WHITE MOUNTAIN TITANIUM CORP - FORM 10-K

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EX-31.2 - EXHIBIT 31.2 - WHITE MOUNTAIN TITANIUM CORP	exhibit31-2.htm
EX-32.2 - EXHIBIT 32.2 - WHITE MOUNTAIN TITANIUM CORP	exhibit32-2.htm
EX-23.1 - EXHIBIT 23.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit23-1.htm
EX-31.1 - EXHIBIT 31.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit31-1.htm
EX-32.1 - EXHIBIT 32.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit32-1.htm
EXCEL - IDEA: XBRL DOCUMENT - WHITE MOUNTAIN TITANIUM CORP	Financial_Report.xls
EX-21.1 - EXHIBIT 21.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit21-1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 333-129347

WHITE MOUNTAIN TITANIUM CORPORATION
(Exact name of Registrant as specified in its charter)

NEVADA	87-0577390
State or other jurisdiction of incorporation or	I.R.S. Employer Identification No.
organization

Augusto Leguia 100, Oficina 1401, Las Condes,	None
Santiago Chile
(Address of principal executive offices)	(Zip Code)

Issuer’s telephone number, including area code: (56) 22 657-1800

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes [ ] No [X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
(1) Yes [X] No[ ] (2) Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files
Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated Filer [ ]	Accelerated Filer [ ]
Non-Accelerated Filer [ ]	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes [ ] No [X]

As of June 30, 2014, the aggregate market value of the registrant’s common equity held by non-affiliates was approximately $10,522,424 computed by reference to the average bid and asked price of the Common Stock. For the purpose of the foregoing calculation only, all directors and executive officers of the registrant are assumed to be affiliates of the registrant. Such determination should not be deemed an admission that such officers and directors are, in fact, affiliates of the registrant.

At March 27, 2015, there were 86,880,392 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

PART I

ITEM 1.	BUSINESS	4

ITEM 1A.	RISK FACTORS	13

ITEM 1B.	UNRESOLVED STAFF COMMENTS	19

ITEM 2.	PROPERTIES	19

ITEM 3.	LEGAL PROCEEDINGS	28

ITEM 4.	MINE SAFETY DISCLOSURES	28

PART II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	28

ITEM 6.	SELECTED FINANCIAL DATA	32

ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	35

ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	35

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	35

ITEM 9A.	CONTROLS AND PROCEDURES	35

ITEM 9B.	OTHER INFORMATION	36

PART III

ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	36

ITEM 11.	EXECUTIVE COMPENSATION	40

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	47

ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	49

ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	51

PART IV

ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES	52

Throughout this report, unless otherwise designated, the terms “we,” “us,” “our,” “the Company” and “our company” refer to White Mountain Titanium Corporation, a Nevada corporation, and its consolidated subsidiaries. All amounts in this report are in U.S. Dollars, unless otherwise indicated.

Forward Looking Statements

The statements contained in this report that are not historical facts are forward-looking statements that represent management’s beliefs and assumptions based on currently available information. Forward-looking statements include the information concerning our possible or assumed future results of operations, business strategies, need for financing, competitive position, potential growth opportunities, potential operating performance improvements, ability to retain and recruit personnel, the effects of competition and the effects of future legislation or regulations. Forward-looking statements include all statements that are not historical facts and can be identified by the use of forward-looking terminology such as the words “believes,” “intends,” “may,” “should,” “anticipates,” “expects,” “could,” “plans,” or comparable terminology or by discussions of strategy or trends. Although we believe that the expectations reflected in such forward-looking statements are reasonable, we cannot give any assurances that these expectations will prove to be correct. Such statements by their nature involve risks and uncertainties that could significantly affect expected results, and actual future results could differ materially from those described in such forward-looking statements.

Among the factors that could cause actual future results to differ materially are the risks and uncertainties discussed in this report. While it is not possible to identify all factors, we continue to face many risks and uncertainties including, but not limited to, the cyclicality of the titanium dioxide industry, global economic and political conditions, global productive capacity, customer inventory levels, changes in product pricing, changes in product costing, changes in foreign currency exchange rates, changes in government regimes, policies and regulations, competitive technology positions and operating interruptions (including, but not limited to, labor disputes, leaks, fires, explosions, unscheduled downtime, transportation interruptions, war and terrorist activities). Mining operations are subject to a variety of existing laws and regulations relating to exploration and development, permitting procedures, safety precautions, property reclamation, employee health and safety, air and water quality standards, pollution and other environmental protection controls, all of which are subject to change and are becoming more stringent and costly to comply with. Should one or more of these risks materialize (or the consequences of such a development worsen), or should the underlying assumptions prove incorrect, actual results could differ materially from those expected. We disclaim any intention or obligation to update publicly or revise such statements whether as a result of new information, future events or otherwise.

There may also be other risks and uncertainties that we are unable to predict at this time or that we do not now expect to have a material adverse impact on our business.

PART I

ITEM 1. BUSINESS

Overview

We are a mineral exploration company engaged in the search for mineral deposits or reserves which could be economically and legally extracted or recovered. We hold mining concessions covering two rutile properties located in the Atacama region (Region III) of northern Chile, namely Cerro Blanco and the La Martina.

We were incorporated in the State of Nevada on April 24, 1998. We have six wholly owned subsidiaries: SCM White Mountain Titanium, a Chilean stock company which holds our Chilean mining concessions for our Cerro Blanco project and conducts our principal exploration operations on that property; White Mountain Metals SpA, a Chilean stock company which holds the sublicense for the Chinuka process; White Mountain Titanium Corporation, a Canadian stock company which provides management and administrative services on behalf of the U.S. parent; White Mountain Minerals SpA, which holds our Chilean mining concessions for our La Martina project and conducts our principal exploration operations on that property; White Mountain Energy Ltda., an inactive Chilean company; and White Mountain Titanium (Hong Kong), a Hong Kong corporation; and Cerro Blanco Titanium Corporation Limited (Shenzhen), a Chinese corporation.

Our principal business is to explore for and develop natural rutile deposits on our mining concessions. Our principal objectives are to advance the Cerro Blanco project towards a final engineering feasibility, to secure off-take agreements for the planned rutile concentrate output, and to secure funding or other arrangements to place the project into production, if warranted. It would be the intention to sell the rutile concentrate to titanium metal and pigment producers. In addition, we continue to research into the recovery of feldspar and the production of refined titanium metal from materials sourced from these mining concessions. We also plan to expand our exploration activities on the La Martina concessions which we discovered in 2013.

Our common stock is currently traded in the over-the-counter market and is quoted on the OTCQB Markets. Upon meeting listing requirements, it is our intention to graduate to a more senior exchange in due course.

We have produced no revenues, have experienced losses since inception, have no revenue producing operations, and currently rely upon the sale of our securities to fund our exploration activities on our mining properties.

Cerro Blanco

We are progressing in various stages of development on our Cerro Blanco project, which is our principal project. We have identified nine natural rutile prospects designated as the Las Carolinas, La Cantera, Eli, Chascones, Hororio’s Creek, Hippo Ear, Quartz Creek, Algodon and Bono prospects. The last five of these have only recently been located. We presently hold 44 registered mining exploitation concessions and 36 exploration concessions over an area of approximately 17,041 hectares.

La Martina

La Martina consists of six registered exploration concessions, covering an area of 1,288 hectares, comparable in size to the area covering the current nine known prospects at Cerro Blanco. Alteration and mineralization at La Martina is similar to that observed on the Cerro Blanco property.

Off-Take Agreements

We currently have two definitive off-take agreements in place:

•

During 2011, we entered into our first off-take agreement with a major international pigment producer where that producer will purchase 25,000 tonnes per annum of our standard grade, natural rutile concentrate at US$1,200 per tonne FOB port. Although deliveries did not commence by September, 2014, the contract remains in place. The term of the agreement may be extended by mutual agreement.

•

On September 27, 2012, we entered into a second off-take agreement with a major international pigment producer for the supply of natural rutile concentrate from the Cerro Blanco project. Under the agreement, the pigment producer has agreed to purchase 10,000 tonnes per annum of our standard grade rutile concentrate at $1,250 per tonne FOB port. The three-year term, which commences upon the production of 5,000 tons of product from the Cerro Blanco project, may be extended by mutual agreement.

Titanium Industry and Market Overview

Overview

Titanium is the ninth most abundant element, making up about 0.6% of the earth’s crust. Titanium occurs primarily in the minerals anatase, brookite, ilmenite, leucoxene, perovskite, rutile, and sphene. Of these minerals, only rutile, ilmenite and leucoxene, an alternation product of ilmenite, have significant economic importance. Both rutile and ilmenite are chemically processed to produce both titanium dioxide pigment and titanium metal.

Approximately 95% of titanium is consumed in the form of titanium dioxide concentrate, primarily as a white pigment in paints, paper, and plastics. Titanium dioxide pigment is characterized by its purity, refractive index, particle size, and surface properties. The superiority of titanium dioxide as a white pigment is due mainly to its high refractive index and resulting light-scattering ability, which impart excellent hiding power and brightness.

Titanium metal is well known for its corrosion resistance, high strength-to-weight ratio, and high melting point. Accordingly, titanium metal is used in sectors, such as the aerospace and chemicals industries, where such considerations are extremely important.

Our business is currently focused on the mining concessions which constitute the Cerro Blanco property. These concessions host a hard rock rutile deposit as opposed to ilmenite laden mineral sands deposits held by most of our competitors. Rutile has a higher percentage of titanium oxide than mineral sands.

Industry Background

The bulk of the world’s titanium is used as the metal oxide, The chemically processed titanium ore, whether rutile or ilmenite based, is turned into pure titanium dioxide and used as a brilliant white pigment which imparts whiteness and opacity to paint, plastics, paper and other products. The use of titanium dioxide as a color carrier has grown over the last 40 years, since the use of white lead based paints was banned throughout the world for health reasons. Titanium dioxide is chemically inert, which gives it excellent color retention. It is thermally stable, with a melting point at 1,668ºC, which makes it suitable for use in paints and products that are designed to withstand high temperatures. About 5% of the world’s titanium is used as the metal, due to its exceptional properties. It has the highest strength to weight ratio of any metal; is as strong as steel but 45% lighter. The most noted chemical property of titanium is its excellent resistance to corrosion, capable of withstanding attack by acids, moist chlorine gas, and by common salt solutions.

The table below gives a summary of distribution and end uses on an industry by industry basis for titanium dioxide (also designed as “TiO₂”).

	U.S. Distribution of TiO₂pigment shipments by industry: 2012
	Industry	Percent
	Paint and Coatings	59.8%
	Plastics and Rubber	24.46%
	Paper	10.6%
	All Other*	5.0%

* Includes agricultural, building materials, ceramics, coated fabrics and textiles, cosmetics, food, paper and printing ink. Source: U.S. Geological Survey, 2012 Minerals Yearbook, “Titanium”, September2014.This and other U.S. Geological Survey publications referenced in this Titanium Industry and Market Overview can be found online at http://minerals.usgs.gov/minerals/pubs/

The table below gives a broad picture of principal uses for titanium dioxide.

Uses of Titanium Dioxide
*Industry*	*Use*
Paints & Pigments	Paints, coatings, lacquer, varnishes, to whiten and opacity polymer binder systems, to provide coating and hiding power, and to protect paints from UV radiation and yellowing of the color in sunlight.
Plastics	To ensure high whiteness and color intensity, and increase plastic impact strength in such items as window sections, garden furniture, household objects, plastic components for the automotive industry.
Paper	Additive to whiten and increase opacity of paper.
Cosmetics	Protection against UV radiation in high-factor sun creams; to give high brightness and opacity in toothpaste and soaps.
Food	High brightness and opacity in foods and food packaging.
Pharmaceuticals	High chemical purity titanium dioxide is used as a carrier and to ensure brightness and opacity.
Printing Inks	Protection against fading and color deterioration.
Other	Titanium dioxide is used in chemical catalysts, wood preservation, rubber, ceramics, glass, electroceramics, welding fluxes, and high temperature metallurgical processes.

The following table sets forth the estimated world reserves of titanium minerals based upon global resources of titanium minerals.

World Reserves of Ilmenite and Rutile (‘000 tons TiO₂)
Country	Ilmenite	Rutile
Australia	100,000	18,000
Canada	31,000	-
China	200,000	-
India	85,000	7,400
Norway	37,000	-
South Africa	63,000	8,300
Ukraine	5,900	2,500
U.S.	2,000	-
All Other	96,100	5,800

Source: U.S. Geological Survey, Mineral Commodity Summaries, “Titanium Mineral Concentrates”, January 2015

Titanium Pigment Production

Mining of titanium minerals is usually performed using surface methods like dredging and dry mining and gravity spirals. Ilmenite is often processed to produce a synthetic rutile.

The most widely used processes for the manufacture of titanium dioxide pigment are the sulphate and chloride processes. Commercially manufactured titanium dioxide pigment is available as either anatase-type or rutile-type, categorized according to its crystalline form, regardless of whether it is made from the mineral rutile. Anatase pigment is currently made by sulphate producers only, while rutile pigment is made by both the chloride and the sulphate processes. The decision to use one process instead of the other is based on numerous factors, including raw material availability, freight, and waste disposal costs.

Anatase and rutile pigments, while both are white, have different properties and thus have different end-uses. For example, rutile pigment is less reactive with the binders in paint when exposed to sunlight than is the anatase pigment and is preferred for use in outdoor paint. Anatase pigment has a bluer tone than rutile, is somewhat softer, and is used mainly in indoor paints and in paper manufacturing. Depending on the manner in which it is produced and subsequently finished, TiO₂pigment can exhibit a range of functional properties, including dispersion, durability, opacity, and tinting.

In the chloride process, rutile is converted to TiCl₄by chlorination in the presence of petroleum coke. TiCl4is oxidized with air or oxygen at about 900ºC, and the resulting TiO₂ is calcined to remove residual chlorine and any hydrochloric acid that may have formed in the reaction. Aluminum chloride is added to the TiCl₄to assure thatvirtually all the titanium is oxidized into the rutile crystal structure. The process is conceptually simple but poses a number of significant chemical engineering problems because of the highly corrosive nature of chlorine, chlorine oxides and titanium tetrachloride at temperatures of 900°C or higher.

In the sulphate process, ilmenite or titanium slag is reacted with sulfuric acid. Titanium hydroxide is then precipitated by hydrolysis, filtered and calcined. This is a process involving approximately 20 separate processing steps. As sulphate technology is predominantly a batch process, it is possible to operate one part of a sulphate process plant while another part is shut down for maintenance. To some extent, stocks of intermediate reaction products can be allowed to build up, awaiting further processing downstream at some later time. It is also possible that a sulphate process plant can be run at 60 - 80% capacity utilization fairly easily if necessary, simply by switching off one or more of its calciners.

Synthetic rutile is formed by removing the iron content from ilmenite, thereby concentrating the titanium dioxide content to at least 90%. In this way, ilmenites can be upgraded to chloride route feed stocks and used as a substitute for rutile.

Demand for Titanium Pigment

An assessment of historical data contained in the U.S. Geological Survey publication “Titanium Minerals Handbook, 1970 - 2007” shows that world demand for titanium dioxide pigments showed practically unbroken annual growth from 1.6 million tons in 1970 to 3.9 million tons in 2000. Demand declined to 3.7 million tons in 2001, rebounded to approximately 4.0 million tons in 2002 and steadily increased to approximately 4.9 million tons in 2007. Since 2007, demand for titanium pigment has continued to grow together with installed capacity. In their Mineral Commodity Summaries, “Titanium and Titanium Dioxide, January 2013” the U.S. Geological Survey estimate 2012 world titanium dioxide pigment capacity at 6.55 million tons, the same as the previous year.

Titanium Dioxide Prices

The U.S. Geological Survey Mineral Industry Surveys, “Titanium Mineral Concentrates”, January 2015, published prices for bulk rutile mineral concentrates, for Australia, were quoted at $1,250 in 2013 and $975 in 2014 per tonne. By comparison, published prices for ilmenite concentrates were $265 per tonne, $165 per tonne respectively for the same period. The current price for high grade rutile is approximately $1,000 per tonne, and for ilmenite approximately $160 per tonne.

Major Developments since December 31, 2013

Industry Perspective

The global paints and pigments industry faced continued challenges during 2014, with Western pigment producers facing high levels of cheaper finished products from Asia. According to market commentators, this led to destocking, which, according to industry observers, is now coming to an end.

Pigment producers are expecting steadier prices for 2015 and into next year. As the preferred TiO2 feedstock, firming prices for pigment should have positive implications for rutile and synthetic rutile. Management remains optimistic about the longer term prospects for TiO2feedstocks, in particular high grade rutile.

Cerro Blanco Project, Environmental Impact Statement, Desalination Plant and Final Engineering

Set against that backdrop of expectations for firmer prices for pigments and TiO2feedstocks and stubbornly difficult equity markets for junior exploration and development companies, we have continued to advance the Cerro Blanco project to final feasibility as quickly as funds have allowed.

Our two principal aims are to secure approval for the Environmental Impact Statement (the “EIS”), and to conclude detailed design engineering and a definitive, final engineering feasibility study.

Environmental Impact Statement

We have proceeded to complete the EIS, which was filed with the Chilean Environmental Authority, Servicio de Evaluación Ambiental (“SEA”) in February 2013. The SEA assessment, with its technical site visits and community public meetings having now been completed, has entered a phase where detailed written questions relating to the EIS are being directed to us for a written response.

Management believes the Cerro Blanco remains an important project within the region as it is one of only two mining projects currently in front of the environmental authorities in Region III of northern Chile. With many larger projects running into difficulties, or facing technical challenges, White Mountain management and technical personnel continue to work with the local communities and the environmental authorities to obtain full EIS approval for the project. In April 2014, the Company completed and filed a written response with SEA, Servicio de Evaluación Ambiental, to a first round of questions and comments posed during a public review of the Company’s EIS application. On July 1, 2014, SEA sent the Company a second round of questions and comments, 70% fewer than were raised in the first round. As importantly, by the second round almost half of the government ministries had no further questions or comments and, of those raised, most sought further clarification centered on three issues: water, disaster contingencies and resettlement and community issues.

Following official receipt of the second round of questions and comments, the Company was given 90 working days to prepare and file a written response with SEA. This work was completed and the report, filed in October 2014.

During November and December 2014, the Company received fewer than 100 comments and questions from the environmental authorities, and these questions have now been addressed, and submitted.

In addition, we have successfully concluded negotiations with six households that would be required to be re-located as part of any production planning. We have also successfully addressed all questions from the communities during the public meetings stage.

Desalination Plant

The Cerro Blanco project final feasibility will include a desalination plant to supply industrial quality process water to the mining and rutile processing plant. The desalination plant, based on conventional reverse osmosis technology, will be sited some five kilometers from the coast. Our technical personnel believe that the output of the desalination plant will exceed the industrial water requirements of the Cerro Blanco project itself. Discussions are underway with several companies in the region who have expressed a desire to purchase water from us. Should these discussions have a positive outcome, the desalination plant could be operated as a stand-alone facility, producing industrial water both for third party sale and the Cerro Blanco project within as little as 12 months of the EIS approval being granted. In effect, the desalination plant could become a separate profit center within the rutile recovery process

Final Engineering

Our own technical staff in Santiago has already completed the bulk of the final design engineering to a level that is acceptable for final feasibility requirements. A definitive, final engineering feasibility study will require the input of an independent third party engineering consultant to review and vouch the quality of our work and provide an independent sign-off.

The Chinuka Process

For the moment, no research funds are being advanced to Chinuka Limited plc. (“Chinuka”) by the Company. We have received an update on research activities from Chinuka. In its semi-annual report to us, Chinuka provided further evidence of the applicability and capability of the Chinuka Process to treat a range of Cerro Blanco natural rutile concentrates, ilmenite concentrate and combinations of natural rutile and ilmenite concentrates to produce titanium metal. Furthermore, Chinuka reported that it has produced niobium metal from a niobium oxide feedstock using the Chinuka Process. These results demonstrate that the Chinuka Process is not metal specific and holds forth the possibility to adapt the process to produce electro-refined metal from several transition elements which have the capability to form an oxy-carbide.

Since September 2013, Chinuka has been granted a full patent on its proprietary Chinuka Process in the U.K., China and Russia. Chinuka is awaiting further grants from international patent authorities to cover and protect the Chinuka Process in North America, Brazil, Chile, and India.

TZMI Scoping Study

In September 2014, the Company entered into a Consultancy Agreement with TZMI of Australia, an independent consultancy providing both market and technical advice to companies operating in the TiO2 and other industries. Their mandate, at a scoping level, was to review the proposed rutile mining and processing activities at Cerro Blanco, and based on their assessment and knowledge of other similar sized operations, to propose possible changes which could lower the future capital and operating costs at Cerro Blanco. The report, among other proposals, considered the greater use of spirals in the gravity pre-concentration stage and the subsequent reduction in size of the flotation area.

The Company has recently received the final report and is evaluating the findings. There appear to be many positive initiatives in the study, which if supported by corroborative work, could have a positive effect in lowering both capital and operating costs.

Financing

On December 4, 2013, we entered into a $10,000,000 financing by means of a binding Memorandum of Understanding (the “MOU”) dated December 3, 2013, with Grand Agriculture Investment Limited (the “Investor”), a company formed in Hong Kong and controlled by Kin Wong, a director, Chief Executive Officer, and a shareholder of the Company. Pursuant to the MOU, the Investor agreed to purchase 5,714,286 units (the “First Tranche Units”) and an additional 20,000,000 units (the “Second Tranche Units”). The purchase price per unit for the First Tranche Units was $0.35 per unit for gross proceeds of $2,000,000, and the purchase price per unit for the Second Tranche Units was $0.40 per unit for gross proceeds of $8,000,000. Each First Tranche Unit consists of one share of the Company’s Common Stock and one warrant to purchase one share of Common Stock at $0.45 per share exercisable immediately upon issuance through December 31, 2016. Each Second Tranche Unit consists of one share of Common Stock and 90% of one warrant to purchase one share of Common Stock at $0.55 per share exercisable immediately upon issuance through December 31, 2017 (the “Second Tranche Warrants”).

On April 14, 2014, pursuant to the MOU, the Company sold 5,000,000 Second Tranche Units for $2,000,000.

On July 30, 2014, the MOU was amended. The parties agreed to increase the amount of the investment by up to $5,000,000 in Second Tranche Units.

Pursuant to the MOU, on August 12, 2014, the Company received $2,500,000 through the sale of 6,250,000 Second Tranche Units. These 6,250,000 Second Tranche Units, including 5,625,000 Second Tranche Warrants.

Other Corporate Matters

•	In July 2014, we completed corporation registration for Cerro Blanco Titanium Corporation Shenzhen in Shenzhen, China as a wholly owned subsidiary under direct control of White Mountain Titanium (Hong Kong) Limited which was reactivated.
•	Effective August 15, 2014, we appointed Eric Gan as the Chief Financial Officer of the Company.
•	On September 30, 2014, we terminated the service agreement with Chapelle Capital Corp. owned and controlled by Brian Flower. Mr. Flower no longer serve as Executive Vice President and director of the Company after the termination date.
•	We issued 70,000 bonus common stock shares to Lan Shangguan on her termination date, our former Chief Financial Officer, to reward her service during the transition period.
•	Pursuant to the terms of the Company’s 2010 Stock Option/Stock Issuance Plan (the “Plan”), we granted to Kin Wong, our Chief Executive Officer options to purchase up to 400,000 shares of common stock; granted to Wei Lu, our Executive Director options to purchase up to 300,000 shares of common stock; granted to Greg Weigang Ye, our Director, options to purchase up to 175,000 shares of common stock; granted to Yee Ya Pei, our Director, options to purchase up to 200,000 shares of common stock. These options are fully vested and are exercisable at $0.45 per share. The options granted to Kin Wong and Wei Lu will expire on December 31, 2017. The options granted to Greg Weigang Ye and Yee Ya Pei will expire on October 2, 2017.

•

We amended the terms of the warrants issued to Brian Flower, our former Executive Director, and Mike Kurtanjek, our President and Chief Operating Officer. The amended terms reduce the number of warrant shares from 1,000,000 to 300,000, change exercise price from $1.50 per share to $0.65 per share, and extend the expiration date to December 31, 2017 for each person.

Competition

If we were to commence production, we would compete with a number of existing titanium dioxide concentrate producers, including Iluka Resources Inc., Richards Bay Iron and Titanium Pty. Ltd., QIT-FeretTitane Inc., and Sierra Rutile Limited as well as other projects proposed for development. Each of the existing producers has an operating history as well as proven reserves and resources. However, the majority of their collective production is in the form of ilmenite or synthetic rutile, not natural rutile.

