TITANIUM SANDS LIMITED — Interim / Quarterly Report 2021

Oct 31, 2021

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QUARTERLY OPERATIONS REPORT TO 30[th ] SEPTEMBER 2021

ASX RELEASE

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30[th] October 2021

TITANIUM SANDS LIMITED ACN 009 131 533

Level 11, London House 216 St. Georges Terrace Perth Western Australia 6000 Tel: +61 (08) 9481 0389 Facsimile: +61 (08) 9463 6103 Website http://titaniumsands.com.au

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Contact:

Dr James Searle Managing Director james.searle@titaniumsands.com.au

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• COVID-19 related conditions in Sri Lanka have improved significantly during the September Quarter.

• Vaccination coverage of the adult Sri Lankan population has now exceed 90% for those aged over 20 years, and near 100% for those 30 years and older.

• Inbound quarantine free travel for fully vaccinated persons is now permitted subject to a negative Covid-19 test within 72 hours prior to arrival.

• Government Departments and businesses are beginning to operate more normally.

• As a penultimate requirement of the tenure renewal process presentations have been made to the Geological Survey and Mines Bureau for three core exploration licenses, the presentation for a fourth license is expected to be held shortly.

• A six week resource upgrade drilling program remains in obeyance pending satisfactory implementation of COVID-19 site management protocols and refresh-training of the site crew in safe operating procedures.

• The project mineral resources remain wholly open at depth and partially laterally; further drilling will support project optimisation in future more definitive studies.

Directors

Lee Christensen Dr James Searle Jason Ferris

Ticket

ASX: TSL

COVID-19 IMPACT ON OPERATIONS

A total of 4,439 COVID-19 patients have been reported for this week, increasing the number of patients reported in Sri Lanka to 535,962. A total of 13,593 deaths have been recorded so far in Sri Lanka. The average daily count of patients as well as patient deaths has reduced over the last few weeks.

Sri Lanka’s health authorities warned that they have gone on alert over the mutated version of the delta variant, known as delta plus, which was already spreading in countries such as the UK, New Zealand, and Israel. Infecting even those who are fully vaccinated.

Vaccinations:

 The number of people over 30 years who have received both doses of the COVID-19 vaccine is now close to 100%

• Administering the Pfizer-Biontech vaccine to all students aged 16-19 has commenced (22[nd] Oct).

• Health, military, police personnel and those engaged in the tourism sector along with frontline workers will be administered with the Pfizer vaccine as a booster dose.

District COVID numbers and restrictions :

• The primary section of all schools in the country will re-open on the 25[th] of October.

• Certain restrictions will have to remain until December this year in order to curb the unnecessary movement of people in Sri Lanka. However, quarantine restrictions pertaining certain sectors such as restaurants and cinemas have been relaxed.

• The daily nationwide restriction on non-essential travel between 11pm and 4am remains in effect.

• The operation of railway services within provinces will commence from the 25[th] of October.

• Mannar district has reported 21 patients for this week (17[th] Oct. – 24[th] Oct.) increasing the total number of patients to 2,173.

TENURE

As with other Government Departments the Geological Survey and Mines Bureau has resumed near normal operations including processing of tenure renewal applications. Accordingly as a penultimate requirement in the tenure renewal process presentation on three core exploration licences have been made to the GSMB and a fourth license presentation is expected shortly. Renewal of these four exploration licenses for a two year period would mean that the five core licenses for the project can then form the basis for an industrial mining license application (Table 1).

The company is reviewing its requirement to retain the remaining four environmentally sensitive licenses along the coastline of Mannar Island which contain only minor peripheral heavy mineral resources.

Exploration License	Holder	EL	Validity	Area	Status
EL 370	Kilsythe Exploration(PVT)LTD	4/05/2021	3/05/2023	31km2	Current
EL 351	Sanur Minerals(PVT)LTD	29/11/2021	28/11/2023	15km2	Current
EL 345	Sanur Minerals(PVT)LTD	13/12/2019	12/12/2021	10km2	Renewal Pending
EL 343	Orion Minerals(PVT)LTD	29/11/2021	28/11/2023	5km2	Renewal Pending
EL 344	Orion Minerals(PVT)LTD	29/11/2021	28/11/2023	8km2	Renewal Pending
EL 180/R/3	Applex Ceylon(PVT)LTD	5/03/2019	4/03/2021	45km2	Renewal Pending
EL 182/R/3	Applex Ceylon(PVT)LTD	5/03/2019	4/03/2021	26km2	Renewal Pending
EL 371	Hammersmith Ceylon(PVT)LTD	26/02/2018	25/02/2020	4km2	Renewal Pending
EL 372	Hammersmith Ceylon(PVT)LTD	26/02/2018	25/02/2020	51km2	Renewal Pending
Table 1 Mannar Island Project tenure. Green =current, Blue =GSMB presentation completed,
Yellow = renewal pending and subject to review by Titanium Sands Ltd.

