I really hope this is the last time I will read about, write about and think about Titan Minerals. It is a story of obfuscation, hubris, deceit, greed, dishonesty, and so much more. My son tells me that the entire stock market is full of crooks, which I don't agree with, but if Titan was your only sample: than yes. So my little report here is based upon stuff I found on the internet. No names have been changed - there are no innocents. The focus here will be on Titan Minerals, not so much on Mundo and Minera what Titan named itself earlier. Almost all of the stuff on Titan that I found was written by Titan. Usually a company will have others writing about it: analysts, shareholders etc. , but that isn't the case with Titan. So there will definitely be lots of reading between the lines, interpretation, and speculation. It is all accurate to the best of my knowledge, and ability. This stuff is far from my areas of expertise, so their might be errors and omissions. One thing that makes me trust what Titan says about itself is that once you cut through the BS , it makes them look so bad. If they were just making this all up surely they would try and make themselves look good.
Our story will begin in 2015. Titan had started its life as Mundo in 2006 and then Minera abit later. Under these names Titan had tried a number of mining related ventures all of which failed, rather spectacularly. By 2015 they had never made a yearly profit on anything they tried. By 2015 their latest adventure, the San Santiago toll mill was no longer operating, Minera was out of money, out of time with creditors, and out of luck. The share price fell to .0001. So in an effort to avoid bankruptcy they appointed an Administrator and went into receivership. My guess is that this was to try and preserve the ASX listing: listings have value and are expensive to acquire. And that's where things sat with Titan until the end of 2017, with the listing suspended but not cancelled.
In the meantime our Matthew Carr, the driving force behind Titan all along, needed money. He had always paid himself a generous salary with Mundo and Minera but the stock options of which he had literally billions never paid off. No doubt he had seen that some of the artisanal miners made out ok, so he decided to try his luck as one. Titan had acquired the Torrecillas property way back in 2006, and with Titan now basically gone, he 'acquired' the property. My guess is that whoever would pay the concession fees got the property. On the property was an old underground mine , that had produced gold for a long time but it was considered exhausted. The rest of the property had been poked over for probably a few hundreds of years, but no one had ever found anything of interest besides the mine. Mundo and Minera mined it for a number of years at very low tonnage, but never turned a profit. Carr started a company called Andina , and started pulling out between 30 and 50 tpd from the old mine by chasing some veins a little deeper. All he would have needed to do that is maybe a drill at the rock face, some kind of loader to move the material to the surface, and then a small truck with a 10 ton capacity that was capable of making the trip to the Tulin Toll Mill , which he had leased, maybe 3 or 4 times a day. And in 2014, 15 and 16 he actually turned a profit, maybe for the first time in his life, from mining. In 2016 the profit was $358,000 A. But each year production was going down, and by 2017 it was no longer profitable. Looks like the mine was now totally exhausted.
In the meantime the Administrator had spent a couple years trying to salvage something for the creditors and shareholders of Minera , but was unable to find anything to liquidate. Nobody was interested in the San Santiago mill at any price. So now begins the story of Titan.
In the second half of 2017 someone showed up willing to put $6 A into Titan to bring it back from the dead. Now, I never tried to dig through the available info to figure out who that might have been. For one it is easy for investors to hide their identity and for another who cares about the name. Actually I don't blame Titan, or anyone else associated with them for this debacle. They are just doing what they do. And I don't think anything they are doing is that illegal, dishonest, immoral, etc. Ok, they are trying to steal money from innocent people so that's kind of bad, but it is 100% the people who are suppose to keep that from happening that are culpable. Anyway, why would someone put real money into Titan, actually it was still called Minera at that time. This now becomes a bit more speculative, but Titan was just what they were looking for. A company that had nothing, so they could get it cheap, a company with a listing and a history, a bad history for sure, but with some creative writing and positioning it could be made to look like , at least a little plausibly, something real. A company that has been around for awhile. At the time Titan literally had nothing: a mill that they couldn't sell, or ever operate at a profit; and nothing else. But one thing they did have from the 2018 audited Financials : accumulated loses of $100,386,685 still on the books. And loses for tax purposes can be money, if you plan to have profit. The corporate tax rate in Australia is 30% so the loses could save $30 m of tax for a profitable co. And how they hoped to become profitable, was to acquire a company that had a good chance of profitability , maybe even on a grand scale: Core Gold.
The Administrator in late 2017 convinced the creditors and share holders that there was nothing to liquidate, and so they had nothing to lose in taking the deal offered. Which was that with the $6 m infusion Titan could relist, and the shareholders would get 10,382,352 shares of the renewed company. In the meantime the person who put up the $6 m would get 600,000,000 shares, the broker 316,032,382, Carr / friends, and various others, a bunch more, for a total of 1,635,392,352 shares outstanding. Better than nothing for the shareholders, but just barely. And right from the start the share price was set at 2 cents , and with the shareholders only owning less than 1% of the company it was easy and cheap to hold it there.
