Titanium Corporation Inc. (the “Company” or “Titanium”) (TSX-V:
TIC) today released its results for the year ended December 31,
2019. The Company also confirms that it will hold its annual and
special meeting (the "Meeting") as a virtual only meeting via live
audio webcast online at https://web.lumiagm.com/242557530 on
Thursday, June 25, 2020 at 10:00 a.m. (Toronto time).
In early 2020, two major world events, the
COVID-19 pandemic and the collapse of oil prices, have introduced
unprecedented uncertainties for many industries and the global
economy, which are affecting commodity prices and market demand.
This includes sectors directly related to the Company including
Canada’s oil sands industry, the global minerals sands industry and
the Alberta and Canadian economies. The duration and extent of the
impact of these events is not known but could affect the progress
and timing of the Company’s CVW™ Horizon Project (the
“Project”).
The Company with Canadian Natural Resources
Limited ("Canadian Natural") were working towards a joint decision
on the commercial project following the completion of the front end
engineering design (“FEED”) phase of the Project. However, the
Company and Canadian Natural have determined that further
engineering work is required related to post-FEED optimization in
areas which have the potential to reduce costs and increase
efficiency. During the first half of 2020, the Company and Canadian
Natural have been working to plan and execute the post-FEED
engineering review for optimization of the Project. In parallel,
the Company has been working with Alberta and Federal funding
agencies to contract funding for the detailed engineering phase of
the Project.
"During 2019, our Company completed significant
milestones toward commercialization of our Project including the
FEED, the award of $50 million of additional government grant
funding toward the engineering, procurement and construction phases
of our Project and further measures to strengthen our balance sheet
and add expertise to our Board. The COVID-19 pandemic and dramatic
decline of world crude oil demand and prices which occurred in the
first quarter of 2020, and remain ongoing, have introduced
unprecedent uncertainties for many industries and in particular
have had a very negative impact on the Alberta and Canadian
economies and, in particular, the oil sands industry. The duration
and severity of these impacts have caused the oil sands industry to
reduce capital spending and will impact the timing of new projects,
including the Project,” commented Scott Nelson, Titanium’s
President and Chief Executive Officer. “We believe our CVW™
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. Our team
continues to work with our industry partner, Canadian Natural, and
the various government funding agencies toward advancing our
Project as conditions improve.”
Certain highlights for the three and
twelve-month periods ended December 31, 2019 are set out in more
detail below:
- During 2019, the Company conducted
technical marketing programs including meeting with potential
minerals processors and customers, visiting their facilities and
providing minerals samples for customer testing. These activities
are largely suspended due to the COVID-19 pandemic and will be
resumed when the relevant countries and businesses reopen and
resume normal operations.
- 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. Optimization of the Project is on-going including refining
capital and operating costs to achieve the most efficient and cost
effective implementation of our CVW™ technology.
- On August 7, 2019, the Company
announced the appointment of Bruce Griffin to the Board of
Directors of the Company as an independent Director of the Company.
Mr. Griffin has also been appointed to the Company's
Commercialization Committee. Most recently, Mr. Griffin was 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
of units 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,
immediately following the final closing of the private placement,
the Company had 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 during the
Project activities post-FEED 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. 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 management and
directors receive all or a portion of their compensation and fees
in restricted share units and deferred share units ("RSUs" and
"DSUs", respectively), respectively. This program is aimed to
conserve cash and further align management and the Board with
shareholder interests. Since inception of the program in 2015, the
program has conserved $2.1 million of management cash compensation
and $1.6 million of directors' cash compensation for a total of
$3.7 million. Since 2015, the Company's directors have been
receiving 100% of their compensation in DSUs in lieu of cash
compensation. After the fourth quarter 2019 award of DSUs, the
number of DSUs available for issuance under the DSU plan has been
depleted. Over the same period, management has been receiving a
significant portion of incentive and retention compensation and, in
certain cases, a portion of base salary, in the form of RSUs. At
the end of the third quarter of 2019, the number of RSUs available
for issuance under the RSU plan was almost depleted. For both the
Board and management, earned compensation intended to be settled
with DSUs or RSUs is being recorded as deferred compensation until
such time as additional DSUs and RSUs may be issuable pursuant to
the respective plans given the limits on issuances provided
therein.
