TITANIUM SANDS LIMITED — Interim / Quarterly Report 2021

Jul 29, 2021

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QUARTERLY OPERATIONS REPORT TO 30[TH] JUNE 2021

ASX RELEASE

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30[th] July 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 continue to limit project activity to offsite work.

• A six week resource upgrade drilling program remains in obeyance pending improvement in COVID-19 related conditions.

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

COVID-19 IMPACT ON OPERATIONS

During the June Quarter new cases began to increase from a low of 264 new cases per day at the end of March to 1,883 on July 1[st] . Since then daily case reports have continued to rise slowly to around 1,940 on the 28[th] of July. The Sri Lanka Medical Association reports that the Delta variant is spreading in Sri Lanka. The health system is under stress with hospitals at capacity.

Sri Lankan Health authorities are pro-active in testing, tracking, tracing and managing COVID-19 hot spots as they develop. This has involved selective lockdowns and restrictions on movement. International travel to and from Sri Lanka remains largely curtailed and subject to rapidly changing constraints.

Directors

Lee Christensen Dr James Searle Jason Ferris

Ticket ASX: TSL

Government directives are in place for varying requirements for Government and private office workers to work from home and only essential staff to come to work on a rotational basis.

Over 23% of the 21.8 million of the population have received at least one dose of a range of vaccines including Pfizer, Astra-Zeneca, Moderna and Sinovac. On the 25[th] of June a record number of 400,000 vaccinations were administered.

Titanium Sands is continuing to monitor the COVID-19 situation in Sri Lanka but will not recommence field work until regulatory constraints permit and it is considered safe for our personnel to recommence operations.

Corporate activities in Australia are being handled in keeping with local recommendations with everything being done via the internet with no significant change from normal.

TENURE

Exploration licence	EL validity	EL validity	Area	Renewal date
EL 370/R/1	04.05.2021	03.05.2023	31km2	03.03.2023
EL 180/R/3	05.03.2019	04.03.2021	45km2	04.01.2021
EL 182/R/3	05.03.2019	04.03.2021	26km2	04.01.2021
EL 372	26.02.2018	25.02.2020	51km2	25.12.2019
EL 371	26.02.2018	25.02.2020	4km2	25.12.2019
EL 351	13.12.2019	12.12.2021	15km2	12.10.2021
EL 352	13.12.2019	12.12.2021	10km2	12.10.2021
EL327/R/1	14.12.2018	13.12.2020	5km2	13.10.2020
EL328/R/1	14.12.2018	13.12.2020	8km2	13.10.2020
		Total	195km2

Table 1 Mannar Island Project tenure*.

*All necessary applications and submissions for the renewal of tenure have been lodged and are expected to be renewed in due course.

As previously advised (ASX announcement 23[rd] of July 2021) an appeal was lodged with the Geological Survey and Mines Bureau (GSMB) against their decision to not renew exploration licenses EL/327/R/1 and EL/328/R1. As previously announced (ASX: 23[rd] July Mineral resource appeal update) an appeal was heard at the Ministry of Environment, the parent ministry of the GSMB, and formal decision in writing is pending.

The company’s view on the merits of the appeal remain the same as previously reported.

A further update will be provided once the decision has been received.

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 $74k and $16k 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 $29k focussed on completion of the updated mineral resource estimate and the scoping study. 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 June 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 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	- - - (95) (165) - - - - - -	- - - (443) (835) - - - - - -
	(260)	(1,278)
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	- - - (29) - -	- - - (325) - -

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 (12 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	- - - - - - - -	- - - - - - - -
	(29)	(325)
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	- - - - - - - - -	2,367 - - (230) - - - - -
	-	2,137
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)	1,863 (260) (29) -	1,040 (1,278) (325) 2,137

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 (12 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	1,574	1,574
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)	1,574 - - -	1,863 - - -
	1,574	1,863
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 74 6.2 Aggregate amount of payments to related parties and their associates included in item 2 16 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.		74
		16

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) (260) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (29) Total relevant outgoings (item 8.1 + item 8.2) (289) Cash and cash equivalents at quarter end (item 4.6) 1,574 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 1,574 Estimated quarters of funding available (item 8.6 divided by item 8.3) 5.4 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?	(260) (29) (289) 1,574 -
		1,574
	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 July 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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