Titan Mining Corporation (TI) Earnings Call Transcript & Summary

Good day, and welcome to the IAccess Alpha Virtual Best Ideas Summer Investment Conference 2026. Our next presenting company is Titan Mining Corporation. [Operator Instructions] I'd now like to turn the floor over to today's host, Rita Adiani, President and CEO of Titan Mining Corporation. Please go ahead.

Thank you, and welcome to everyone who's here to hear us on this presentation. Titan Mining is a New York Stock Exchange listed company with the ticker TII and also listed on the Toronto Stock Exchange with ticker TI. I will now guide you through the information that -- some of the information, which has been provided here, does contain some forward-looking information. So please feel free to read the disclaimer at your convenience, and we look forward to discussing more as we get through this presentation. Titan is a U.S.-based company with 2 assets within its platform currently, and we're growing out our third asset base. We are the United States' fourth largest zinc producer with cash flow positive operations at our zinc mine in upstate New York. As you can see from the diagram on the right-hand side, and the map there that we are very, very close to the Canadian border, which gives us great infrastructure. And we are one of the largest mineral rights owners in upstate New York with about 120,000 acres under our control. We have a 5,000 tonne per day mill, fully operational mill. We have rail port air access, and we have been in operation now for 8 years. As a zinc company, we started the operation about 8 years ago with less than 1/4 of the employees that we have today. So we have actually grown our employee base as well very close to 165 employees at site with an upstate New York. Our critical mineral upside from existing operations really relies on getting germanium, which is currently included within our zinc process stream more into commercial production and we're working on that. We have about 13,000 kilos a year of germanium, which is actually contained within our zinc process streams. The story for Titan really did begin to change towards the end of 2023, early 2024 where we made a significant natural flake graphite discovery within a mile of our existing mill for our existing zinc well. We took the initiative to actually set up a production facility. It's a small-scale production facility for producing natural flake graphite currently co-located with our zinc operations, which is producing about 1,200 metric tons of graphite flake, a natural flake graphite concentrate with the ability to scale that up to 2,500 metric tons per annum, which is a bit about 5% of U.S. domestic consumption today. Our plan is now to scale the operations all the way up to a 40,000 metric ton per annum capacity, which we'll look to satisfy about 50% of the U.S. demand. That makes us effectively the first end-to-end natural flake graphite producer in the United States since 1956. The graphite project on its own has very, very compelling economics. It has an NPV of about $513 million, after-tax IRR of 37% and a 2.7-year payback. Our goal is to move ahead with our plan with a view to [indiscernible] going into construction next year and being in production shortly thereafter. Our leadership team really does comprise of the best-in-class team. Our Board of Directors is headed by Richard Warke, who is a Canadian entrepreneur. And Richard, together with the founder of the Augusta Group have had great success in the mining industry for over 30 years. We've been responsible for discovery of some of the larger scale assets, taking them through discovery and development. And as with Equinox Gold, which is one of the [indiscernible] one of the companies within the group, even taking it into production into a multi-asset company. We also have a good representation from both sides of the aisle, which is governor George [indiscernible], who is a 3-term governor for the state of New York as well as Speaker John [indiscernible], who is the 53rd Speaker of the House of Representatives. In the United States, we have Bill [indiscernible], who was also Andrew [indiscernible] Chief of Staff together with Don and myself and [ Len ] providing expertise from a technical capital markets perspective as well as from an accounting perspective. Our management team, which is based out of upstate New York and also out of Vancouver, comprises of myself, my VP of Operations, Joel Rheault; our VP of Commercial and Sales Jenny; and Matt [indiscernible], who is our VP of Geology and Exploration. In Vancouver, we have our new CFO, who will be joining us shortly. Richard together with [indiscernible] and Tom as General Counsel and Senior VP of Corporate Affairs. The -- we are part of the Augusta Group. The Augusta Group has a very long track record of value creation. And as you can see from the slide here, Richard personally owns -- who is our Executive Chairman, he owns about 50% of the stock together with 6% held by board and management. We have some very high-quality institutional holders of the stock, which is [indiscernible], which is a fund based out of Chicago, together with BlackRock, which is one of the largest investors in the mining space as a [indiscernible] fund. We also have a number of institutional and family offices, which hold about 32% of the stock. The Augusta Group has had, as I mentioned previously, significant success in the mining industry. We have taken companies from discovery all the way through development and exits, very [indiscernible] exits in a number of ways, and we are very delighted to be 1 of the 2 companies within the portfolio currently, which comprise [indiscernible] and obviously Titan Mining. Titan really is one of those companies, which is -- we're very proud of ourselves of being first in a number of ways. With respect to federal support, we are the first mining company to have been supported by United States [indiscernible] Bank, which provided us with first loan of about $16 million for expanding our zinc corporations. And we are now in discussions with them to procure another $120 million for our graphite project. And that $120 million is about 65% of the total expected capital cost. And so for us, that's a great endorsement, not only of the project, but also shows the financial discipline, which we exercised within the business and obviously trying to make the project a lot more accretive for shareholders through long-term debt. The facility being discussed with [ Axon ]Bank is a 12-year facility with 2 years interest-only and 10 years repayment. And it really does validate our strategic importance given that we are the first company really which is not only the recipient and a long party to the first direct mining loan, but also, obviously, a U.S. critical mineral [indiscernible] in Upstate New York. Okay. A little bit about our germanium process streams and why we see this is important for the United States. About 60% of germanium production is actually controlled by China. Germanium is used in everything from night vision defense applications through to infrared uptakes, semiconductors and also fiber optics. So it is absolutely critical, not only for the semis industry for the AI boom, but also for the defense space. germanium price in the United States has grown significantly from 2020 when it was predominantly and is currently controlled by China today where, obviously, China has implemented very strict export controls and so that is likely to benefit us significantly. Germanium consumption in the United States has been around the 30,000 kilo mark, and we expect the consumption to go up rapidly because of the end users really being in the defense space and semis and fiber optics. For us, germanium is really a byproduct. With the mineral inventory that we have been able to work through within our current mineral resource base, we see the opportunity of really being able to unlock about 13,000 kilos a year, which is a pretty significant amount given that the United States consumes about 30,000, our inventory is already 13,000. So even if we apply a modest recovery rate to it, the ability to contribute significantly to germanium requirements of the United States is a pretty exciting value proposition. We do not actually mine any of the process streams because they already mined as part of our zinc production or they are sitting in our tails. We did enter into an agreement with Teck -- Teck's [indiscernible] operations and their refinery, which really does allow us to find a downstream solution without having to spend a significant amount of CapEx. We are currently working through the technical program, which will then lead us to the offtake discussions and then all the implementing it to begin sending U.S.