- Effective April 1, 2020, the
Company has taken additional measures to protect its balance sheet,
reduce costs and conserve cash over the months ahead including
reducing all salaries. Titanium’s President and Chief Executive
Officer voluntarily reduced his salary by 20% and the other members
of the management team voluntarily reduced their salaries by
15%.
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 (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
year ended December 31, 2019, the Company had net income of $3,250
compared to a loss of $7.6 million for the year ended December 31,
2018. The recovery of Project contributions in respect of the FEED
($3.5 million) and a SR&ED tax credit ($71,000) during the year
ended December 31, 2019 exceeded total R&D costs of $1.6
million which resulted in a net recovery of $2.0 million for
R&D. This R&D recovery offset G&A expense of $2.0
million during the year resulting in $3,250 net income reported.
For a development stage company, and given the timing of Project
contributions, in respect of the FEED, the net income reported was
in line with expectations.
Research & Development –
R&D spending during the year ended December 31, 2019 consisted
primarily of compensation for technical staff and on-going minerals
testing and analysis. With completion of the FEED portion of the
Project in the first quarter of 2019, R&D was in a net recovery
of $2.0 million for the year ended December 31, 2019 due primarily
to the $3.5 million receipt of Project contributions with respect
to the FEED and to a lesser extent receipt of a refundable
SR&ED tax credit. Project costs were lower by $8.2 million for
the year ended December 31, 2019 compared to the same period in
2018 due to the completion of the FEED portion of the Project on
February 28, 2019. The Company continues to work on Project
activities post-FEED 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 –
For the year ended December 31, 2019, cash expenses were lower by
$0.2 million which was offset by increases in non-cash deferred
compensation of $0.1 million. Cash expenses were lower for the year
ended December 31, 2019 in all categories except for a small
increase in travel costs where activity was focused on minerals
market development work with potential customers for future
minerals off-take agreements in international markets. Stock based
compensation was lower during the three and twelve-month period
ended December 31, 2019 as the Company granted 1,125,000 stock
options on April 30, 2018 and the number and fair value of stock
options being amortized was lower in the three and twelve month
periods ended December 31, 2019 than the comparative three and
twelve-month periods ended December 31, 2018.
Cash Position – The Company had
an aggregate of $5.1 million in cash at December 31, 2019
consisting of $3.1 million in interest-bearing cash accounts and a
$2.0 million 30-day cashable GIC 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 Project contributions with respect to the FEED
during the year. 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’s discussion
and analysis and audited financial statements for the year ended
December 31, 2019, please visit our website at
www.titaniumcorporation.com or SEDAR at www.sedar.com.
Further to the notice of the annual and special
meeting above, the record date for shareholders to receive notice
and be entitled to vote at the Meeting is May 11, 2020. Further
information will be included in the Company's management
information circular in respect of the Meeting, which is expected
to be mailed to shareholders and filed under the Company's profile
on www.sedar.com in mid-May and will also be made available on
the Company's website at www.titaniumcorporation.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 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 expected timing and format of the Meeting, as well as
the timing for mailing and posting of materials relating to the
Meeting; the Company's continuing cash conservation program; 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 prices, other
commodity prices and the decrease in global demand for crude oil in
2020, and the ongoing significant 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 ability of the
Company to hold the virtual Meeting at the end of June 2020; 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
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” therein, 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 April 27, 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 |
Jennifer Kaufield |
President & CEO |
Vice President Finance & CFO |
Tel: (403) 561-0439 |
Tel: (403) 874-9498 |
Email: snelson@titaniumcorporation.com |
jkaufield@titaniumcorporation.com |
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