In order to compete with existing producers and other projects proposed for development, first and foremost our rutile concentrates would need to meet buyers’ specifications, including particle size, concentration levels, calcium and impurities. Management believes metallurgical tests to date have demonstrated that the rutile mineralization at the Cerro Blanco concessions can be concentrated to an acceptable level to buyers. This is borne out by two, definitive off-take agreements for rutile concentrates entered into by the Company and major international pigment producers.

Management believes that the location of the Cerro Blanco project provides us with a number of competitive advantages. The property is located in a designated mining region, at a low elevation, near the coast and three towns from which it will be able to draw manpower, supplies and equipment. The area has a sunny climate and good infrastructure including road and rail transport links, line power and water. The working port of Huasco, which is capable of handling 70,000 tonne ships, is only 30 kilometers northwest of Cerro Blanco and provides seaborne access to the high growth markets of South America and Asia as well as North America and Europe.

Government Compliance

Our exploration activities are subject to extensive national, regional, and local regulations in Chile. These statutes regulate the mining of and exploration for mineral properties, and also the possible effects of such activities upon the environment. Future legislation and regulations could cause additional expense, capital expenditures, restrictions and delays in the development of the Cerro Blanco property, the extent of which cannot be predicted. Also, permits from a variety of regulatory authorities are required for many aspects of mine operation and reclamation. In the context of environmental permitting, including the approval of reclamation plans, we must comply with known standards, existing laws and regulations that may entail greater or lesser costs and delays, depending on the nature of the activity to be permitted and how stringently the regulations are implemented by the permitting authority. We are not presently aware of any specific material environmental constraints affecting the Cerro Blanco property that would preclude its exploration, economic development, or operation. Nevertheless, as a condition to placing the property into production, we have submitted the EIS for review and approval.

Chile enacted provisions in its 1980 Constitution to stimulate the development of mining, while at the same time guaranteeing the property rights of both local and foreign investors. While the state owns all mineral resources, exploration and exploitation of these resources is allowed via mining concessions, which are granted by the courts. A Constitutional Organic Law, enacted in 1982, sets out that certain rights and obligations may attach to concessions, such as the right to mortgage or transfer concessions and the entitlement of the holder to explore (pedimentos) as well as to exploit (mensuras). A concession is obtained by filing a claim and includes all minerals that may occur within the area covered by the concession. The holder of a concession also has the right to defend his interest against the state and third parties.

Mining claims in Chile are acquired in the following manner:

•	Pedimento: A pedimento is an exploration claim precisely defined by coordinates with north-south and east-west boundaries. These may range in size from a minimum of 100 hectares to a maximum of 5000 hectares, with a maximum length-to-width ratio of 5:1. A pedimento is valid for a maximum period of two years, following which the claim may be reduced in size by at least 50%, and renewed for an additional two years, provided that no overlying claim has been staked. Claim taxes are due annually in the month of March; if the taxes on a pedimento are not paid by such time, the claim can be restored to good standing by paying double the annual claim tax by or before the beginning of the following year. In Chile, new pedimentos are permitted to overlap pre-existing claims; however, the previously staked or underlying claim always takes precedence as long as the claim holder maintains his claim in good standing and converts the pedimento to a manifestacion within the initial two year period.
•	Manifestacion: During the two-year life of a pedimento, it may be converted at any time to a manifestacion. Once an application to this effect has been filed, the claim holder has 220 days to file a “Solicitud de Mensura”, or “Request for Survey” with a court of competent jurisdiction, and notify surrounding claim holders of the application by publishing such request in the Official Mining Bulletin. This notifies surrounding claim holders, who may contest the claim if they believe their pre-established rights are being encroached upon. The option also exists to file a manifestacion directly on open ground, without going through the pedimento filing process.
•	Mensura: The claim must be surveyed by a government licensed surveyor within nine months of the approval of the “Request for Survey.” During the survey any surrounding claim owners may be present, and once completed the survey documents are presented to the court and reviewed by SERNAGEOMIN, the National Mining Service. Assuming that all steps have been carried out correctly and all other necessary items are in order, the court then adjudicates the application and grants a permanent property right (a mensura), the equivalent to a “patented claim.”

Each of the above stages of the acquisition of a mining claim in Chile requires the completion of several steps, including application, publication, inscription payments, notarization, tax payments, legal fees, “patente” payments, and extract publication, prior to the application being declared by the court as a new mineral property. Details of the full requirements of the claim staking process are documented in Chile’s mining code. Most companies carrying on operations in Chile retain a mining claim specialist to carry out and review the claim staking process and ensure that their land position is kept secure.

In 1994 Chile adopted legislation establishing general environmental norms which must be followed in activities such as mining. This legislation requires us to prepare an Environmental Impact Statement which must include a description of the project and a plan for compliance with the applicable environmental legislation. It must also include base line studies containing the information relative to the current components of the existing environment in the area influenced by the project. Further, it must consider the construction, operation and closure/abandonment phases of the project. It must also include a plan to mitigate, repair, and compensate, as well as risk prevention and accident control measures, to achieve a project compatible with the environment. The study must be presented to the community for comment and to the regional arm of the National Environmental Commission for approval.

We have completed an environmental base line study on the Cerro Blanco property, which has been submitted to the regional Chilean government authority for review and approval. The work completed to date forms the basis of our current EIS. While the environmental monitoring and base line studies completed to date have not identified any endangered plant or animal species on the property, and while the property is located at distance from human habitation, these studies cited a risk of airborne dust being generated from rock blasting and crushing operations and from road haulage activities at open pit mining operations. Without proper blasting, crushing and road maintenance practices in place, there is a risk that airborne dust generated from the planned mining activity at Cerro Blanco could be transported by winds to the village of Nicolasa, located approximately 14 kilometers to the northeast, or onto farmland located within the Huasco River valley to the north-northeast. Nevertheless, prevailing winds at the mine site are east-west which should permit us to schedule blasting and other activities which create significant dust on days with prevailing or no winds. Our principal rock crushing plant will be fitted with dust containment units which should also mitigate dust from these activities. We also plan to use water trucks to dampen roadways and limit the amount of dust from trucks using these roads.

Insurance

We maintain property and general liability insurance with coverage we believe is reasonably satisfactory to insure against potential covered events, subject to reasonable deductible amounts, through our exploration stage.

If we proceed to development of a mining operation, our mining activities could be subject to substantial operating risks and hazards, including environmental hazards, industrial accidents, labor disputes, encountering unusual or unexpected geologic formations or other geological or grade problems, encountering unanticipated ground or water conditions, pit-wall failures, flooding, rock falls, periodic interruptions due to inclement weather conditions or other unfavorable operating conditions and other acts of God. Some of these risks and hazards are not insurable or may be subject to exclusion or limitation in any coverage which we obtain or may not be insured due to economic considerations.

Employees

Our staffing level consolidated with our subsidiaries consists of thirteen staff in total, ten of whom are full-time. With a small in-house engineering team on staff, we continue to depend upon the services of outside geologists, metallurgists, engineers, and other independent contractors to conduct our drilling program, develop our pilot plant, and conduct the various studies required to complete exploration of our mining concessions. In addition, we do not have, at this stage, any agreements or arrangements for the necessary managers and employees who will be necessary to operate the mine if commercial production commences. We do not have any existing contracts for these services or employees.

ITEM 1A. RISK FACTORS

Risks Related to Our Company and its Business

We have not developed any proven or probable reserves on our concessions and unless we do so, we may not be able to commence principal mining operations.

As an exploration stage company, our work is highly speculative and involves unique and greater risks than are generally associated with other businesses. We cannot know if our mining concessions contain commercially viable ore bodies or reserves until additional exploration work is done and an evaluation based on such work concludes that development of and production from the ore body is technically, economically, and legally feasible. If we are unable to develop commercially viable ore bodies, we may be unable to secure funding to place our Cerro Blanco project in production.

We may be unable to insure against all potential risks on our mining project which could result in significant losses.

Because of our continued losses, there is substantial doubt about our ability to continue as a going concern, which may hinder our ability to obtain future financing.

Our financial statements as of and for the years ended December 31, 2014 and 2013 were prepared assuming that we would continue as a going concern. Our significant cumulative losses from operations as of December 31, 2014, raised substantial doubt about our ability to continue as a going concern. If the going-concern assumption were not appropriate for our financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used. Since December 31, 2014, we have continued to experience losses from operations. We have continued to fund operations through the sale of equity securities. Nevertheless, we will require additional funding to complete much of our planned mineral exploration activities and completing a feasibility study on our mining concessions. Our ability to continue as a going concern following the completion of the feasibility study on our mining concessions is subject to our ability to generate a profit and/or obtain necessary additional funding from outside sources, including obtaining additional funding from the sale of our securities. Except for potential proceeds from the sale of equity in offerings by us, we have no other source for additional funding. Our continued net operating losses and stockholders’ deficiency increase the difficulty in meeting such goals and there can be no assurances that such methods will prove successful.

Because of our reliance on a single mining project, there is a substantial risk that our business may fail.

The Cerro Blanco property is our only mining project. Without the completed final feasibility study there is no assurance that this property contains any reserves which could be economically and legally extracted or produced, in which event the funds that we spend on exploration would be lost and we would be forced to cease operations. Our business plan is to explore solely for titanium deposits or reserves on the Cerro Blanco mining concessions. If this exploration program is unsuccessful, we will be unable to continue operations.

Because of the speculative nature of exploration of mining concessions, there is a substantial risk that our business may fail.

Exploration for minerals is highly speculative and involves substantial risks, even when conducted on properties known to contain significant quantities of mineralization, and most exploration projects do not result in the discovery of commercially mineable deposits of ore. The likelihood of our mining concessions containing economic mineralization or reserves, or our ability to produce a rutile concentrate meeting buyers’ specifications for particle size, concentrate levels, or calcium and impurities, is not assured.

Even if we substantiate commercial reserves of titanium on the Cerro Blanco property, we may not be able to successfully commence commercial production unless we receive additional funds, for which there are no present arrangements or agreements.

We estimate that we will require, at a minimum, additional funds of approximately $4,000,000 to complete all intended exploration of the Cerro Blanco property. We may encounter contingencies or additional costs not presently contemplated. We have not yet commenced principal mining operations on the property and we have no income. Substantial expenditures are required to establish proven and probable ore reserves through drilling, to determine metallurgical processes to extract the metals from the ore, and to construct mining and processing facilities. If our exploration programs are successful in establishing titanium dioxide reserves of commercial tonnage and grade, we will require significant additional funds in order to place the mining concessions into commercial production. At present we do not have any source of this additional funding and there is no assurance that we will be able to obtain such financing.

Should we determine that there are estimates of proven and probable reserves, they are subject to considerable uncertainty. Such estimates are, to a large extent, based on specific commodity prices and interpretations of geologic data obtained from drill holes and other exploration techniques. Producers use feasibility studies to derive estimates of capital and operating costs based upon anticipated tonnage and grades of ore to be mined and processed, the predicted configuration of the ore body, expected recovery rates of metals from the ore, the costs of comparable facilities, the costs of operating and processing equipment and other factors. Actual operating costs and economic returns on projects may differ significantly from original estimates. Further, it may take many years from the initial phase of exploration before production and, during that time, the economic feasibility of exploiting a discovery may change.

The most likely source of future funds presently available to us to commence commercial production is through the sale of equity capital. However, we do not currently have any arrangements in this regard. Any sale of equity securities will result in dilution to existing shareholders. As an alternative for the financing of commercial production we could seek to locate a joint venture partner to provide a portion or all of the required financing or through the sale of a partial interest in the Cerro Blanco property to a third party in exchange for cash or production expenditures. Although we have engaged in preliminary discussions with potential joint venture partners, we presently have no sources for this type of alternative financing.

We have an absence of historical revenues and no current prospects for future revenues. We also have a history of losses which we expect to continue into the future. Our current cash resources are insufficient to meet our obligations through the exploration stage, and if we are unable to secure additional financing, we will either have to suspend or cease operations.

We have been engaged in the exploration of minerals for several years and have not generated any historical revenues relating to our mineral exploration activities. We have incurred cumulative net losses of $55,533,880 from these activities through December 31, 2014, and anticipate a net loss until we are able to commence principal mining operations, if ever. During this exploration stage we have no source of funding to satisfy our cash needs except for our existing cash resources, which management estimates will not be sufficient to meet our cash needs to complete all of our planned mineral exploration activities and a feasibility study. The scope and cost of a feasibility study will be dependent upon factors such as plant size and process recovery design, neither of which will be known until further metallurgical testing and product marketing are completed. As such, we have no plans for revenue generation and we do not anticipate revenues from operations unless we are able to locate an economic ore body, commence principal mining operations, and are able to sell the concentrate. There is no assurance that management’s estimates of the costs of exploration and completion of the feasibility study are accurate, or that contingences will not occur which will increase the costs of exploration. Even if we locate an ore body, we may not achieve or sustain profitability in the future. If we are unable to secure additional financing and do not begin to generate revenues or find alternate sources of capital before our cash resources expire, we will either have to suspend or cease operations.

We have entered into off-take agreements which are conditioned upon our ability to commence principal mining operations within certain dates which if not met could result in the loss of these off-take agreements.

We have entered into two definitive off-take agreements which are conditioned upon our commencing production by September 30, 2014 in one case and by December 31, 2014 in the other. Failure to meet these deadlines would mean that these off-take agreements may be terminated by the purchaser at any time following the deadlines. Neither party indicates the agreements should be terminated. It is the Company's intention to re-negotiate these contracts on the completion of the BFS.

We do not have firm contracts for items which could affect the raw materials and services needed to place our Cerro Blanco project into production which would result in higher operating costs.

Costs at any mining location are affected by the price of input commodities, such as fuel, electricity and labor. Chile is heavily reliant on the importation of oil, natural gas, refined petroleum products and coal to meet its fuel and electricity needs. Since we acquired the Cerro Blanco project, global energy price and transportation cost increases have caused fuel and electricity prices in Chile to rise; labor costs in Chile have risen as well. A continuation of this trend of increasing costs could have a significant negative effect on the economics and the viability of our project.

Currency fluctuations may negatively affect costs we incur outside of the United States.

Currency fluctuations may affect our costs as a significant portion of our expenses are incurred in Chilean pesos. During the last six months the exchange rate of pesos to the U.S. dollar has fluctuated from 551 to 606. These fluctuations have meant that our in-country operational and exploration expenses in U.S. dollar terms have been difficult to predict in any specific reporting period. Although the trend in the exchange rate fluctuation favored us by saving our operating costs in Chile, any decrease in the exchange rate in the future will increase our operating costs in Chile.

Current global financial conditions could adversely affect the availability of new financing and our operations.

Current global financial conditions have been characterized by increased market volatility. Several financial institutions have either gone into bankruptcy or have had to be re-capitalized by governmental authorities. Access to financing has been negatively impacted by both the rapid decline in value of sub-prime mortgages and the liquidity crisis affecting the asset-backed commercial paper market. We are wholly dependent on outside financing to meet our future operating needs and these factors may adversely affect our ability to obtain equity or debt financing in the future on terms favorable to us. Additionally, these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. If such increased levels of volatility and market turmoil continue, our operations, and our ability to finance the capital costs of our project could be adversely impacted.

The granting of governmental permits to commence mining operations is subject to compliance with stringent national and local environmental laws and regulations.

In general the environmental application review and enforcement process in Chile has been significantly toughened over the past years. As a consequence, EIS are much longer and the vast majority of the applications are not approved. The public review process usually results in hundreds if not thousands of queries, all of which must be addressed in detail as an amendment to the application, which then gets reviewed, frequently with additional qualifications requested within the 45-day period following submission of the responses. We submitted our EIS application in February 2013. In July, 2013 we received 550 comments on the application. On July 1, 2014, SEA sent the Company a second round of questions and comments, 70% fewer than were raised in the first round. Following official receipt of the second round of questions and comments, the Company was given 90 working days to prepare and file a written response with SEA. This work was completed and the report, filed in October 2014. During November and December 2014, the Company received less than 100 comments and questions from the environmental authorities, and these questions have now been addressed, and submitted. If we are unable to adequately satisfy regulators with these or subsequent responses, we will not be granted necessary mining permits to commence operations. In addition, we are not able to control the length of the review process and excessive delays could have a material negative impact on our cash flow and proposed business operations.

If we are unable to adequately prevent dust from our mining operations or to meet dust level standards established in any operating permit obtained in the future, we may be unable to commence or continue planned mining operations on the Cerro Blanco project, or the costs associated with the remediation of dust created from our mining operations could exceed amounts currently budgeted for compliance with anticipated standards.

We have not obtained our mining permit to commence principal mining operations on the Cerro Blanco project. Based upon our past environmental monitoring and base line studies prepared for us which cited a risk of airborne dust being generated from rock blasting and crushing operations and from road haulage activities at open pit mining operations, we anticipate that the issue of airborne dust will be an issue closely reviewed and monitored by the government. Without proper blasting, crushing and road maintenance practices in place, there is a risk that airborne dust generated from the planned mining activity at Cerro Blanco could be transported by winds to the village of Nicolasa, located approximately 14 kilometers to the northeast, or onto farmland located within the Huasco River valley. Airborne dust from our mining operations could negatively affect agricultural plants or animals being raised in the area, or could negatively affect respiratory functions of persons living near the site. If we are unable to provide adequate remediation plans in our environment impact statement, we may be unable to obtain the necessary operations permit to commence principal mining operations. In the alternative, the government could require us to implement more costly remediation procedures to obviate any potential airborne dust contamination. Once we receive our operating permit, if we are unable to meet the standards for airborne particles set forth in the permit, we could be cited by the government for noncompliance and fined or we could be forced to cease mining operations until the problem is remedied, which could require more expensive remediation measures. In addition, if we exceed reasonable dust standards, neighboring communities and businesses, especially the agriculture business in the Huasco River valley, could seek monetary damages from damages caused by the dust created from our mining activities or could seek injunctive relief to terminate any mining operations causing damage to the community or business. We could incur increased operating costs from these actions and could be delayed in our planned mining activities, each of which would have a material negative impact on our ability to commence or engage in our planned mining activities.

Because we have not secured water rights and access to utilities for development of our mining concessions, there is no assurance that we would be able to develop the property.

We are subject to factors beyond our control, such as production costs, including the availability of adequate and cost-effective supplies of electricity, water, and diesel fuel to run the heavy equipment and backup generators. We have no current binding arrangements to provide electricity, water, or diesel fuel. While we believe that we have various alternatives available to us with respect to negotiating these arrangements, there is no assurance that we will be able to do so, or that the terms and costs of such arrangement or agreement will be satisfactory to us or within our current operating budget. Our inability to secure these items, or to obtain them at a reasonable cost, could affect our ability to proceed with the project if commercial reserves of titanium are discovered.

Commodity prices, including those for industrial minerals such as titanium dioxide, are subject to fluctuation based on factors that are not within our control, and a significant reduction in the commodity price for titanium dioxide could have a material negative impact on our ability to continue our exploration of our mining concessions or to raise operating funds.

Titanium dioxide pigment is used in a number of products, primarily paint and coatings, paper, and plastics, while titanium metal is used largely in the commercial airline, aerospace and defense industries. Any decline in the economy of these products or industries could have a material impact on the value of titanium. In addition, there are newly developing low-cost methods for developing titanium metal which may have an impact on the price of titanium. Also, there are existing lower-cost substitutes for titanium. For example, titanium competes with aluminum, composites, intermetallics, steel, and super alloys in high-strength applications. There are also a number of lower-cost ores which can be substituted for titanium in applications that require corrosion resistance or which can be used as a white pigment. Management is unable to presently predict the effect the decline in the economy or the use of titanium substitutes may have on the price of titanium in the future.

If we are able to commence commercial production, we will be in competition with a number of other companies, most of which are better financed than we are.

The market for titanium dioxide, as with other minerals, is intensely competitive and dominated, in this case, by a small number of large, well-established and well-financed companies, including Iluka Resources Inc., a subsidiary of Iluka Resources Ltd., Richards Bay Iron and Titanium Pty. Ltd., QIT-Fer et Titane Inc., and Titania A/S, which represent the world leaders in production of titanium mineral concentrates, as well as smaller titanium producers. All of the major competitors have longer operating histories and greater financial, technical, sales and mining resources than we do. Because of the significantly greater resources of these companies, should we commence mining operations, we may not be able to compete successfully with these entities.

Risks Related to Our Common Stock

There are a large number of shares issuable upon exercise of our outstanding options and warrants that may be available for future sale, and the sale of additional shares may depress the market price of our common stock.

As of March 27, 2015, we had 86,880,392 shares of common stock issued and outstanding, outstanding warrants to purchase up to 21,487,585 shares of common stock, and outstanding options to purchase up to 1,375,000 shares of common stock. We also have existing contracts which call for the issuance of up to 1,275,000 additional shares upon the occurrence of certain events. All of the warrants and options are immediately exercisable. The sale of these shares may adversely affect the market price of our common stock.

Because our shares are designated as “penny stock”, broker-dealers will be less likely to trade in our stock due to, among other items, the requirements for broker-dealers to disclose to investors the risks inherent in penny stocks and to make a determination that the investment is suitable for the purchaser.

Our shares are designated as “penny stock” as defined in Rule 3a51-1 promulgated under the Exchange Act and thus may be more illiquid than shares not designated as penny stock. The SEC has adopted rules which regulate broker-dealer practices in connection with transactions in “penny stocks.” Penny stocks are defined generally as: non-Nasdaq equity securities with a price of less than $5.00 per share; not traded on a “recognized” national exchange; or in issuers with net tangible assets less than $2,000,000, if the issuer has been in continuous operation for at least three years, or $10,000,000, if in continuous operation for less than three years, or with average revenues of less than $6,000,000 for the last three years. The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC, to provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer’s account, to make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. These disclosure requirements may have the effect of reducing the level of trading activity, if any, in the secondary market for a stock that is subject to the penny stock rules. Since our securities are subject to the penny stock rules, investors in the shares may find it more difficult to sell their shares. Many brokers have decided not to trade in penny stocks because of the requirements of the penny stock rules and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. The reduction in the number of available market makers and other broker-dealers willing to trade in penny stocks may limit the ability of purchasers in this offering to sell their stock in any secondary market. These penny stock regulations, and the restrictions imposed on the resale of penny stocks by these regulations, could adversely affect our stock price.

Our board of directors can, without stockholder approval, cause preferred stock to be issued on terms that adversely affect common stockholders.

Under our articles of incorporation, our board of directors is authorized to issue up to 100,000,000 shares of preferred stock, none of which are issued and outstanding as of the date of this report. Also, our board of directors, without shareholder approval, may determine the price, rights, preferences, privileges and restrictions, including voting rights, of those shares. If the board causes any shares of preferred stock to be issued, the rights of the holders of our common stock could be adversely affected. The board’s ability to determine the terms of preferred stock and to cause its issuance, while providing desirable flexibility in connection with possible acquisitions and other corporate purposes, could have the effect of making it more difficult for a third party to acquire a majority of our outstanding voting stock. Preferred shares issued by the board of directors could include voting rights, or even super voting rights, which could shift the ability to control the company to the holders of the preferred stock. Preferred shares could also have conversion rights into shares of common stock at a discount to the market price of the common stock which could negatively affect the market for our common stock. In addition, preferred shares would have preference in the event of liquidation of the corporation, which means that the holders of preferred shares would be entitled to receive the net assets of the corporation distributed in liquidation before the common stock holders receive any distribution of the liquidated assets. We have no current plans to issue any additional shares of preferred stock.

Our board of directors has adopted a shareholder rights plan which may make it more difficult for a third party to effect a change-of-control.

Our board of directors has adopted a shareholder rights plan for the purpose of impeding any effort to acquire our company on terms that are inconsistent with its underlying value and which would not therefore be in the best interests of our stockholders. The existence of this or any shareholder rights plan will make it more difficult, delay, discourage, prevent or make it more costly to acquire or effect a change-in-control that is not approved by our board of directors, which in turn could prevent our stockholders from recognizing a gain in the event that a favorable offer is extended and could materially and negatively affect the market price of our common stock.

We have not paid, and do not intend to pay, dividends and therefore, unless our common stock appreciates in value, our investors may not benefit from holding our common stock.

We have not paid any cash dividends since inception. We do not anticipate paying any cash dividends in the foreseeable future. As a result, our investors will not be able to benefit from owning our common stock unless the market price of our common stock becomes greater than the price paid for the stock by these investors.

The public trading market for our common stock is volatile and will likely result in higher spreads in stock prices.

