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- Tao Commodities (TAO) has acquired an option to purchase Hyperion Metals, which holds the Titan heavy mineral sands project in Tennessee, U.S.
- The project covers 2100 acres and the previous exploration indicates the presence of a high-grade titanium and zircon deposit
- Titan has access to high-grade infrastructure, including road, rail, shipping, gas, power, processing facilities and a localised workforce
- Tao has secured commitments for a $2 million placement to fund the acquisition, exploration and transaction costs
- The company plans to start an exploration drilling program with expectations to receive results on the HMS grade and assemblage by the end of the year
- Tao Commodities is trading 79.17 per cent higher at 21.5 cents
Tao Commodities (TAO) has acquired an option to purchase Hyperion Metals, which holds the Titan heavy mineral sands project in Tennessee, U.S.
The project covers 2100 acres and the previous exploration indicates the presence of a high-grade deposit.
The project sits within the McNairy Sand, where Altair International reported a resource of 3.6 per cent heavy mineral sands (HMS) proximate to Titan in 1998.
The HMS were made up of 15 per cent zircon, 5 per cent rutile and 60 per cent high-titanium dioxide (TiO2) ilmenite.
The project is located around 15 kilometres from Chemours’ New Johnsonville pigment plant, which is one of the largest pigment plants globally. Titan also has access to extensive high-grade infrastructure, including roads, shipping, rail, power, gas and a localised workforce.
The U.S. has designated titanium and zircon as critical minerals, which allows for potential access to U.S. federal funding programs down the line.
The acquisition
Tao has secured commitments for a $2 million placement to fund the acquisition. Along with existing cash reserves, the placement will also support exploration at Titan and transaction costs for the acquisition.
Tao will issue 25 million shares at eight cents each, subject to shareholder approval.
Hyperion has entered into exclusive option agreements with local landowners which allows the company to lease or purchase around 2,100 acres of land area and the associated mineral rights.
In the case of a lease, the company will pay a net smelter royalty to landowners of around 5 per cent of all product mined and sold.
If purchased, the land will be sold for market value, plus a premium of around US$1,750 to US$1,950 per acre (around A$2480 to A$2760 per acre).
Hyperion’s founders include Ian Middlemas and Anastasios Arima, who were key players in the development of Piedmont Lithium (ASX:PLL). Mr Arima was responsible for raising $83 million for the development of Piedmont’s lithium project in North Carolina.
Upon completion of the acquisition Mr Arima will join Tao’s board as Executive Director and will be based out of Charlotte, North Carolina.
Subject to shareholder approval, Tao will issue 3.5 million unlisted management options, exercisable at 25 cents each and expiring December 31, 2023, to incoming management.
The next steps
Tao aims to get moving at Titan as soon as possible, with major milestones in the pipeline before the end of 2020.
The company plans to start an exploration drilling program with expectations to receive results on the HMS grade and assemblage by the end of the year.
Tao will also conduct metallurgical testwork on the ilmenite, zircon and rutile to determine the quality of potential end-products.
Along with building-out the U.S. development to support the project’s advancement, Tao is making moves to fill a gap in the billion-dollar U.S. titanium supply market.
Tao Commodities is trading 79.17 per cent higher at 21.5 cents at 12:17 pm AEST.
