TITANIUM SANDS LIMITED — Capital/Financing Update 2019

Feb 18, 2019

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ASX RELEASE

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19 February 2019

TITANIUM SANDS LIMITED ACN 009 131 533

Level 11, London House 216 St. Georges Terrace Perth Western Australia 6000 Tel: +61 (08) 9481 0389 Faxsimile: +61 (08) 94636103 email

http://titaniumsands.com.au

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CONVERSION OF PERFORMANCE SHARES

19 February 2019 – Perth, Australia

Titanium Sands Ltd (ASX: TSL or the “ Company ”) is pleased to advise that the recent resource announcement (ASX:TSL 11 February 2019*) confirming that the inferred (JORC) resource has increased to 53.08Mt at 6.7% Total Heavy Minerals, has satisfied a performance milestone for conversion of Titanium Sands Performance Shares into ordinary shares.

On 12 December 2018 the Company issued 66,666,667 Class A Performance Shares (“ Performance Shares ”) as consideration for the acquisition of Srinel Holdings Limited as part of the Company’s reinstatement to Official Quotation on the Australian Securities Exchange (“ ASX ”).

The Performance Shares convert into fully paid ordinary shares (“ Ordinary Shares ”) in the Company when the Company has satisfied the performance milestone of achieving a total Mineral Resource of 20 million tonnes of heavy mineral content of not less than 5% discovered (or equivalent tonnage to heavy mineral content discovered ratio. For example, 10 million tonnes of heavy mineral content of not less than 10% discovered) (“ Milestone ”). Consequently that the first performance milestone has now been met.

The Board has resolved to convert the Performance Shares into Ordinary Shares.

Contacts:

Titanium Sands

Dr James Searle Managing Director Tel: +61 419 949 636 james.searle@titaniumsands.com.au

Accordingly, 66,666,667 Performance Shares have been converted into 66,666,667 Ordinary Shares in the Company.

The Appendix 3B in respect of the Ordinary Shares issued are appended to this announcement. As the Performance Shares were subject to an ASX Escrow Restriction to 18 December 2020, the Ordinary Shares will also remain in escrow for that period.

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Directors

Lee Christensen Dr James Searle Jason Ferris

James Searle Managing Director

About Titanium Sands Ltd (http://titaniumsands.com.au)

Ticket

ASX: TSL

Titanium Sands Ltd is an Australian based mineral company that is focused on the exploration of heavy mineral sand concentrations that occur along the modern sandy shorelines of Sri Lanka. Titanium Sands Ltd hold five exploration licences for heavy mineral sands located in North West Sri Lanka on Mannar Island and the adjacent mainland coast. Current exploration is focused around Mannar Island which has an area of 166km[2] joined to the mainland shore by road and rail.

*An update resource statement for the Mannar Island Project was released in full to the ASX on the 11 February 2019.

*An initial resource statement for the Mannar island Project was released in full to ASX on the 22 April 2015.

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 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)	Fully paid ordinary shares
	66,666,667
	Fully paid ordinary shares

• See chapter 19 for defined terms.

Appendix 3B Page 1

01/08/2012

4 Do the[+] securities rank equally in Yes all respects from the date of allotment with an existing[+] class of [NB: Shares are subject to ASX imposed quoted[+] securities? escrow and will not be quoted until 18 December 2020] 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 5 Issue price or consideration Nil – Issued on conversion of Class A Performance Shares 6 Purpose of the issue Shares issued on conversion of Class A (If issued as consideration for the Performance Shares acquisition of assets, clearly identify those assets) 6a Is the entity an[+] eligible entity that No 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 Not applicable resolution under rule 7.1A was passed 6c Number of +securities issued Nil without security holder approval under rule 7.1 6d Number of[+] securities issued with Nil 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 8 Number and+class of all+securities quoted on ASX (_including_the securities in section 2 if applicable)	Nil
	66,666,667
	Not applicable
	Not applicable
	7.1 - 90,007,420 7.1A – N/a
	18 February 2019
	Number	+Class
	477,182,782	Fully paid ordinary shares

• See chapter 19 for defined terms.

Appendix 3B Page 3

01/08/2012

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
	158,133,356 33,333,333 133,333,333 30,000,000 14,285,714	Fully paid ordinary shares – escrowed to 18 December 2020 Class B Performance Shares (converting on a 1:1 basis) escrowed to 18 December 2020 Class C Performance Shares (converting on a 1:1 basis) escrowed to 18 December 2020 Director Options (exercisable at $0.05; expiring 18 January 2021) escrowed to 18 December 2020 Unlisted Options (exercisable at $0.021; expiring 25 January 2021)
	N/A

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or nonrenounceable? 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

• See chapter 19 for defined terms.

Appendix 3B Page 5

01/08/2012

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 )

(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)

• See chapter 19 for defined terms.

Appendix 3B Page 7

01/08/2012

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

• 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:

David McEntaggart Date: 19 February 2019 (Company Secretary)

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 172,582,782
securities on issue 12 months before date
of issue or agreement to issue
Add the following:
• Number of fully paid ordinary securities 300,000,000 (issued 12 December 2018)
issued in that 12 month period under an
exception in rule 7.2 58,095,239 (issued 12 December 2018)
• Number of fully paid ordinary securities 13,371,450 (issued 12 December 2018)
issued in that 12 month period with
shareholder approval 20,000,000 (issued 12 December 2018)
• Number of partly paid ordinary securities 66,666,667 (issued 18 February 2019)
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” 630,716,138
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• See chapter 19 for defined terms.

Appendix 3B Page 9

01/08/2012

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”	Step 2: Calculate 15% of “A”
“B”	0.15 [Note: this value cannot be changed]
Multiply“A” by 0.15	94,607,420
Step 3: Calculate “C”, the amount of placement capacity under rule 7.1 that has already been used
Insertnumber 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	4,600,000 (issued 12 December 2018)
“C”	4,600,000
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	94,607,420
Subtract“C” Note: number must be same as shown in Step 3	4,600,000
Total[“A” x 0.15] – “C”	90,007,420 [Note: this is the remaining placement capacity under rule 7.1]

placement capacity under rule 7.1
“A” x 0.15	94,607,420
Note: number must be same as shown in
Step 2
Subtract“C”	4,600,000
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	90,007,420
	[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 11

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