Our common stock is trading in the over-the-counter market and is quoted on the OTCQB. The over-the-counter market for securities has historically experienced extreme price and volume fluctuations during certain periods. These broad market fluctuations and other factors, such as our ability to implement our business plan pertaining to the Cerro Blanco mining concessions in Chile, as well as economic conditions and quarterly variations in our results of operations, may adversely affect the market price of our common stock. In addition, the spreads on stock traded through the over-the-counter market are generally unregulated and higher than on stock exchanges, which means that the difference between the price at which shares could be purchased by investors on the over-the-counter market compared to the price at which they could be subsequently sold would be greater than on these exchanges. Significant spreads between the bid and asked prices of the stock could continue during any period in which a sufficient volume of trading is unavailable or if the stock is quoted by an insignificant number of market makers. We cannot insure that our trading volume will be sufficient to significantly reduce this spread, or that we will have sufficient market makers to affect this spread. These higher spreads could adversely affect investors who purchase the shares at the higher price at which the shares are sold, but subsequently sell the shares at the lower bid prices quoted by the brokers. Unless the bid price for the stock increases and exceeds the price paid for the shares by the investor, plus brokerage commissions or charges, the investor could lose money on the sale. For higher spreads such as those on over-the-counter stocks, this is likely a much greater percentage of the price of the stock than for exchange listed stocks. There is no assurance that at the time the investor wishes to sell the shares, the bid price will have sufficiently increased to create a profit on the sale. We do not anticipate that there will be any public trading market for the Warrants.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

Cerro Blanco Property

Through our Chilean subsidiary, Sociedad Contractual Minera White Mountain Titanium, we are progressing in various stages of development on our Cerro Blanco project, which is our principal project. We have identified nine natural rutile prospects designated as the Las Carolinas, La Cantera, Eli, Chascones, Hororio’s Creek, Hippo Ear, Quartz Creek, Algodon and Bono prospects. The last five of these have only recently been located. We presently hold 41 registered mining exploitation concessions and 33 exploration concessions over an area of approximately 17,041 hectares. We are in the preparation stage for a feasibility study to determine whether the concessions contain commercially viable ore reserves. If we are successful in obtaining a feasibility study which supports commercially viable ore reserves, we intend to exploit the concessions and to produce titanium dioxide concentrate through conventional open pit mining and minerals processing.

In 2013 we also located six registered exploration concessions, covering approximately 1,288 hectares, known as the La Martina property. We have not allocated sufficient resources to this property to conduct significant exploration activities and do not consider the property material at present because of the lack of information available on the mineralization of the property, but we plan to commence exploration activities on this property as funds become available.

Glossary of Terms

Certain terms used in this section are defined in the following glossary:

ALKALIC DIORITE-GABBRO-PYROXENITE INTRUSIVE: a potassium and sodium rich, coarse grained and possibly dark colored igneous rock with associated magnesium and iron that consolidated from magma beneath the earth's surface.

DEVELOPMENT: work carried out for the purpose of opening up a mineral deposit and making the actual extraction possible.

DISSEMINATED: fine particles of mineral dispensed through the enclosing rock.

EXPLOITATION MINING CONCESSIONS: licensed claims where the holder has the right to permit, develop, and operate a mine.

EXPLORATION: work involved in searching for ore by geological mapping, geochemistry, geophysics, drilling and other methods.

GRADE: mineral or metal content per unit of rock or concentrate or expression of relative quality e.g. high or low grade.

INTRUSIVE: a volume of igneous rock that was injected, while still molten, and crystallized within the earth’s crust.

MINERALIZATION: the concentration of metals and their compounds in rocks, and the processes involved therein.

ORE: material that can be economically mined from an ore body and processed.

RECLAMATION: the restoration of a site after exploration activity or mining is completed.

RUTILE: a mineral, titanium dioxide (TiO₂), trimorpheus with anatase and brookite.

TiO₂: Titanium dioxide. The form of titanium found in the mineral rutile.

TITANIUM: a widely distributed dark grey metallic element, (Ti), found in small quantities in many minerals. The mineral ilmenite, (FeTiO₃), is currently the principal feedstock for the production of titanium dioxide (TiO₂) powder and titanium metal.

Location and Access

The Cerro Blanco property is located approximately 39 kilometers, or approximately 24 miles, west of the city of Vallenar in the Atacama geographic region (Region III) of northern Chile and southwest of the Cerro Rodeo Mining District. Access to the property is as follows: The main Ruta 5, the Pan American Highway, runs north from Santiago for approximately 665 kilometers to Vallenar; from there a paved road runs west toward the Port of Huasco for a distance of 22 kilometers to the village of Nicolasa; at Nicolasa a municipally maintained dirt road runs approximately 10 kilometers southwest to the property. Management believes access to the property is adequate to accommodate the type of vehicles and traffic during the exploration stage on the property. Improvements to the dirt road will be required for the development and production stages. These improvements will include widening of the road and topping it with gravel. Management believes adequate supplies of bedrock and gravel are available for this purpose, although it currently has no arrangements or agreements to provide either the improvement services or supplies. The area is served by a regional airport at Vallenar.

Cerro Blanco lies within an established mining district where management believes experienced mineworkers and support personnel are available. Labor rates in the region are considerably less costly when compared with standard North American rates. Mining is one of the main sectors of the Chilean economy and Region III has a broad base of mining contractors and suppliers of both new and used mining and processing equipment.

The local climate is generally arid with little rainfall in normal years. Vegetation is minimal, supporting only desert scrub and sparse cactus. Topography consists of low hills with a mean elevation of 100 meters, which are incised periodically by active creeks. The Huasco River, 15 kilometers, approximately 9 miles, to the north, is a source of water. Additionally, high-tension power lines pass 15 kilometers, approximately 9 miles, to the north of the property along the Vallenar-Huasco highway.

In addition to road transport links, power and water access, a port facility with a capacity to handle 70,000 ton ships is accessible at Huasco, which is 30 kilometers, approximately 19 miles, northwest of the property. The property also lies close to a fully operational rail track. If necessary, a spur line could be run into the property linking it directly to the port.

Title Status and Exploration Rights

Under the Chilean mining code, surveyed mineral concessions can be held in perpetuity subject only to an annual tax based on the land held. We have converted 33 of our existing exploration licenses into exploitation licenses. The tax payments for March 2012, 2013 and 2014 were $107,159, $107,275, and $66,897, respectively, at the prevailing exchange rate. Drop of several no commercial value property claims and favorable exchange rate contributed to a significant decrease in the tax payment for 2014. We anticipate that the tax payment for 2015 will be about the same as that of 2014.

The Chilean mining code does not convey surface rights to owners of the mining concessions. However, the owners of mining concessions are entitled to the establishment of the necessary easements for mining exploration and exploitation. The surface lands are subject to the burden of being occupied, to the extent required by mining operations, by ore yards and dumps, slag and tailings, ore extraction and benefaction plants, electric substations and communications lines, canals, reservoirs, piping, housing, construction and supplementary works, and to the encumbrance of transit and of being occupied by roads, railways, piping, tunnels, inclined planes, cableways, conveyor belts and all other means used to connect the operations of the concession with public roads, benefaction facilities, railroad stations, shipping ports, and consumer centers. The establishment of these easements, the exercise thereof, and the compensation therefore, are to be agreed upon either between the concession owner and the surface owner, or are established by court decision under a special brief procedure contemplated by the law.

The significant portion of the surface rights for the Cerro Blanco project are owned by Agrosuper, a large Chilean agricultural concern, as well as local communities. In 2010, the Company commenced discussions with Agrosuper, and local communities, to establish a mutually acceptable access corridor to the mine site. In addition to road traffic, it was envisaged that this corridor would also be used to bring line power and process water to site. Upon completion of the final feasibility study, we intend to continue to advance discussions with Agrosuper to acquire the surface rights either through negotiation or through the courts. This is an ongoing progress. Nevertheless, should this alternative fail, we will proceed to seek the easement through the court, which under Chilean mining law we have the right to obtain. We do not anticipate any material difficulty with surface rights on the Cerro Blanco property.

Geology and Mineralization

Management believes the Cerro Blanco property contains a large and possibly unique type of titanium mineralization. Nevertheless, we are still in the exploration stage of development and there are no known reserves on the property. The titaniferous mineral located on the property is clean red-brown and black rutile which occurs disseminated with the tonalitic suite of an alkalic diorite-gabbro-pyroxenite intrusive. Its uniformly disseminated nature and associated alteration endow it with strong similarities to porphyry copper deposits. Natural rutile concentrates are the preferred feed stock for both titanium metal and titanium dioxide pigment.

Exploration History

In 1990 - 1991, the western half of the property, then referred to as BarrancaNegra, was held under option by Adonos Resources of Toronto, Canada, who conducted extensive rock sampling, geological mapping and 450 meters of trenching.

In 1992, the property was optioned by Phelps Dodge, to which they applied the name Freirina. In late 1992 and early 1993, 1,200 meters of diamond and 6,000 meters of reverse circulation drilling were completed, principally in the most westerly Cerro Blanco anomaly. In 1993, two 15 tonne bulk samples were taken for metallurgical testing. A gravity concentrate was produced from a 15 tonne sample of this material by Lakefield Research in Santiago. Fifty kilograms of this concentrate were shipped to Carpco Inc. in Florida for further gravity circuit up-grading followed by dry-milling using magnetic and electrostatic separation techniques.

In 1999, Dorado Mineral Resources N.L. purchased the property and re-named the property Celtic. In February 2000, a preliminary processing test carried out by RMG Services Pty. Ltd., Adelaide, Australia, on behalf of Dorado, used combined microwave leaching and flotation in the up-grading of Celtic (Freirina) gravity concentrate.

In June 2000, a review and summary of prior exploration programs and results was conducted by an independent geological consultant on behalf of Dorado Mineral Resources N.L. A cross-sectional estimation of the resource potential of the Cerro Blanco deposit based on the prior drilling and surface sampling was completed as part of this study. Later the same month a scoping study based on level plans produced for the area of highest density drilling was undertaken on behalf of Dorado RecursosMinerales Chile S.A. by TecniterraeLimitada, a Santiago based group of consulting mining engineers. In 2000, a further study was commissioned by Dorado RecursosMinerales Chile S.A. to supervise the collection of a second bulk sample of 25 tonnes for metallurgical testing. Also during this program the Cerro Blanco area was geologically re-mapped.

In August 2001, ownership of the property was transferred to Kinrade Resources Limited. Subsequent to these events, Kinrade defaulted on its obligations and was unable to meet the payment schedules as required under contract.

In the fall of 2003, ownership of the property passed to Sociedad Contractual Minera White Mountain Titanium, formerly known as CompañíaMinera Rutile Resources Limitada, the wholly owned subsidiary of White Mountain Titanium Corporation. The purchase was completed in September 2005.

In 2006, we undertook two drill programs on the Las Carolinas prospect. The first was designed to test ore variability and provided 15 different composites which were subjected to metallurgical testing. The second consisted of a 16-hole, 2,900- meter infill and step out drill program designed to increase resources in the central portion of the main zone as well as to test new target areas to the south and south-west. Core recoveries in excess of 95% were achieved in the majority of holes drilled. Split core samples were sent out for metallurgical testing and grade variability studies. Whole-core geotechnical testing was carried out in respect of rock mechanics for mine planning purposes.

Planning and execution of the both drill programs was closely linked to previous metallurgical test work. The principal focus was to target titanium resources which would yield a high grade TiO₂concentrate from conventional flotation. After an extensive evaluation of historic data, our contract geologists devised an ore ranking system, MR1 (“Mine Rank 1”) through to MR4, with ranks MR1 and MR2 producing the best, and most commercially acceptable chemical product specifications. Both historic drill data and data from these two drilling campaigns was input into a geological model. This geologic model, together with other datum such as metallurgical test work, ore ranking and rock mechanics, then formed the basis of an integrated resource model.

During 2007, the Company’s geological team undertook and extensive geochemical sampling program to the south and southwest, principally focused on the Eli prospect. Working on a 25 by 25 meter grid, the team took nearly 700 samples of outcrop material over an area of 1,100 meters by 900 meters. These were sent for chemical assay.

Samples showed mineralization with TiO₂grades in the range 1.0%to3.0%; two samples from high grade vein material reported results in excess of 21% TiO₂and 25% TiO₂, respectively. The Company followed up by building a 12 kilometer, five meter wide access road to and around Eli. Drill pads were constructed on 50 meter centers adjacent to the road grid covering the prospect. An initial drill program involving two diamond drill rigs commenced in late April, 2008 and ran through June. Approximately 4,000 meters of drilling was completed and the results indicated that the Eli prospect has the potential for high TiO2 grades, geologically it is more complex than either Las Carolinas or La Cantera.

In January 2008, the Company retained a consultant as a qualified person under Canadian National Instrument 43-101 to prepare a NI 43-101 compliant technical report on the Cerro Blanco property (the “Technical Report”). The Technical Report, which was dated February 25, 2008 and was based on extensive geological mapping, surface sampling, 14,078 meters of drilling and a geological model developed by the Company, is filed on SEDAR.

In 2010, the Company’s geological staff oversaw the construction of access roads and drill pads such that a program comprised of approximately 50 diamond drill holes totaling 7,500 meters can be undertaken. This drilling, typically to an average depth of 150 meters, was designed to reclassify more of the established geologic resources to the measured and indicated categories. This drilling was completed in 2011.

We are currently preparing for a drill program at Las Carolinas and La Cantera of approximately 5,200 meters which forms part of the budget to take the project to Final Feasibility. All access roads and drill pads have already been constructed for this program.

Engineering History

Following completion of the 2008 NI 43-101 Technical Report, the Company retained the consultant to compile a NI 43-101 compliant preliminary assessment of the Cerro Blanco project (the “Assessment”). The Assessment, which was dated May 30, 2008 and incorporated by reference the 2008 Technical Report as well as reports prepared for the Company by other independent experts in their fields, is filed on SEDAR. The latter reports include preliminary process plant engineering and costing report prepared by AMEC-Cade Idepe dated March, 2008, a preliminary pit design report prepared by NCL Ingenieria y Construccion dated May 2008, various metallurgical reports prepared by SGS Lakefield, an environmental base line study prepared by Arcadis Geotecnica dated December 2004 and titanium marketing information provided by David Rochester, the Company’s marketing consultant.

For engineering design purposes, the Assessment adopted a base case set of assumptions, the major assumptions being the construction of an open pit mine, processing plant and ancillary facilities capable of producing 100,000 tonnes per year of high grade rutile concentrate grading plus 94.5% TiO2 at start up, scaling to 130,000 tonnes per year in production Year 4 at an assumed undiluted head grade to the plant of 2.3% TiO 2. Mining would commence on the Las Carolinas prospect and feed would be conveyed downhill to a processing plant located less than two kilometers to the northeast. Within the plant, the process flow sheet consisted of a semi-autogenous grinding mill, gravity pre-concentration and column flotation circuits and high intensity magnetic separation with process water sourced from a desalination plant constructed at the port of Huasco.

Based on these assumptions AMEC-Cade Idepe designed a processing plant with an initial operating capacity of approximately 5.1 million tonnes per year, increasing to approximately 6.1 million tonnes per year by Year 4. They estimated a cost to construct the plant and ancillary facilities of US$117 million in direct costs and US$42 million in indirect costs, for a total of US$159 million. To this figure, and as this was a preliminary study, AMEC-Cade Idepe added a 20% contingency to arrive at a total estimated cost of US$190 million. With respect to processing plant operating costs, AMEC-Cade Idepe estimated site and transportation costs to port of US$3.60 per tonne processed (US$184 per tonne of rutile concentrate) in Year 1, dropping to US$3.50 per tonne processed (US$180 per tonne of rutile concentrate) in Year 4. The anticipated reduction in operating costs is attributed to increased volumes as well as increased efficiencies from the gravity pre-concentration circuit. Electric power consumption was the highest single cost item, comprising approximately 31% of the total estimated unit operating costs. AMEC-Cade Idepe recommended that the Company proceed to the pilot stage and investigate two possibilities for reducing capital costs: the use of sea water rather than desalinated water in the processing plant and sitting the plant elsewhere on the property to lower the installed cost of the conveyor. Two alternate sites were identified.

With respect to mining, mining costs would be in addition to the processing plant operating costs estimates set out above. A preliminary mine plan will be prepared once further drilling has been completed. At present, NCL have modeled preliminary optimized pits for only the central zone of the Las Carolinas prospect on the assumption that this could be the initial pit area. The pits were modeled using 10 x 10 x 10 meter blocks and base case pit wall angles of 45 degrees, with sensitivities run at 50 degrees. Whilst the objective of our mapping, surface sampling and drilling programs is to both increase the quantity and classification of TiO2 resources on the Cerro Blanco property, the project is at an exploration stage and there is no guarantee of future exploration success or of economic viability. For these reasons, project cash flow estimates are not included in the Assessment.

The Assessment concluded that results from the considerable body of work completed on the project to date support our recommended, phased work programs and that the estimated costs for the work programs were reasonable and adequate to the present stage of the project. The overall objective of our work programs is to complete an independent final feasibility study which supports the construction of a natural rutile, TiO2 mining operation on the property.

In December 2009, we announced completion of a detailed Stage 2 pilot plant test work program culminating in one 60 hour continuous test run. The primary objective of the Stage 2 pilot plant test work was to produce a natural rutile, titanium dioxide concentrate meeting the chemical and particulate specifications of titanium pigment and sponge metal producers. The test work was conducted on a 275 tonne bulk sample representative of currently identified, at and near surface natural rutile mineralization sourced from the Las Carolinas prospect at our Cerro Blanco project. The bulk sample, which was taken from an area of the Las Carolinas prospect which could be chosen to provide initial mine feed to a full scale process plant, assayed 2.9% TiO2.

Following crushing to minus ½ inch, mill underflow was fed to a gravity pre-concentration circuit which consisted of a fine fraction recovery cyclone as well as middlings and coarse fraction mechanical vibrating tables. The mechanical vibrating tables concentrated the higher specific gravity, natural rutile while rejecting some 50% by volume of the lower specific gravity feed material. The result of gravity pre-concentration was to upgrade the natural rutile being processed from an initial grade of 2.9% TiO2 to a grade of approximately 5.0% TiO2. Upgraded material from the gravity pre-concentration circuit was fed to a conditioning tank for pH adjustment and from there to a conventional flotation circuit for further recovery, concentration and cleaning. Flotation feed from the conditioning tank was passed to rougher, scavenger and five cleaning flotation stages, where the majority of the natural rutile was recovered and concentrated. An acid pH in the flotation circuit between 3.5 and 4.75 was maintained in the flotation circuit. Tailings from the flotation circuit could form the feed source for a feldspar recovery circuit.

Following the final flotation cleaning stage, the natural rutile, titanium dioxide concentrate was fed to a high intensity magnetic separator to remove magnetic and para-magnetic minerals. Magnetic separation resulted in two concentrate products: a high grade natural rutile, titanium dioxide concentrate and a magnetic and para-magnetic minerals by-product concentrate.

The following table provides a chemical analysis of the final product from the 60 hour test run for both + and -75 micron fractions after magnetic separation:

Magnetic Separation Results from the Concentrate
produced during Continuous Operation – Non-magnetics

			Assays
Element			+75 Micron Fraction	-75 Micron Fraction
Titanium	TiO2	%	96.8	97.3
Iron	Fe2O3	%	0.70	0.86
Silica	SiO2	%	0.95	0.80
Alumina	Al2O3	%	0.11	0.08
Magnesia	MgO	%	<0.01	<0.01
Calcium	CaO	%	0.06	0.17
Sodium	Na2O	%	0.07	0.03
Potassium	K2O	%	0.02	0.02
Phosphorus	P2O5	%	<0.01	<0.01
Manganese	MnO	%	<0.01	0.01
Chromium	Cr2O3	%	0.39	0.42
Vanadium	V2O5	%	0.23	0.26
LOI		%	0.17	0.18

Following completion of the Stage 2 pilot plant test work, we conducted further optimization test work on the rutile process flow sheet, specifically the use of spirals and Knelson concentrators in the gravity pre-concentration circuit and the use of sea water as the aqueous medium in the flotation circuit. In January 2010 we released results from this optimization test work which stated that spirals were a viable alternative to mechanical vibrating tables in the pre- concentration circuit and that comparable concentrate grades and recoveries were obtained using sea water versus fresh water as the aqueous medium in the flotation circuit.

Also in January 2010, we reported that we had successfully completed a locked cycle, flotation test work program to recover feldspar from natural rutile flotation tailings.

All test work was carried out in an acidic environment (pH 3.5 to 5.5) - very similar to pH conditions previously used in the flotation of rutile. Management believes this is an important achievement as it obviates the need to undertake major pH adjustment from the rutile to the feldspar flotation circuit. A sodium feldspar concentrate assaying 9.07% Na2O and 0.37% Fe2O3 was produced using fresh water as the aqueous medium and minimal addition of flotation reagents. As with the natural rutile, titanium dioxide concentrate results achieved in the optimization test work, comparable sodium feldspar concentrate grades were obtained using sea water versus fresh water as the aqueous medium.

On December 21, 2010, we announced that we had signed a contract with SGS Lakefield (“SGS”) to conduct a further process development program for the recovery of high purity sodium feldspar concentrate from the Cerro Blanco project. The objective of this program was to refine and optimize the sodium feldspar process flow sheet and to enhance overall concentrate specifications. Working on a feedstock derived from the tailings stream of earlier rutile pilot plant test work, SGS was to examine the selective use of flotation activators and collectors and the effect of varying process conditions on the recovery of a high purity, sodium feldspar concentrate to a specification suitable for use in glass and ceramics applications. From a metallurgical perspective, findings from this process development program would add to the considerable body of project information that already exists concerning the recovery of co-product feldspar. From a commercial point of view, samples of the resultant concentrate would be made available to several international industrial mineral companies who have expressed a possible interest in purchasing sodium feldspar concentrate produced from the project.

Environmental, Surface Rights and Infrastructure History

In 2005 - 2006, Arcadis Geotecnica conducted an environmental base line study over the Las Carolinas and La Cantera prospects. Based on field information gathered, vegetation in the area was comprised mostly of bushes, cactus and plants characteristically found in desert regions and areas of sandy and stony soils. Whilst no native animals were observed, animals potentially living in the area would include foxes, rodents, pumas, guanacos, rabbits and reptiles. The study stated that a mining operation as contemplated would have no significant impact on land vertebrates but care would need to be exercised on the northern slopes favored by reptiles. Six underground springs were identified, several with only seasonal flow. As well six houses were observed extending from the project north towards Vallenar, three of which are occupied on a permanent basis. Conversations with the inhabitants suggested that they would have a positive view of the project due to the economic and social benefits it would bring. Arcadis Geotecnica recommended an intensive follow up survey of one ravine for possible archaeological relics and identified two areas for the possible stockpiling of waste rock. We retained Arcadis Geotechnica to complete the recommended follow up survey and no archaeological relics were found.

In 2010, Arcadis Geotecnica was contracted to complete a baseline monitoring update over approximately half of the project’s land area in preparation for the commissioning of an EIS. Arcadis’ scope of work was to update field work carried out in 2005 - 2006 and to consider the environmental impact of the proposed mining operation on indigenous flora and fauna and local communities. In addition, Arcadis was to work with Company personnel to plan and implement the necessary project permitting process, including legal requirements, for final site remediation.

In February 2013, the Company completed and submitted the EIS to the Chilean Environmental Authority. In July 2013 we received 550 comments on our submission.

In April 2014, the Company completed and filed a written response with SEA, Servicio de Evaluación Ambiental, to a first round of questions and comments posed during a public review of the Company’s EIS application. On July 1, 2014, SEA sent the Company a second round of questions and comments, 70% fewer than were raised in the first round. As importantly, by the second round almost half of the government ministries had no further questions or comments and, of those raised, most sought further clarification centered on three issues: water, disaster contingencies and resettlement and community issues.

During November and December 2014, the Company received less than 100 comments and questions from the environmental authorities, and these questions have now been addressed, and submitted.

Metric Conversion Table

For ease of reference, the following conversion factors are provided:

Metric Share	U.S. Measure	U.S. Measure	Metric Share
1 hectare	2.471 acres	1 acre	0.4047 hectares
1 meter	3.2881 feet	1 foot	0.3048 meters
1 kilometer	0.621 miles	1 mile	1.609 kilometers
1 tonne	1.102 short tons	1 short ton	0.907 tonnes

ITEM 3. LEGAL PROCEEDINGS

There are no material pending legal proceedings to which we or any of our subsidiaries is a party or of which any of their property is the subject. Further there are no material proceedings to which any director, officer or affiliate of our Company, any owner of record or beneficially of more than five percent of any class of voting securities of our Company, or any associate of any such director, officer, affiliate of our Company, or security holder is a party adverse to us or any of our subsidiaries or has a material interest adverse to us or any of our subsidiaries.

