Hancock Prospecting JV & Earn-In Deal

HANCOCK PROSPECTING SUBSIDIARY, HANRINE, TO SPEND UP TO US$120M TO EARN 80% INTEREST

On 18th September 2024 Titan announced that it had executed a Letter of Offer from Hancock Prospecting Pty Ltd (Hancock) wholly owned subsidiary Hanrine Ecuadorian Exploration and Mining S.A (Hanrine) Linderos Copper Project JV Earn-In Deal

  • Titan and Hancock Prospecting Pty Ltd (Hancock) wholly owned subsidiary Hanrine Ecuadorian Exploration and Mining S.A (Hanrine), have agreed to terms for Hanrine to acquire up to an 80% ownership interest in the Linderos Copper Project.

The key terms of the JVA are outlined below:

  • (Earn-in and Consideration) Hanrine will have the right to acquire up to an 80% interest in the Linderos Copper Project on the following terms:
Milestone No. Earn-In Milestones Earn-in Interest Total Earned Interest Earn-in Period Status
1 Payment of an aggregate of US$2 million 5% 5% Within 30 days of execution of JVA COMPLETE
2 Completion of 10,000m of new drilling at the  Linderos Copper Project or spending US$8 million of expenditure (whichever occurs first) 25% 30% Within 3 years of execution of JVA COMPLETE
3 Completion of an additional 15,000m of new drilling at the Linderos Copper Project or spending an additional US$12 million of expenditure (in addition to any amounts spent to satisfy the previous milestone) (whichever occurs first) 21% 51% Within 7 years of execution of JVA UNDERWAY
4 A decision to mine or total aggregate expenditure of US$120 million (whichever occurs first) 29% 80% Within 15 years of execution of JVA PENDING
  • (Additional Payment) Hanrine will pay an additional US$1 million to Titan within 30 days following Hanrine achieving a 51% interest in the Linderos Copper Project, based on the above milestones.
  • (Earn-in Period Extension) If a delay event occurs (including, amongst others, a force majeure event or a delay in obtaining any authorisation from a government agency to undertake activities at the Linderos Copper Project), the Earn-in Periods will be extended for the duration of that delay event (with such extension not exceeding 24 months).
  • (Decision Not to Proceed) Hanrine may provide a cessation notice at any time to cease earning into the Linderos Copper Project (Cessation Notice). Following the provision of a Cessation Notice, Hanrine is not obliged to pay any further earn-in expenditures and will retain its then existing Earn-in Interest (with such Earn-in Interest to be adjusted/increased based on any additional earn-in expenditure incurred from the date of the previous Earn-in Interest and the date of the Cessation Notice).
  • (Free Carried) Titan will be free carried during the Earn-in Period until the date Hanrine earns its fourth Earn-in Interest (80%) or provides a Cessation Notice. Following the end of the free carry period, Titan and Hanrine will contribute to the approved work programs and budgets based on their respective percentage interests in the Linderos Copper Project. Titan may elect to contribute its portion of the work programs and budgets or dilute its joint venture interest.
  • (Net Smelter Royalty) If Titan’s interest dilutes to 10% or less, Titan’s interest in the joint venture will convert into a 2.7% net smelter royalty (Titan NSR). Hanrine will have a right of pre-emption in respect of any sale, transfer or assignment of the whole, or part, of the Titan NSR.
  • (Change of Control) If, prior to the date Hanrine acquires its third Earn-in Interest:
    • a 15% or more change in the shareholding or control of Linderos or a holding company of Linderos (other than Titan) occurs;
    • a scheme of arrangement in respect to Titan is announced;
    • a takeover bid (whether on market or off market) in respect to Titan is announced; or
    • Titan announces that a person has, via the lodgement of a substantial shareholder notice, acquired or holds a relevant interest of 15% or more of the issued shares of Titan,

Hanrine shall have the right (but not the obligation) to accelerate and acquire up to the third Earn-in Interest (being total interest of 51%) (Acceleration Option) by paying to Titan US$6,000,000 less any earn-in expenditures incurred by Hanrine from the date Hanrine earned its previous Earn-in Interest to the date of exercise of the Acceleration Option.

  • (First Right of Refusal) The parties will have a first right of refusal over each other’s interest in the Linderos Copper Project. In addition, following Hanrine acquiring the third Earn-in Interest (ie holds a 51% interest), Hanrine will also have a right of first refusal over the proposed sale of 15% or more of Linderos or any holding company of Linderos (other than Titan) and can elect to either acquire those shares in Linderos (or the holding company of Linderos) or the portion of joint venture interest that corresponds to the shareholding proposed to be disposed of.
  • (Management) Hanrine will have the right to appoint the manager during the Earn-in Period and the management committee will comprise of representatives from Titan and Hanrine.
  • (Other matters) The JVA also contains standard provisions in respect to the rights and duties of the manager, the function of the management committee, the approval of work programs and budgets and confidentiality, consistent with an agreement of this nature.