Titanium Resources Group

Preliminary Results

March 23, 2010: Titanium Resources Group (“TRG” or “the Company”) announces
preliminary results for the year ended 31 December, 2009.

Highlights

Sales of US$36.8 million in the year (2008: US$39.4 million1).

EBITDA pre exceptional items of US$6.0 million (2008: loss US$22.6 million).

Cash costs reduced by 56% in the year to US$28.7 million (2008: $64.7 million).

US$2 million cash generated from operating activities (2008: cash consumed $25
million).

Construction of Dredge D3 progressing on budget and expected to be

commissioned in Q1 2011.

Versi Dredge successfully commissioned and now fully operational.

All 2010 rutile production sold with an average 5% price increase achieved over
2009 contracted prices for standard grade rutile.

Titanium feedstock market fundamentals suggest pricing will improve significantly

in 2011.
Commenting on the results, TRG Chief Executive John Sisay said:

“Following a busy year, TRG has made significant progress on a number of fronts in
2009 and is now in a strong position to grow and deliver value to shareholders. The
successful capital raise, significant reductions in operating costs, achievement of
operating profitability, a positive EBITDA before exceptionals and a robust operating
performance should provide the basis for a sustainable improvement in the Company’s
performance. Furthermore, titanium feedstock market fundamentals suggest pricing will
further improve significantly in 2011, at the same time as the Company’s sales contracts
expire.

1
Excluding US$10 million of Bauxite sales in 2008. Total sales for 2008 were US$49.4 million

1
“In November 2009 we successfully raised US$25 million from new and existing
shareholders to expand production at the Sierra Rutile mine, through the completion of
the construction of Dredge D3, the upgrading of Dredge D1’s Wet Plant and upgrades
at the Company’s Land Plant. These projects are expected to be fully commissioned
within the next 12 months and Dredge D3 is expected to add rutile production of 30,000
tonnes in its first full year of operation.

“The positive outlook for titanium markets and TRG’s ability to significantly increase
production means we are well positioned to benefit from future price increases. Our key
focus for 2010, therefore, is on ensuring that Dredge D3 and our other growth projects
are delivered successfully.”

For further information

Titanium Resources Group

John Sisay, Chief Executive
Walter Kansteiner, Non-executive Chairman
Telephone: +44 (0) 207 321 0000

Arbuthnot Securities
Nominated Adviser & Broker
John Prior/Ed Burbidge
Telephone: +44 (0) 20 7012 2000

Aura Financial
Michael Oke / Andy Mills
Telephone: +44 (0) 207 321 0000

Chief Executive’s Review

Following a busy year, TRG has made significant progress on a number of fronts in
2009 and is now in a strong position to grow and deliver value to shareholders. The
successful capital raise, significant reductions in operating costs, achievement of
operating profitability, a positive EBITDA before exceptionals and a robust operating
performance should provide the basis for a sustainable improvement in the Company’s
performance. Furthermore, titanium feedstock market fundamentals suggest pricing will
further improve significantly in 2011, at the same time as the Company’s sales contracts
expire.

The fall in the Company’s sales in 2009 compares to the previous year during which
significant contributions were recorded from the Sierra Minerals Bauxite mine (“SML”)
as well as additional rutile production from Dredge D2. Stripping out SML’s contribution
sales fell by just 6% in the year, a very creditable result.

2
Following the lifting of the Company’s suspension from trading on AIM in January 2009,
the Company implemented a wide reaching cost cutting and efficiency optimisation
programme which resulted in a reduction in costs of sales for the year of 56%. These
significant cost savings helped the Company achieve EBITDA before exceptionals for
the year of US$6.0 million compared to a loss of US$22.7 million during the previous
year.

In November 2009 we successfully raised US$25 million from new and existing
shareholders to expand production at the Sierra Rutile mine, through the completion of
the construction of Dredge D3, the upgrading of Dredge D1’s Wet Plant and upgrades
at the Company’s Land Plant. These projects are expected to be fully commissioned
within the next 12 months and Dredge D3 is expected to add rutile production of 30,000
tonnes in its first full year of operation.

The Company successfully reached a Settlement Agreement for US$3.5 million in April
2009 with the second largest of its reinsurers, in relation to the Company's Dredge D2
insurance claims. The Company expects to have concluded court appointed mediation
with the rest of its reinsurers by the end of March 2010. Should a settlement not be
reached at mediation, a four week trial has been set down to commence on 28 June
2010. Whilst there can be no certainty about the conclusion of our legal action, we
believe we are in a strong position based upon the legal and technical merits of our
claim.