ITEM 4. MINE SAFETY DISCLOSURES

There are no reportable events required pursuant to this item.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

Our common stock is quoted on the OTCQB under the symbol “WMTM.” The table below sets forth for the periods indicated the range of the high and low bid information as reported by a brokerage firm, as reported on the Internet, and/or as reported by OTC Markets. These quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commission and may not necessarily represent actual transactions.

			High		Low
FISCAL YEAR ENDED	First	$	0.65	$	0.94
DECEMBER 31, 2013	Second	$	0.53	$	0.75
	Third	$	0.46	$	0.69
	Fourth	$	0.30	$	0.58

FISCAL YEAR ENDED	First	$	0.44	$	0.43
DECEMBER 31, 2014	Second	$	0.37	$	0.37
	Third	$	0.43	$	0.32
	Fourth	$	0.34	$	0.29

Holders

At March 27, 2015, we had approximately 171 record holders of our common stock. The number of record holders was determined from the records of our transfer agent and does not include beneficial owners of common stock whose shares are held in the names of various security brokers, dealers, and registered clearing agencies. We have appointed Interwest Transfer Company, Inc., 1981 East 4800 South, Suite 100, Salt Lake City, UT 84117, to act as the transfer agent of our common stock.

Dividends

We have never declared or paid any cash dividends on our common stock. We do not anticipate paying any cash dividends to stockholders in the foreseeable future. In addition, any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our financial condition, results of operations, capital requirements, and such other factors as the Board of Directors deem relevant.

Purchases of Equity Securities

We have no equity securities registered pursuant to Section 12 of the Exchange Act.

Unregistered Sales of Equity Securities

There were no equity securities sold by us during the year ended December 31, 2014, without registration under the Securities Act that have not been previously reported.

Shareholder’s Rights Plan

On January 18, 2011, we entered into a Rights Agreement (the “Rights Agreement”), dated January 18, 2011, between us, our transfer agent, Interwest Transfer Company, Inc., as Rights Agent (the “Rights Agent”). In connection with the adoption of the Rights Agreement, effective January 18, 2011, the Board of Directors declared a dividend distribution of one right (“Right”) for each outstanding share of our common stock, payable to stockholders of record on January 28, 2011. Each Right, when exercisable, entitles the registered holder to purchase from us one one-thousandth of one share of Series B Junior Participating Preferred Stock at a price of $4.00 per one one-thousandth share (the “Purchase Price”), subject to adjustment.

Initially, the Rights were attached to all certificates representing shares of our common stock then outstanding, and no separate certificates evidencing the Rights would be distributed. The Rights will separate from our common stock and a distribution of Rights Certificates (as defined below) will occur upon the earlier to occur of (i) 10 days following a public announcement that a person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial ownership of 15% or more of the outstanding shares of our common stock (the “Stock Acquisition Date”) or (ii) ten business days (or such later date as the Board of Directors may determine) following the commencement of, or the first public announcement of the intention to commence, a tender offer or exchange offer the consummation of which would result in the beneficial ownership by a person of 15% or more of the outstanding shares of our common stock (the earlier of such dates being called the “Distribution Date”).

Until the Distribution Date, (i) the Rights will be evidenced by our common stock certificates, and will be transferred with and only with the common stock certificates, (ii) new stock certificates issued after January 28, 2011, upon transfer or new issuance of our common stock contained a notation incorporating the Rights Agreement by reference, and (iii) the surrender for transfer of any certificates for shares of our common stock outstanding will also constitute the transfer of the Rights associated with the common stock represented by such certificate.

The Rights are not exercisable until the Distribution Date and will expire at the close of business on January 18, 2021, unless such date is extended, the Rights Agreement is terminated, or the Rights are earlier redeemed or exchanged by us as described below. The Rights will not be exercisable by a holder in any jurisdiction where the requisite qualification to the issuance to such holder, or the exercise by such holder, of the Rights has not been obtained or is not obtainable.

As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Rights Certificates”) will be mailed to holders of record of our common stock as of the close of business on the Distribution Date and, thereafter, the separate Rights Certificates alone will evidence the Rights. Except as otherwise determined by the Board of Directors, only shares of our common stock issued prior to the Distribution Date will be issued with Rights.

In the event that a person becomes the beneficial owner of 15% or more of the then outstanding shares of our common stock, except pursuant to an offer for all outstanding shares of our common stock which the Board of Directors determines to be fair to and otherwise in the best interests of our company and its stockholders (a “Qualifying Offer”), each holder of a Right will, after the end of a redemption period referred to below, have the right to exercise the Right by purchasing, for an amount equal to the purchase price, common stock (or, in certain circumstances, cash, property or other securities of our company) having a value equal to two times such amount, provided that the per share value of the common shares shall not be less than the applicable exercise price of warrants issued pursuant to the Securities Purchase Agreement dated July 7, 2005, as amended, with Rubicon Master Fund, which exercise price is currently $0.50 per share. Notwithstanding any of the foregoing, following the occurrence of the events set forth in this paragraph, all Rights that are, or (under certain circumstances specified in the Rights Agreement) were, beneficially owned by any Acquiring Person will be null and void. However, Rights are not exercisable following the occurrence of the events set forth above until such time as the Rights are no longer redeemable by us as described below.

For example, at a Purchase Price of $4.00 per Right, each Right not owned by an Acquiring Person (or by certain related parties) following an event set forth in the preceding paragraph would entitle its holder to purchase $8.00 worth of our common stock (or other consideration, as noted above) for $4.00. Assuming that our common stock had a per share value of $2.00 at such time, the holder of each valid Right would be entitled to purchase four shares of our common stock for $4.00.

In the event that at any time following the Stock Acquisition Date, (i) we are acquired in a merger or other business combination transaction (other than a merger that follows a Qualifying Offer), or (ii) 50% or more of our assets or earning power is sold or transferred, each holder of a Right (except Rights which previously have been voided as described above) shall, after the expiration of the redemption period referred to below, have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the Purchase Price of the Right (e.g., common stock of the acquiring company having a value of $8.00 for the $4.00 Purchase Price).

At any time after a person or group of affiliated or associated persons becomes an Acquiring Person and prior to the acquisition by such person of 50% or more of the outstanding shares of our common stock, the Board of Directors may exchange the Rights (other than Rights owned by such person or group which have become void), in whole or in part, at an exchange ratio of one share of our common stock (or, in certain circumstances, other equity securities of our company that are deemed by the Board of Directors to have the same value as shares of our common stock) per Right (subject to adjustment).

The Purchase Price payable, and the number of one one-thousandths of a share of Preferred Stock or other securities or property issuable, upon exercise of the Rights are subject to adjustment from time to time to prevent dilution under certain circumstances.

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares will be issued (other than fractions which are integral multiples of one one-thousandth of a share of Preferred Stock) and in lieu thereof, an adjustment in cash will be made based on the market price of the Preferred Stock on the last trading date prior to the date of exercise.

In general, the Board of Directors may redeem the Rights in whole, but not in part, at any time during the period commencing on January 18, 2011, and ending on the tenth business day following the Stock Acquisition Date (the “Redemption Period”) at a price of $0.001 per Right (payable in cash, common stock or other consideration deemed appropriate by the Board of Directors). Under certain circumstances set forth in the Rights Agreement, the decision to redeem the Rights will require the concurrence of a two-thirds majority of the Board of Directors. After the Redemption Period has expired, our right of redemption may be reinstated if an Acquiring Person reduces his beneficial ownership to 10% or less of the outstanding shares of our common stock in a transaction or series of transactions not involving us and there are no other Acquiring Persons. Immediately upon the action of the Board of Directors ordering redemption of the Rights, the Rights will terminate and the only right of the holders of Rights will be to receive the $0.001 redemption price.

Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of our company, including, without limitation, the right to vote or to receive dividends. While the distribution of the Rights will not be subject to federal taxation to stockholders or to us, stockholders may, depending upon the circumstances, recognize taxable income in the event that the Rights become exercisable for common stock (or other consideration) of our company or for common stock of the acquiring company as set forth above.

Except with respect to the Redemption Price of the Rights, any of the provisions of the Rights Agreement may be amended by the Board of Directors prior to the Distribution Date. After the Distribution Date, the provisions of the Rights Agreement may be amended by the Board of Directors in order to cure any ambiguity, defect or inconsistency or to make changes which do not adversely affect the interests of holders of Rights (excluding the interests of any Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement; provided however, no amendment to adjust the time period governing redemption may be made at such time as the Rights are not redeemable.

A total of 500,000 shares of Preferred Stock are reserved for issuance upon exercise of the Rights.

The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to a person or group that attempts to acquire our company without conditioning the offer on a substantial number of Rights being acquired, or in a manner or on terms not approved by the Board of Directors. The Rights, however, should not deter any prospective offeror willing to negotiate in good faith with the Board of Directors, nor should the Rights interfere with any merger or other business combination approved by the Board of Directors.

At least once every three years the Audit Committee of the Board of Directors or a committee of directors comprised of directors who are independent of management and free from any relationship that, in the opinion of the Board of Directors would interfere with their exercise of independent judgment, shall review and evaluate the Rights Agreement in order to consider whether the maintenance of the Rights Agreement continues to be in our interests and our stockholders. Following each such review, the committee will communicate its conclusions to the full Board of Directors, including any recommendation in light thereof as to whether the Rights Agreement should be modified or the Rights should be redeemed.

In association with the $10,000,000 financing entered into with Grand Agriculture Investment Limited in December 2013, on November 27, 2013, we amended the first paragraph of the definition of “Acquiring Person” in Section 1 of the Rights Agreement which was amended and restated in its entirety to read as follows:

“Acquiring Person” shall mean any Person that, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 15% or more of the shares of Common Stock of the Company then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company or any Subsidiary of the Company, or any Person holding shares of Common Stock for or pursuant to the terms of any such employee benefit plan to the extent, and only to the extent, of such shares of Common Stock so held. Notwithstanding the foregoing, Kin Wong together with his Affiliates and Associates (a “Qualified Exempt Person”), who as of January 18, 2011, was the Beneficial Owner of in excess of 15% of the Company’s outstanding Common Stock shall not be deemed an Acquiring Person; provided however, that if after the date hereof, any Qualified Exempt Person shall become at any time the Beneficial Owner of an additional 2% of the shares of Common Stock of the Company then outstanding in excess of the amount such Qualified Exempt Person beneficially owned as of the date hereof, except for and excluding the securities purchased from the Company pursuant to the Binding Memorandum of Understanding dated December 3, 2013, then such Qualified Exempt Person shall be deemed an Acquiring Person hereunder as to all of their Common Stock beneficially owned. Notwithstanding anything in this definition of Acquiring Person to the contrary.

ITEM 6. SELECTED FINANCIAL DATA

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and related notes thereto as filed with this report.

Overview

We are a mineral exploration company engaged in the search for mineral deposits or reserves which could be economically and legally extracted or recovered. We hold two rutile properties located in the Atacama region (Region III) of northern Chile, namely Cerro Blanco and La Martina, with the latter only been discovered in early 2013.

Our principal business is to explore for and develop natural rutile deposits on our Cerro Blanco mining concessions. Our principal objectives are to advance the Cerro Blanco project towards a final engineering feasibility, to secure off-take agreements for the planned rutile concentrate output, and to secure funding or other arrangements to place the project into production, if warranted. It would be the intention to sell the rutile concentrate to titanium metal and pigment producers. In addition, we continue to fund research and development on the Chinuka Process, which is conducting research into the recovery of feldspar and the production of refined titanium metal from materials sourced from these mining concessions.

We have produced no revenues, have experienced losses since inception, have no operations, and currently rely upon the sale of our securities to fund our operations.

Results of Operations

We recorded a loss for the year ended December 31, 2014, of $7,751,071 ($0.10 per weighted average common share outstanding) compared to a loss of $4,493,817 ($0.07 per weighted average common share outstanding) for 2013, representing an increase in the amount of $3,257,254.

Excluding one-time charge of $1,477,774 for write-off of unamortized technology rights due to impairment loss and other items such as interest and foreign exchange, our loss from operations was $6,205,330 for the year ended December 31, 2014(2013: $4,405,662), an increase of $1,799,668.

A significant increase in operating expenses in 2014 compared to 2013 was primarily due to increase in exploration expense, increase in management fee and director and officer consulting fee, and increase in consulting fee relating to equity financing. The analysis of these expenses is as follows:

•	Exploration expense of $2,403,199 for 2014 as compared to $1,725,190 for 2013, a 35% increase of $678,009. The increase is due to more consulting and geological works necessary to complete the EIS. At the end of year 2014, the EIS project is close to completion.

•

Consulting expense of $570,985 for 2014 as compared to $204,057 for 2013. Consulting fees paid to financial adviser for the first and second tranche equity finance and other finance consulting contributed an increase of $273,928 in consulting expense during 2014. Engaging TZ Minerals International Pty Ltd, a mineral marketing and consulting firm caused $93,000 increase in the expense.

•

Management and Consulting fees for directors and officers increased by $794,874 to $1,663,365 for 2014 from $868,491 for 2013. The increase was primarily from non-cash expense for stock based compensation ($197,400 for stock issued and $163,892 for options granted to directors and officers pursuant to our 2010 stock/option plan, $376,588 for amortization of grant date fair value of warrants and amendment of these warrants originally issued to an existing and a former executive officer and $47,768 for bonus shares issuable upon meeting certain performance and market conditions). Increased management service also contributed to the increase of consulting fees in 2014.

Advertising and Promotion expense was $36,286 (2013: $35,367), the same level as for 2013.

Professional fees were $425,368 (2012: $275,756), the increase was consistent with the significant increase in the level of exploration activities we conducted during 2014 for the EIS project and establishing Hong Kong and China operations.

For 2014, we ceased providing funds to Chinuka process research due to cash restraints. As a result, Research and Development expense decreased to $8,197 (2013: $335,188). Ceasing to fund Chinuka caused a write-off of our Technology Rights, a long-lived asset, as management concluded the carrying amount of the intangible asset may not be recoverable.

Travel and vehicle expense was $284,913 (2013: $165,181). Travel expense increased as a result of increased activities associated with raising funds and attendance of industry conferences.

Liquidity and Cash Flow

As of December 31, 2014, we had working capital of $747,390 (2013: $1,692,148) including $949,806 (2013: $2,056,996) of cash.

Cash used in operating activities totaled $5,130,308 (2013: $3,742,216). As discussed earlier on the results of operation, the increase of cash used in operating activities is a result of increased activities in completion of the EIS project, increase in consulting and management service, resuming operation in Hong Kong and initiating operation in China. For the cash used, $2,403,199 of this amount was spent on exploration and technical work related activities in association with EIS project, $1,370,938 on management fees, $1,092,086 on consulting and professional service and the balance on general and administrative expenditures during the current year.

Cash used in investing activities was $161,882 (2012: $78,259). During the year, the majority of the spending ($124,000) was from renovation of an office we leased for China operation and purchase of furniture for office use. The rest was used in purchase of mining equipment and access rights on an easement.

In 2014, we raised a total of $4,185,000 in net cash through financing activities (2013: $4,750,751). Two private placements were completed for gross proceeds of $4,500,000 less selling commissions, finders’ fees and legal fees of $315,000. The proceeds were used to support our operating activities during the year.

We have prepared a 2015combined operating budget which incorporates general corporate and administrative expenses as well as a base case of Chilean operations plus expenditures to complete the EIS project.

We anticipate 2015expenditures on our Chilean operations including EIS expenditure to be as follows:

Equipment &Desalination Plant Site	$	242,785
Additional Process Test Work		33,776
Environmental		417,009
Technical Staff		627,976
G & A		802,828
Total	$	2,124,374

Our planned work programs for 2015 under the current budget, once completed, will enable us to obtain the approval of the EIS, commence fundamental engineering work and continue environmental dust monitoring. As discussed in this document, we have a total of $3.5million committed from the sale of Second Tranche Units pursuant to a MOU dated April 10, 2014 with the Investor. We anticipate that our current cash holding plus the committed net $3.4million will provide sufficient funding to carry out our planned work programs as well as to finance the necessary general corporate and administrative expenses in 2015.

We anticipate that we will need to raise additional funds in order to complete Bankable Feasibility Studies (the “BFS”). We estimate that approximately $4,000,000 - $5,000,000 in additional funding would be needed to complete work necessary for the BFS. If we are able to raise a further $1,300,000 - $1,500,000, we will undertake additional exploration work on those prospects that exhibit large geophysical signatures and/or high TiO2 grades at surface, as recommended by our NI 43-101 Consultants. If successful, this work could significantly increase the scale of our project.

We believe that the prospects are such that we will be able to raise sufficient funds. However, there are a number of risk factors which will influence our ability to do so, including the state of the capital markets generally, and the market price of our common stock. With the exception of funds on deposit and the expected $3,500,000 from the final sale of Second Tranche Units, we have no other sources of committed funds, except for outstanding warrants for which there are no commitments to exercise. The most likely source of new funds would be an equity placement of common shares or some form of strategic alliance. We believe that a failure to raise funds in a timely manner would likely delay the achievement of some of our project milestones, would delay any decision regarding the viability of operations while likely increasing future costs, and would affect our ability to continue as a going concern.

Off-Balance Sheet Arrangements

During the year ended December 31, 2014, the Company did not have any off-balance sheet arrangements.

Critical Accounting Estimates

The Company accounts for stock-based compensation expenses associated with stock options and other forms of equity compensation in accordance with ASC 718-10, Share-Based Payment, as interpreted by SEC Staff Accounting Bulletin No. 107. ASC 718-10 requires the Company to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as expense over the requisite service periods in the Company’s statement of operations. The Company uses the straight-line single-option method to recognize the value of stock-based compensation expense for all share-based payment awards. Stock-based compensation expense recognized in the statement of operations is reduced for estimated forfeitures, as it is based on awards ultimately expected to vest. ASC 718-10 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

During the year ended December 31, 2014, the Company granted bonus shares to management issuable based on certain market and performance conditions. In addition, the Company issued shares held in escrow with performance conditions. Further, the Company modified warrants issued in 2010. All these share-based compensations were accounted for in accordance with ASC 718.

The Company ceased funding the research of Chinuka Process in 2014. We assessed the impact on our technology rights relating to Chinuka Process and, to be prudent, we recognized an impairment loss by writing off the carrying value of this intangible asset based on our assessment.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, we have elected not to provide the disclosure required by this item.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The financial statements and supplementary data required by this item are included following the signature page of this report.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

No events are reportable pursuant to this item.

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our principal executive officer, Kin Wong, and our principal financial officer, Eric Gan, have concluded, based on their evaluation, as of the end of the period covered by this report, that our disclosure controls and procedures (as defined in Rule 15d-15(e) under the Exchange Act) are (1) effective to ensure that material information required to be disclosed by us in reports filed or submitted by us under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, and (2) designed to ensure that material information required to be disclosed by us in such reports is accumulated, organized and communicated to our management, including our principal executive officer and principal financial officer, as appropriated, to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of our company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management assessed our internal control over financial reporting as of December 31, 2014, the end of our fiscal year. Management based its assessment on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO 2013 Criteria). Management’s assessment included evaluation of such elements as the design and operating effectiveness of key financial reporting controls, process documentation, accounting policies, and our overall control environment.

Based on our assessment, management has concluded that our internal control over financial reporting was effective, as of the end of the fiscal year, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with generally accepted accounting principles.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting (as defined in Rule 15d-15(f) under the Exchange Act) that occurred during the year ended December 31, 2014, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

No events are reportable pursuant to this item.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The following table sets forth as of March 27, 2015, the name and ages of, and position or positions held by, our executive officers and directors, the employment background of these persons, and any directorships held by the current directors during the last five years in any company with a class of securities registered pursuant to section 12 of the Exchange Act or subject to the requirements of section 15(d) of the Exchange Act or any company registered as an investment company under the Investment Company Act of 1940. The Board believes that all the directors named below are highly qualified and have the skills and experience required for effective service on the Board. The directors’ individual biographies below contain information about their experience, qualifications and skills that led the Board to nominate them.

			Director
Name	Age	Positions	Since	Employment Background
Kin Wong	46	Director, Chairman, Chief Executive Officer	2014	Mr. Wong has served as our Chairman and Chief Executive Officer since 2014 and has over 20 years of successful operation, business development and restructuring, and investment experience. He founded and since 2009 has been the Chairman and CEO of both Zhejiang Jingyue Oriental Hotel Management Co. and Zhejiang ShiliQianXi Tourism Development Co., a leading tourism and commercial property development firm in Zhejiang Province. From 2006 to 2009, he was the founder and Chairman of Dongguan Xingyu Property Development Co. and Hong Kong Yuxin Properties, during which tenure he successfully developed a luxury commercial and residential hybrid property. Prior to that, he worked for the hotel and property development arm of China Travel Service Holding Hong Kong Limited for over 10 years with progressive managerial responsibilities to eventually become the CEO of a major subsidiary -- Guangzhou Yishun Property Development Co. in 2003, overseeing several billions of Chinese Yuan worth of hotel, office, shopping mall and high end residential property development, restructuring, and investment. Mr. Wong obtained his MBA from Jinan University in 1995.

Michael P. Kurtanjek	63	Director, President, Chief Operating Officer	2004	Mr. Kurtanjek has served as our President since February 2004 and as our Chief Operating Officer since 2014. Mr. Kurtanjek holds a Ph.D. in Metallurgy from the University of Birmingham, U. K. In 1978 he joined British Steel, and worked on a variety of metallurgical projects in Europe, the Middle East and Asia through 1988. From 1988 to 1995, he worked in investment banking with James Capel& Co. and Credit Lyonnais Securities. From 1995 to 2004, he was a director of Grosvenor Corporate Capital Ltd., a private business consulting firm.

Howard M. Crosby	61	Director	2004	Since 1989, Mr. Crosby has been president of Crosby Enterprises, Inc., a family-owned business advisory consulting firm. From 1994 to June of 2006 he served as president and director of Cadence Resources Corporation, a publicly traded oil and gas company. He served as an officer and director of Independence Resources PLC from March of 2010 until October of 2013. He currently serves as President and Director of Shoshone Silver/Gold Mines, Inc., a reporting company. Mr. Crosby is also a director or advisor to a number of privately held companies. He received a bachelor’s degree from the University of Idaho in 1975.

Wei Lu	47	Director	2008	Wei Lu has been a partner of Cybernaut Capital Management Ltd, a private equity firm with a Greater China regional focus since 2008, and has over fifteen years of diverse experience in investment research and management as well as business operations. From 2005 until 2007 he was previously a vice president of The Blackstone Group, assisting in managing an Asia Pacific investment fund. Prior to Blackstone, from 2004 to 2005, he was a vice president and senior analyst at Oppenheimer Asset Management and a vice-president and senior analyst at Bank of New York Capital Markets from 1998 to 2001. From 2001 until 2004 he was also a co- founder and CFO of the San Francisco headquartered internet technology and consulting firm SRS2 Inc. Mr. Lu received an MBA degree from Northeastern University in 1993, an MS in Economics from the University of Connecticut in 1992, and a Bachelor of Science degree in International Business from Shanghai Jiaotong University in 1988. Mr. Lu is a Chartered Financial Analyst Charter holder.

John J. May	62	Director	2008	Mr. May has been the managing partner of City and Westminster Corporate Finance LLP, a financial consulting firm, registered under the UK FCA since April 2008. He has also been the senior partner of John J. May Chartered Accountants since July 1994. He retired as a senior partner, of 17 years standing, from Crowe Clark Whitehill, an International Accountancy firm, in June 1994. Mr. May is the Chairman of; Red Leopard Holdings PLC, a mining company and of Hayward Tyler Group Plc, an engineering company and a director of Pires Investments Plc, which are all listed on the AIM in the UK. He is Chairman of the Genesis Initiative Limited, a lobbying group for small and medium sized businesses to the UK Government. An elected Councillor for the Borough of Surrey Heath since 2003, he is also a Freeman of the City of London.

Yee Y (Sue) Pei	52	Director	2014	Ms. Pei has spent over 20 years in investment projects in China, across different industries including infrastructure, terminal, hotel, estate, agricultural, pharmaceutical, and mobile internet. In 1992 she joined Hutchison Whampoa China which was involved in investing, building and operating hotel, agricultural, pharmaceutical, mobile devices, and application projects in China. Ms. Pei was one of the leading team members who initiated the project feasibility study, went through the contract negotiation, and established the joint venture for Hutchison Beijing Tongrentang, Hutchison Shenyang Times Hotel, and Hutchison Heilongjiang Agricultural joint venture companies. In 1998 Ms. Pei was appointed and served through June 2010 as General Manager and board director for the joint venture companies in China and gained extensive China experience through the daily operation. From June 2010 through June 2013, she served as Executive Director of Beijing WHSD, which was engaged in the mobile internet business including the company’s strategic plan, budgeting, financial control, etc. From September 1990 until June 1992 Ms. Pei was enrolled in Management Studies at the University of Oxford. In 1986 she received a Bachelor of Arts degree in English Literature at Yanjing University and in 2008 she received a PhD in Agricultural Economic Management at Northeast Agricultural University in China.