-made germanium or U.S. mined germanium for refining through to [indiscernible]. A little bit about graphite and why it's so important. So we have tightened started off with the zinc business. We have been expanded into graphite and are currently producing graphite at a small scale. And then obviously, we have the byproduct potential within our germanium operation. So why is graphic so important? It really is a material which is used for everything from coatings for aircraft and for the defense purposes through to coatings for ammunitions and for nozzles and -- for nozzles within rockets. China dominates about 80% of global output and controls about 90% of processing. And we see this and see Titan as really the ability to provide a good solution to this China dominated framework. The United States currently imports 100% of its graphite requirement. So really, it does create a perfect opportunity for us to onshore this industry and given that this discovery is within a mile of our existing current operating areas and currently sits within our property boundary, it does make it very exciting as an add-on project for Titan. A little bit about our graphite project and how we see the footprint developing. The current project is designed for 13 years. We see a significant amount of upside within this, the ability to expand the deposit to the to the east as well as to the south. It has a nominal processing rate of about 1.4 million tonnes, which leads to production of about 40,000 tonnes of natural fleet graphite. We -- as previously mentioned, the project has very, very strong economics, which is about north of USD 500 million together with an after-tax IRR of 7%. And again, as I referenced earlier, the expected capital, so this is expected to be about $160 million, of which we believe we have line of sight into $120 million of debt, which really makes this project very, very accretive for shareholders given its ability to generate about $130 million plus of annual EBITDA. And if you can see from the site plan, it really is a very compact site, and it is all based within our existing property boundary and property framework, which does allow us to streamlined permitting as we look towards advancing this project. The demonstration plant, which has already been commissioned and is currently shipping initial concentrate. We are looking at qualifying the material with a number of customers, over 20-plus customers, within the coming months. We're operating in a 1,200 metric ton per year capacity with the ability to add an additional shift to take that up to 2,500 metric tons. And the purpose of this platform was really to first and foremost begin to set up a facility on a small scale so that we could begin to advance qualification and approvals with defense and industrial customers and obviously obtain offtake contracts to support a large-scale expansion from 1,200 metric tons all the way up to 40,000 metric tons. With respect to the graphite, really, our product mix is very much focused on the defense and aerospace applications together with energy security and ESS, which is becoming a very, very big component of our economies overall and graphite is significantly used in ESS storage backup. We also find the uses of our graphite and qualifying our graphite with high-tech and advanced material developers, such as silicon carbide substrate, heat spreaders and thermal interface materials. As mentioned previously, we see significant upside really within the 13-year mine life. We expect the mine life to be closer to 20 years. And we've already done a significant amount of infill drilling, which has shown that the resource expands towards the east and remains open at depth. So we see this as a long life operation, not something which is going to last for 10 or 12 years, but probably for 20-plus years. A little bit about our foundational business. The zinc business has been in operation now for 8 years. Our current production base is close to about 65 million pounds of zinc. We see this as a long-life operation. About 8 years ago, we had 7 or 8-year mine life. We continue to add resources in quantities more than we deplete them. And at current zinc prices, we are, obviously, making a pretty good margin on the business and zinc price at 160 ASIC is all in is about $107. So we're taking away a pretty healthy margin with the expectation of probably having close to $25 million to $30 million of EBITDA for 2026. And this really sets us apart from a number of other developers and miners who are developing other projects is because we have the benefit of not only an operational base, but also cash flow from our existing zinc operations. Our zinc business can -- has always had significant upside associated with exploration. We continue to explore within the mine and also within the region, as I mentioned, we own about 120,000 acres in the [indiscernible]. And late last -- early last year, we added a target, which was really a copper-gold target and we look to advance that over the coming months and looking to add more zinc resources to unlock more of a hub-and-spoke approach as well as potentially copper gold targets in the short and medium term. So why Titan? My personal belief is that Titan is really at an inflection point. We are today sitting at an EBITDA of close to $30 million. By adding in the graphite, which is expected to be in production within a few years, we expect to be able to ramp up our EBITDA to over $125 million with significant upside, not only coming from the graphite business as we look to expand that further, but also from the germanium operations which we're looking to unlock really in the coming months. And this is just to wrap up what do we see as a key catalyst for the remainder of the year and going into 2027. We expect to have a feasibility study completed by the end of the year. We expect to enter into offtake contracts and also make the decision to move ahead with construction of the 40,000 metric per tonne per annum plant which is expected to [indiscernible] this year going into construction early next year on the graphite. We are working through the technical program, which will allow us to provide and obtain some revenue for the germanium operations or the germanium byproduct. And obviously, we continue to focus on exploration, not only with the graphite business but also with the zinc business. So needless to say, I think we've had a very busy few years behind us, but going into end of 2026, early 2027, we really see this as an inflection point for Titan and also our path towards onshoring mineral independence for certain minerals which are controlled by China. I think I'll stop there and happy to take questions now.