Rutile production for the year was broadly in line with the Company’s estimates with
achieved rutile production of 21,514, tonnes in Q4 2009, a 96.8% increase from the
levels of Q3. The increased production levels in Q4 2009 were a result of operational
improvements on Dredge D1 combined with its mining of the higher grade Lanti South
deposit.

In addition to my appointment as CEO and the appointment of Lindberg Charles as

CFO, the Company has seen a number of changes to its Board and management team.
François Colette has been appointed as a Non-Executive Director, and Raju Jaddoo
has become a Non-Executive Director following his resignation as Chief Financial
Officer. Further to these Board changes, the Company has also made a number of
senior operational appointments.

These include the appointment of Mark Button as Chief Operating Officer, bringing with
him a wealth of operational experience that will be of significant value to the Company
and the promotion of Sahr Wonday to General Manager of SRL’s operations following
more than 30 years working across the different plants, latterly as Deputy General
Manager.

After the end of the period Neil Gawthorpe was appointed Marketing Director having
worked as TRGs Sales & Marketing Manager since January 2008.

3
TRG supports the Government of Sierra Leone’s 2007 manifesto pledge to ensure that
Sierra Leone’s mineral wealth is developed sustainably and to the benefit of the Sierra
Leonean people. The Company has a strong working relationship with the Government
and continues to work with the Ministry for Mineral Resources review team to ensure
that our mutually beneficial relationship continues.

Production

Rutile Production Ilmenite Production

2009
(tonnes) (tonnes)
Quarter 1 18,000 5,028
Quarter 2 13,418 3,630
Quarter 3 10,932 2,575
Quarter 4 21,514 3,928
Total 63,864 15,161

During 2009 the Company produced 63,864 tonnes of rutile, broadly in line with the
Company’s targeted production for the year of 65,000 tonnes. The Company saw a
significant increase in production during the final quarter of 2009 as a result of improved
dredge availability and increased digging rates combined with Dredge D1 mining higher
grade areas of the Lanti South deposit. Production in Q1 has been in line with
expectations and the Company anticipates that production levels will increase as the
year progresses. As a result, TRG is targeting rutile production of 90,000 tonnes in
2010, in addition the Company expects to produce a modest amount of ilmenite and
zircon concentrate in the year

A build up of slimes in the Lanti South pond where Dredge D1 is mining resulted in a
number of mechanical breakdowns to pumps and reduced recoveries in the wet plant,
with a knock on effect on dredge availability notably in Q3. As a result the Company
purchased a new IMS Versi-Dredge (“the Versi-Dredge”) for US$1.1 million, which has
been financed from the cash flows generated from operations.

The Versi-Dredge, which was delivered to site in February, has been commissioned and
is now fully operational. The Company expects that it will take approximately 6 months
to remove the slimes in the Lanti South pond. This should not only assist the Company
in meeting its production targets for 2010, but also ensure the full mine life of the Lanti
South Pond is preserved.

Once the slimes have been removed, the Company intends to use the Versi-Dredge to
increase production by mining deposits such as those in the Mogbwemo tailings area,
which contains a mineral resource of approximately 18 million tonnes of ore at an
average rutile grade of 0.94%. In anticipation of the Versi-Dredge mining these tailings
later in the year, the Company is currently evaluating plans to construct a small wet
plant for the dredge.

4
Dredge D3

The Board approved fund raising for the construction of Dredge D3 last year and,
following the placing conducted in November, development work began in December
2009 following the appointment of CEMMATS as pre-project managers. The project,
which is expected to add 30,000 tonnes per annum to rutile production in its first full
year of operation, is progressing on budget and is expected to be commissioned in Q1
2011.

Following a review of the dredge design, the Company has decided to construct Dredge
D3 with a separate floating wet plant rather than with an integral plant as previously
planned. Whilst this has caused a short delay to the project it will result in improved
recoveries from the wet plant once the dredge is in operation.

We expect to award contracts for the mechanical and electrical contractors in the
coming weeks and to have completed orders for all long lead items by April.

D1 Wet Plant and Land Plant upgrades

The upgrade of spirals on the Dredge D1 Wet Plant is progressing ahead of schedule.
Proposals from three independent suppliers have been received and are currently being
reviewed with the tender expected to be awarded later this month. It is currently
anticipated that the new spirals will be commissioned in Q3 2010.

