TTM keeps hitting new gold and silver - current 3.1M oz gold and 22M oz silver JORC resource is going to grow… how big?

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,516,823 TTM shares at the time of publishing this article. The Company has been engaged by TTM to share our commentary on the progress of our Investment in TTM over time.

Over the last 12 hours, gold soared past its previous all time record high price set back in February.

Up 2% in just last night's session, and up ~13% since the start of the year - that's a lot for a commodity.

It's been a very strong run to US ~$2,990 per ounce, and it's looking to break through the psychologically significant US $3,000 per ounce mark soon...

This is very good news for companies with big gold JORC resources...

And those drilling right now and planning to release JORC resource updates in the coming months...

It means their in-ground resource value goes up.

Our Investment Titan Minerals (ASX:TTM), already has 3.1M ounces of gold and 22M ounces of silver in JORC resources at its main project in Ecuador.

TTM has 3 drill rigs on site right now and is targeting a major resource upgrade for the middle of this year.

There are also some metallurgical testwork results to come.

Metwork tests and the resource upgrade are important because they de-risk the project for institutional investors - they need to see some of this before investing large amounts...

(TTM has also got some pretty attractive copper exploration assets - one of which is in a JV with Gina Rinehart’s Hanrine Exploration with an asset look through value of US$30M for TTM's 20% interest - but we will get to those later)

TTM is currently capped at $100M and had $18.8M cash in the bank at the end of 2024.

(TTM also had an extra $4.9M in cash come in from options exercised on the 7th of Feb)

TTM is currently chasing new gold discoveries in untested areas in and around its current JORC resource - this will feed into the JORC resource update planned for the middle of the year.

Last week TTM delivered some pretty important drill hits below its resource area (more on that later in today’s note).

Later in the year, TTM’s plan is to drill completely untested parts of the project across a ~9km area. This is where TTM could make entirely new discoveries and multiply its resource.

As we noted above, TTM has a US$120M Joint Venture with Hanrine, a subsidiary of Gina Rinehart’s Hancock Prospecting for a copper porphyry project, also in Ecuador.

According to the webinar TTM released yesterday (link below), drill results from the copper project should be out any day now...

So two of TTM’s most advanced assets are both about to deliver more news:

• Dynasty project - which has a 3.1M oz gold and 22M oz silver in JORC resources, and
• Linderos project - a copper porphyry where TTM is free carried in a US$120M JV. As part of the deal, Hanrine will do ~25km of drilling and spend up to US$120M for 80% of the project. The look through valuation of TTM’s 20% free carried stake is ~US$30M / $47M AUD...

TTM is currently only being valued at ~US$20 per ounce on an EV/gold ounces basis...

Usually, companies with resources this big trade upwards of $50-100 per ounce, depending on location and type of deposit.

That EV/oz. ratio could get even smaller when TTM upgrades its resource in a few months time.

TTM already has strong institutional investor backing with Tribeca Investment Partners owning ~14%, and the Top 20 owning 74%.

Are more big institutional investors waiting for the official JORC resource update and metwork test results to come up with their own fair valuations on the company and enter the stock?

We hope so...

The first time TTM put out a JORC resource the gold price was US$1,900/oz.

Now gold is at ~US$3,000/oz...

We are Invested to hopefully see the market re-rate TTM - taking into account the upgraded gold/silver resource & the copper free-carry...

TTM CEO Melanie Leighton held a webinar on Wednesday, running through the latest on TTM and what to expect over the coming months, for those who missed it you can check it out here:

(Watch the video here)

Today we will cover:

• more details about why we Invested in TTM,
• what we are looking forward to over the coming months,
• unpack this week’s webinar (we summarise it so you don't have to watch it all),
• and the drill results from last week.

TTM’s drill results from last week:

We think things are looking good for TTM’s mid-year JORC resource update.

The timing couldn't be better given the current gold price, and the drill hits continue to come.