Thank you for the presentation, Rita, we will proceed to the Q&A session now. Titan has evolved from a zinc producer to a broader critical minerals platform. How do you describe the company's transformation story to investors today?

That's a really good question. I think we didn't go looking for a lot of these additional opportunities. We were fortunate enough to find them in our backyard as I put it, but we really are at an inflection point. The zinc business will always continue to be a solid foundation for us, which provides all the downside production with investors looking for. From an upside perspective, it's obviously what we offer is a significant amount of near-term cash flow upside coming from the graphite business. together with this ability to really cater to minerals, which are currently controlled by China. So our ability to be able to command the premium, not only for graphite, but also the germanium has become pretty evident in our discussion. They are not significant premiums, but they are premiums nonetheless. And it's -- for us, it's all about being the first mover, which obviously requires a lot more work. But at the end of the day, I think we've made -- we've turned ourselves into -- from a zinc producer, as mentioned, into a graphite developer and soon we will be transitioning into a full-scale graphite producer and also a germanium producer.

Our next question, the [ Kilden ] Graphite project appears to be potentially transformational asset, what initially attracted Titan to graphite? And what gives you confidence in the project's long-term economics?

The graphite discovery was really one that we came across, and this was end of 2023, that we came across graphite more per ton than actually going to look for it. And it was at the time where we began to recognize that the critical minerals security narrative and the defense requirement for graphite was going to become pretty significant very quickly. So our initial research into it and our initial technical work into it was very much focused on seeing if we can focus on quality which will allow us to compete in the United States. And what we're very proud to see is from discovery, which was really in 2023, we've been able to get to production in 2026. So it's taken us about 2.5 to just about 3 years to effectively get there and begin producing graphite. So that, for us, is a big endorsement that not only are we convinced about the macro picture for the commodity but we're also very, very enthused by the fact that it is something that we can easily execute on. And I think that counts on a significant scale for any kind of project because there might be a lot of inventory in the ground. But the question is, does it come with the right product quality, which we've been able to prove through our demonstration plant and very soon we will be looking at getting customer base announced very shortly.