Work to complete the upgrade of the Land Plant is continuing and the Company is
confident the work will be completed in the second half of the year as anticipated.

Exploration

The Company commissioned its new EVH 2100 aircore rig during late 2009 and has
conducted reconnaissance mapping and sampling in Sierra Rutile owned concessions
which have identified well mineralised zones suitable for further investigation. These
represent promising extensions to the existing mineral resource and dredgeable
operations, with exploration drilling planned over these targets. The drilling will be
orientated towards: improving the mineral resource confidence in the Gbeni and
Ndendemoia areas; confirming promising extensions to known mineral resources; and
identifying potential new mineral resource areas.

Financials

Cash Position

The Company had a cash balance of US$25.9 million as at 31 December 2009. The
US$25 million gross proceeds raised during 2009 were largely undrawn as at the
Balance Sheet date as the planning phase of the projects which started before year end
does not require a substantial amount of cash.

5
Turnover and Loss Before Tax

Rutile and ilmenite sales from Sierra Rutile in 2009 of US$36.8 million were robust
compared with US$39.4 million in 2008 given the reduction in production capacity. The
total sales of US$36.8 million in the year, represents a decline of 25% from 2008 as a
result of the disposal of the Sierra Minerals bauxite mine in the second half of 2008 and
reduced production from Sierra Rutile, resulting in a loss before taxation of US$7.5
million (2008: US$40.4 million).

Cost Reduction

We have successfully completed significant cost cutting measures in the year and the
completion of the heavy fuel oil power plant increased fuel savings by over 50%. Fuel
costs have fallen in line with market prices, lower cost of fuel oil as compared to diesel
and increased efficiency.

Cash costs have also been significantly reduced through improvements to procurement
processes, reduced use of consumables, salary cuts, a reduction in headcount and a
fall in the use of contracted services.

In the year these measures produced a combined US$36 million reduction in cash
costs, a fall of 56%. The Company anticipates that in the future, costs will rise in line
with increased production levels and inflation, however they are expected to remain
significantly below 2008 levels.

Exceptional items

The Company recorded a one off US$6.4 million exceptional gain following the writing
back of previous provisions relating to share options which were put in place at the IPO.
The options, which are priced at 47p, expire on 15 August 2010.

Other exceptional costs relate mainly to costs associated with the private placement to
raise US$25 million (gross) completed during November 2009.

The Company recorded an overall exceptional gain of US$3.7 million in 2009.

Finance Costs

The increase in finance costs to US$7.5 million was as a result of a US$3.7 million
interest charge on the €35 million loan from the EU, the remaining costs of US$3.8
million occurred following adverse currency movements.

6
Marketing

The Company fully sold all of its production in 2009 and has already sold all of its
production for 2010 under contract, achieving an average price increase of 5% for
standard grade rutile compared to 2009 contracted prices.

There has been strong demand for higher margin industrial grade rutile from Asian
markets, and this has resulted in a number of positive developments. Sales of industrial
grade rutile into the Japanese market for 2010 have doubled, whilst the Company
successfully entered the Chinese market for the first time through a contract for bulk
rutile. There is potential for further sales to this expanding company and negotiations
on future supply contracts are underway.

Industrial grade typically sets a premium of US$100 per tonne to standard grade rutile
at little extra cost to the Company and therefore increased sales into this market is an
important step for the Company.

Longer term demand for the Company’s industrial grade rutile outside of China is likely
to be supported by the increasing trend towards the use of flux cored wire technology as
opposed to welding rods.

Although the markets for titanium feedstocks were in oversupply during 2009, much of
this surplus was of sulphate grade ilmenite. In contrast, the market for high TiO2
chloride feedstock remains tight and we expect this to continue due to long-term supply
fundamentals.

A number of other producers have shut or mothballed capacity and there is a lack of
new projects coming on stream to replace older mines which are approaching the end
of their lives. As a result, supply side deficits in the titanium feedstock markets are
unavoidable in the medium term. This tightening of supply is likely to be most acute in
the high grade feedstock markets in which TRG operates.

The long term drivers for increased rutile consumption in the pigment industry remain
intact as stringent environmental regulations imposed on pigment producers make
higher purity feedstocks more attractive as they require less energy and produce less
waste.

Additionally, the Company will shortly commence bulk shipment of zircon concentrate,
providing a new revenue stream from a high value material used in the ceramics
industry. Demand for the zircon concentrate is very high and contract negotiations are
well advanced for further shipments during the year.

