World Titanium Resources : Quarterly Activities and Cashflow Report

f97ce93c-7853-4c80-8d09-d9ac833a077f.pdf

ASX Release 22 April 2016‌

Quarterly Report - Period Ending 31 March 2016 HIGHLIGHTS

• AMED final cash offer of 7 cents per ordinary share in World Titanium Resources secures at least a 68.39% controlling interest.

• Test work by Mineral Technologies is near concluded and is expecting to secure a saleable zircon/rutile concentrate by the end of April for testing by potential customers in May.

• An independent alternate mine plan for Ranobe mining leases was completed to treat 12 Million tonnes per annum (Mtpa) for 17 year mine‐life.

• A 39% increase in the Mineral Resource estmate to 244.7 million tonnes garding 8.02% Heavy Mineral (HM) based on the new mine plan.

• An independent Scoping Study demonstrated that simplifying the processing stream to sell only zircon/rutile concentrates in container and stockpile ilmenite will require a capital cost of US$48m plus VAT (up to 20%), working capital and other owners costs.

• Cash balance at 31 March 2016: A$1.9 million.

AMED 7 cent takeover cash offer secures at least a 68.39% controlling interest

On 18 January 2016, World Titanium Resources Limited ("World Titanium") announced an unsolicited takeover offer from African Minerals Exploration and Development Fund 11 ("AMED"). Under the offer, AMED proposed an unconditional cash offer of 5 cents per ordinary share in World Titanium commencing on 2 February 2016. Your Directors recommended that there was no need for our shareholders to act at this stage.

On 25 February 2016, AMED raised the unconditional cash offer to 7 cents per ordinary share and extended the offer until closing on 8 March 2016. Following the increased all‐cash offer, control passed over to AMED and the cash offer was extended until Friday 18 March. On 7 March, your Directors recommended that shareholders accept the offer.

AMED announced acceptance of 68.39% of World Titanium on 17 March 2016 and near the completion of the all‐cash takeover bid on 18 March.

On 29th March 2016, World Titanium announced the Top 20 shareholders now own 98.48% of the ordinary shares on issue of 463,404,808. At the time, your company still maintained 298 registered shareholders. It should be noted that the main two shareholders now own between 93‐94% of World Titanium.

World Titanium Resources Limited ABN 21 120 723 426 Head Office: Level 17, 500 Collins Street, Melbourne, Victoria, 3000, Australia

Telephone: [phone] Fax: [phone]

www.worldtitaniumresources.com

RANOBE MINE PROJECT Background

On 27 April 2012, World Titanium Resources Limited (WTR) received two Mining Licences abutting each other some 55 kilometres north of Tulear on the south west coast of Madagascar. Each of the Mining Licences has a term of 40 years and is renewable.

On 23 June 2015, the Environmental Management Plan (EMP) for the Ranobe Project as approved by ONE was signed by your company and we have agreed to commit to the conditions of the EMP.

Test work with Mineral Technologies

Preliminary work was completed in the December quarter 2015 by Mineral Technologies (MT) near Brisbane, Queensland on two‐stage Wet High Intensity Magnetic Separation (WHIMS) to clearly define and optimise the maximum recovery of magnetic ilmenite versus the more non‐magnetic zircon/rutile concentrate product.

We have since approved additional test work to process 5 tonnes of Ranobe run‐of‐mine mineralised sand with about 8% HM. As part of this program, we intend to test the suitability of using the newly MT designed Spiral 12 when compared with the Spiral 6.3 (both designed and manufactured by MT). I have requested MT to produce a final Heavy Mineral Concentrate (HMC) without the trash via the WHIMS and clean‐up with spirals/tables. A portion of the HMC will be sent to our potential customer base for assessment. We anticipate a HMC sample by the end of April 2016.