Continuing with the graphite questions. The company has started the [indiscernible] could eventually supply a significant portion of U.S. natural graphite demand. How large is the market opportunity? And when do you see the greatest sources of demand?

Yes. There's a great slide and Irina probably worth taking us to the slide, which is I guess Slide 25, if I'm not mistaken about deck, and we're happy to demonstrate that. As you can see on Slide 25, we believe that the global -- the U.S. demand for graphite, which is what we're looking to cater to, really is about between 75,000 to 80,000 -- 72,000 to about 80,000 metric ton market. And the demand for graphite really will be driven by all these new EFS projects. And the EFS projects really are being driven by the AI rollout. And so we see the ability to be able to obtain pretty significant market penetration going up all the way from 80,000 metric tons to about 200,000 metric tons within a span of the next decade. So for us, the market factors are very exciting. And obviously, being the first mover really gives us that advantage to be able to get a significant part of the market share.

There's a lot of questions about germanium, so maybe we can move to germanium now. How quickly do you anticipate progressing study and negotiations with Teck resources with regards to germanium extract from your ore?

Our expectation is by the end of the year -- about in the next 3 months, we are due to complete our technical development. And alongside that, we will be progressing the offtake discussions. So we would expect to have something in place by the end of the year or early next year.

In terms of exploration, investors are interested, when would you expect results from your 2025 exploration program?

The results from our exploration program, first and foremost, will be largely focused on the graphite and as I mentioned, we'll be able to demonstrate very quickly the growth in mine life. We have completed our infill drilling and it has expanded the resource pretty significantly. So the existing resource stays and then we've also been able to step back towards the east, which has given us a significant increase in mineral inventory. Our production base is just because of the numbers that you can see on the screen here on Slide 25, we believe that the production base in the U.S. is about 80,000 -- close to 80,000 metric tons. So we're going to keep our production base constant really at 40,000 metric tons, so we'll be able to see a significant increase in mine life for the graphite going up from 13 years to closer to 15-plus years. And then with respect to the zinc and with respect to other commodities, which we're targeting there is constant information out, which is available through our MD&A, but really, we expect to get through further on those targets in the second half of this year.

Moving on to [indiscernible] relationship. The company has highlighted a potential $120 million [indiscernible] [indiscernible] package for [indiscernible]. How would that financing impact project development and shareholder dilution?

So as I mentioned earlier, we expect the total capital cost for the project to be about $160 million, out of which we expect the debt to be $120 million. So really, we're looking at a maximum net of any cash flow contributions, which may come from our zinc operations, a very modest sort of equity raise if one is required. We're doing really, really well with our zinc operations as the zinc price is very supportive. If we were to do an equity raise to support the construction, it would be very modest. And obviously, we're looking at other non-dilutive structures as well to offtake financing, et cetera, for a graphite project. But if we look at the accretion and the accretion metrics of the project for about just, let's call it, a $20 million dilution, which is about $20 million to $40 million. That's the range if we just put it that way, that is between 10% to probably 20% of the current market cap of the company. But what it leads to is significant increase in EBITDA, so going up on the EBITDA projection of about $25 million to $30 million to north of $125 million, which is almost 5x. So we believe that the graphite project is very, very accretive. And really, the benefit of that is because all the infrastructure is really installed at site, and we really have a full-scale operational team at site. So we believe that it is a very accretive project, not only from a financial metrics perspective, but also from a stakeholder perspective and creating jobs for the economy in the North country.

I think we only have 1 minute, maybe a closing remark in terms of what do you believe investors are still underappreciating about Titan's asset portfolio and long-term value creation opportunity?

I think I've said it before, I do believe we're in an inflection point. And I think volatility always creates opportunity. For us, I see a significant, significant catalyst coming up in the next 6 months or so and then going into the new year as we look to derisk the graphite story, add germanium to the production portfolio and obviously continue to grow with our zinc operations. I think it's a very unique opportunity to cap your downside and have uncapped upside. So I would recommend that folks take a look at the story. And obviously, we're happy to answer any questions as required.

Thank you, everyone, and thank you for joining Titan Mining for our presentation today, and we look forward to connecting tomorrow in our one-on-one sessions. Thank you. Bye.

Thank you. That concludes Titan Mining Corporation's presentation. You may now disconnect. Please consult the conference agenda for the next presenting company.