Weigang Greg Ye	45	Director	2014	Mr. Ye has more than 15 years of experience in private equity, entrepreneurship, executive management and consulting. In 2010 he was one of the founding partners of Delta Capital, a domestic private equity firm in China specializing in early growth equity investments in China, focusing on sectors such as clean technology, high-margin manufacturing, and consumer and information technology, where he has served in Executive Management. From 2006 until 2010 Mr. Ye was a managing partner of Shanghai NewMargin Ventures, a private equity management company in China managing over 10 RMB and USD private-equity funds since its inception in 1999, with total assets under management exceeding RMB 10 billion. During his tenure in NewMargin, Mr. Ye led the investment activities in the clean technology, high-margin manufacturing and IT sectors. Prior to his work at NewMargin, Mr. Ye worked for Cadence Design Systems Inc., a global software company, as Group Director of Corporate Strategy and Business Development, and was with PricewaterhouseCoopers, responsible for financial audit and capital market consulting projects. He has served on the Board of Directors for Dago New Energy from 2009 until 2011 and for Sunking Group since 2008. Mr. Ye graduated in 1993 from Northeast Missouri State University with a Master of Accountancy Degree and obtained his MBA degree from Harvard University in 2001. Mr. Ye is a U.S. CPA in inactive practice status.

Eric Gan

Chief Financial
Officer

Mr. Gan has served as our Chief Financial Officer since July 2014. From November 2011 to the present, Mr. Gan has worked as a Senior Financial Consultant for The Goetzman Group Inc., a company that provides financial staffing services to Fortune 500 companies. As part of his employment, Mr. Gan is responsible for reviewing financial schedules, account variance analysis and reconciliations, accounting process reengineering, and Sarbanes-Oxley compliance. During to his employment with the Goetzman Group Inc., Mr. Gan served as Chief Financial Officer for China SLP Filtration Technology, Inc., a U.S. public company located in China. As Chief Financial Officer, Mr. Gan’s responsibilities included working with auditor and securities counsel on SEC filings and preparing financial statements in accordance with U.S. GAAP for inclusion with SEC filings. Mr. Gan was awarded a Master of Accounting from the University of Southern California, Los Angeles, California, a Master of Arts from Fudan University, Shanghai, and a Bachelor of Arts from Nanchang University, Nanchang, P.R. China.

There are no family relationships between any director, executive officer, or person nominated or chosen by the Company to become a director.

Leadership Structure

Mr. Wong serves as our Chief Executive Officer and as Chairman of our Board of Directors. The Board attempts to ensure that thorough, open and honest discussions take place at all Board and committee meetings, and that all of the directors are sufficiently informed about each matter that arises so that appropriate action may be taken.

Management is responsible for the day-to-day management of risks confronting our businesses, but our Board has broad oversight responsibility for our risk management programs, including enterprise strategic risk oversight. Our Board as a whole oversees risks related to our corporate and business strategies, operations and enterprise risk management. In performing its oversight role, our Board is responsible for satisfying itself that the risk management processes designed and implemented by our management are functioning, and that necessary steps are taken to foster a culture of risk-adjusted decision-making within our organization.

Involvement in Certain Legal Proceedings

During the past ten years there have been no events under any bankruptcy act, no criminal proceedings and no judgments, injunctions, orders or decrees material to the evaluation of the ability and integrity of any of our directors or executive officers, and none of our executive officers or directors has been involved in any judicial or administrative proceedings resulting from involvement in mail or wire fraud or fraud in connection with any business entity, any judicial or administrative proceedings based on violations of federal or state securities, commodities, banking or insurance laws or regulations, and any disciplinary sanctions or orders imposed by a stock, commodities or derivatives exchange or other self-regulatory organization

Audit and Compensation Committees

We have a standing audit committee composed of Weigang Greg Ye, Wei Lu and John J. May. The board has determined that Messrs. May and Ye would both qualify as audit committee financial experts. Mr. May serves as chairman of this committee.

We also have a standing compensation committee composed of the following directors: Yee Y (Sue) Pei, Howard M. Crosby, John J. May and Wei Lu. Ms. Pei serves as chairman of this committee.

The board has adopted a policy to compensate non-executive directors who are members of committees of the board. These persons will receive $1,000 plus expenses for attendance in person at each committee meeting. They will receive $500 for attendance at committee meetings by conference telephone. In addition, each chairman of the committee will receive $1,000 per meeting they chair.

Nominating Procedures

We do not have a standing nominating committee; recommendations for candidates to stand for election as directors are made by the Board of Directors. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors.

Shareholder Communications

The Company encourages stockholder communications to our board of directors and/or individual directors. Stockholders who wish to communicate with our board of directors or an individual director should send their communications to the care of Michael P. Kurtanjek, President, Augusto Leguia 100, Oficina 1401, Las Condes, Santiago Chile.

Code of Ethics

On August 30, 2005, we adopted a Code of Ethics which applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, as well as to other employees or contractors and anyone associated with our company.

ITEM 11. EXECUTIVE COMPENSATION

Executive Compensation Summary

The following table sets forth information concerning the annual compensation awarded to, earned by, or paid to the following named executive officers for all services rendered in all capacities to our company and its subsidiaries for the years ended December 31, 2014 and 2013.

SUMMARY COMPENSATION TABLE

			Stock	Option	All Other
Name and Principal		Salary⁽¹⁾	Awards⁽²⁾	Awards⁽²⁾	Compensation⁽³⁾	Total
Position	Year	($)	($)	($)	($)	($)
Kin Wong	2014	81,000	8,995	60,982	nil	150,977
CEO	2013	nil	nil	nil	nil	nil

Michael P. Kurtanjek	2014	240,000	42,000	188,294	27,363	497,657
President and former CEO	2013	240,000	nil	nil	27,363	267,363

Brian Flower	2014	158,200	74,788	188,294	nil	421,282
Former Executive Vice President	2013	210,000	nil	nil	nil	210,000

⁽¹⁾	Amounts shown represent base salary earned or paid during the fiscal year pursuant to management service agreements described below.

⁽²⁾	The grant date fair value of all stock and option awards has been calculated in accordance with applicable financial accounting standards. For fiscal 2014, the Company issued 100,000 shares of common stock to Mr. Kurtanjek and Mr. Flower respectively. For fiscal 2014, we have granted 400,000 stock options to Mr. Wong. Amended warrants granted to Mr. Kurtanjek and Mr. Flower from 1,000,000 warrants to 300,000 warrants each and committed to issuing 300,000 and 200,000 bonus shares to Kin Wong and Brian Flower respectively based on meeting certain performance and service conditions. These options/warrants are fully vested immediately after the grant date.

⁽³⁾	The additional compensation for Mr. Kurtanjek represents the cost to us to maintain an apartment for him in Chile.

Executive Employment Agreements

Kurtanjek Management Services Agreement

On February 6, 2006, we entered into a one-year renewable Management Services Agreement effective February 1, 2006, with Mr. Kurtanjek for service as President and chief executive officer of our company and for providing management of the planning, implementation, and reporting on exploration, feasibility, and project development activities carried out on the Cerro Blanco property. This agreement was amended on August 31, 2007, December 21, 2007, January 1, 2010, and effective May 1, 2011. On June 2, 2011, the Compensation Committee recommended and the Board approved an increase in Mr. Kurtanjek’s monthly salary to $20,000 effective May 1, 2011; for 2010 and the first four months of fiscal 2011, his monthly salary was $15,410.

The term of the amended agreement expires on December 31, 2015, and will be automatically extended for additional one-year terms unless it is terminated by us six months prior to December 31, 2015, or six months prior to any extended period. The agreement may also be terminated by either party without cause upon six months’ written notice. Mr. Kurtanjek will also be entitled to participate in our annual management share compensation pool and will receive not less than 25% per year from such pool. The amended agreement also provides for severance payments in the event of termination upon a change of control by which he would receive a severance payment equal to three times the highest annual base salary, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination. Mr. Kurtanjek devotes essentially all of his time to the business of our company. Mr. Kurtanjek is also eligible to receive stock bonuses upon achieving the following milestones: 300,000 shares upon the signing of the first definitive strategic alliance agreement and/or arrangement of project capital; 200,000 shares upon listing of the common stock on a senior exchange; and 200,000 shares upon completion of a final feasibility study.

On September 29, 2014, the Compensation Committee recommended and the Board approved an amendment to the existing Management Services Agreement with Michael P. Kurtanjek pursuant to which changes were made to the compensation payable to Mr. Kurtanjek which are summarized as follows:

•

Commencing retroactive to August 1, 2014, and until the month during which the Company receives regulatory approval of the EIS, Mr. Kurtanjek will not receive $5,000 of his $20,000 monthly salary. The unpaid portion will accrue, without interest, and be paid promptly, but not later than the last business day of the calendar month next following receipt of the EIS.

•	On or about February 7, 2010, the Company granted to Mr. Kurtanjek a five-year incentive warrant to purchase up to 1,000,000 shares of common stock of the Company at $1.50 per share. The warrant was amended as follows: (i) the expiration date of the warrant was extended to December 31, 2017; (ii) the number of warrants was reduced to 300,000; and (iii) the exercise price of the warrants was reduced to $0.65.

•	Mr. Kurtanjek retains his right to participate in the Company’s annual share compensation pool, but the right to at least 25% of the pool has been eliminated.

On December 30, 2013, the Board of Directors approved the grant of 100,000 fully-vested shares of Common Stock of the Company to Mr. Kurtanjek for services performed as a director and officer to be issued upon approval of the EIS.

The Rich Top Agreement

Under the terms of the Rich Top Agreement, Mr. Wong agreed to serve as Chairman and Chief Executive Officer of the Company and his company will provide designated management services. The terms of the agreement are retroactive to July 1, 2014, when Mr. Wong first began providing the services. The base amount payable under the agreement is $13,500 per month, plus reimbursable out of pocket expenses. Effective August 1, 2014, and until the month during which the Company receives regulatory approval of its EIS, $1,700 of this base amount will not be paid but will accrue, without interest, and be paid promptly, but not later than the last business day of the calendar month next following receipt of the EIS. As a signing bonus, the Company granted to Mr. Wong options to purchase up to 400,000 shares of common stock pursuant to the terms of the Company’s 2010 Stock Option/Stock Issuance Plan (the “Plan”). These options are fully vested, will expire on December 31, 2017, and are exercisable at $0.45 per share. In addition, the Company has agreed to grant Mr. Wong the following stock bonuses under the Plan: (i) 300,000 shares after the closing price of the Company’s stock has been maintained at or above the price of $1.00 per share for at least two thirds of the trading days during any 30-consecutive-trading-days’ period, (ii) 500,000 shares upon the Company signing the first definitive strategic alliance agreement and/or arrangement of project capital of not less than $10,000,000, excluding the current funding as provided in the Binding MOU, as amended; and (iii) 200,000 shares upon obtaining a listing for the Company’s stock on a senior stock exchange in Asia. Mr. Wong will also be entitled to participate in the Company’s annual management share compensation pool. The Company has agreed to provide him with the use of office space at the Company’s offices. The agreement also provides for severance payments in the event of termination upon a change of control by which he would receive a severance payment equal to the highest annual base amount, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination. The agreement may be terminated by either party without cause upon three months’ written notice.

On September 29, 2014, the Board of Directors of the Company approved the grant of 400,000 fully-vested options to Mr. Wong. The options are exercisable at $0.45 and expire December 31, 2017.

Chapelle Management Services Agreement

On August 1, 2009, we entered into a Management Services Agreement with Chapelle Capital Corp., a company partly owned by Brian Flower, a former executive officer and director. Under this agreement Mr. Flower was to act as our Executive Chairman and provide management services. This agreement was amended effective January 1, 2010 and May 1, 2011. On June 2, 2011, the Compensation Committee recommended and the Board approved an increase in Mr. Flower’s monthly salary to $20,000 effective May 1, 2011; for 2010 and the first four months of fiscal 2011, his monthly salary was $13,340. The term of the amended agreement was to expire on December 31, 2015, and could be automatically extended for additional one-year terms unless it is terminated by us six months prior to December 31, 2015, or six months prior to any extended period. The agreement could also be terminated by either party without cause upon six months’ written notice. Mr. Flower was also entitled to participate in our annual management share compensation pool and will receive not less than 25% per year from such pool. The amended agreement also provided for severance payments in the event of termination upon a change of control by which he would receive a severance payment equal to three times the highest annual base salary, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination. Mr. Flower was also eligible to receive stock bonuses upon achieving the following milestones: 300,000 shares upon the signing of the first definitive strategic alliance agreement and/or arrangement of project capital; 200,000 shares upon listing of the common stock on a senior exchange; and 200,000 shares upon completion of a final feasibility study.

On September 29, 2014, the Compensation Committee recommended and the Board approved an amendment to the existing Management Services Agreement with Chapelle Capital pursuant to which changes were made retroactive to March 1, 2014:

•	The amount of time required under the agreement was reduced from 80% of Mr. Flower’s time to 60% of his time.

•	The termination date of the agreement was set as September 30, 2014, to coincide with the closing of the Company’s Vancouver office.

•	Mr. Flower relinquished his right to bonus shares except for a bonus of 200,000 shares of common stock upon completion of the EIS, even if this occurs after expiration of the term of the agreement.

•	On or about February 7, 2010, the Company granted to Mr. Flower a five-year incentive warrant to purchase up to 1,000,000 shares of common stock of the Company at $1.50 per share. The warrant was amended as follows: (i) the expiration date of the warrant was extended to December 31, 2017; (ii) the number of warrants was reduced to 300,000; and (iii) the exercise price of the warrants was reduced to $0.65.

•	Mr. Flower will receive 100,000 shares under the Company’s annual share compensation pool for 2014 and has eliminated the right to at least 25% of the pool.

•	Following the expiration of the Chapelle Capital Amended Agreement, Mr. Flower has agreed to make himself available on a project-by-project basis to assist the Company on its Cerro Blanco project under terms which the parties intend to negotiate prior to Mr. Flower performing these post-expiration services.

Mr. Flower has resigned as Executive Chairman, Executive Vice-President, and director of the Company.

On December 30, 2013, the Board of Directors approved the grant of 100,000 fully-vested shares of Common Stock of the Company to Mr. Flower for services performed as a director and officer.

Equity Awards

The following table provides information on stock and option awards held by the named executive officers as of December 31, 2014:

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

		Option Awards
		Number of
		Securities
		Underlying
		Unexercised
		Options	Option
		(#)	Exercise Price	Option Expiration
Name	Grant Date	Exercisable	($)	Date
Kin Wong	10/2/14	400,000	0.45	12/31/2017

		Stock Awards
		Number	Market
		of Shares	Value of
		or Units	Shares of
		of Stock	Units of
		that Have	Stock that
		Not Vested	Have Not Vested
Name	Grant Date	(#)	($)
Michael Kurtanjek	09/28/14	200,000⁽¹⁾	68,000
	09/28/14	200,000⁽²⁾	68,000
	09/28/14	300,000⁽³⁾	102,000
Kin Wong	09/28/14	500,000⁽⁴⁾	170,000
	09/28/14	200,000⁽²⁾	68,000
Brian Flower	09/28/14	200,000⁽⁵⁾	68,000

⁽¹⁾	Will vest upon reaching final feasibility.
⁽²⁾	Will vest upon listing with senior exchange.
⁽³⁾	Will vest upon reaching stock price greater than $1.00 for a period of time
⁽⁴⁾	Will vest upon signing of first definitive strategic alliance agreement and/or arrangement of project capital.
⁽⁵⁾	Will vest upon completion of EIS

Stock Option Plan

Our Board of Directors adopted a Stock Option Plan on August 30, 2005. Our shareholders approved the plan on November 10, 2006. The purpose of the plan is to provide eligible persons an opportunity to acquire a proprietary interest in our company and to participate in the profitability of the company.

There are 3,140,000 shares of common stock authorized for stock options under the plan, which are subject to adjustment in the event of stock splits, stock dividends, and other situations. In addition, aggregate grants to a single person are limited to 5% of the total number of issued and outstanding shares and the aggregate number authorized for grants to insiders is limited to 20% of the issued and outstanding shares. Grants to consultants are limited to 2% of the issued and outstanding shares.

The plan is administered by our Board of Directors. Participants in the plan are to be selected by our Board of Directors. The persons eligible to participate in the plan are as follows: (a) directors of our company and its subsidiaries; (b) officers of our company and its subsidiaries; (c) employees of our company and any of its subsidiaries; and (d) those engaged by us to provide ongoing management or consulting services, or investor relations activities for us or any entity controlled by us.

The purchase price under each option is established by the Board of Directors at the time of the grant and may not be discounted below the maximum discount permitted under the policy of the Toronto Exchange.

The Board of Directors will fix the terms of each option, but no option can be granted for a term in excess of five years. The Board of Directors will not impose a vesting schedule upon any options granted which provides for exercise of an option for less than 25% of the shares subject to the option upon approval of listing of our stock on the Toronto Exchange and 12.5% every quarter thereafter.

During the lifetime of the person to whom an option has been granted, only that person has the right to exercise the option and that person cannot assign or transfer any right to the option.

In the event of the death of the option holder, the options will immediately vest and may be exercised for up to one year from the date of death. If the option holder’s relationship with us is terminated for cause, the unexercised options will immediately terminate. If the option holder retires, voluntarily resigns, or is terminated for other than cause, the options will be exercisable for 90 days thereafter or for 30 days if the person was engaged in investor relations.

In the event of the corporate take-over, reorganization or change of control, the options will vest and the holder may exercise the options or, in the event of a corporate reorganization, receive the kind and amount of shares or other securities or property that he would have been entitled to receive if he had been a holder of shares of our company at the time of the reorganization, or, if appropriate, as otherwise determined by the Board of Directors.

2010 Stock Option/Stock Issuance Plan

The options held by the named executive officers at year-end were granted pursuant to our Stock Option/Stock Issuance Plan adopted on June 29, 2010. The purpose of the plan is to provide eligible persons, including our officers and directors, an opportunity to acquire a proprietary interest in our company and as an incentive to remain in our service.

There are 8,590,450 shares of our common stock authorized for non-statutory and incentive stock options and stock grants under the plan, which are subject to adjustment in the event of stock splits, stock dividends, and other situations. The number of shares of our common stock available for issuance under the plan will automatically increase by an amount such that on the first trading day of January each calendar year during the term of the plan, beginning with calendar year 2011, the number of shares of our common stock reserved and available for issuance under the plan will represent 10% of the total number of shares of our common stock outstanding on the last trading day in December of the immediately preceding calendar year.

The plan is administered initially by the Board of Directors. The persons eligible to participate in the plan include: (a) our employees and employees of our subsidiaries; (b) non-employee members of our Board or non-employee members of the board of directors of any of our subsidiaries; (c) our officers or officers of any subsidiary; and (d) consultants and other independent advisors who provide services to us or any of our subsidiaries.

The plan will continue in effect until all of the stock available for grant or issuance has been acquired through exercise of options or grants of shares, or until ten years after the adoption of the plan by the Board of Directors, whichever is earlier. The plan may also be terminated in the event of certain corporate transactions such as a merger or consolidation or the sale, transfer or other disposition of all or substantially all of our assets.

Management Compensation Pool

The Board of Directors has approved an employee benefit plan for officers, directors, and employees to increase stockholder value and the success of the company by motivating members of management to provide services to the company and perform to the best of their abilities, to achieve the company’s objectives, and to allow us to minimize the cash component of compensation while at the same time providing a sufficiently attractive overall compensation plan with which to attract and retain management. The plan will be open to directors, officers or employees of or consultants to our company or an affiliate of the company. The pool will consist of up to 1% of the outstanding shares at the end of each year. Participants in the pool will be determined by our Chairman subject to approval by the Compensation Committee, and grants will be made under our 2010 Stock Option/Stock Issuance Plan.

Director Compensation

The following table sets forth certain information concerning the compensation of our directors, excluding the named executive officers whose total compensation is set forth in the Summary Compensation Table above, for the last fiscal year ended December 31, 2014:

DIRECTOR COMPENSATION

	Fees Earned or
	Paid in Cash⁽¹⁾	Stock Awards	Option Awards	Total
Name	($)	($)⁽²⁾	($)⁽²⁾	($)
Howard M. Crosby	nil	25,200	nil	25,200
Wei Lu	3,500	33,600	45,737	82,837
John J. May	9,500	25,200	nil	34,700
Yee Y (Sue) Pei	7,000	nil	30,491	37,491
Weigang Greg Ye	4,000	nil	26,680	30,680

⁽¹⁾	Non-executive directors receive $1,000 plus expenses for attendance in person at each meeting of the Board of Directors and receive $500 for attendance at such meetings by conference telephone. Also non-executive directors who are members of committees of the board receive $1,000 plus expenses for attendance in person at each committee meeting and they receive $500 for attendance at committee meetings by conference telephone. In addition, each chairman of a committee receives $1,000 per meeting they chair.

⁽²⁾	The grant date fair value of all stock and option awards has been calculated in accordance with applicable financial accounting standards. For fiscal 2014, the Company issued 60,000 shares of common stock to Messrs. May and Crosby, respectively, and 80,000 shares of common stock to Mr. Lu. For fiscal 2014, we have granted 300,000 stock options to Mr. Lu, 200,000 stock options to Ms. Pei, and 175,000 stock options to Mr. Ye. These options are fully vested immediately after the grant date.

Management and Business Agreements

Crosby Enterprises Business Consultant Agreement

On August 1, 2005, we entered into a five-month renewable Business Consultant Agreement, as amended effective December 21, 2007, with Crosby Enterprises, an entity controlled by Howard M. Crosby, one of our directors. On February 6, 2006, we renewed this agreement from January 1, 2006 through May 31, 2006, and have since extended it on a month-to-month basis. Crosby Enterprises has agreed to perform financial consulting and public relations services for us. The monthly compensation payable under the agreement is $6,500 per month. Mr. Crosby devotes approximately 40% of his time to the fulfillment of the obligations under this agreement. In the event of termination upon a change of control, Crosby Enterprises will be compensated as follows: immediate payment of a severance amount equal to three times the highest annual base cash compensation paid to it; the immediate vesting of any outstanding unvested options, warrants, or other convertible instruments; the pro rata amount of any bonuses for which it is eligible; the extension of the exercise period for at least six months following such termination.

On December 30, 2013, the Board of Directors approved the grant of 60,000 fully-vested shares of Common Stock of the Company to Mr. Crosby for services performed as a director.

The W Formation Agreement

Under the terms of the W Formation Agreement, Mr. Lu and his company will provide designated management services. The terms of the agreement are retroactive to April 1, 2014, when Mr. Lu first commenced providing the services. The base amount payable under the agreement is $13,500 per month, plus reimbursable out of pocket expenses. Effective August 1, 2014, and until the month during which the Company receives regulatory approval of its EIS, $1,700 of this base amount will not be paid but will accrue, without interest, and be paid promptly, but not later than the last business day of the calendar month next following receipt of the EIS. As a signing bonus, the Company granted to Mr. Lu options to purchase up to 300,000 shares of common stock pursuant to the terms of the Plan. These options are fully vested, will expire on December 31, 2017, and are exercisable at $0.45 per share. In addition, the Company has agreed to grant Mr. Lu the following stock bonuses under the Plan: (i) 200,000 shares after the closing price of the Company’s stock has been maintained at or above the price of $1.00 per share for at least two thirds of the trading days during any 30-consecutive-trading-days’ period, (ii) 350,000 shares upon the Company signing the first definitive strategic alliance agreement and/or arrangement of project capital of not less than $10,000,000, excluding the current funding as provided in the Binding MOU, as amended; and (iii) 150,000 shares upon obtaining a listing for the Company’s stock on a senior stock exchange in Asia. Mr. Lu will also be entitled to participate in the Company’s annual management share compensation pool. The Company has agreed to provide him with the use of office space at the Company’s offices. The agreement also provides for severance payments in the event of termination upon a change of control by which he would receive a severance payment equal to the highest annual base amount, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination. The agreement may be terminated by either party without cause upon three months’ written notice.

On December 30, 2013, the Board of Directors approved the grant of 80,000 fully-vested shares of Common Stock of the Company to Mr. Lu for services performed as a director.

