It is a rainy, windy and thoroughly miserable day. I guess a good day to give an update on ,what else, Titan Minerals. Even as they seem to be approaching their death spiral, as long as there is the slightest life left, good and honest people will not be safe. So if I can do , my admittedly tiny part, in assisting to their death, I will. I would much prefer to do so in a way that would bring immense human suffering to the Titan Principals.
Nothing much new here, just a rehash mostly.
I guess it is time again to summarize why Titan
MInerals is so worthless. First let's look at their 'properties':
-The latest addition is the Coriorcco property. They have no ownership and never will. Rather they have an agreement that if they do the exploration and development work, and find something worth trucking away, they can do so, and will pay the owner on a tonnage hauled basis. So far only rock chip sampling has been done.
- Las Antas is somewhat similar, they have no ownership, but can achieve a % ownership by spending a few million on exploration. And then if they find and develop something they will get a % of it. So far they have spent nothing. So far only rock chip sampling has been done.
- Torrecillias has been owned off and on by Mundo, MInera,and various others and now Titan. Titan got it back when they bought Carr's Andina. Carr had claimed it, I don't think anyone has actually 'bought' it ,as in paid something for it. Paying the concession fees seems to get you 'ownership'. The property has an old underground mine where Carr managed to find the last unexploited vein. He trucked 30 tpd from there for a few years to the infamous Tullin Mill. When the vein ran out , the mine was abandoned for good. No one has done more than a look at the surface rock (chip sampling) over the decades (centuries?) that people have been looking for gold in the area, on the remainder of the property.
These three properties obviously contain some gold. You would be hard pressed to find a property anywhere in Peru that contained zero gold. And there is the possibility that after spending a few million exploring and drilling, and a few more million developing a mine, which if you were in a big hurry you might do in a couple years, than you might find some thing. As far as present value, the two properties that Titan has zero ownership of and on which they have spent zero , would be worth zero. Simple logic. And no one has ever paid anything to 'own' Torrecillias , so at present I would say it is also worth zero.
And the final property, which they do seem to own, is the Vista Mill. As Titan says in one of it's 'writings' at full capacity the mill could process 150 tpd and produce 8100 oz au per gtr. And what could that be worth.
Well, let's compare to Dynacor. Dynacor is a toll mill operator in Peru, has been for decades, has always been profitable, pays a dividend with a yield of 2.5% in 2018, is Canadian, and produced 81,000 oz au in 2018 from a 300 tpd mill. Interestingly they have about the same market cap as Titan. The ore came exclusively from artisans; they are the gold standard ,so to speak, as far as efficient buying and operating; and their gross operating margin is 12%. Good for a toll miller.
Therefore it seems to follow that if Titan could produce at capacity ,8100 oz per qtr (in the first half 2019 they produced 1,962 oz), if they operated at the same efficiency as Dynacor; if the Peruvian authorities don't pursue criminal and civil charges for the actions at Tulin; if the permit to operate Vista isn't rescinded with a less corrupt regulatory system; if they can find enough artisans to deliver the 150 tpd needed which is no easy task in Peru, and Dynacor has spent years developing their artisan sources; then their share of the gold produced at 12% margin would be worth $1.45 m per qtr at $1500 gold. Remember Titan is at least a couple years, and more than a few million spent, from having their own source of ore. Titan spent $1.4 million in each qtr of 2019 on Administration, similar to 2018, so in the very best case scenario the Vista Mill could cover Administration costs. And the mill is probably worth the couple million it cost to build, and perhaps they could sell it before the Peruvian authorities confiscate it for costs associated with the Tulin clean up. So I would give Titan's Peru assets a value of $2 m, if they act quickly.
And then from the June 30 financial stms. they state Net Assets of $15,208,668 which includes : cash , Core shares, the $3m US debt, and everything else.
In the list of assets they list intangibles at $11,952,365 (goodwill !), and assets classified as held for sale of $1,817,341 which is the San Santiago Mill. So subtracting those two (the San Santiago Mill has been for sale since at least 2014,and they may or may not have legal title): we are left with Net Assets of $1,438,962 as of June 30. Since June 30 they have sold shares worth $6 million , but probably lost a couple million in operations at the Vista Mill, plus spent about a $100,000 mailing out those circulars; giving them real or actual, Net Assets of about $5 million. Sounds about right.
And what have they had to put in to achieve this? End of 2017 $6m, 2018 $7m and $4m , and then after June 30, 2019 another $6m ; giving a grand total of $23m put in by sophisticated investors. And the return? Well at present there has been no return. Actually that might not be totally true. I think they are still trying to get people to buy their shares on the ASX. Their write ups paint a glowing picture of the company, making it look like they already own Core, with a great deal of their presentations detailing Core's assets. Plus describing the wonderful properties they have in Peru that they don't own in any way. They totally control HotCopper, the Aust, forum similiar to this one and remove any critical post pronto, and even have Analysts singing their praises which would mean that the Analysts are total idiots ( very much possible) , or are under contract to Titan. So I guess it is possible that some unsuspecting innocents, who aren't into checking up much before buying, are in fact buying their shares. And if they run short of shares, they just print a bunch more. It is possible they are making a couple thousand dollars every once in a while this way. But really , $23m with almost nothing , and headed to nothing soon, to show for it. I am very glad I am not sophisticated.
A final thought : was thinking about how when they started Mundo, the first of the Titan names, they could very well have had good intentions to make a go of the Brazilian properties they acquired. Most of the company info from that time is gone,so it is hard to say. But if that was the case than they proved to be amazingly inept. They bought properties that were worthless when they bought them,and with time that was proven to be very true. They were totally suckered. And then trying to get something out of the properties was a comedy of errors. They had the Brazilian stuff in a subsidiary so when it went bankrupt the main company was saved. So then when they moved back to Peru, one would think they might have learned something. But it totally seems that what they learned is that toll milling is hard, but duping innocent investors not so much. Investors poured around $50 m into the Brazil thing. So when they started with Minera in Peru and the San Santiago mill, they just 'bought' an old run down,non operating mill, and some worthless properties , and started up a very efficient misinformation factory. With Minera they claimed to have a CEO who later said he never, and never would, have anything to do with them; had some decent properties that only on fine print reading you realized that they were only thinking about them, and in the end nothing came of it; etc. etc. etc. And folks poured another $50 million, and lost, into Minera.
By my guess, and it is a guess because Mundo info is scant, and Minera info incomplete, that of the $104,649,133 of cumulative losses Titan reports as of June 30, losses that would be what innocent investors have put in, the Mundo, Minera, Titan principals have skimmed out $15 million for their personal bank accounts. Around 15%. Better than the 12% the best toll miller can make. And now that is what Titan has become: 100% misinformation factory.
And I only hope that this latest seemingly insane , whatever it is they are now doing, is the last. And they will go down in history as one of the biggest failures in so many ways.
Thinking a little more, I guess it is still possible they can sell the losses for the $23 m they put into Titan, and then the $15 m skimmed they keep. In that case it is the poor duped investors of Australia that are once again the big losers.