In the first 4 weeks to early February, the sand throughput over the MG12 spirals was varied from 2.5 tonnes per hour (t/hr) to 3.8 t/hr and HM recoveries were identical. As per the recently announced ADP Scoping Study, the processing capacity of 12 Mtpa implies a rate of 3.8 t/hr. This variation in throughput with consistent HM recovery implies there is scope to increase throughput further with little or no recovery loss.

Up to the end of March 2016, MT have been successful in completing preparation of the HMC at a grade of 94%HM (86%VHM). The Valuable Heavy Mineral consists mostly of Ilmenite, Zircon and Rutile.

I can advise that the first stage rougher WHIMS processing was very successful with the mass yield comparing favorably with previous test work in 2015 and recovered 73% of the total iron minerals to the magnetic (reject) fraction. The magnetic fraction comprises mostly ilmenite and leucoxene based products containing at least 49% titanium dioxide and iron.This was actually a better result than the initial preliminary test work in 2015.

By the end of April MT will prepare final concentrate and tails samples and finalise mineralogy analysis. MT will also be able to start modelling the preferred flowsheet.

A 39% increase in the Mineral Resource estimate for Ranobe Mining Licences

On 18 January, your Company announced Measured and Indicated Resources in the Mining Licences of

1. mt grading at 8.02% HM, an increase of 39% over the 2012 maiden resource estimate of 176 mt at 8.13% HM. The upgrading of the resource classification is inclusive within a revised global Mineral Resource estimate of 884.2 mt at the measured, indicated and inferred confidence levels grading at 6.19% HM.

   The 2015 updated mineral resource estimates provided below replace the previous estimates prepared in accordance with the 2004 edition of the JORC Code, and first disclosed by the Company in 2012 (reference Australian Stock Exchange (ASX) releases of 9 August and 28 August 2012). This updated estimate includes:

   • Additional drilling of 363 air‐core holes into the Ranobe deposit undertaken in late 2012 for a total of 8088.2 metres.

   • Inclusion of a digitized 3% HM cut‐off.

   • Reporting in accordance with the 2012 edition of the JORC Code.

Alternate Mine Plan

Given the scale of the capital costs from Independent Consultant, EPMS, of over US$175m plus working capital (reported September quarterly 2015) and the difficulty your company envisaged in securing offtake ilmenite contracts in the current over‐supplied world market, we are shaping a new mine plan. With the assistance of independent consultant, Geovia Services of South Africa, the alternate mine plan is based on:

1. Similar to 2012 mine plan and excavate to an average depth of some 17.5 metres below the natural surface;

2. To increase sand processing from 8 to 12 mtpa, and

3. Simplify wet processing and produce a simpler metallurgical circuit. The scoping study detailed below is based on the new mine plan.

Scoping Study option reduces capital costs

A high level Scoping Study completed by independent consultant, ADP Marine and Modular (ADP) of Cape Town, South Africa has demonstrated that simplifying the processing stream to sell only zircon/rutile concentrates in container and stockpile ilmenite will require a capital cost of US$48m plus VAT (up to 20%), working capital and other owners costs.

Given the difficulty we envisaged to secure consumer ilmenite contracts at adequate pricing to support the projected development plan, your company is examined a number of different alternative processing methods. We believe a simpler processing plant will enable the company to commence production on a smaller scale focusing on higher margin products, which we expect will reduce upfront capital costs. On this basis, your company contracted independent consultants, ADP to provide a Scoping Study for the Ranobe project operating at a 50% increase in the mining rate from 8 to 12 million tonnes per year of mineralised sand when compared with the TZMI Definitive Engineering Study announced on 28 August 2012. ADP Marine and Modula (ADP) in Cape Town, South Africa, is a leading supplier of modular processing plants and projects in diamonds, minerals sands, coal and gold mining industries.

ADP has an agreement with Mineral Technologies on the Gold Coast in Queensland, Australia to combine their skills in such areas as spiral technology, electrical processing and other similar gravity separation methods.

The Ranobe Scoping Study considered:

• A dry mining operation to treat 12 million tonnes per year of mineralized sand around 8% HM per year.