Outlook

The positive outlook for titanium markets and TRG’s ability to significantly increase
production means we are well positioned to benefit from future price increases. Our key

7
focus for 2010, therefore, is on ensuring that Dredge D3 and our other growth projects
are delivered successfully.

Despite this focus on growth, I am convinced that the operational improvements

achieved in 2009 can be continued in the year ahead. The improved production
performance shown in the second half of last year has continued into 2010 and the
steps we took to reduce expenditure and improve efficiency have resulted in sustainable
cost reductions.

Sierra Leone remains a challenging place to operate, however, I am convinced that the
Company is well positioned to deliver a sustained improvement in operating
performance and profitability.

8
CONSOLIDATED STATEMENT OF FINANCIAL POSITION - DECEMBER 31, 2009

Note 2009 2008

ASSETS USD'000 USD'000
Non-current assets
Property, plant and equipment 1 123,933 125,503
Intangible assets 2 13,243 13,311
Non-current receivables 753 753
137,929 139,567

Current assets
Inventories 16,088 14,482
Trade and other receivables 16,806 23,258
Current tax assets - 70
Cash in hand and bank balance 25,902 7,362
58,796 45,172
Total assets 196,725 184,739

EQUITY AND LIABILITIES

Capital and reserves
Share capital 4 251,963 238,026
Revenue deficit (130,995) (123,128)
Owners' interest 120,968 114,898

LIABILITIES
Non-current liabilities
Borrowings 5 51,638 45,073
Provision for liabilities and charges 3,261 3,261
54,899 48,334

Current liabilities
Trade and other payables 20,673 21,499
Current tax liabilities 175 -
Borrowings 5 10 8
20,858 21,507
Total liabilities 75,757 69,841
Total equity and liabilities 196,725 184,739

9
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR
ENDED DECEMBER 31, 2009

Note 2009 2008

USD'000 USD'000
Sales 36,849 49,417
Cost of sales 6 (38,443) (72,315)
Gross loss (1,594) (22,898)
Other income 2,187 518
Administrative and marketing expenses (4,342) (7,932)
(3,749) (30,312)
Exceptional item 7 3,698 (7,707)
Finance costs 8 (7,514) (2,338)
Loss before taxation (7,565) (40,357)
Taxation (302) (86,925)
Loss for the year (7,867) (127,282)
Other comprehensive income - -
Total comprehensive income for the year (7,867) (127,282)
Loss attributable to:
Owners of the parent (7,867) (127,282)
Minority interest - -
(7,867) (127,282)
Total comprehensive income attributable to:
Owners of the parent (7,867) (127,282)
Minority interest - -
(7,867) (127,282)
Loss per share (USD)
- basic (0.03) (0.52)
- diluted (0.03) (0.52)

10
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED
DECEMBER 31, 2009

Share Revenue
capital deficit Total
USD'000 USD'000 USD'000

Balance at January 1, 2009 238,026 (123,128) 114,898

Total comprehensive income for the
year - (7,867) (7,867)

Adjustment for employee share options (11,282) - (11,282)

Issue of share capital 25,219 - 25,219

Balance at December 31, 2009 251,963 (130,995) 120,968

Balance at January 1, 2008 237,041 4,154 241,195

Employee share options:

- Options vested 985 - 985

Loss for the year - (127,282) (127,282)

Balance at December 31, 2008 238,026 (123,128) 114,898

11
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED
DECEMBER 31, 2009

2009 2008
USD'000 USD'000
Operating activities

Cash generated from/(absorbed in) operations 2,000 (23,986)

Interest received 16 436

Interest paid (12) (1,241)

Tax paid (57) (351)

Net cash from/(used in) operating activities 1,947 (25,142)

Investing activities

Purchase of property, plant and equipment (8,658) (32,803)

Purchase of intangible assets - (210)

Proceeds from disposal of plants 30 99

Proceeds from disposal of subsidiaries - 28,676

Net cash used in investing activities (8,628) (4,238)

Financing activities
Proceeds from repayment of loan - 11,147
Proceeds from issue of shares 25,219 -
Net cash from financing activities 25,219 11,147

Net increase/(decrease) in cash and cash

equivalents 18,538 (18,233)

Movement in cash and cash equivalents

At January 1, 7,354 25,587

Increase/(Decrease) 18,538 (18,233)

