filed with the
securities regulatory authorities in Canada from time to time and
available on SEDAR (sedar.com).
The forward-looking information contained in
this news release describes our expectations as of November 18,
2019 and, accordingly, are subject to change after such date.
Except as may be required by Canadian securities laws, we do not
undertake any obligation to update or revise any forward-looking
information contained in this news release, whether as a result of
new information, future events or otherwise.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
For further information, contact:
Scott Nelson
President & CEO
Tel: (403) 561-0439
Email: snelson@titaniumcorporation.com
Jennifer Kaufield
Vice President Finance & CFO
Tel: (403) 874-9498
jkaufield@titaniumcorporation.com
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