TITANIUM SANDS LIMITED — Interim / Quarterly Report 2021

Jan 30, 2022

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ASX RELEASE

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31 January 2022

QUARTERLY OPERATIONS REPORT TO 31[st] DECEMBER 2021

• Geological Survey and Mines Bureau Technical Services (GSMBTS) appointed to manage drilling program and oversee the sample preparation facilities

• Resource conversion and extension drilling program commenced

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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Directors

Lee Christensen Dr James Searle Jason Ferris

Ticket

ASX: TSL

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

• Exploration license EL351 renewed for further 2 year term

• TSL re-instated to quotation

RESOURCE CONVERSION AND EXTENSION DRILLING

As announced to the market (ASX:TSL 4/1/22[1] ) a resource upgrade and extension program was commenced. The program will consist of about 304 holes to a nominal depth of 12m for a total meterage of around 3,600m. The program is being undertaken within the Company’s high grade zone as outlined in the initial scoping study (ASX:TSL 16/06/2020[2] ). The high-grade zone currently contains a mineral resource[1] of 93Mt at 5.24%THM of which 32% is in the indicated category (Table 1). This high-grade zone represents only 35% of the total current mineral resource estimate for the project of 265Mt at 4.38%THM (Table 2).

The primary objective of the drilling will be to convert more of the resource in the high-grade zone from an inferred to indicated mineral resource category by decreasing the RC aircore drill line separation from a nominal 400m to 200m. A secondary objective will be to drill 12m deep holes beneath a 2.2km[2] area of the high-grade zone resource only tested by shallow auger drilling down to 2-3m below surface.

Sample preparation is being undertaken through the Company’s on-site sample preparation facilities and will be undertaken concurrently with the drilling. Analytical laboratory determinations of Total Heavy Mineral content is being undertaken in a specialised independent laboratory.

An updated resource estimate will follow allowing for a revision of the project’s scoping study and will assist the Company’s proposed mining license application process.

The Sri Lankan Geological Survey and Mines Bureau Technical Services Division (GSMBTS) has been contracted to supervise the

drilling program and on site sample preparation. Drilling is being carried out using the Company’s own RC/Aircore drilling rig.

As announced to the market (ASX:TSL 28/1/22[3] ) 74 of the 304 hole program have been completed. While the program is progressing well it is tracking slightly behind schedule due to inclement weather and seasonal rains. Measures are being implemented to improve drilling and sample handling logistics and wet season conditions are expected to abate shortly.

As also reported (ASX:TSL 28/1/22[3] ) sample preparation is being undertaken in the onsite sample preparation facilities with 432 samples ready for submission to the specialist heavy mineral laboratory in South Africa. The Company has taken the precautionary step to close the sample preparation facility for 10 days due to a positive COVID-19 test received by one of our sample preparation team. Additional supervision and labour resources will assist in making up time once the preparation facility is re-opened.

TENURE

As announced to the market (ASX:TSL 22/12/21[4] ) EL351 was renewed for a 2-year term expiring 23[rd] of December 2023. This renewal confirms TSL’s 5 most important exploration licences are compliant and current until at least mid 2023 (Table 3).

CORPORATE

As announced to the market (ASX:TSL 04/01/2022[5] ) Titanium Sands Ltd was re-instated to Quotation on the ASX following the release by the Company regarding the commencement of explorations works.

COVID-19 IMPACT ON OPERATIONS

Nearly 6,000 COVID-19 cases have been reported in the last 7 days in Sri Lanka, and this reflects largely the increased transmissibility of the Omicron variant. The Mannar District has reported 17 identified COVID-19 cases between the 1[st] and 26[th] of January 2022. As mentioned above as a precautionary measure the operations at the Company’s sample preparation facility have been suspended for 10 days.

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.

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Table 1 Mineral resource estimate for a higher grade zone contained within the resources tabulated below for a 2% (THM) lower cut off. Previously reported to the ASX in full compliance with the JORC 2012 requirements see below[5] .

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Table 2 Mineral Resource Estimate based on a lower cut off of 2% (THM). Previously reported to the ASX in full compliance with the JORC 2012 requirements see below[5] .

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Table 3 Mannar Island Project tenure*.

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

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 $92k and $12k 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 $91k focussed on preparation and commencement of the resource infill and extension drilling program. 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

Previously Reported Exploration Results and Mineral Resources

This report includes information (Table 1 and 2) that relates to Exploration Results and Mineral Resources prepared and first disclosed under JORC Code 2012. The information was extracted from the Company’s previous ASX announcement as follows: Released to the ASX 24/9/2020 “’Project update and garnet added to resource estimate”. This announcements is available to view on the Company’s website www.titaniumsands.com.au The Company confirms that it is not aware of any new information or data that materially affect the information included in the relevant market announcement and, in the case of estimates of the Company’s Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply with respect to the resource block model and total heavy mineral content and have not materially changed. The Company confirms that the form and context in which the Competent Persons’ findings are presented have not been materially modified from the relevant original market announcements.

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.

Previously Reported information foot notes for reference

This report includes information that relates to announcements previously made to the ASX including exploration Results and Mineral Resources prepared and first disclosed under JORC Code 2012. The information was extracted from the Company’s previous ASX announcements as follows:

1 ASX.Announcement 04/01/2022 Resource Infill and Extension Drilling Program Commences

2 ASX Announcement 16/06/2020 Scoping Study Confirms Potential for Major Dredging Project.

3 ASX Announcement 28/01/22 Update on Resource Infill and Extension Drilling Program

4 ASX Announcement 24/09/20 Project Update and Garnet Added to Resource Estimate

5 ASX Announcement 04/01/2022 Re-instatement to Quotation.

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 31 December 2021

Consolidated statement of cash flows	Current quarter $A’000	Year to date (6 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	- - - (111) (129) - - - - - -	- - - (262) (300) - - - - - -
	(240)	(562)
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	- - - (91) - -	- - - (211) - -

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 (6 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	- - - - - - - -	- - - - - - - -
	(91)	(211)
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)	1,132 (240) (91) -	1,574 (562) (211) -

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 (6 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	801	801
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)	801 - - -	1,132 - - -
	801	1,132
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 92 6.2 Aggregate amount of payments to related parties and their associates included in item 2 12 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.		92
		12

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) (240) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (91) Total relevant outgoings (item 8.1 + item 8.2) (331) Cash and cash equivalents at quarter end (item 4.6) 801 Unused finance facilities available at quarter end (item 7.5) - Total available funding (item 8.4 + item 8.5) 801 Estimated quarters of funding available (item 8.6 divided by item 8.3) 2.4 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?	(240) (91) (331) 801 -
		801
	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: 31 January 2022

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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