On September 29, 2014, the Board of Directors of the Company approved the grant of 300,000 fully-vested options to Mr. Lu. The options are exercisable at $0.45 and expire December 31, 2017.

Other Option Grants to Directors

On December 30, 2013, the Board of Directors approved the grant of 60,000 fully-vested shares of stock to Mr. May for services performed as a director.

On October 1, 2014, the Board of Directors approved the grant of 200,000 fully-vested stock options to Ms. Pei for services performed as a director.

On October 1, 2014, the Board of Directors approved the grant of 175,000 fully-vested stock options to Mr. Ye for services performed as a director.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table sets forth certain information furnished by current management and others, concerning the ownership of our common stock as of March 27, 2015, of (i) each person who is known to us to be the beneficial owner of more than five percent of our common stock, without regard to any limitations on conversion or exercise of convertible securities or warrants; (ii) each director and named executive officer; and (iii) directors and executive officers as a group:

Name and Address of	Amount and Nature of
Beneficial Owner	Beneficial Ownership⁽¹⁾	Percent of Class⁽²⁾
Michael P. Kurtanjek	3,715,795⁽³⁾	4.30%
9 Church Lane
Copthorne
West Sussex, England
RH103PT

Howard M. Crosby	1,131,500	1.30%
6 East Rose Street
Walla Walla, WA 99362

Wei Lu	880,000⁽⁴⁾	1.01%
61 Wayne Road
Needham, MA 02494


John J. May	730,000⁽⁵⁾	*
2 Belmont Mews
Camberley
Surrey GU152PH

Kin Wong	3,493,927⁽⁶⁾	4.02%
Xinchang County Party Committee
Party School
Shiliqianxi Scenic Area
Qixing Street, Xinchang County
Zhejiang Province

Yee Y (Sue) Pei	400,000⁽⁷⁾	*
602 Phase 4 Zhuyu International
Mansion
9 Capital Gym South Road
Haidian District
Beijing, China

Weigang Greg Ye	289,000⁽⁸⁾	*
188 Yu-Yi Road
Shanghai, China

Executive Officers and Directors as a Group (7 persons)	10,640,222	12.25%

Rubicon Master Funds⁽¹⁰⁾	6,594,000	7.59%
c/o Rubicon Master Fund Management LLP
103 Mount St.
London W1K2TJ
United Kingdom

Knox, LLC⁽¹¹⁾	5,769,231⁽¹²⁾	6.64%
1060 Vegas Valley Drive
Las Vegas, NV 89109

Marathon Capital Management, LLC⁽¹³⁾	6,248,644	7.19%
4 North Park Drive
Suite 106
Hunt Valley, MD 21030

Million Cheer Investment⁽¹⁴⁾	9,500,000⁽¹⁵⁾	10.93%
Flat A, 22/F, Tower 1, The Hermitage, No. 1 Hoi Wnag
Road, Tai Kok Tsui, Kowloon
Hong Kong
*Less than 1%

⁽¹⁾	Beneficial Ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants, or other conversion privileges currently exercisable or convertible, or exercisable or convertible within 60 days of March 27, 2015, are deemed outstanding for computing the percentage of the person holding such option or warrant but are not deemed outstanding for computing the percentage of any other person.

⁽²⁾	Percentage based on 85,905,392 shares of common stock outstanding as of March 27, 2015.

⁽³⁾	Includes 300,000 stock purchase warrants and 21,350 shares deposited in a brokerage account.

⁽⁴⁾	Includes 382,500 shares issuable pursuant to vested options and 100,000 shares deposited in a brokerage account.

⁽⁵⁾	Includes 82,500 shares issuable pursuant to vested options.

⁽⁶⁾	Includes 700,000 stock purchase warrants, 400,000 shares issuable pursuant to vested options, and 5,000,000 shares owned by an entity which Mr. Wong controls.

⁽⁷⁾	Includes 100,000 stock purchase warrants and 200,000 shares issuable pursuant to vested options.

⁽⁸⁾	Includes 57,000 stock purchase warrants and 175,000 shares issuable pursuant to vested options.

⁽⁹⁾	Includes 1,000,000 stock purchase warrants and 50,000 shares deposited in a brokerage account.

⁽¹⁰⁾	Shares are held by Rubicon Master Fund, an exempted company incorporated in the Cayman Islands on 3 November 1999 under registration number 93790. The beneficial owners of Rubicon Master Fund are Rubicon Global Fund and Rubicon Global Partners LP with those entities having widely diversified beneficial owners. Rubicon Master Fund holds all voting rights with reference to its shareholding in the Company.

⁽¹¹⁾	Fredrick J. Mancheski has sole voting rights to these shares for the entity.

⁽¹²⁾	Includes 1,153,846 shares issuable upon exercise of warrants.

⁽¹³⁾	James Kennedy has sole voting rights to these shares for the entity.

⁽¹⁴⁾	Hui Tang Liang has sole voting rights to these shares for the entity.

⁽¹⁵⁾	Includes 4,500,000 stock purchase warrants.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth as of the most recent fiscal year ended December 31, 2014, certain information with respect to compensation plans (including individual compensation arrangements) under which our common stock is authorized for issuance:

EQUITY COMPENSATION PLAN INFORMATION

	Number of
	securities to be	Weighted-	Number of securities
	issued upon	average exercise	remaining available for
	exercise of	price of	future issuance under
	outstanding	outstanding	equity compensation
	options,	options,	plans (excluding
	warrants and	warrants and	securities reflected in
	rights	rights	column (a) and (b))
Plan Category	(a)	(b)	(c)
Equity compensation plans approved by security holders	nil	--	640,001⁽¹⁾
Equity compensation plans not approved by security holders	22,862,585⁽²⁾	$0.55	3,436,039⁽³⁾
Total	22,862,585		4,076,040

⁽¹⁾	Represents outstanding options and shares available for future issuance under the 2005 Stock Option Plan.

⁽²⁾	Represents 21,487,585 warrants and options to purchase 1,375,000 shares issued under the 2010 Stock Option/Stock Issuance Plan.

⁽³⁾	Represents outstanding options and shares available for future issuance under the 2010 Stock Option/Stock Issuance Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Certain Relationships and Related Transactions

On September 15, 2010, we entered into a non-exclusive, non-transferable, non-assignable sublicense agreement with La Serena Technologies Limited, a Hong Kong company, for the sublicensing to our Chilean subsidiary, Sociedad Contractual Minera White Mountain Titanium, of titanium metal technology developed by Chinuka Limited plc and licensed to La Serena. We are obligated during the first four years of the agreement to make cumulative expenditure of $5,000,000 towards the development of the technology. During the years ended December 31, 2013, 2012, 2011 and 2010, we spent $335,188, $307,574, $276,760 and $166,802, respectively, for an aggregate of $1,086,324 toward the development of the technology. On or before September 15, 2015, we are obligated to make additional expenditures of $3,913,676 under this agreement. Michael P. Kurtanjek, our President and a director, and Brian Flower, our former Executive Chairman, Executive Vice President, and director, serve as two of the four directors of Chinuka and La Serena and own in excess of 10% of the equity interest in each entity. Howard M. Crosby, one of our directors, owns less than 10% of the equity interest in each entity and does not serve as a director or officer of either entity.

On December 4, 2013, we entered into a Binding Memorandum of Understanding (the “MOU”) dated December 3, 2013, with Grand Agriculture Investment Limited (the “Investor”), a company formed in Hong Kong and controlled by Kin Wong, a shareholder and now Chairman, CEO, and director of the Company. Pursuant to the MOU, the Investor agreed to purchase 5,714,286 units (the “First Tranche Units”) and an additional 20,000,000 units (the “Second Tranche Units”). The purchase price per unit for the First Tranche Units is $0.35 per unit for gross proceeds of $2,000,000, and the purchase price per unit for the Second Tranche Units is $0.40 per unit for gross proceeds of $8,000,000. Each First Tranche Unit consists of one share of the Company’s common stock (the “Common Stock”) and one warrant to purchase one share of Common Stock at $0.45 per share exercisable immediately upon issuance through December 31, 2016. Each Second Tranche Unit consists of one share of Common Stock and 90% of one warrant to purchase one share of Common Stock at $0.55 per share exercisable immediately upon issuance through December 31, 2017 (the “Second Tranche Warrants”). The closing of the sale of the first half of the First Tranche Units occurred on December 4, 2013, at which time the Company received $1,000,000 in proceeds, and the closing of the sale of the second half of the First Tranche Units occurred on December 13, 2013, at which time the Company received $1,000,000 in proceeds.

In the closing of the sale of the First Tranche Units the following purchases were made by directors: Mr. Wong purchased 700,000 units, consisting of 700,000 shares of common stock and First Tranche Warrants to purchase an additional 700,000 shares at $0.45 per share, for total cash consideration of $245,000; Ms. Pei purchased 100,000 units, consisting of 100,000 shares of common stock and First Tranche Warrants to purchase an additional 100,000 shares at $0.45 per share, for total cash consideration of $35,000; and Mr. Ye purchased 57,000 units, consisting of 57,000 shares of common stock and First Tranche Warrants to purchase an additional 57,000 shares at $0.45 per share, for total cash consideration of $19,950.

In connection with the completion of the closing of the sales of the Second Tranche Units, we agreed to grant to the Investor at no additional cost warrants to purchase up to 6,000,000 shares of Common Stock at $0.50 per share exercisable immediately upon issuance and through December 31, 2017 (the “Bonus Warrants”). The Bonus Warrants will be in form substantially identical to the Second Tranche Warrants.

Pursuant to the MOU, on April 10, 2014, Million Cheer Investment Limited (“MCIL”), a company formed in Hong Kong, purchased 5,000,000 units (the “Second Tranche Units”). The purchase price per unit for the Second Tranche Units was $0.40 per unit for gross proceeds of $2,000,000. Each Second Tranche Unit consists of one share of Common Stock and 90% of one Second Tranche Warrant.

On July 30, 2014, the MOU was amended. The parties agreed to increase the amount of the investment by up to $5,000,000 in Second Tranche Units. Because of his ownership and management of the Investor, Mr. Wong, the Company’s Chairman and CEO, abstained from the vote by the Board of Directors approving the amendment.

On July 30, 2014, the Board of Directors of appointed Eric Gan to the office of Chief Financial Officer effective August 15, 2014. In connection with his appointment, Mr. Gan entered into a letter agreement with the Company pursuant to which the Company has agreed to pay him a monthly salary of $11,000 until the Company achieves certain milestones, at which time the monthly salary would increase to $12,500.

On January 27, 2015, the Compensation Committee recommended and the Board of Directors approved a Management Services Agreement with JPES Inc., a company owned and controlled by Mr. Gan (the “CFO Management Services Agreement”). The CFO Management Services Agreement was executed by the Company and Mr. Gan on January 27, 2015, and was effective retroactive to November 1, 2015. This agreement will superseded the prior letter agreement dated August 1, 2014, between the Company and Mr. Gan.

Under the terms of the CFO Management Services Agreement, Mr. Gan has agreed to continue to serve as Chief Financial Officer of the Company and his company will provide designated financial management services. The base amount payable under the agreement is $12,500 per month, plus reimbursable out of pocket expenses. Until the month during which the Company receives regulatory approval of its Environmental Impact Statement (“EIS”), $1,500 of this base amount will not be paid but will accrue, without interest, and be paid promptly, but not later than the last business day of the calendar month next following receipt of the EIS. As a signing bonus, the Company granted to Mr. Gan options to purchase up to 300,000 shares of common stock pursuant to the terms of the Company’s 2010 Stock Option/Stock Issuance Plan (the “Plan”). These options are fully vested, will expire on December 31, 2017, and are exercisable at $0.45 per share. In addition, the Company has agreed to grant Mr. Gan the following stock bonuses under the Plan: (i) 200,000 shares upon the Company signing the first definitive strategic alliance agreement and/or arrangement of project capital, and (ii) 200,000 shares upon obtaining a listing for the Company’s stock on a senior stock exchange. Mr. Gan will also be entitled to participate in the Company’s annual management share compensation pool. The Company has agreed to provide him with the use of office space at the Company’s offices. The agreement also provides for severance payments in the event of termination upon a change of control by which he would receive a severance payment equal to the highest annual base amount, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination. The agreement may be terminated by either party without cause upon three months’ written notice.

Effective August 12, 2014, the Company entered into a termination agreement (the “Termination Agreement”) with Lan Shangguan in connection with her management services agreement through Red Creek Consulting Inc. The termination date of the agreement will be November 15, 2014 (the “Termination Date”). Ms. Shangguan previously received 70,000 shares under the Company’s Management Compensation Plan. These shares are being held in escrow pending completion of the Company’s environmental impact study on its Cerro Blanco project. These shares will be released to Ms. Shangguan upon completion of the EIS or the Termination Date, whichever occurs first. In addition, Ms. Shangguan was issued 70,000 fully vested shares of common stock for no cash consideration as a bonus for providing transitional services (the “Bonus Shares”). The Bonus Shares will be issued on or about the Termination Date under the stock issuance program of the Plan as an incentive for Ms. Shangguan’s cooperation during the transition to the new Chief Financial Officer.

Director Independence

Our securities are not listed on a national securities exchange or in an inter-dealer quotation system which has requirements that directors be independent. Therefore, we have adopted the independence standards of the American Stock Exchange, now known as the NYSE MKT LLC, to determine the independence of our directors and those directors serving on our committees. These standards provide that a person will be considered an independent director if he or she is not an officer of the company and is, in the view of the company’s board of directors, free of any relationship that would interfere with the exercise of independent judgment. Our board of directors has determined that Wei Lu, John J. May, Yee Y (Sue) Pei, and Weigang Greg Ye meet this standard, and therefore, would be considered to be independent.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Fees Paid

Smythe Ratcliffe LLP, Chartered Accountants, served as our accounting firm for the two years ended December 31, 2014and 2013. The following fees were paid to our independent registered public accounting firm for services rendered during our last two fiscal years:

Audit Fees

The aggregate fees billed for professional services rendered by our principal accountant for the audit of our annual financial statements, review of financial statements included in the quarterly reports and other fees that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for the fiscal year ended December 31, 2014 were $63,245 (2013- $59,679).

Audit-Related Fees

There were no fees billed for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of the financial statements, other than those previously reported above, for the fiscal years ended December 31, 2014and 2013.

Tax Fees

We paid $23,667 to our tax accountant and $1,845 to our auditors for tax related work in 2014(2013: - $14,991).

All Other Fees

There were no other fees billed for products or services provided by the principal accountant, other than those previously reported above, for the fiscal years ended December 31, 2014 and 2013.

Audit Committee

Our Audit Committee has considered whether the non-audit services provided by our auditors to us are compatible with maintaining the independence of our auditors and concluded that the independence of our auditors is not compromised by the provision of such services. Our Audit Committee pre-approves all auditing services and permitted non-audit services, including the fees and terms of those services, to be performed for us by our independent auditor prior to engagement.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements

The following financial statements are filed with this report:

	Report of Independent Registered Public Accounting Firm

	Consolidated Balance Sheets at December 31, 2014 and 2013

	Consolidated Statements of Operations for the years ended December 31, 2014, 2013, 2012, and for the cumulative period from inception (November 13, 2001) through December 31, 2014

	Consolidated Statements of Cash Flows for the years ended December 31, 2014, 2013, 2012, and for the cumulative period from inception (November 13, 2001) through December 31, 2014

	Consolidated Statements of Stockholders’ Equity from inception (November 13, 2001) through December 31, 2014

	Notes to Consolidated Financial Statements

Exhibits

The following exhibits are included with this report:

Exhibit Number	Exhibit Description	Form	Incorporated by Reference		Filing Date	Filed Here with
Exhibit Number	Exhibit Description	Form	File No.	Exhibit	Filing Date	Filed Here with
3.1	Amended and Restated Articles of Incorporation	8-K	333-129347	3.1	9/9/13
3.2	Current Bylaws	8-K	333-129347	3.1	7/8/13
4.1	Specimen certificate for Registrant’s common stock	SB-2	333-129347	4.1	10/31/05
4.2	Rights Agreement, dated as of January 18, 2011, between the Company and Interwest Transfer Company, Inc., as Rights Agent, as amended November 27, 2013	10-K	333-129347	4.2	3/14/14
4.3	Certificate of Withdrawal of Certificate of Designation, as filed with the Nevada Secretary of State on February 4, 2013	10-K	333-129347	4.3	3/15/13
10.1	2005 Stock Option Plan*	SB-2	333-129347	4.9	10/31/05
10.2	2010 Management Compensation Plan*	S-1	333-164963	4.11	2/12/10
10.3	2010 Stock Option/Stock Issuance Plan*	8-K	333-129347	99.1	7/13/10
10.4	Stock Option Grant Form for 2010 Stock Option/Stock Issuance Plan	8-K	333-129347	99.2	7/13/10
10.5	Stock Issuance Form for 2010 Stock Option/Stock Issuance Plan	8-K	333-129347	99.3	7/13/10
10.6	Management Services Agreement dated February 6, 2006, with Michael P. Kurtanjek*	SB-2/A	333-129347	10.9	5/30/06
10.7	Amendment No 1 dated August 31, 2007, to Management Services Agreement dated February 6, 2006, with Michael P. Kurtanjek*	SB-2	333-148644	10.10	1/14/08

10.8	Amendment No. 2 dated December 21, 2007, to Management Services Agreement dated February 6, 2006, with Michael P. Kurtanjek*	SB-2	333-148644	10.11	1/14/08
10.9	Amendment No. 3 effective January 1, 2010, to Management Services Agreement dated February 6, 2006, with Michael P. Kurtanjek*	S-1	333-164963	10.32	2/12/10
10.10	Amendment No. 4 effective May 1, 2011, to Management Services Agreement dated February 6, 2006, with Michael P. Kurtanjek*	10-K	333-129347	10.10	3/15/13
10.11	Amendment No. 5 dated September 29, 2014, to Management Services Agreement dated January 1, 2010, with Michael Kurtanjek*	8-K	333-129347	99.1	10/3/14
10.12	Warrant agreement dated February 7, 2010, with Michael P. Kurtanjek*	S-1	333-164963	10.33	2/12/10
10.13	Option Agreement dated August 31, 2007, with Michael Kurtanjek*	10-K	333-129347	10.12	3/15/13
10.14	Management Services Agreement dated August 1, 2009, with Chapelle Capital Corp.*	S-1/A	333-148644	10.29	12/15/09
10.15	Amendment No. 1 effective January 1, 2010, to Management Services Agreement dated August 1, 2009, with Chapelle Capital Corp.*	S-1	333-164963	10.30	2/12/10
10.16	Amendment No. 2 effective May 1, 2011, to Management Services Agreement dated August 1, 2009, with Chapelle Capital Corp.*	10-K	333-129347	10.15	3/15/13
10.17	Amended and Restated Management Services Agreement dated March 1, 2014 with Chapelle Capital Corp.*	8-K	333-129347	99.2	10/3/14
10.18	Warrant agreement dated February 7, 2010, with Chapelle Capital Corp.*	S-1	333-164963	10.31	2/12/10
10.19	Brokerage Representation Agreement dated November 26, 2007, with Beacon Hill Shipping Ltd.*	SB-2	333-148644	10.24	1/14/08
10.20	Business Consulting Agreement dated August 1, 2005, with Crosby Enterprises, Inc.*	SB-2	333-129347	10.7	10/31/05

10.21	Renewal dated February 6, 2006, of Business Consulting Agreement with Crosby Enterprises, Inc.*	SB-2/A	333-129347	10.7(a)	5/30/06
10.22	Amendment dated December 21, 2007, to Business Consulting Agreement dated August 1, 2005, with Crosby Enterprises, Inc.*	SB-2	333-148644	10.15	1/14/08
10.23	Option Agreement dated August 18, 2005, with Crosby Enterprises, Inc.*	SB-2	333-129347	10.6	10/31/05
10.24	Option Agreement dated August 31, 2007, with Howard M. Crosby*	10-K	333-164963	10.23	3/29/12
10.25	Option Agreement dated March 5, 2008, with John J. May*	10-K	333-164963	10.24	3/29/12
10.26	Warrant Agreement dated June 30, 2009, with John J. May*	10-Q	333-129347	10.1	8/10/09
10.27	Option Agreement dated March 5, 2009, with Wei Lu*	10-K	333-164963	10.26	3/29/12
10.28	Warrant Agreement dated June 30, 2009, with Wei Lu*	10-Q	333-129347	10.2	8/10/09
10.29	Sublicense Agreement dated September 15, 2010, between Sociedad Contractual Minera White Mountain Titanium and La Serena Technologies Limited (confidential information has been redacted)	10-Q	333-129347	10.1	11/15/10
10.30	Termination Agreement with Lan Shangguan	8-K	333-129347	99.1	8/15/2014
10.31	Option Grant Form dated October 1, 2012, with Lan Shangguan*	10-K	333-129347	10.32	3/15/13
10.32	Form of Warrant Agreement Unit Offering	8-K	333-129347	10.1	5/10/13
10.33	Binding Memorandum of Understanding dated December 3, 2013	10-K	333-129347	10.31	3/14/14
10.34	Amendment to Binding Memorandum of Understanding, dated September 11, 2014	10-Q/A	333-129347	10.1	2/27/15
10.35	Form of First Tranche Warrant (Included in Exhibit 10.34)	10-K	333-129347	10.32	3/14/14
10.36	Form of Second Tranche Warrant (Included in Exhibit 10.34)	10-K	333-129347	10.33	3/14/14

10.37	Management Services Agreement effective July 1, 2014 with Rich Top Management Limited*	8-K	333-129347	99.3	10/3/14
10.38	Management Services Agreement effective April 1, 2014 with The W Formation Group Inc.*	8-K	333-129347	99.4	10/3/14
10.39	CFO Management Services Agreement dated effective November 1, 2014*	8-K	333-129347	99.1	1/29/15
14.1	Code of Ethics	10-KSB	333-129347	14.1	3/29/07
21.1	List of Subsidiaries					X
23.1	Consent of Smyth Ratcliffe, LLP, independent registered public accounting firm					X
31.1	Rule 15d-14a Certification by Principal Executive Officer					X
31.2	Rule 15d-14(a) Certification by Principal Financial Officer					X
32.1	Section 1350 Certification of Principal Executive Officer					X
32.2	Section 1350 Certification of Principal Financial Officer					X
101.INS	XBRL Instance Document					X
101.SCH	XBRL Taxonomy Extension Schema Document					X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document					X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document					X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document					X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document					X

*Management contract, or compensatory plan or arrangement, required to be filed as an exhibit.

SIGNATURE PAGE FOLLOWS

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WHITE MOUNTAIN TITANIUM CORPORATION

Date: March 30, 2015	By:	/s/ Kin Wong
		Kin Wong, Chief Executive Officer
		(Principal Executive Officer)

Date: March 30, 2015	By:	/s/ Eric Gan
		Eric Gan, Chief Financial Officer
		(Principal Financial and Accounting Officer)

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.

NAME	TITLE	DATE

/s/ Kin Wong	Director & Chairman	March 30, 2015
Kin Wong

/s/ Michael P. Kurtanjek	Director	March 30, 2015
Michael P. Kurtanjek

/s/ Howard M. Crosby	Director	March 30, 2015
Howard M. Crosby

/s/ Wei Lu	Director	March 30,2015
Wei Lu

/s/ John J. May	Director	March 30, 2015
John J. May

/s/ Yee Y (Sue) Pei	Director	March 30, 2015
Yee Y (Sue) Pei

/s/ Weigang Greg Ye	Director	March 30, 2015
Weigang Greg Ye

Supplemental Information to be Furnished With Reports Filed Pursuant to Section 15(d) of the Act by Registrants Which Have not Registered Securities Pursuant to Section 12 of the Act

No annual report or proxy statement, form of proxy or other proxy soliciting material was sent or provided to shareholders during the year ended December 31, 2014.

WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)

Consolidated Financial Statements
December 31, 2014, 2013 and 2012
(Expressed in US dollars)

Index	Page

Report of Independent Registered Public Accounting Firm	F-2

Consolidated Financial Statements

Consolidated Balance Sheets	F-3

Consolidated Statements of Operations	F-4

Consolidated Statements of Cash Flows	F-5

Consolidated Statements of Stockholders’ Equity (Deficit)	F-6

Notes to Consolidated Financial Statements	F-8 - F-25

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE DIRECTORS AND STOCKHOLDERS OF WHITE MOUNTAIN TITANIUM CORPORATION
(An Exploration Stage Company)

We have audited the accompanying consolidated balance sheets of White Mountain Titanium Corporation as at December 31, 2014 and 2013, and the related consolidated statements of operations, stockholder’s equity (deficit) and cash flows for the years ended December 31, 2014, 2013 and 2012, and the cumulative period from inception through December 31, 2014. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of White Mountain Titanium Corporation as at December 31, 2014 and 2013, and the result of its operations and its cash flows for the years ended December 31, 2014, 2013 and 2012, and the cumulative period from inception through December 31, 2014 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements referred to above have been prepared assuming the Company will continue as a going concern. As discussed in note 2 to the consolidated financial statements, the Company incurred losses from operations since inception, has not attained profitable operations and is dependent upon obtaining adequate financing to fulfill its operating activities. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management’s plans in regard to these matters are also discussed is note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ SmytheRatcliffe LLP
Chartered Accountants

Vancouver, Canada
March 27, 2015

F-2

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Balance Sheets

(Expressed in US dollars)

As at		December 31, 2014			December 31, 2013

Assets
Current
Cash	$	949,806		$	2,056,996
Prepaid expenses		89,631			77,803
Receivables		25,468			33,519
Total Current Assets		1,064,905			2,168,318
Property and Equipment (Note 5)		278,015			194,594
Mineral Properties (Note 6)		651,950			651,950
Technology Rights (Note 7)		-			1,788,886

Total Assets	$	1,994,870		$	4,803,748

Liabilities

Current
Accounts payable and accrued liabilities (Note 11)	$	317,515		$	476,170

Total Liabilities		317,515			476,170

Stockholders’ Equity

Preferred Stock and Paid-in Capital in Excess of $0.001 Par Value (Note 8(a) and (b))
100,000,000 shares authorized Nil (2013 – Nil) shares issued and outstanding		-			-
Common Stock and Paid-in Capital in Excess of $0.001 Par Value (Note 8(a) and (c))
500,000,000 shares authorized 85,905,392 (2013 – 73,855,392) shares issued and outstanding		57,211,235			52,110,387

Deficit Accumulated During the Exploration Stage		(55,533,880	)		(47,782,809	)

Total Stockholders’ Equity		1,677,355			4,327,578

Total Liabilities and Stockholders’ Equity	$	1,994,870		$	4,803,748

See notes to consolidated financial statements.

F-3

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Statements of Operations

(Expressed in US dollars)

											Cumulative Period
											from Inception on
											November 13,
											2001 through
		Years Ended December 31,									December 31,
		2014			2013			2012			2014
Expenses
Advertising and promotion	$	36,286		$	35,367		$	109,165		$	570,464
Amortization		389,573			374,821			390,365			1,745,167
Bank charges and interest		19,140			17,974			33,514			136,064
Consulting fees (Note 8(e))		570,985			204,057			397,095			3,912,812
Consulting fees – directors and officers (Notes 8(e) and 11)		889,118			463,579			1,130,029			9,668,956
Engineering consulting (recovery)		-			-			-			711,084
Exploration (Note 6)		2,403,199			1,725,190			3,876,711			15,587,998
Filing fees		16,981			26,400			2,227			125,738
Insurance		37,418			42,046			56,432			474,228
Investor relations, net		56,475			7,500			38,000			954,639
Licenses and taxes		(36,765	)		-			-			343,182
Management fees (Notes 8(e) and 11)		774,247			404,912			733,412			5,361,748
Office (Note 8(e))		95,003			117,992			321,555			998,346
Professional fees		425,368			275,756			345,296			3,081,434
Rent (Note 11)		195,857			170,217			162,478			1,107,414
Research and development (Note 7)		8,197			335,188			307,574			1,094,521
Telephone		33,321			30,477			35,726			237,507
Transfer agent fees		6,014			9,005			7,137			50,381
Travel and vehicle		284,913			165,181			242,487			2,080,262
Loss Before Other Items		(6,205,330	)		(4,405,662	)		(8,189,203	)		(48,241,945	)
Impairment loss on long-lived asset (Note 7)		(1,477,774	)		-			-			(1,477,774	)
Gain on Sale of Marketable Securities		-			-			-			87,217
Loss on Sale of Assets		-			-			-			(19,176	)
Adjustment to Market for Marketable Securities		-			-			-			(67,922	)
Foreign Exchange		(68,026	)		(88,206	)		(252,141	)		(960,310	)
Interest Income		59			51			985			363,541
Dividend Income		-			-			-			4,597
Change in Fair Value of Warrants (Note 8(f))		-			-			-			(2,748,999	)
Change in Fair Value of Preferred Stock(Note 8(b))		-			-			-			(240,000	)
Financing Agreement Penalty		-			-			-			(330,000	)
Net Loss and Comprehensive Loss for Period		(7,751,071	)		(4,493,817	)		(8,440,359	)		(53,630,771	)
Preferred stock dividends		-			-			-			(1,537,500	)
Net Loss Available for Distribution	$	(7,751,071	)	$	(4,493,817	)	$	(8,440,359	)	$	(55,168,271	)
Basic and Diluted Loss Per Common Share(Note 9)	$	(0.10	)	$	(0.07	)	$	(0.14	)
Weighted Average Number of Shares of Common Stock Outstanding		80,416,077			65,297,413			61,293,901

See notes to consolidated financial statements.

F-4

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Statements of Cash Flows

(Expressed in US dollars)

											Cumulative Period
											from Inception
											on November 13,
											2001 through
		Years Ended December 31,									December 31,
		2014			2013			2012			2014

Operating Activities
Net loss for period	$	(7,751,071	)	$	(4,493,817	)	$	(8,440,359	)	$	(53,630,771	)
Items not involving cash
Amortization		389,573			374,821			390,365			1,745,167
Stock-based compensation		588,248			164,912			261,212			4,511,089
Loss on sale of assets		-			-			-			19,176
Common stock issued for services		327,600			-			1,280,055			8,248,935
Change in fair value of warrants		-			-			-			2,748,999
Change in fair value of preferred stock		-			-			-			240,000
Financing agreement penalty		-			-			-			330,000
Write-off of Intangible Assets		1,477,774			-			-			1,477,774
Adjustment to market for marketable securities		-			-			-			67,922
Gain on sale of marketable securities		-			-			-			(87,217	)
Non-cash exploration expenditures		-			-			-			600,000
Changes in non-cash working capital
Prepaid expenses		(11,828	)		15,972			(12,805	)		(98,932	)
Receivables		8,051			31,328			(2,368	)		(18,186	)
Marketable securities		-			-			-			19,295
Accounts payable and accrued liabilities		(158,655	)		164,568			(12,978	)		251,669
Cash Used in Operating Activities		(5,130,308	)		(3,742,216	)		(6,536,878	)		(33,575,080	)
Investing Activities
Additions to property and equipment		(161,882	)		(78,259	)		(108,182	)		(706,352	)
Additions to mineral properties		-			-			-			(651,950	)
Cash Used in Investing Activities		(161,882	)		(78,259	)		(108,182	)		(1,358,302	)
Financing Activities
Repayment of long-term debt		-			-			-			(100,000	)
Issuance of preferred stock for cash		-			-			-			5,000,000
Issuance of common stock for cash		4,185,000			4,750,751			5,788,055			30,729,352
Stock subscriptions received		-			-			-			263,500
Working capital acquired on acquisition		-			-			-			171
Cash Provided by Financing Activities		4,185,000			4,750,751			5,788,055			35,893,023
Foreign Exchange Effect on Cash		-			-			-			(9,835	)
Inflow (Outflow) of Cash		(1,107,190	)		930,276			(857,005	)		949,806
Cash, Beginning of Period		2,056,996			1,126,720			1,983,725			-
Cash, End of Period	$	949,806		$	2,056,996		$	1,126,720		$	949,806

Supplemental Cash Flow Information
Common shares issued for settlement of debt	$	-		$	-		$	-		$	830,000
Share issue costs included in accounts payable	$	-		$	-		$	-		$	63,920
Common shares issued to acquire technology	$	-		$	-		$	-		$	2,800,000
Common shares issued for preferred stock	$	-		$	-		$	-		$	740,000
Income tax paid	$	-		$	-		$	-		$	-
Interest paid	$	-		$	-		$	-		$	-

See notes to consolidated financial statements.

F-5

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficit)

(Expressed in US dollars)

			Common Stock					Preferred Stock
			and Paid-In					and Paid-in												Total
	Shares of		Capital in					Capital in												Stockholders’
	Common		Excess of		Shares of			Excess of			Subscriptions			Subscriptions			Accumulated			Equity
	Stock		Par Value		Preferred Stock			Par Value			Receivable			Received			Deficit			(Deficit)

Balance, December 31, 2002 and inception (November 13, 2001)	-	$	-		-		$	-		$	-		$	-		$	-		$	-
Shares issued for cash
Private placements	4,040,000		404,000		-			-			(111,000	)		-			-			293,000
Shares issued for services	7,211,000		72,110		-			-			-			-			-			72,110

Balance, prior to acquisition	11,251,000		476,110		-			-			(111,000	)		-			-			365,110
Shares of accounting subsidiary acquired on reverse takeover	1,550,000		28,368		-			-			-			-			-			28,368
Adjustment to eliminate capital of accounting subsidiary on revere takeover	-		(28,368	)	-			-			-			-			-			(28,368	)
Adjustment to increase capital of accounting parent on reverse takeover	-		365,779		-			-			-			-			-			365,779
Excess of purchase price over net assets acquired on recapitalization	-		-		-			-			-			-			(365,607	)		(365,607	)
Net loss for year	-		-		-			-			-			-			(830,981	)		(830,981	)
Balance, December 31, 2003	12,801,000		841,889		-			-			(111,000	)		-			(1,196,588	)		(465,699	)
Shares issued for cash
Private placement	2,358,633		1,405,180		-			-			-			-			-			1,405,180
Share subscriptions received	-		-		-			-			111,000			120,000			-			231,000
Shares issued for services	128,500		205,320		-			-			-			-			-			205,320
Stock-based compensation	-		651,750		-			-			-			-			-			651,750
Net loss for year	-		-		-			-			-			-			(1,523,509	)		(1,523,509	)

Balance, December 31, 2004	15,288,133	$	3,104,139		-		$	-		$	-		$	120,000		$	(2,720,097	)	$	504,042

Balance, December 31, 2004	15,288,133	$	3,104,139		-		$	-		$	-		$	120,000		$	(2,720,097	)	$	504,042
Shares issued for cash
Private placement	459,000		459,000		6,250,000			5,000,000			-			(120,000	)		-			5,339,000
Preferred stock issued for debt	-		-		625,000			500,000			-			-			-			500,000
Shares issued for services	82,000		115,200		-			-			-			-			-			115,200
Stock-based compensation	-		688,920		-			-			-			-			-			688,920
Beneficial conversion feature	-		1,537,500		-			-			-			-			(1,537,500	)		-
Net loss for year	-		-		-			-			-			-			(2,642,954	)		(2,642,954	)

Balance, December 31, 2005	15,829,133		5,904,759		6,875,000			5,500,000			-			-			(6,900,551	)		4,504,208
Shares issued for financial agreement penalty	440,000		330,000		-			-			-			-			-			330,000
Stock-based compensation	-		59,896		-			-			-			-			-			59,896
Net loss for year	-		-		-			-			-			-			(2,184,843	)		(2,184,843	)

Balance, December 31, 2006	16,269,133		6,294,655		6,875,000			5,500,000			-			-			(9,085,394	)		2,709,261
Shares issued for cash
Private placement	5,070,000		2,340,683		-			-			-			-			-			2,340,683
Shares issued for services	1,600,000		1,565,000		-			-			-			-			-			1,565,000
Shares issued for conversion of preferred stock	6,250,000		5,000,000		(6,250,000	)		(5,000,000	)		-			-			-			-
Stock-based compensation	-		718,184		-			-			-			-			-			718,184
Net loss for the year	-		-		-			-			-			-			(3,921,817	)		(3,921,817	)

Balance, December 31, 2007	29,189,133		15,918,522		625,000			500,000			-			-			(13,007,211	)		3,411,311
Shares issued for cash
Private placement	2,814,909		1,967,086		-			-			-			-			-			1,967,086
Stock-based compensation	-		45,339		-			-			-			-			-			45,339
Net loss for the year	-		-		-			-			-			-			(3,175,908	)		(3,175,908	)

Balance, December 31, 2008	32,004,042	$	17,930,947		625,000		$	500,000		$	-		$	-		$	(16,183,119	)	$	2,247,828

Balance, December 31, 2008	32,004,042	$	17,930,947		625,000		$	500,000		$	-		$	-		$	(16,183,119	)	$	2,247,828
Warrants exercised	2,100,000		1,045,340		-			-			-			-			-			1,045,340
Shares issued for cash
Private placement	1,496,930		900,691		-			-			-			-			-			900,691
Reduction in warrant liability on exercise of 2,000,000 warrants	-		199,000		-			-						-			-			199,000
Shares issued for services	800,000		560,000		-			-			-			-			-			560,000
Cumulative effect of change in accounting principle	-		-		-			-			-			-			(1,084,375	)		(1,084,375	)
Correction of error	-		-		-			(500,000	)		-			-			-			(500,000	)
Stock-based compensation	-		1,024,122		-			-			-			-			-			1,024,122
Net loss for the year	-		-		-			-			-			-			(6,480,005	)		(6,480,005	)

Balance, December 31, 2009	36,400,972		21,660,100		625,000			-			-			-			(23,747,499	)		(2,087,399	)
Warrants exercised	2,193,040		1,315,824		-			-			-			-			-			1,315,824
Stock options exercised	50,000		25,000		-			-			-			-			-			25,000
Shares issued for cash
Private placement	5,384,624		3,186,947		-			-			-			-			-			3,186,947
Subscription receivable	-		-		-			-			(32,500	)		-			-			(32,500	)
Shares issued for services	738,000		986,400		-			-			-			-			-			986,400
Shares issued for technology	4,000,000		2,800,000		-			-			-			-			-			2,800,000

F-6

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)

Consolidated Statements of Stockholders’ Equity (Deficit)

(Expressed in US dollars)

Common Stock

Preferred Stock

and Paid-In

and Paid-in

Total

Shares of

Capital in

Stockholders’

Common

Excess of

Shares of

Excess of

Subscriptions

Accumulated

Equity

Stock

Par Value

Preferred Stock

Par Value

Receivable

Received

Deficit

(Deficit)

Shares issued for conversion of preferred stock	1,000,000		740,000	(625,000	)		-		-			-		-			740,000
Stock-based compensation	-		120,409	-			-		-			-		-			120,409
Net loss for the year	-		-	-			-		-			-		(2,246,280	)		(2,246,280	)

Balance, December 31, 2010	49,766,636	$	30,834,680	-		$	-	$	(32,500	)	$	-	$	(25,993,779	)	$	4,808,401


Stock-based compensation	-		188,097	-			-		-			-		-			188,097
Share subscriptions received	-		-	-			-		32,500			-		-			32,500
Common stock issued for services	2,565,000		3,137,250	-			-		-			-		-			3,137,250
Additional paid in capital recognized on warrant conversion	-		2,550,000	-			-		-			-		-			2,550,000
Warrants exercised	4,499,306		2,325,375	-			-		-			-		-			2,325,375
Stock options exercised	1,659,999		830,000	-			-		-			-		-			830,000
Net loss for the year	-		-	-			-		-			-		(8,854,854	)		(8,854,854	)

Balance, December 31, 2011	58,490,941		39,865,402	-			-		-			-		(34,848,633	)		5,016,769
Stock-based compensation (Note 8(e))	-		261,212	-			-		-			-		-			261,212
Shares issued for cash
Private placement (Note 8(c))	3,736,248		5,275,555	-			-		-			-		-			5,275,555
Common stock issued for services (Note 8(c))	584,500		1,280,055	-			-		-			-		-			1,280,055
Warrants exercised (Note 8(f))	235,000		117,500	-			-		-			-		-			117,500
Stock options exercised (Note 8(d))	790,000		395,000	-			-		-			-		-			395,000
Net loss for the year	-		-	-			-		-			-		(8,440,359	)		(8,440,359	)

Balance, December 31, 2012	63,836,689	$	47,194,724	-		$	-	$	-		$	-	$	(43,288,992	)	$	3,905,732
Stock-based compensation (Note 8(e))	-		164,912	-			-		-			-		-			164,912
Shares issued for cash
Private placement (Note 8(c))	10,018,703		4,750,751	-			-		-			-		-			4,750,751
Net loss for the year	-		-	-			-		-			-		(4,493,817	)		(4,493,817	)


Balance, December 31, 2013	73,855,392	$	52,110,387	-		$	-	$	-		$	-	$	(47,782,809	)	$	4,327,578
Stock-based compensation (Note 8(e))	-		588,248	-			-		-			-		-			588,248

Shares issued for services	800,000		327,600														327,600
Private placement (Note 8(c))	11,250,000		4,185,000	-			-		-			-		-			4,185,000

Net loss for the year	-		-	-			-		-			-		(7,751,071	)		(7,751,071	)

Balance, December 31, 2014	85,905,392	$	56,994,556	-		$	-	$	-		$	-	$	(55,533,880	)	$	1,677,355

See notes to consolidated financial statements.

F-7

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

1.	NATURE OF BUSINESS AND BASIS OF PRESENTATION

White Mountain Titanium Corporation (the “Company”) is in the business of exploring for titanium deposits or reserves on its Cerro Blanco mining concessions. The Company is an exploration stage company and its principal business is to advance exploration and development activities on the Cerro Blanco rutile (titanium dioxide) Property (“Cerro Blanco”) located in Region III of northern Chile.

These consolidated financial statements are prepared in accordance with United States (“US”) generally accepted accounting principles (“GAAP”).

2.	GOING CONCERN

These consolidated financial statements have been prepared by management on the basis of GAAP applicable to a going concern, which assumes the Company will continue to operate for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations.

The Company has an accumulated deficit of $55,533,880 (2013 - $47,782,809) and incurred a loss of $7,751,071 (2013 - $4,493,817), has not yet commenced revenue-producing operations, and has significant expenditure requirements to continue to advance its exploration and development activities on the Cerro Blanco property.

These consolidated financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate because management believes the actions already taken or planned will mitigate the adverse conditions and events that raise doubts about the validity of the going concern assumption used in preparing these consolidated financial statements. Management intends to raise additional capital through stock issuances to finance operations.

If the going concern assumption were not appropriate for these consolidated financial statements, then adjustments would be necessary to the carrying values of the assets and liabilities, the reported expenses, and the balance sheet classifications used.

3.	SIGNIFICANT ACCOUNTING POLICIES

(a)

Principles of consolidation

These consolidated financial statements include the accounts of the Company and its wholly- owned subsidiaries, Sociedad Contractual Minera White Mountain Titanium (“White Mountain Chile”), a Chilean corporation; White Mountain Metals SpA, a Chilean corporation; White Mountain Minerals SpA, another Chilean corporation; White Mountain Titanium Corporation, a Canadian corporation; White Mountain Titanium (Hong Kong) Limited, a Hong Kong corporation; and Cerro Blanco Titanium Corporation Limited (Shenzhen), a Chinese corporation. All significant intercompany balances and transactions have been eliminated.

(b)

Amortization

Amortization for property and equipment is provided using a straight-line method based on the following estimated useful lives:

Vehicles	- 5 years
Office furniture	- 5 years
Office equipment	- 5 years
Computer equipment	- 5 years
Computer software	- 1 - 5 years
Field equipment	- 5 years

F-8

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

3.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

Technology rights are amortized on a straight-line basis over their estimated useful life of nine years, which is the expected development period of the technology.

(c)

Exploration expenditures

The Company is in the exploration stage of developing its mineral properties and has not yet determined whether these properties contain ore reserves that are economically recoverable.

Exploration costs incurred in locating areas of potential mineralization are expensed as incurred. Mineral property acquisition costs are capitalized. Commercial feasibility is established in compliance with the United States Securities and Exchange Commission (“SEC”) Industry Guide 7, which consists of identifying that part of a mineral deposit that could be economically and legally extracted or produced at the time of the reserve determination. After an area of interest has been assessed as commercially feasible, expenditures specific to the area of interest for further development are capitalized. In deciding when an area of interest is likely to be commercially feasible, management may consider, among other factors, the results of prefeasibility studies, detailed analysis of drilling results, the supply and cost of required labor and equipment, and whether necessary mining and environmental permits can be obtained.

Mining projects and properties are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of these assets may not be recoverable. If the estimated future cash flows expected to result from the use of the mining project or property and its eventual disposition are less than the carrying amount of the mining project or property, impairment is recognized based upon the estimated fair value of the mining project or property. Fair value is generally based on the present value of the estimated future net cash flows for each mining project or property, calculated using estimated mineable reserves and mineral resources based on engineering reports, projected rates of production over the estimated life of the mine, recovery rates, capital requirements, remediation costs and future prices considering the Company’s hedging and marketing plans.

(d)

Research and development

The Company expenses all research and development costs, related to technology rights, as incurred.

(e)

Asset retirement obligations (“ARO”)

The Company recognizes a legal liability for obligations related to the retirement of property and equipment, and obligations arising from the acquisition, construction, development or normal operations of those assets. Such asset retirement costs must be recognized at fair value when a reasonable estimate of fair value can be estimated in the period in which the liability is incurred. A corresponding increase to the carrying amount of the related asset, where one is identifiable, is recorded and amortized over the life of the asset. Where a related future value is not easily identifiable with a liability, the change in fair value over the course of the year is expensed. The amount of the liability is subject to remeasurement at each reporting period. The estimates are based principally on legal and regulatory requirements.

It is possible that the Company’s estimates of its ultimate reclamation and closure liabilities could change as a result of changes in regulations, changes in the extent of environmental remediation required, changes in the means of reclamation or changes in cost estimates. Changes in estimates are accounted for prospectively commencing in the period the estimate is revised.

(f)

Long-lived assets

Long-lived assets, including mineral properties and intangible assets with determinable useful lives, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets and is charged to earnings. Assets to be disposed of are reported at the lower of the carrying amount or fair value less the costs to sell. Intangible assets with determinable useful lives are amortized on a straight-line basis over their respective estimated useful lives.

F-9

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

3.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

(g)

Income taxes

The Company uses the asset and liability method of accounting for income taxes, which requires the recognition of deferred tax liabilities and assets for expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. Deferred tax assets and liabilities are measured using tax rates expected to be in effect when the temporary differences are likely to be realized. A valuation allowance against deferred tax assets is recorded if, based upon weighted available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company provides for uncertain tax provisions and the related interest and penalties based upon management’s assessment of whether a tax benefit is more likely than not to be sustained upon examination by tax authorities. This assessment is based on only the technical merits of the tax position. If a tax position does not meet the more likely than not recognition threshold, the benefit of that position is not recognized in the financial statements and a liability for unrecognized tax benefits is established. A tax position that meets the more likely than not recognition threshold is measured to determine the amount of benefit to recognize in the financial statements. The tax benefit recognized is measured as the largest amount of benefit that is greater than 50% likely of being realized upon ultimate resolution with a taxing authority.

(h)

Warrants

Proceeds received on issuance of units, consisting of common shares and warrants, are allocated first to common shares based on the market trading price of the common shares, and the remaining amount is allocated to warrants.

(i)

Stock-based compensation

The Company accounts for stock-based compensation expenses associated with stock options and other forms of equity compensation in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 718-10 Stock Compensation. ASC 718-10 requires the Company to estimate the fair value of share-based payment awards on the date of grant using an option pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s statements of operations. The Company uses the straight-line single- option method to recognize the value of stock-based compensation expense for all share-based payment awards. Stock-based compensation expense recognized in the statements of operations is reduced for estimated forfeitures, as it is based on awards ultimately expected to vest. ASC 718-10 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

(j)

Loss per share

The Company accounts for loss per share in accordance with ASC 260-10 Earnings Per Share, which requires the Company to present basic and diluted earnings per share. The computation of loss per share is based on the weighted average number of shares of common stock outstanding during the period presented (see Note 8(c)). The Company uses the two-class method to calculate loss per share for common stock, as well as preferred stock at their conversion equivalent to common stock.

F-10

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

3.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

The calculation of diluted loss per share excludes the effects of all common share equivalents that would be anti-dilutive.

(k)

Financial instruments

All financial instruments are classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for-trading are measured at fair value with gains and losses recognized in net loss. Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive loss and reported in shareholders’ equity. Any financial instrument may be designated as held-for- trading upon initial recognition.

Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as other than held-for-trading, which are expensed as incurred, are included in the initial carrying value of such instruments.

(l)

Conversion of foreign currency

The functional and reporting currency of the Company and its subsidiaries is the US dollar. The Company’s foreign operations are remeasured into US dollars as follows:

	•	Monetary assets and liabilities, at year-end rates;
	•	All other assets and liabilities, at historical rates; and
	•	Revenue and expense items, at the exchange rate in effect on the date of the transaction.