Last Friday, TTM announced that it had hit more gold OUTSIDE of its JORC resource.

This is very good news going into a resource upgrade inside the next few months...

We also noticed that there was one more assay coming up-dip from that result - so we have that result to look forward to as well.

The cross section above is just one small snippet of the wider Dynasty project, but it gives you an idea of what TTM is still finding as it drills out the asset:

Most of TTM’s drilling to date has been down to a maximum depth of ~200m.

TTM’s strategy to grow the resource is to find more gold at depth below the existing resource.

We now have confirmation that gold does indeed extend down there.

Now the question is... how much?

TTM has assays pending from one more hole in this deeper section, and CEO Melanie Leighton mentioned on the webinar from this week that they would be following up those hits to see if there is more gold at depth.

IF TTM keeps hitting gold at depth below its resource, it could make a meaningful impact on the size of its resource.

TTM’s CEO Melanie Leighton mentioned that the potential upside to the resource is so good that it may be worth delaying the upgrade to drill out these areas at depth.

At this stage TTM’s JORC resource upgrade is due in the June quarter.

This, combined with further metallurgical testwork, could start to attract the interest of more institutional investors looking for development stage gold projects.

The resource upgrade will be from the yellow area in the image below:

Later in the year, TTM will be drilling out the blue areas, to try and upgrade the resource again.

The drilling in the blue sections is where we think the big unexpected discoveries for TTM could come from.

TTM could make repeat discoveries that multiplies its resource OR smaller discoveries that incrementally increase the JORC.

Whatever happens, we think it will be well received by the market in an environment where gold prices are trading at all time highs.

Here is the timeline of what we are looking forward to with TTM:

TTM also has news coming from its US$120M copper Joint Venture

In September last year, TTM finalised a deal to farm out one of its copper exploration projects to Hanrine, a subsidiary of Hancock Prospecting (owned by Gina Rinehart).

The deal is worth up to US$120M and will see TTM eventually become a 20% free carried partner in the Linderos project (assuming Hanrine Exploration continues to like what it sees and continues to invest in the asset).

Linderos is a large-scale porphyry project...

The kind of project that attracts the world’s biggest mining companies and deep pocketed partners (like a Gina Rinehart controlled private entity).

This is TTM’s second most advanced project.

In the webinar we learnt that drilling was recently completed and assay results could be announced to market in the next few weeks.

Copper is another commodity that's been going for a bit of a run of late:

Any solid drill results from a project where TTM has a US$120M free carry would be big for the company.

Especially given the value of its gold/silver project, and its current market cap of ~$100M.

(that 20% free carried interest on a look through valuation alone is valued at US$30M / $47M AUD).

So over the next 3 months there are three major sets of catalysts for TTM:

• More drilling results from its Dynasty Gold project (we are particularly interested in that assay result at depth and seeing more deeper holes).
• An upgrade to its Dynasty JORC resource by mid 2025. (Once drilling is complete and the resource models are updated)
• Drilling results from its Linderos copper-gold project, the JV with Hancock Prospecting.

Then in the second half of 2025, TTM will undertake:

• A scoping study for Dynasty.
• More drilling at its flagship Dynasty project, to continue to grow the size of its gold resource. This drilling will focus on the underexplored parts of the project - which could deliver surprise upside if significant ounces can be added to the project.

Ultimately, drilling out and advancing either its copper or gold project is a key part of our TTM Big Bet.

Some of the biggest operators in the world are already active in this part of the world.

(Both the $2.9BN capped Dundee Precious Metals and $9.8BN capped Lundin Gold operate in Ecuador).

IF TTM can prove up a big enough project it could eventually become an M&A target for a peer in the region.

Our TTM Big Bet:

“We want to see TTM prove up a $1BN plus copper or gold discovery in Ecuador which is so attractive that a mining major acquires the company.”

NOTE: Our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved - just some of which we list in our TTM Investment memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true.

