TITANIUM SANDS LIMITED — Capital/Financing Update 2018

Dec 11, 2018

Ltd

12 December 2018

Company Announcements Office Australian Securities Exchange 20 Bridge Street SYDNEY NSW 2000

COMPLETION OF ACQUISITION

Titanium Sands Limited (“ Company ”) is pleased to announce that it has completed its acquisition of Srinel Holdings Limited (“ Srinel ”) pursuant to the Option Agreement with Cuprum Holdings Limited (“ Vendor ”). Srinel holds exploration licences that constitute the Mannar Island Heavy Mineral Sands Project in Sri Lanka.

In accordance with the Company’s prospectus dated 29 March 2018 as varied by the supplementary prospectus dated 21 June 2018 and second supplementary prospectus dated 19 September 2018 (“ Prospectus ”) the following securities have been issued:

• (a) Public Offer – 300,000,000 Shares at $0.02 per share having raised $6 million under the Prospectus;

• (b) Vendor Offer – 58,095,239 Shares and 233,333,333 Performance Shares to the Vendors (escrowed for 24 months);

• (c) Cash Reimbursement Shares – 13,371,450 Shares to Vendor in lieu of cash consideration (escrowed for 24 months);

• (d) Creditor Offer – 4,600,000 Shares to the Creditors for amounts owing under loans advanced by the Creditors;

• (e) Facilitation Offer – 20,000,000 Shares under the Facilitation Offer (escrowed for 24 months); and

• (f) Director Options – 30,000,000 Director Options (exercisable at $0.05; expiring 18 January 2021) (escrowed for 24 months).

An Appendix 3B for the issue of these securities is attached.

The Company is currently finalising all outstanding ASX conditions for reinstatement and will update the market once a reinstatement date has been confirmed.

Yours faithfully

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Nicki Farley Company Secretary

Titanium Sands Limited Level 24, 44 St Georges Terrace, PERTH, WESTERN AUSTRALIA 6000 Telephone +61 8 6211 5099, Facsimile +61 8 9218 8875

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12

Name of entity

TITANIUM SANDS LIMITED

ABN

65 009 131 533

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued	Fully paid ordinary shares Performance Shares Unlisted Options
	Public Offer – 300,000,000 Shares Vendor Shares – 58,095,239 Shares Vendor Cash Reimbursement – 13,371,450 Shares Creditor Offer – 4,600,000 Shares Performance Shares – 66,666,667 Class A, 33,333,333 Class B and 133,333,333 Class C Performance Shares Director Options – 30,000,000 Options Facilitation Shares – 20,000,000 Shares

• See chapter 19 for defined terms.

Appendix 3B Page 1

01/08/2012

3 Principal terms of the+securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if+convertible securities, the conversion price and dates for conversion) 4 Do the+securities rank equally in all respects from the date of allotment with an existing+class of quoted+securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment	Public Offer – 300,000,000 Shares Vendor Offer – 58,095,239 Shares Vendor Cash Reimbursement – 13,371,450 Shares Creditor Offer – 4,600,000 Shares Facilitation Shares – 20,000,000 Shares Director Options – 30,000,000 Options ($0.05; expiring 18 January 2021) Performance Shares – 66,666,667 Class A, 33,333,333 Class B and 133,333,333 Class C Performance Shares (converting on a 1:1 basis on the satisfaction of milestone)
	Public Offer Shares - Yes Vendor Offer Shares - Yes Vendor Cash Reimbursement Shares - Yes Creditor Offer Shares – Yes Facilitation Shares – Yes Director Options – No, will convert into ordinary shares on conversion Performance Shares – No, will convert on a 1:1 conversion basis on the satisfaction of milestones

5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	Public Offer Shares - $0.02 per Share. Vendor Shares and Performance Shares issued for the acquisition of 100% of Srinel Holdings Limited. Vendor Cash Reimbursement Shares issued in lieu of cash reimbursement (conversion price of $0.02 per Share). Creditor Shares issued to convert outstanding loans (conversion price of $0.02 per Share). Facilitation Shares issued in consideration for services provided in relation to the acquisition of Srinel Holdings Limited. Director Options issued to incentive the performance of directors.
	Funds raised under the Public Offer will be used as set out in the Company’s Prospectus dated 29 March 2018 including exploration of the Sri Lankan Project, scoping study on the Sri Lankan Project, working capital and expenses of the Offers. Vendor Shares, Cash Reimbursement Shares and Performance Shares to be issued in consideration for the acquisition of 100% of Srinel Holdings Limited. Creditor Shares issued to convert outstanding loans. Facilitation Shares issued in consideration for services provided in relation to the acquisition of Srinel Holdings Limited. Director Options issued to incentive the performance of directors.

• See chapter 19 for defined terms.

