Delays Loom? Titanium Sands Advances Funding Amid Licence Uncertainty
Titanium Sands Limited has locked in $800,000 in stage two funding to complete environmental studies and advance the Industrial Mining Licence for its Mannar Island Project in Sri Lanka, backed by strong government support.
- Stage two funding of $800,000 secured via convertible loan
- Environmental studies nearing completion for Mannar Island Project
- Positive government engagement on Industrial Mining Licence approval
- Loan convertible into shares with 10% interest, repayment due December 2026
- Funds allocated to finalise environmental assessments and operational costs
Funding Milestone Achieved
Titanium Sands Limited (ASX, TSL) has announced a significant funding milestone, securing up to $800,000 through a convertible loan agreement with its largest shareholders. This injection of capital is earmarked to accelerate the environmental studies and regulatory approvals critical to advancing the Mannar Island Project in Sri Lanka.
Government Support Strengthens Project Outlook
In a recent meeting convened by Sri Lanka's Ministry of Finance, Titanium Sands received strong backing from key government bodies including the Board of Investment, Geological Survey and Mines Bureau, and Central Environment Authority. These departments have pledged their assistance in expediting the issuance of the Industrial Mining Licence (IML), a pivotal regulatory hurdle for the project’s development.
Managing Director Dr James Searle highlighted the positive momentum, noting the government's interest in fostering projects that contribute to economic recovery. The Mannar Island Project, with its robust financial profile, aligns well with national priorities to generate revenue and industrial activity.
Environmental Studies Near Completion
The environmental impact assessments are approaching finalisation, with only a few outstanding reports remaining. The consultants managing these studies remain confident that the process will conclude shortly, satisfying the stringent requirements set by Sri Lankan authorities. Completion of these studies is a prerequisite for the IML issuance, underscoring their critical role in the project timeline.
Loan Terms and Use of Funds
The $800,000 loan will be disbursed in two tranches of $400,000 each, with repayments due by December 30, 2026. Interest accrues at 10% per annum, and the lender holds the option to convert the loan and accrued interest into ordinary shares at $0.005 per share, accompanied by unlisted options exercisable at $0.023. This convertible structure offers flexibility but also introduces potential dilution for existing shareholders.
Funds raised will primarily support the completion of environmental studies, progress the IML approval process, and cover general operating expenses and working capital needs. CPS Capital Group Pty Ltd has been engaged to facilitate this funding arrangement, receiving fees and options as part of their mandate.
Looking Ahead
With environmental assessments nearing completion and government departments aligned, Titanium Sands is positioned to move closer to securing the Industrial Mining Licence. This progress is a critical step toward unlocking the value of the Mannar Island Project and advancing it toward development.
Bottom Line?
Titanium Sands’ secured funding and government backing set the stage for key regulatory approvals, but investors should watch for timing and dilution risks ahead.
Questions in the middle?
- When exactly will the Industrial Mining Licence be issued?
- How might loan conversion impact existing shareholder equity?
- What are the remaining environmental study hurdles and their potential delays?