At December 31, 25,892 7,354

12
TITANIUM RESOURCES GROUP LTD AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2009

1. PROPERTY, PLANT AND EQUIPMENT

Plant, Mineral sand
machinery prospect and Capital
and Mine work in
Infrastructure equipment development progress Dredge 2 Exploration Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
(a) COST
At January 1, 2009 17,672 146,520 51,017 51,785 10,521 2,054 279,569
Addition - 3,011 2,781 2,461 - 404 8,657
Transfer - 32,075 12,553 (44,628) - - -
Impairment charge - - (120) - (395) - (515)
Disposal - (38) - - - - (38)
At December 31, 2009 17,672 181,568 66,231 9,618 10,126 2,458 287,673

DEPRECIATION
At January 1, 2009 14,341 110,231 29,326 168 - - 154,066
Charge for the year 518 5,241 3,915 - - - 9,674
Transfer - - 168 (168) - - -
At December 31, 2009 14,859 115,472 33,409 - - - 163,740

NET BOOK VALUES

At December 31, 2009 2,813 66,096 32,822 9,618 10,126 2,458 123,933

Exceptional (gain)/loss
TITANIUM RESOURCES GROUP LTD AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2009

1. PROPERTY, PLANT AND EQUIPMENT (CONT'D)

Plant, Mineral sand
machinery prospect and Capital
and Mine work in
Infrastructure equipment development progress Dredge 2 Exploration Total
USD'000 USD'000 USD'000 USD'000 USD'000 USD'000 USD'000
(b) COST
At January 1, 2008 20,341 144,433 48,061 52,892 25,871 1,075 292,673
Addition 740 9,670 3,059 15,368 2,475 1,491 32,803
Transfer - - - (16,475) 16,475 - -
Impairment charge - - - - (34,300) - (34,300)
Disposal of subsidiaries (3,409) (6,707) (103) - - (512) (10,731)
Disposal - (876) - - - - (876)
At December 31, 2008 17,672 146,520 51,017 51,785 10,521 2,054 279,569

DEPRECIATION
At January 1, 2008 14,785 108,348 27,024 168 - - 150,325
Charge for the year 419 4,874 2,315 - - - 7,608
Disposal of subsidiaries (863) (2,132) (13) - - - (3,008)
Disposal adjustment - (859) - - - - (859)
At December 31, 2008 14,341 110,231 29,326 168 - - 154,066

NET BOOK VALUES

Exceptional (gain)/loss 3,331 36,289 21,691 51,617 10,521 2,054 125,503

(c) Depreciation has not been charged on Construction in Progress where the assets are presently not in the condition necessary to operate in the
manner intended by management.

(d) Depreciation charge of USD 9,674,000 (2008: USD 7,608,000) has been charged in cost of sales.

(e) Dredge D2 capsized when mining in the Gangama mine during the year 2008. This resulted in the dredge being damaged. Management has
assessed its cost for impairment and consequently recognised an additional impairment loss of USD 395,000 (2008: USD 34.3 million) with
respect to the dredge.
TITANIUM RESOURCES GROUP LTD AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2009

2. INTANGIBLE ASSETS Computer

software
Goodwill costs Total
USD'000 USD'000 USD'000
(a) COST
At January 1, 2009 12,876 570 13,446
Addition during the year - - -
At December 31, 2009 12,876 570 13,446

AMORTISATION
At January 1, 2009 - 135 135
Charge for the year - 68 68
At December 31, 2009 - 203 203

NET BOOK VALUE

At December 31, 2009 12,876 367 13,243

(b) COST
At January 1, 2008 12,876 360 13,236
Addition during the year - 210 210
Exceptional (gain)/loss 12,876 570 13,446

AMORTISATION
At January 1, 2008 - 86 86
Charge for the year - 49 49
At December 31, 2008 - 135 135

NET BOOK VALUE

At December 31, 2008 12,876 435 13,311

(c) Amortisation charge of USD 68,000 (2008: USD 49,000) has been charged in cost of sales.

