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Nov 2005 - Titan Resources

Titan Resources Limited (TIR) –Australia’s Next Junior Nickel Producer

  • Titan appears to be well advanced towards becoming Australia’s next junior nickel producer based on a number of its properties capable of producing nickel, with Armstrong capable of being treated and within a feasibility study, a scoping study in progress on Widgie Townsite, closely followed by scoping studies on Munda, 132N and Widgie 3. All the studies are scheduled to have been completed by the end of March 2006.
  • Titan’s share price fell from about 30c when WMR rejected the Armstrong ore for failing to meet their specifications. It was not that the ore is untreatable, just that it is too similar to Mt Keith ore (it appears to be even better than Mt Keith ore), whereas high iron-rich Kambalda-type concentrates are required (with an Fe:MgO ratio of up to 11:1 they are higher than anything that WMR can produce), to blend with WMR nickel concentrates & prevent WMR’s nickel furnace from overheating.
  • Armstrong ore can be treated to produce an acceptable product and higher recovery than WMR would allocate, and its concentrate can be sold (there are a number of expressions of interest). At this stage the most likely route appears to be CSM modifying the back end of a mothballed gold plant to result in a >1mtpa concentrator at potentially lower costs than TIR may have paid to WMR.
  • CSM has the right to 50% of the Armstrong ore and in November 2005 is expected to have earnt 50% of the gold-nickel orebody at Munda. Munda contains spectacular gold intersections such as 6m @ 27g/t where the nickel and gold orebodies intersect, and separately 11m and 17m @ 17g/t in the hangingwall lode.
  • Conceptually, Titan’s market cap can be theoretically derived from its net cash, 50% of Armstrong and its post AIM floated interest in BioHeap in early 2006. To which can be added 50% of Munda, plus Widgie Townsite, Widgie 3 and 132N. To this can be added possibly a re-opened Mt Edwards and the extensive kms of untested basalt / ultramafic contact that can now be explored at Widgiemooltha using techniques such as SQUID. TIR appears to have the potential to at least double its current share price and attain a market cap of A$40m to A$50m or so.
  • Reed Resources (RDR) have announced that they have entered into a call option (that expires on 14 December 2005) over up to 16% of the Titan shares held by CSM’s wholly owned subsidiary Consolidated Nickel, in which Consolidated Nickel would receive 1RDR – for - 4 TIR shares. RDR’s current 3.8% (~14m shares) held in TIR appears to mainly be held by associates of RDR. RDR may only be able to swap 2m RDR (for 8m TIR) otherwise CSM appears to then hold >19.9% of RDR.
  • Written by: Keith Goode
  • Wednesday, 09 November 2005

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