I would contend then that they have been planning this since the middle of 2017. Now it is possible they had other companies in mind as possible merger targets as well , to begin with, but at some time they settled on Core. And then the Core BOD3 was brought on board, so to speak. (BOD3: Sedun, Bailey and Clough) That would explain why Core couldn't raise any money , sell any properties etc. once they came out of receivership even though there had been much talk of many possible deals; it's own BOD was working to starve it of cash. It would also explain why the plan for drilling at Copper Duke was suddenly stopped, even though it would have cost little, because everyone knows that as little as three holes at Copper Duke could entirely change the Core Gold story, and make this type of merger totally unnecessary.
For the first half of 2018 Titan did basically nothing, but then must have realized they needed to make the company look like it was something at least, so they 'merged' with Andina, Carr's venture which at least had started construction on a small toll mill. Another $11 m was put in , going to relisting fees, some debts, lots to Carr and friends for wages , and some for finishing the Vista mill. At the present time ,from the year end 2018 financials again, they declare Total Assets of $26,994,861. Of this $5,459,476 is cash which according to their projections would now be $1m; $1,716,454 for the San Santiago mill which it would be reasonable to write off by now, and $12,193,538 for intangibles which I think must be Carr's tongue, as he is one sweet talking guy. So if you subtract those you get $7 m for Total Assets which seems about right. They own 0% of the Las Antas property they talk about alot, and have always done this little trick, talk about something like you own it. In my opinion the Torrecillas property is worthless , for lots of reasons, and all they have done so far is look at a few rock chips, the same rocks that have no doubt been looked at countless times over the years. So their only hard asset would be the Vista mill which seems to have cost $4 m, and perhaps has been paid for?
The other mystery has always been how they have a market cap of $60 m when their assets are so little, and their profit non existent. I have tried to contact or find a shareholder of Titan. I am not sure there are any, outside the insiders involved. I have posted on Hotcopper, the Australian forum equivalent to this one, and I wasn't rude or anything, just asking if there were any shareholders out there , and it was quickly removed. Titan totally controls the forum, and there are no shareholder postings. So it looks like they have set a floor of 2 cents on the share price and buy and sell a little to maintain the look of an active company. If you look at the 2 billion plus shares out, you can count up almost all of them having gone to insiders.
Another mystery has been why only an ASX listing? This is pure speculation again, but does explain the facts, and that is they want to control the share price again. But this time to let it fall. Once the merger is complete, the share price will fall off a cliff. There will be no buyers. None of the Titan insiders will have a reason to buy; nobody from Core will buy, partly because it will be a pain to do so, and it will be apparent very quickly that the share price is headed down; and no one on the ASX has ever heard of Titan, there are no retail shareholders of Titan at present who might think of adding.
And if it doesn't go down enough, Titan insiders will sell some of their shares to force it down. As part of the merger deal , Titan has done a term sheet committing them to a further $10m US financing. But this will be done at the current market price at that time. So if the market price at the time is .0001 again, that means a further 1,000,000,000,000 shares would be issued and Core Gold shareholders share of the new Titan would fall from approx 50% to .03%. Now it is possible that they wont do it quite that drastically, so maybe it will just be a 10 to 1 drop, and we will keep 5%. With this perhaps Sedun and Bailey and Clough will feel a little safer walking down the street (they probably shouldn't) . And then Carr/ friends will see their approx 20% of the new Titan drop to 2% which is more reasonable since they have brought zero cash to the deal bringing only a worthless company , but with a listing and big tax loses. And they are totally aware that this is the plan. I suspect that Carr will also be given the Vista mill once the dust settles; who knows maybe he can eke out a profit from it, and Titan will be solely an Ecuador Co.
So the insiders would have spent $17 m on Titan to get it going again, $3m on Core shares, $20 m to the new company as per the agreement, a further $10m US ($14m A) post merger, and they perhaps have 40 million shares of Core at present at about 30 cents a share or $12m. Total $66 m. A spent. And for this they get anywhere between 60% of Core if they don't do the horrible dilution described above, to as much as 99.? % if they do. Core is easily worth $200m and maybe as much as a billion. The horrible dilution of course makes the most sense and explains why only an ASX listing. And Sedun, Bailey, Clough, will get what has been agreed upon for their support, Reyes if he goes along ditto, Vertex I don't quite know as it seems they would have slightly higher standards of non corruption to withhold. And all the rest for the ones behind this.
Couple final things: This is not an Australian Co taking a run at a nice Canadian Co. This is someone (s) using Titan as a vehicle to take a run at Core. Probably none are Aussie. It will stay an Aussie Co for the tax relief, the first $100m of profit tax free, but once the ownership %s are sorted out, they will for sure list on the TSX, in the USA, and wherever else. After the merger is complete the entire board will resign and a board more representative of the owners will be appointed. With the money Sedun and Bailey make from this they will retire and probably even move away from Canada, where things have gotten a little unfriendly for them. Clough I can't say as his part is small, his payoff small, but in some ways his actions might be the most reprehensible: to hurt so many people for so little gain to himself. And really, the last question is: did 'they' really think that Core shareholders would 'buy' this deal? Did they think it wouldn't be immediately seen for what it was : I think the first post on this forum deriding the deal was out within a half hour of the announcement. So I guess that means 'they' aren't that clever, or ' they' have this wrapped up and don't care what the Core shareholders think. And I don't think the 'they' is Sedun. I think he is just doing what he's told to do, by whoever it is pulling the strings.