(d) Impairment tests for goodwill: goodwill is allocated to the Group's cash-generating units identified
according to country of operation and business activity.
TITANIUM RESOURCES GROUP LTD AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2009

3. INVESTMENTS IN SUBSIDIARY COMPANIES

(a) The list of the Company's significant subsidiaries is as follows:

Class of Proportion of Proportion of
shares ownership interest voting power held Country of Main
Name held Year end Direct Indirect Direct Indirect incorporation business

2009

Titanium Fields Resources Ltd Ordinary December 31, 2009 100% - 100% - British Virgin Islands Intermediate holding company
SRL Acquisition No.1 Limited 1 'A' share December 31, 2009 - 100% - 100% British Virgin Islands Intermediate holding company
SRL Acquisition No.3 Limited Ordinary December 31, 2009 - 100% - 100% British Virgin Islands Intermediate holding company
The Natural Rutile Company Limited
Ordinary December 31, 2009 - 100% - 100% British Virgin Islands Marketing of Rutile
Sierra Rutile Holdings Limited Ordinary December 31, 2009 - 96.12% - 96.12% British Virgin Islands Intermediate holding company
Sierra Rutile Limited Ordinary December 31, 2009 - 96.12% - 96.12% Sierra Leone Extraction, concentration and sale
of Rutile and Ilmenite sands.
Agricultural Resources Group Ltd Ordinary December 31, 2009 100% - 100% - British Virgin Islands Agricultural projects
Biofuel Resources Group Ltd Ordinary December 31, 2009 100% - 100% - British Virgin Islands Biofuel projects

2008
Exceptional (gain)/loss
Titanium Fields Resources Ltd Ordinary December 31, 2008 100% - 100% - British Virgin Islands Intermediate holding company
SRL Acquisition No.1 Limited 1 'A' share December 31, 2008 - 100% - 100% British Virgin Islands Intermediate holding company
SRL Acquisition No.3 Limited Ordinary December 31, 2008 - 100% - 100% British Virgin Islands Intermediate holding company
The Natural Rutile Company Limited
Ordinary December 31, 2008 - 100% - 100% British Virgin Islands Marketing of Rutile
Sierra Rutile Holdings Limited Ordinary December 31, 2008 - 97.54% - 97.54% British Virgin Islands Intermediate holding company
Sierra Rutile Limited Ordinary December 31, 2008 - 97.54% - 97.54% Sierra Leone Extraction, concentration and sale
of Rutile and Ilmenite sands.
Agricultural Resources Group Ltd Ordinary December 31, 2008 100% - 100% - British Virgin Islands Agricultural projects
Biofuel Resources Group Ltd Ordinary December 31, 2008 100% - 100% - British Virgin Islands Biofuel projects

(b) With the exception of Sierra Rutile Limited, all the subsidiaries are incorporated in the British Virgin Islands (BVI) where there is no legal requirement for the preparation and filing of
accounts. Titanium Resources Group Ltd is quoted on the AIM market of the London Stock Exchange which requires the publication of annual audited financial statements.

(c) During the year ended December 31, 2009, further shares equivalent to 1.416% of the issued share capital of SRHL were transferred to the Government of Sierra Leone (GOSL) with regards to PAYE
not remitted to GoSL by SRL in accordance with SRL Act and amendment to the Act.

(d) On July 25, 2008, the following subsidiaries, which were involved in the extraction and marketing of bauxite, were disposed: Global Aluminium Limited,
Bauxite Marketing Ltd and Sierra Mineral Holdings 1 Limited.
TITANIUM RESOURCES GROUP LTD AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2009

4. SHARE CAPITAL Number of Ordinary

shares shares
(a) Issued shares and options USD'000
At January 1, 2008 245,342,848 237,041
Employee share option scheme:
- Options vested 733,333 985
At December 31, 2008 246,076,181 238,026
Proceeds from new issues (See note (ii) below) 151,200,000 25,219
Employee share option scheme:
- Options vested 483,333 596
Adjustment for share options (11,895,439) (11,878)
At December 31, 2009 385,864,075 251,963

(i) The total authorised number of ordinary shares is 500,000,000 shares (2008: 500,000,000 shares) with no par value.
All issued shares are fully paid and are admitted on the AIM market of the London Stock Exchange.

(ii) At the end of November 2009, TRG made a new placement of 151,200,000 common shares. The placing with
institutional investors at a price of 10p per share raised £15,120,000 (USD 25.219 million) before expenses.