Appendix 3B Page 3

01/08/2012

6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h_in_ relation to the +securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of +securities issued without security holder approval under rule 7.1 6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of securities issued under an exception in rule 7.2 6g If securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the issue date and both values. Include the source of the VWAP calculation. 6h If securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 Dates of entering+securities into uncertificated holdings or despatch of certificates	No
	Not applicable
	Nil
	Nil
	Nil
	Nil
	Not applicable
	Not applicable
	Not applicable
	12 December 2018

8 Number and+class of all+securities quoted on ASX (_including_the securities in section 2 if applicable) 9 Number and+class of all+securities not quoted on ASX (_including_the securities in section 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	477,182,782	Fully paid ordinary shares
	Number	+Class
	91,466,689 66,666,667 33,333,333 133,333,333 30,000,000 14,285,714	Fully paid ordinary shares – escrowed for 24 months from re- instatement Class A Performance Shares (converting on a 1:1 basis) escrowed for 24 months from re- instatement Class B Performance Shares (converting on a 1:1 basis) escrowed for 24 months from re- instatement Class C Performance Shares (converting on a 1:1 basis) escrowed for 24 months from re- instatement Director Options (exercisable at $0.05; expiring 18 January 2021) escrowed for 24 months from re- instatement Unlisted Options (exercisable at $0.021; expiring 25 January 2021)
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 5

01/08/2012

Part 2 - Bonus issue or pro rata issue

11	Is security holder approval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which the+securities
	will be offered
14	+Class of+securities to which the
	offer relates
15	+Record date to determine
	entitlements
16	Will holdings on different
	registers (or subregisters) be
	aggregated for calculating
	entitlements?
17	Policy for deciding entitlements
	in relation to fractions
18	Names of countries in which the
	entity has+security holders who
	will not be sent new issue
	documents
	Note: Security holders must be told how their
	entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of
	acceptances or renunciations
20	Names of any underwriters
21	Amount of any underwriting fee
	or commission
22	Names of any brokers to the
	issue
23	Fee or commission payable to the
	broker to the issue

24	Amount of any handling fee
	payable to brokers who lodge
	acceptances or renunciations on
	behalf of+security holders
25	If the issue is contingent on
	+security holders’ approval, the
	date of the meeting
26	Date entitlement and acceptance
	form and prospectus or Product
	Disclosure Statement will be sent
	to persons entitled
27	If the entity has issued options,
	and the terms entitle option
	holders to participate on
	exercise, the date on which
	notices will be sent to option
	holders
28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do+security holders sell
	their entitlements_in full_through
	a broker?
31	How do+security holders sell
	part of their entitlements
	through a broker and accept for
	the balance?
32	How do+security holders dispose
	of their entitlements (except by
	sale through a broker)?
33	+Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities ( tick one )

• See chapter 19 for defined terms.

Appendix 3B Page 7

01/08/2012

(a)[Securities described in Part 1. Fully paid ordinary shares only ]

(b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37 A copy of any trust deed for the additional[+] securities

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought

40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted[+] securities?

If the additional securities do not rank equally, please state:

• the date from which they do

• the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment

• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that other security)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted +quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• See chapter 19 for defined terms.

Appendix 3B Page 9

01/08/2012

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: (Company Secretary) Print name: Nicki Farley

Date: 12 December 2018

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for +eligible entities

Introduced 01/08/12

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid ordinary
securities on issue 12 months before date
of issue or agreement to issue
Add the following:
• Number of fully paid ordinary securities
issued in that 12 month period under an
exception in rule 7.2
• Number of fully paid ordinary securities
issued in that 12 month period with
shareholder approval
• Number of partly paid ordinary securities
that became fully paid in that 12 month
period
Note:
• Include only ordinary securities here –
other classes of equity securities cannot
be added
• Include here (if applicable) the securities
the subject of the Appendix 3B to which
this form is annexed
• It may be useful to set out issues of
securities on different dates as separate
line items
Subtract the number of fully paid ordinary -
securities cancelled during that 12 month
period
“A”
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• See chapter 19 for defined terms.

Appendix 3B Page 11

01/08/2012

Step 2: Calculate 15% of “A”

“B” 0.15 [Note: this value cannot be changed] Multiply “A” by 0.15

Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used

Insert number of equity securities issued or agreed to be issued in that 12 month period not counting those issued:

• Under an exception in rule 7.2

• Under rule 7.1A

• With security holder approval under rule 7.1 or rule 7.4

Note:

• This applies to equity securities, unless specifically excluded – not just ordinary securities

• Include here (if applicable ) the securities the subject of the Appendix 3B to which this form is annexed

• It may be useful to set out issues of securities on different dates as separate line items

• “C” -

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

“A” x 0.15

Note: number must be same as shown in Step 2

Subtract “C” Note: number must be same as shown in Step 3 Total [“A” x 0.15] – “C” [Note: this is the remaining placement capacity under rule 7.1]

Part 2

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Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement
capacity is calculated
“A”
Note: number must be same as shown in
Step 1 of Part 1
Step 2: Calculate 10% of “A”
“D” 0.10
Note: this value cannot be changed
Multiply “A” by 0.10
Step 3: Calculate “E”, the amount of placement capacity under rule
7.1A that has already been used
Insert number of equity securities issued or
agreed to be issued in that 12 month period
under rule 7.1A
Notes:
• This applies to equity securities – not
just ordinary securities
• Include here – if applicable – the
securities the subject of the Appendix
3B to which this form is annexed
• Do not include equity securities issued
under rule 7.1 (they must be dealt with
in Part 1), or for which specific security
holder approval has been obtained
• It may be useful to set out issues of
securities on different dates as separate
line items
“E”
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• See chapter 19 for defined terms.

Appendix 3B Page 13

01/08/2012

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

“A” x 0.10

Note: number must be same as shown in Step 2

Subtract “E”

Note: number must be same as shown in Step 3

Total [“A” x 0.10] – “E”

Note: this is the remaining placement capacity under rule 7.1A