Our key takeaways from the Webinar with TTM’s CEO

Earlier this week we listened to TTM’s CEO Melanie Leighton talk through the most recent results at Dynasty.

Anyone who missed it can watch the 30 minute webinar here.

Here were our key takeaways from the call:

• On the drill results from last week - Melanie talked specifically about drillhole CVD25-122 and how the sections up dip and down dip (circled in red below) would be the focus of future drilling. If TTM hit more gold in those areas it could add to the JORC in a big way.

• Update on the copper JV with Gina - Melanie Leighton was planning to meet the Hancock team this week. Hopefully that meeting means we start to see some drill results from the JV in the near term.
• An update on the Dynasty drill program - Melanie mentioned there were 3 rigs currently drilling at Dynasty and that the program would finish up in late April.
• JORC Resource upgrade expected mid-2025 - She said that the resource could be delayed if the extensions at depth are too good to exclude from the updated resource.
• Copper Duke prospect to be drilled later in the year - she said this would be in Q3/4. This is a big copper porphyry target that has Tier 1 potential given the early exploration work done to date. Drilling at Linderos unlocked the Hanrine Exploration JV, and it is possible that first pass drilling could unlock a funding partner on this asset too.
• Catalyst for institutional buying - There are two big catalysts that could bring institutional buying into TTM. She said metallurgical testwork and a resource upgrade would unlock that buying. Both catalysts should come before the end of H1-2025.
• TTM only valued at an US$22/ounce of gold resource - TTM had a slide in the presentation showing how TTM is being valued at such a low multiple to its Dynasty resource and how the market is ascribing no value to other assets. The copper JV with Gina for example has a look through value of US$30M (for TTM’s 20% free carried interest).
• Exploration going into the second half of 2025 - this is the blue sky upside for TTM, so it was nice to see Melanie talk about a potential 5,000m drill program on regional gold targets at Dynasty later in the year. An interesting thing we also noticed was her mention of a “porphyry potential” at Dynasty too. That means copper. We haven't seen TTM test that theory at all yet...

What’s next for TTM?

More drilling at Dynasty gold project 🔄

TTM has 5,400m left to drill at its Dynasty gold project.

We expect the company to complete this drilling over the coming months and set itself up for a resource upgrade.

Resource upgrade/update at Dynasty 🔲

By mid-year we expect TTM to publish a resource upgrade over its Dynasty Project.

Drilling results from the Linderos Copper project 🔄

10,000m of drilling has been completed.

We should expect the results of this project to be announced over the next couple of months.

Metwork 🔄

February metallurgical testwork, “metwork” has achieved recoveries of 85-88% gold from oxide ore material which extends from surface at the Cerro Verde prospect, which we think is a good start.

TTM expects to release additional metwork results on “transitional and primary ore domains from the Cerro Verde and Iguana prospects” using conventional techniques.

Conventional techniques are almost always better for a project’s viability.

What could go wrong?

With the balance sheet healthy in the medium term, the key risk for now is “exploration risk”.

If TTM is unable to discover more gold over its Dynasty project and publish a resource upgrade lower than market expectations, it could have a negative impact on the share price.

In addition, if the 10,000m of drilling at Linderos does not deliver the copper hits that Hanrine needs to continue to fund exploration, it could also jeopardize further development and investment over this project.

Exploration / Drilling risk

There is no guarantee that TTM’s extensional drilling programs will be successful and TTM may fail to uncover enough economic mineralisation to justify the expense.

Source: “What could go wrong?” - 29 May 2024 TTM Investment Memo

Our TTM Investment Memo:

Our Investment Memo provides a short, high-level summary of our reasons for Investing.

We use this memo to track the progress of all our Investments over time.

Click here to read our TTM Investment Memo where you will find:

• What does TTM do?
• The macro theme for TTM
• Our TTM Big Bet
• What we want to see TTM achieve
• Why we are Invested in TTM
• The key risks to our Investment Thesis
• Our Investment Plan