(iii) Reconciliation of number of shares Number of Ordinary

Exceptional (gain)/loss shares shares
USD'000

Issued shares 385,864,075 251,963

Options vested but not yet exercised 11,895,439 11,832
Adjustment for share options (11,895,439) (11,832)
385,864,075 251,963

(b) Share options - Employees

Share options were granted to directors and to selected employees. The exercise price of the granted option was
determined by the Board before such grant. According to section 2.3 of the ''Rules of TRG Unapproved Share
Option Scheme'', the price should not be less than the highest of the :
o Nominal value of the shares;
o Average of the middle market quotations of the shares as derived from the Official list for the 30
dealing days immediately preceding the Grant date; and
o Middle market quotation of the shares as derived from the Official list on the Grant date.

Exercise of the option was not subject to performance-related conditions. The options granted had exercise
prices ranging from 47p to 78p each varying on the date of grant.
One third of the option granted vested immediately, one third vested on the first anniversary of the date of grant,
and the remaining third vested on the second anniversary of the date of grant.
In November 2007, certain directors and employees exercised their options. Accordingly, the company
allotted 332,991 shares which were admitted on AIM market for trading.
For the year ended December 31, 2009, 483,333 options (2008: 733,333 options) vested. At year ended December 31,
2009, the provision for the remaining 11,011,963 options were written back because management did not expect them
to be exercised before the expiry date as the exercise prices were by far higher than the market price.
(c) Share options - Professional services
In 2005, in consideration of services given to the company by NabarroWells & Co Ltd, (NWCF LLP), the
company also granted to NWCF LLP an option to subscribe for 936,007 common shares of no par value at a
subscription price of 47p each. In 2007, NWCF LLP exercised its option and subscribed for 52,531 shares
at 47p per share. The company issued these shares which were admitted on AIM market for trading. The
provision for the remaining 883,476 options were written back.
TITANIUM RESOURCES GROUP LTD AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2009

5. BORROWINGS 2009 2008

USD 000 USD 000
Non-current: Government of Sierra Leone (GOSL) 51,638 45,073
Current: Bank overdraft 10 8

51,648 45,081
Analysis of non-current borrowing - GOSL

Balance at January 1, 45,073 44,119

Repayment of interest - (549)
Interests accrued on the loan 3,664 3,647
Exchange difference on revaluation 2,901 (2,144)

Balance at December 31, 51,638 45,073

Due within 12 months - -
Due after one year and before five years 36,146 22,537
Due after five years 15,491 22,537

Exceptional (gain)/loss 51,638 45,073

The GOSL borrowing is subject to interest of 8% per annum and is repayable on June 15 and
December 15 in each year commencing on the first payment date which is the earlier of 84 months after date
of first disbursement or June 15, 2012. The interest is calculated on the basis of a 360 day year consisting
of twelve months of thirty days.

The Group does not have any undertaking, nor is it contractually bound to create, any lien on or with respect
to any of its rights or revenues.

The interest is classified as non current as according to section 3.03 of the Loan Agreement between Sierra
Rutile Limited and the Government of Sierra Leone, the first interest payment shall not be made by the company
until the earliest of the interest payment date occurring thirty – six months after the date of first disbursement,
or June 15, 2008. All interest accruing on the principal balance outstanding from time to time on the loan until
the first interest payment is due shall be added to the principal balance of the loan and shall accrue interest on
the same terms. However, during the year ended December 31, 2008, the Government of Sierra Leone granted
the company a moratorium of further two years. As a result, payments of interest have been deferred to June 2010.
TITANIUM RESOURCES GROUP LTD AND ITS SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEAR ENDED DECEMBER 31, 2009

6. COST OF SALES 2009 2008

USD'000 USD'000
Depreciation 9,674 7,608
Amortisation 68 49
Changes in inventories of finished goods and work in progress (2,036) (6,814)
Mining, processing and direct services costs 24,245 60,866
Rehabilitation, leases & other operating overheads 6,492 10,606
Total cost of sales 38,443 72,315

7. EXCEPTIONAL ITEM 2009 2008

USD'000 USD'000

Claims - 300
Gain on disposal of subsidiaries - (28,204)
Professional and other costs associated with disposal of subsidiaries 760 1,311
Impairment of property, plant and equipment 515 34,300
Placement cost 1,715 -
Adjustment for employee share options (6,397) -
Proceeds from insurance claim (3,500) -
Costs associated with insurance claim 3,209 -
Exceptional (gain)/loss (3,698) 7,707

8. FINANCE COSTS 2009 2008

USD'000 USD'000
Interest expense:
- Government of Sierra Leone loan 3,664 3,647
- Others 12 692
Total borrowing costs 3,676 4,339
Net foreign exchange transaction losses/(gains) 3,838 (2,001)
7,514 2,338