RESOURCE UPGRADE DRILLING PROGRAM

The Mannar Island Project has substantial resource extension and exploration potential. Further infill drilling is planned to convert more of the current mineral resources from inferred to indicated resources. Recommencement of the infill drilling is awaiting further stabilisation of the COVID-19 situation in Sri Lanka, specifically Mannar Island, however preparations have been made so that it can proceed as soon as conditions permit.

Covid-19 site management protocols are being developed in preparation for recommencement of drilling. Drilling spares are being stockpiled and the local field crew are about to receive refresher training in Covid-19 protection measures and augmented operational procedures.

PAYMENTS TO RELATED PARTIES

The total amount paid to related parties of the Company and their associates, as per item 6.1 and 6.2 of the attached Appendix 5B was $134k and $28k respectively. These payments are for Directors fees, salaries and superannuation during the quarter.

OTHER ASX REQUIREMENTS

ASX Listing Rule 5.3.1: Exploration and Evaluation expenditure during the Quarter was $120k focussed on the planned drilling activities and preparation of presentations to regulatory authorities on the evolving scope of the project.

ASX Listing Rule 5.3.2: There were no mining production and development activities during the Quarter.

Ends-

The Board of Directors of Titanium Sands Ltd authorised this announcement to be given to ASX.

Further information contact: James Searle Managing Director T: +61 8 9481 0389 E: james.searle@titaniumsands.com.au

COMPLIANCE STATEMENTS

Forward-Looking Statements

This document may include forward-looking statements. Forward-looking statements include, but are not limited to, statements concerning the Company’s planned exploration program and other statements that are not historical facts. When used in this document, the words such as "could," "plan," "expect," "intend," "may”, "potential," "should,", “further” and similar expressions are forward-looking statements. Although the Company believes that its expectations reflected in these forward- looking statements are reasonable, such statements involve risks and uncertainties and no assurance can be given that further exploration will result in additional Mineral Resources.

Competent Persons

Except where indicated, exploration and technical information above have been reviewed and compiled by James Searle BSc (hons), PhD, a Competent Person who is a Member of the Australian Institute of Mining and Metallurgy, with over 37 years of experience in metallic and energy minerals exploration and development, and as such has sufficient experience which is relevant to the style of mineralisation and type of deposits under consideration as a Competent Person as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Dr Searle is the Managing Director of Titanium Sands Limited and consents to the inclusion of this technical information in the format and context in which it appears.

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

Titanium Sands Limited ABN Quarter ended (“current quarter”) 65 009 131 533 30 September 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- - - (151) (171) - - - - - -	- - - (151) (171) - - - - - -
	(322)	(322)
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets	- - - (120) - -	- - - (120) - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - - - - - - -	- - - - - - - -
	(120)	(120)

3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - - - - -	- - - - - - - - -
	-	-
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above)	1,574 (322) (120) -	1,574 (322) (120) -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	1,132	1,132
5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above)	1,132 - - -	1,574 - - -
	1,132	1,574
6. Payments to related parties of the entity and their associates		Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 134 6.2 Aggregate amount of payments to related parties and their associates included in item 2 28 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments.		134
		28

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities - - Credit standby arrangements - - Other (please specify) - - Total financing facilities - - Unused financing facilities available at quarter end Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		-	-
		-	-
		-	-
		-	-

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (322) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (120) Total relevant outgoings (item 8.1 + item 8.2) (442) Cash and cash equivalents at quarter end (item 4.6) 1,132 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 1,132 Estimated quarters of funding available (item 8.6 divided by item 8.3) 2.5 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(322) (120) (442) 1,132 -
		1,132
	Answer: N/a
	8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?
	Answer: N/a

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer: N/a

Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Date: 30 October 2021

Authorised by: By the Board

(Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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