Australian Mineral Firm expands into Sri Lanka

Australian mineral sands company Titanium Sands Ltd. will expand its resource base in Sri Lanka. It will do so with investor consent to acquire mining rights firms for high-grade ilmenite deposits on Mannar Island in the northwest. In exchange for TSL shares, Titanium Sands Ltd. (TSL) has an agreement with Srinel Holdings Ltd. to acquire the rights to deposit on Mannar Island. The acquisition, which approved at Tuesday's shareholder meeting, means that ISL will increase its massive mineral sand resources eight times a year.

Titanium Sands has been doing test drilling on its Mannar Island project site. The site has five exploration licenses covering 166 square kilometers with massive mineral sand deposits. The proposed acquisition of Titanium Sands would increase the size of its Mannar mineral sands project to approximately 85 million tonnes.

Titanium Sands had previously entered into a conditional sale agreement to acquire a group of companies with mineral sand deposits. The group was holding a 38 square kilometer area that complemented its Mannar Island deposits.

At the 166 square kilometer Mannar Island project in northwest Sri Lanka, the explorer hopes to achieve early production revenues. Of the 357 drill holes analyzed, 330 holes or 92 percent, 2-24 percent THM grades have so far returned outside the specified resource with 35 percent, or 126 holes. A total of 802 holes drilled and the drilling pattern was 200 meters by 50 meters, 90% above the asset envelope.

Titanium Sands said: "In three separate zones, these drill holes indicate the potential for resource extensions. " All these mineralized intercepts are from the surface, and drilling was only a 2-meter to 5-meter depth down to the water table. Results are pending for an additional 465 holes. Drilling of asset infill and extension continues at the Mannar Island licenses of Titanium Sands. In September 2019, the company hopes to review its asset estimate for the venture as it conducts a scoping study for the half-year of June 2020.

In February 2019, a resource update put resources at 53.08 million tonnes of inferred resources, ranking 6.67% of total heavy minerals. With the upgrade, Titanium Sands introduced a new high-grade area with 9.85 million tonnes of full heavy metals at 9.06 percent. Titanium Sands is also hoping with new tenements to expand Mannar's resources and is evaluating a proposed acquisition within an extended period.

The company found a high-grade massive mineral zone extending over a strike length of at least eight by 2 kilometers in the 38 square kilometer package. Titanium Sands considers the land to be complementary to its existing tenure and has 30 days to complete a due diligence investigation from this Monday. At the site, the company has five fully-owned exploration licenses that stretch across Mannar Island and the adjacent coast.

OSL Take: The expansion into the Sri Lankan mineral industry by the Australian mining giant shows the varying scope of business/investment opportunities on the island and their success. The state-owned enterprise selling Zircon and mineral sands is also a clear indication of the many raw materials available for sale in Sri Lanka. Besides mineral sands, there is also a big phosphate deposit in the nation. Foreign mineral businesses could approach the government of Sri Lankaand explore company possibilities in conducting mineral-related operations.

VBS/AT/20200102/Z_TB1