• Average estimated output of 66,000 tonnes per year of zircon/rutile concentrate over the first 17 year alternate mine plan.

• Concentrate shipped using containers from the existing Toliara port.

• Ilmenite averaging some 670,000 tonnes per year will be stockpiled adjacent to the Wet Processing Plant.

• Modular equipment build using ADP's capabilities and Mineral Technologies experience in spiral design.

• Phase TWO capital in Year 3 comprises of an additional US$6m for the installation of a conveyor transport system for the movement of run‐of‐mine material to the Wet Processing Plant and tailings disposal.

  A breakdown of the US$48m capital cost estimate is:

• Spiral plant (using new MG12) US$13.2m

• Steelwork,mechanical equipment US$17.6m

• Engineering,Procure,Construct,Manage (EPCM) US$3.7m

• Local transport/shipping costs from South Africa US$5.7m

• Earthworks, security, site management US$3.6m

• Power generators US$4.2m

Total US$48m

CORPORATE Cash balance at 31 March 2016 was A$1.9m and A$0.6 expected to be spent in next quarter, ending 30 June 2016

Cash used during the quarter amounted to A$0.7m, representing mainly payments for metallurgical test work and administration costs. The cash balance as at 31 March 2016 stood at A$1.9m. Forecast expenditure for the next quarter is to the tune of A$0.6m. In addition to administration costs, there will be ongoing expenses for studies on the Mineral Technologies test work.

Tenement Status

No Tenement changes were made during this quarter. Appendix 1 details current tenement holdings. No tenements are subject to farm in or farm out agreements.

Jeffrey Williams Executive Director World Titanium Resources Perth, Western Australia

All enquiries to be directed to:

[e-mail] or Jeff Williams at [e-mail]

About World Titanium Resources:

World Titanium Resources Limited (ASX: WTR) is an Australian based mining company in the business of developing and exploiting Heavy Mineral Sand deposits in the Republic of Madagascar. The Company owns a 100% of the Toliara Sands Project located along the southwest coast of Madagascar that comprises four Heavy Mineral Sands properties including its flagship Ranobe property.

The Ranobe Property is at an advance state of development with environmental permitting in place. It is anticipated that a Definitive Feasibility Study incorporating an alternate mine plan to that announced in August 2012 (28 August 2012; Ranobe Engineering Results) with a name plate capacity of 12,000,000 tonnes per annum will be undertaken shortly.

As background the Company received the two Mining Licenses for the Ranobe Project on 27 April 2012. Each of the License's has a term of 40 years and is renewable.

Mineral Resource Estimate

The updated mineral resource estimate includes all drilling data reported in the 2012, independent maiden resource estimate undertaken by McDonald Speijers and Associates (2012; see ASX release dated 28 August 2012), with the addition of the 2012 drilling data. The new resource estimate includes a digitized 3% Heavy Mineral (HM) cut‐off, and the recognition of a western boundary formed by the on‐lap of a younger dune formation. Whilst a westward extension to the deposit at or greater than 3% HM in the overlying younger dunes and the underlying Upper Sand Unit is indicated by the drilling data, no mineralogical data for the younger dune system is available at present, and thus the Company is not currently treating this area as a resource, and has excluded it from the current resource estimate.

Resource Category	Tonnes (106)	Oversize %	Slimes %	HM %	Ilmenite %	Rutile %	Zircon %	Monazite/ Xenotime %
Measured	360.2	0.12	3.96	7.23	71.64	2.33	5.58	1.84
Indicated	171.2	0.15	3.90	5.94	72.3	2.33	5.6	1.85

Mineral Resource Estimate1 100 % Basis

1 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2012 Edition, sets out minimum standards, recommendations and guidelines for public reporting in Australasia of Exploration Results, Mineral Resources and Ore Reserves, authored by the Joint Ore Reserves Committee of The Australian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and the Minerals Council of Australia.