Hancock (Hanrine) JV Earn-In Deal

HANCOCK SUBSIDIARY HANRINE TO SPEND UP TO US$120M TO EARN 80% INTEREST

On 18th April 2024 Titan announced that it had executed a Letter of Offer from Hancock Prospecting Pty Ltd (Hancock) wholly owned subsidiary Hanrine Ecuadorian Exploration and Mining S.A (Hanrine) Linderos Copper Project JV Earn-In Deal

  • Titan and Hancock Prospecting Pty Ltd (Hancock) wholly owned subsidiary Hanrine Ecuadorian Exploration and Mining S.A (Hanrine), have agreed to terms for Hanrine to acquire up to an 80% ownership interest in the Linderos Copper Project.
  • The proposed earn-in and joint venture terms comprise the following key milestones:
    • US$2 million payment to Titan to earn initial 5%.
    • 10,000m of drilling, or additional expenditure of US$8 million, whichever occurs first, to earn an additional 25% (total earn in 30%).
    • 15,000m of drilling, or additional expenditure of US$12 million, whichever occurs first to earn an additional 21% (total earn in 51%). Once Hanrine have earnt 51%, they will pay Titan an additional US$1 million.
    • At the Decision to Mine, or at total expenditure of US$120 million, whichever occurs first, Hanrine will earn an additional 29% (total earn in 80%).

The terms of the Proposed Transaction are as follows:

  • (Upfront Payment) US$250,000 is payable to Titan no later than 30 days from signing of the Term Sheet. Upfront payment is refundable in the event that the Linderos Copper Project tenement title is not perfected.
  • (Earn-in and Consideration) Hanrine will have the right to acquire up to an 80% ownership interest in the Linderos Copper Project on the following terms:
Milestone No. Earn-In Milestones Earn-in Interest Total Interest Earnt Time Period to satisfy Earn-in Milestone
1 Execution of formal binding agreement and payment of an aggregate of US$2 million to Titan (being the upfront payment of US$250,000 and subsequent payment of US$1.75 million) 5% 5% Within 30 days of execution of formal binding agreement
2 Completion of 10km of drilling at the Linderos Copper Project or exploration expenditure of an additional US$8 million (whichever occurs first) 25% 30% Within 2 years of execution of formal binding agreement
3 Completion of an additional 15km of drilling or exploration expenditure of an additional US$12 million (whichever occurs first) 21% 51% Within 5 years of execution of formal binding agreement
4 Decision to mine or a US$120 million total investment in the Linderos Copper Project (whichever occurs first) 29% 80% Within 12 years of execution of formal binding agreement
  • (Additional Payment) Additional payment of US$ 1 million is payable to Titan upon Hanrine achieving a 51% interest in the Linderos Copper Project.
  • (Free Carried) Titan will be free carried whilst Hanrine is earning up to an 80% interest in the Linderos Copper Project, following which, Titan and Hanrine will invest on an equal basis and Titan may elect to contribute equity pro rata or dilute its interest.
  • (Net Smelter Royalty) If Titan’s interest dilutes to 10% or less, Titan will swap its interest in the Linderos Copper Project to a 2.7% net smelter royalty.
  • (First Right of Refusal) The parties will retain a first right of refusal over each other’s interest in the Linderos Copper Project.

The Proposed Transaction, including the key terms, remain subject to the parties agreeing and executing a formal binding earn-in and joint venture agreement and there is no certainty that an agreement will be reached between the parties. The Company will update shareholders on the outcome of the negotiations and the status of the earn-in and joint venture agreement by way of further ASX announcements.