Exchange gains and losses arising from these transactions are reflected in operations for the year.

(m)

Use of estimates

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reported period. Accordingly, actual results could differ from those estimates and could impact future results of operations and cash flows.

Significant areas requiring the use of estimates relate to the rates for depreciation and amortization of property and equipment and technology rights, determining the variables used in calculating the fair value of stock-based compensation expense, recoverability of intangible assets and mineral properties, accrued liabilities, determination of valuation allowance for deferred income tax assets and determining AROs.

(n)

Future accounting pronouncements

(i)

In February 2015 the FASB issued update No. 2015-02 – Consolidation (Topic 810) Amendments to the Consolidated Analysis. The amendments in this Update affect reporting entities that are required to evaluate whether they should consolidate certain legal entities. All legal entities are subject to reevaluation under the revised consolidation model. Specifically,the amendments:

	1.	Modify the evaluation of whether limited partnerships and similar legal entities are variable interest entities (VIEs) or voting interest entities

	2.	Eliminate the presumption that a general partner should consolidate a limited partnership

	3.	Affect the consolidation analysis of reporting entities that are involved with VIEs, particularly those that have fee arrangements and related party relationships

	4.	Provide a scope exception from consolidation guidance for reporting entities with interests in legal entities that are required to comply with or operate in accordance with requirements that are similar to those in Rule 2a-7 of the Investment Company Act of 1940 for registered money market funds.

F-11

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

3.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

		The amendments in this Update are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015.

	(ii)	In August 2014, the FASB issued Update No. 2014-15—Presentation of Financial Statements— Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The amendments in the Update provide guidance on management’s responsibility to disclose conditions or events that raise substantial doubt about an entity’s ability to continue as a going concern.The Update requires management also to discuss plans to mitigate the conditions or events and if the plans will alleviate the substantial doubt by considering the probability of implementation of the plans and mitigation effect of the plans. The new requirements are effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early adoption is permitted.

	(iii)	In June 2014, the FASB issued Update No. 2014-12—Compensation—Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force). Effective for annual periods and interim periods within those annual periods, beginning after December 15, 2015. An entity may apply the standards (1) prospectively to all share-based payment awards that are granted or modified on or after the effective date, or (2) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual period presented in the financial statements and to all new or modified awards thereafter. Earlier application is permitted.

	(iv)	In June 2014, the FASB issued update No. 2014-10, Development Stage Entities. The amendments in this update remove the definition of a development stage entity from Topic 915, thereby removing the distinction between development stage entities and other reporting entities from U.S. GAAP. In addition, the amendments eliminate the requirements for development stage entities to (1) present inception-to-date information on the statements of income, cash flows, and shareholder's equity, (2) label the financial statements as those of a development stage entity, (3) disclose a description of the development stage activities in which the entity is engaged, and (4) disclose in the first year in which the entity is no longer a development stage entity that in prior years it had been in the development stage. The amendments also clarify that the guidance in Topic 275, Risks and Uncertainties, is applicable to entities that have not commenced planned principal operations. The amendments also remove paragraph 810-10-15-16, which states that a development stage entity does not meet the condition in paragraph 810-10-15-14(a) to be a variable interest entity (VIE) if (1) the entity can demonstrate that the equity invested in the legal entity is sufficient to permit it to finance the activities it is currently engaged in and (2) the entity’s governing documents and contractual arrangements allow additional equity investments. These amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein.

	(v)	The FASB issued update No. 2014-08—Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in this Update change the requirements for reporting discontinued operations. A discontinued operation may include a component of an entity or a group of components of an entity or a business or nonprofit activities. The Update is effective in the first quarter of 2015 for public companies with calendar year ends.

(vi)

The FASB has issued update No. 2013-11, Income Taxes (Topic 740): Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (a consensus of the FASB Emerging Issues Task Force). US GAAP does not include explicit guidance on the financial statement presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The amendments in this update state that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, should be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. These amendments are effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. Early adoption is permitted.

F-12

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

4.	FINANCIAL INSTRUMENTS AND RISKS

The Company has classified its financial instruments as follows:

Cash– as held-for-trading Accounts payable and accrued liabilities – as other financial liabilities

(a)

Fair value

The Company’s financial instruments consist of cash, accounts payable, and accrued liabilities. The carrying amounts of these instruments approximate their respective fair values due to the short maturities of these instruments. The three levels of the fair value hierarchy are described below:

	•	Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities;
	•	Level 2 - inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (e.g., as prices) or indirectly (e.g., derived from prices); and
	•	Level 3 - inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table summarizes fair value measurement by level at December 31, 2014 and 2013, for assets and liabilities measured at fair value on a recurring basis.

	December 31, 2014		Level 1			Level 2			Level 3			Total
	Cash	$	949,806		$	-		$	- $			949,806

	December 31, 2013		Level 1			Level 2			Level 3			Total
	Cash	$	2,056,996		$	- $			- $			2,056,996

(b)

Credit risk

Credit risk is the risk that counterparty to a financial instrument will fail to discharge its contractual obligations.

The Company mitigates credit risk, in respect of cash, by purchasing highly liquid, short-term guaranteed investment certificates (“GIC”) held at a high credit quality Canadian financial institution and by maintaining its cash with high credit quality Canadian, Chilean and Chinese financial institutions. The receivables consist of Government Sales Tax due from the Government of Canada.

F-13

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

4.	FINANCIAL INSTRUMENTS AND RISKS (Continued)

(c)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows required for operations and anticipated investing and financing activities. The Company’s cash at December 31, 2014 totaled $949,806 (2013 - $2,056,996). At December 31, 2014, the Company had accounts payable and accrued liabilities of $317,515 (2013 - $476,170), all of which are due in the first fiscal quarter of 2015.

(d)

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk.

(i)

Interest rate risk

Interest rate risk consists of two components:

	(a)	To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.

	(b)	To the extent that changes in prevailing market interest rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company’s cash consists of cash held in bank accounts. Due to the short-term nature of these financial instruments, fluctuations in market interest rates do not have a significant impact on estimated fair values and on cash flows associated with the interest income as of December 31, 2014.

(ii)

Foreign currency risk

The Company is exposed to foreign currency risk to the extent expenditures incurred or funds received and balances maintained by the Company are denominated in currencies other than the US dollar (primarily Canadian dollars (“CAD”), Chinese yuan (“CNY”), Hong Kong dollars (“HKD”), and Chilean pesos (“CLP”)). The Company has net monetary assets of $19,536 (2013 - $5,996) denominated in CAD, $44,938 in HKD (2013 - $nil), $122,760 in CNY (2013 - $nil), and net monetary liabilities of $155,120 (2013 - $95,181) in CLP.

For the year ended December 31, 2014, the Company’s sensitivity analysis suggests that a change in the absolute rate of exchange in CAD by 10% will not have a material effect on the Company’s business, financial condition and results of operations, and a change in the absolute rate of exchange in CLP by 16%, CNY by 5%, and HKD by 5% will also not have a material impact.

The Company has not entered into any foreign currency contracts to mitigate this risk.

(iii)

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to other price risk.

F-14

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

5.	PROPERTY AND EQUIPMENT

		December 31, 2014
				Accumulated
		Cost		Amortization		Net
Land held for future development	$	83,958	$	-	$	83,958
Vehicles		129,439		106,221		23,218
Office furniture and fixtures		175,048		57,173		117,875
Office equipment		32,609		14,283		18,326
Computer equipment		7,553		7,553		-
Computer software		68,995		68,995		-
Field equipment		154,029		119,391		34,638
	$	651,631	$	373,616	$	278,015

		December 31, 2013
				Accumulated
		Cost		Amortization		Net
Land held for future development	$	76,770	$	-	$	76,770
Vehicles	$	129,439		94,287		35,152
Office furniture		54,137		31,765		22,372
Office equipment		32,007		14,283		17,724
Computer equipment		9,390		8,385		1,005
Computer software		68,556		52,295		16,261
Field equipment		122,360		97,050		25,310
	$	492,659	$	298,065	$	194,594

6.	MINERAL PROPERTIES

Cerro Blanco

On September 5, 2003, the Company, through its wholly-owned Chilean subsidiary, White Mountain Chile, entered into a purchase agreement with Compañía Contractual Mineral Ojos del Salado (“Ojos del Salado”), a wholly-owned Chilean subsidiary of Phelps Dodge Corporation, to acquire a 100% interest in nine exploration mining concessions, collectively known as Cerro Blanco. Cerro Blanco is located in Region III of northern Chile, approximately 39 kilometres, or 24 miles, west of the city of Vallenar. Consideration for the purchase, including legal fees, was $651,950.

The purchase agreement covering Cerro Blanco was originally entered into between Ojos del Salado and Dorado Mineral Resources NL (“Dorado”) on March 17, 2000. Under that agreement, Dorado purchased the mining exploitation concessions from Ojos del Salado for $1,000,000, of which $350,000 was paid. A first mortgage and prohibitions against entering into other contracts regarding mining concessions without the prior written consent of Ojos del Salado had also been established in favor of Ojos del Salado. On September 5, 2003, White Mountain Chile assumed Dorado’s obligations under the purchase agreement, including the mortgage and prohibitions, with payment terms as described above.

La Martina

As a result of regional exploration carried out in January 2013, a new rutile prospect named La Martina has been discovered and staked in the Atacama, or Region III, geographic region of northern Chile. La Martina, which is located approximately 45 kilometres south-west of the city of Vallenar and 17 kilometres south- west of the Cerro Blanco project, consists of six registered exploration concessions. Concession fees and other costs incurred in staking the property have been expensed.

F-15

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

6.	MINERAL PROPERTIES (Continued)

Ownership in mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyance history characteristic of mineral properties. The Company has investigated ownership of its mineral properties, and to the best of its knowledge, ownership of its interests is in good standing. At present, the Company has determined that it has no material AROs.

Exploration expenditures incurred by the Company during the years ended December 31, 2014, 2013 and 2012 were as follows:

		2014		2013		2012

Assaying	$	104,499	$	3,371	$	16,156
Concession fees		103,022		107,275		107,159
Drilling		-		97,233		188,270
Environmental		1,070,392		568,361		719,317
Equipment rental		37,520		50,634		157,726
Geological consulting fees		447,059		135,028		1,399,709
Maps and miscellaneous		-		-		78,589
Site costs		618,911		745,680		1,159,462
Transportation		21,796		17,608		50,323

Exploration expenditures for the year	$	2,403,199	$	1,725,190	$	3,876,711

7.	TECHNOLOGY RIGHTS

On October 1, 2010, the Company issued 4,000,000 shares of common stock pursuant to the terms of the non-exclusive, sublicensing agreement of the titanium metal technology developed by Chinuka Limited plc (“Chinuka” or the “Chinuka Process”), giving the Company access to the Chinuka Process for the Cerro Blanco project. La Serena Technologies Ltd. (“La Serena”) executed the sublicensing agreement as holder of the Chinuka Process master license. Four million restricted shares of common stock were issued to Chinuka and La Serena (800,000 to Chinuka and 3,200,000 to La Serena); 1,000,000 of the total were delivered at the time of signing of the agreement (500,000 shares each released to Chinuka and La Serena). The balance of common stock was to be released from escrow over 24 months at the end of each subsequent fiscal quarter on the basis of 37,500 to Chinuka and 337,500 to La Serena. As of December 31, 2013 all shares had been issued. The Company may terminate the sublicense agreement under certain circumstances as stipulated in the agreement. In addition, La Serena may terminate the agreement if any of the following conditions are not met:

	•	Cumulative expenditures of $5,000,000 by the Company within five years of the effective date to advance development of the Chinuka Process towards commercialization (2014 expenditures - $8,197; 2013 - $335,188; 2012 - $307,574; 2011 - $276,760);
	•	2% gross royalty payments to La Serena on any revenue generated by the Cerro Blanco project, which is attributable to the Chinuka Process. The gross royalty payments starting five years from the effective date of the agreement are subject to a minimum payment of $200,000 per year; and

•

Commercial production of titanium metal using the Chinuka Process and feed stock derived from the Cerro Blanco project within nine years after closing.

The Company had valued the consideration for the technology rights on the basis of the market value of the common shares issued for technology rights on the date of issuance of $2,800,000.

F-16

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

7.	TECHNOLOGY RIGHTS (Continued)

Up to December 31, 2014, $1,322,226 had been amortized and the carrying amount of the technology rights was $1,477,774 prior to an assessed impairment loss for the entire balance.

		December 31, 2014
			Accumulated
		Cost	Amortization		Write off		Net
Technology rights	$	2,800,000 $	1,322,226	$	1,477,774	$	-

		December 31, 2013
				Accumulated
		Cost		Amortization		Net
Technology rights	$	2,800,000	$	1,011,114	$	1,788,886

During the year ended December 31, 2014, the Company discontinued funding the Chinuka Process research as management allocated resources furthering the development of its Cerro Blanco property.

Management has determined there are indicators of impairment on this long-lived asset. Since the Chinuka Process has not reached commercialization phase, management determined there is no market participant for the technology; therefore, there is no indication of fair market value for the technology rights. The carrying amount of $1,477,774 for the technology rights at December 31, 2014 has been recognized as an impairment loss.

8.	CAPITAL STOCK

(a)

Authorized stock

On July 2, 2013, the Board of Directors, through unanimous written consent, adopted a proposal to amend the Articles of Incorporation to increase the number of authorized shares of common stock to 500,000,000 shares and the number of authorized shares of preferred stock to 100,000,000 shares. The proposal was approved by the stockholders at the Annual General Meeting held on September 5, 2013.

(b)

Preferred stock

During the year ended December 31, 2005, the Company designated and issued 6,825,000 shares of Series A preferred stock with a par value of $0.001 per share. Each share of preferred stock was convertible into one common share at any time at the holder’s option, subject to the adjustments to the conversion ratio. The preferred stock was unlisted, non-retractable and non-redeemable. The preferred stockholders were entitled to the number of votes equal to the number of whole shares of common stock into which the preferred stock are convertible. The preferred stockholders were further entitled to the same dividends and distributions as the common stockholders.

F-17

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

8.	CAPITAL STOCK (Continued)

On February 4, 2013, the Company filed with the Nevada Secretary of State a Certificate of Withdrawal of Certificate of Designations, Preferences and Rights of the Series A convertible preferred stock. The Company has no shares of Series A convertible preferred stock outstanding or authorized to be issued.

On January 18, 2011, the Company’s Board of Directors adopted a stockholders’ rights plan and pursuant to this plan, the Company entered into a rights agreement (the “Rights Agreement”) with its transfer agent, as rights agent of the stockholders. In connection with the adoption of the Rights Agreement, effective January 18, 2011, the Board of Directors declared a dividend distribution of one right (“Right”) for each outstanding share of the Company’s common stock, payable to stockholders of record January 28, 2011. Each Right, when exercisable, entitles the registered holder to purchase from the Company one one-thousandth of one share of Series B junior participating preferred stock (“Series B Preferred Stock”) at a price of $4.00 per share, subject to adjustment.

Pursuant to the rights plan, a total of 500,000 shares of series B preferred stock are reserved for issuance upon exercise of the rights. At December 31, 2014, there were no shares of Series B preferred stock issued and outstanding.

(c)

Common stock

During the year ended December 31, 2014, the Company:

	•	Issued 730,000 shares of common stock at a fair value of $306,600 to management, employees and consultants, under the Management Compensation Pool. Share certificates for 175,000 shares issued to staff in Chile have been distributed, while the remaining share certificates for 555,000 shares issued to consultants and directors and officers have been withheld from distribution. The Board of Directors of the Company elected to place these shares under a voluntary escrow until the Company completes its Environmental Impact Statement (“EIS”).

	•	Closed the sale of 5,000,000 second tranche units (the “Second Tranche Units”) in April 2014 with Million Cheer Investment Limited (“MCIL”), a company formed in Hong Kong. The sale of the units was pursuant to a binding Memorandum of Understanding (the “MOU”) dated April 10, 2014, entered into with Grand Agriculture Investment Limited (the “Investor”), whereby the Investor agreed to purchase a total of 20,000,000 Second Tranche Units. The purchase price for the 5,000,000 Second Tranche Units was $0.40 per unit for gross proceeds of $2,000,000. Each Second Tranche Unit consists of one share of common stock and 90% of one warrant to purchase one share of common stock at $0.55 per share with expiration date of December 31, 2017 (the “Second Tranche Warrants”). The Company paid $140,000 in commissions.

	•	Closed an additional sale of 6,250,000 Second Tranche Units with an accredited investor in August 2014, pursuant to a MOU. The sale price for the 6,250,000 Second Tranche Units was $0.40 per unit for gross proceeds of $2,500,000. Each Second Tranche Unit consists of one share of common stock and a warrant to purchase 90% of one share of common stock at $0.55 per share exercise price with an expiration date of December 31, 2017. The Company paid $175,000 in commissions.

	•	Issued 70,000 shares of common stock to a former Chief Financial Officer with no cash consideration in November 2014. These shares were measured at a fair market value of $21,000 at the issuance date.

During the year ended December 31, 2013, the Company:

•

Issued 4,304,418 units for gross proceeds of $3,013,100 by way of a private placement priced at $0.70 per unit. Each unit consisted of one share of common stock and one-half warrant, each whole warrant exercisable at $0.90 until July 25, 2014.

F-18

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

8.	CAPITAL STOCK (Continued)

The Company paid commissions, finders and legal fees of $250,349. In addition, 215,221 compensation warrants were issued to agents. The terms and conditions of the agent warrants are essentially identical to the terms and conditions of the warrants sold to investors as part of the units, except that the agent warrants had an original expiration date of March 12, 2015.

•

Closed the sale of the 5,714,285 First Tranche Units (the “First Tranche Units”) pursuant to the binding MOU dated December 3, 2013, with the Investor. The purchase price per unit for the First Tranche Units was $0.35 per unit for gross proceeds to the Company of $2,000,000. Each First Tranche Unit consisted of one share of the Company’s common stock and one warrant to purchase one share of common stock at $0.45 exercisable until December 31, 2016. The Company paid $12,000 in commissions.

(d)

Stock options

The Company has a stock option plan, adopted in 2005, and a Stock Option/Stock Issuance Plan, adopted in 2010 (individually the “2005 Plan” and the “2010 Plan”, respectively and, collectively, the “Plans”). Under the Plans, the Company is authorized to grant options to executive officers and directors, employees and consultants of the Company. The 2005 Plan was originally authorized to grant 3,140,000 shares; the 2010 Plan was originally authorized to issue 4,901,740 shares, which amount is increased at the end of each year to represent 10% of the total outstanding shares at year-end, up to a maximum of 3,800,000. The terms of any stock options granted under the Plans may not exceed five years and the exercise price of any stock option plan granted may not be discounted below the maximum discount permitted under the policies of the Toronto Stock Exchange.

The Company has also adopted a management compensation pool (the “pool”) for the benefit of officers, directors and employees of the Company. The pool will consist of 1% of the outstanding shares at the end of each year.

In October 2014, the Company granted 1,075,000(2013 – nil) stock options to directors and officers to purchase the common stock of the Company at an exercise price of $0.45 per share. The options were granted subject to and in accordance with the terms of the Company’s 2010 Plan. The options were fully vested and immediately exercisable with expiration dates of December 31, 2017 for 700,000 options and October 2, 2017 for 375,000 options.

The fair value of the options granted during the year ended December 31, 2014 has been estimated at the date of grant or the date when it became measurable using the Black-Scholes option pricing model with the following weighted-average assumptions: (i) dividend yield 0.00%; (ii) expected volatility of 64.00%; (iii) risk-free interest rate of 1.01%; and (iv) expected life of three years. The fair market value was determined to be $163,892 and was charged against expenses for the year. The Company has assumed no forfeiture rate. The weighted average grant date fair value of options is $0.15.

The following table represents service-based stock option activity during the years ended December 31, 2014 and 2013:

F-19

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

8.	CAPITAL STOCK (Continued)

	December 31, 2014			December 31, 2013
			Weighted				Weighted
			Average				Average
	Number of		Exercise	Number of			Exercise
	Shares		Price	Shares			Price

Outstanding - beginning of year	150,000	$	1.30	315,000		$	1.14
Granted	1,075,000		0.45	-		$	-
Expired	-	$	-	(165,000	)	$	1.00

Outstanding and exercisable – end of year	1,225,000	$	0.55	150,000		$	1.30

As at December 31, 2014 and 2013, the following stock options were outstanding and exercisable:

		Exercise	December 31,	December 31,
Expiry Date		Price	2014	2013

October 2, 2017	$	0.45	375,000	-
December 31, 2017	$	0.45	700,000	-
October 1, 2017	$	1.30	150,000	150,000
			1,225,000	150,000

The shares under option at December 31, 2014, were in the following exercise price ranges:

				Weighted Average
Weighted Average	Number of Shares		Aggregate Intrinsic	Remaining Contractual
Exercise Price	under Option		Value	Life in Years

$ 0.45 - $1.30	1,225,000	$	-	2.6

The shares under option at December 31, 2013 were in the following exercise price ranges:

				Weighted Average
Weighted Average	Number of Shares		Aggregate Intrinsic	Remaining Contractual
Exercise Price	under Option		Value	Life in Years

$ 1.30	150,000	$	-	3.75

(e)

Stock-based compensation

During the year ended December 31, 2014, $136,680 (2013 - $164,912) was recognized as stock-based compensation for the 2,000,000 management warrants issued to directors and officers (Note 8(f)). Effective October 29, 2014, these warrants were modified. As a result of the modification, $168,907 (2013 - $nil) representing the unamortized portion of the grant date fair value of the original warrants along with $71,001 (2013 - $nil) representing the incremental fair value of the replacement warrants was recognized as stock-based compensation. The incremental fair value of the replacement warrants were measured using the Black-Scholes option pricing model with the following weighted average assumptions: exercise price of $0.65, risk-free interest rate of 0.93%, expected life of 3 years, an expected volatility factor of 64%, a dividend yield of 0.00% . The replacement warrants are fully vested as a result of the modification.

During the year ended December 31, 2014, the Company included bonus shares issuable as a result of achieving certain performance and market conditions (Note 11 and 13). As a result, $47,768 was recognized as stock-based compensation measured at $0.36 per common share as at the contract dates.

F-20

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

8.	CAPITAL STOCK (Continued)

Total stock-based compensation recognized for shares issued and options and warrants granted for services was as follows:

		December 31,		December 31,		December 31,
		2014		2013		2012

Management fees	$	630,248	$	164,912	$	493,412
Consulting fees - directors and officers		155,400		-		704,025
Consulting fees		96,600		-		153,300
Professional fees		21,000		-		-
Office		12,600		-		190,530

	$	915,848	$	164,912	$	1,541,267

(f)

Warrants

During the year ended December 31, 2010, the Company issued 2,000,000 warrants to two officers and directors of the Company as compensation, as approved by the Board of Directors in January 2010. These warrants are exercisable at $1.50 per share, expiring December 31, 2015. Effective October 29, 2014, the Company amended these warrants with term changes as follows:

	(i)	The original 2,000,000 warrants were cancelled and replaced by the issuance of 600,000 new warrants;

	(ii)	The expiration date of these warrants was extended to December 31, 2017; and

	(iii)	The exercise price was reset to $0.65 per share.

These amended warrants were fully vested. .

In March 2013, the Company issued warrants to purchase 2,152,216 shares of common stock, as part of a private placement offering (Note 8(c)). Each whole warrant is exercisable at $0.90 per share until July 25, 2014. In addition, 215,221 compensation warrants were issued to agents. The terms and conditions of the agent warrants are identical to the terms and conditions of the warrants sold to investors as part of the private placement units, except that the agent warrants had an original expiration date of March 12, 2015.

On September 5, 2013, the Board of Directors amended all outstanding warrants (except those held by a member of management) to extend the expiration date of the warrants to December 31, 2015. On October 7, 2013, the Board of Directors approved the re-pricing of the exercise price of all outstanding warrants, excluding any warrants held by management, to $0.65.

In December 2013, the Company issued warrants to purchase 5,714,286 shares of common stock, as part of a private placement offering (Note 8(c)). Each whole warrant is exercisable at $0.45 until December 31, 2016.

In April and August 2014, the Company issued investors warrants to purchase 4,500,000 and 5,625,000 shares of common stock, respectively, as part of a private placement offering (Note 8(c)). Each whole warrant is exercisable at $0.55 until December 31, 2017.

F-21

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

8.	CAPITAL STOCK (Continued)

Details of stock purchase warrant activity for the years ended December 31, 2014 and December 31, 2013 are as follows:

	December 31, 2014					December 31, 2013
				Weighted					Weighted
				Average					Average
	Number			Exercise		Number			Exercise
	of Warrants			Price		of Warrants			Price

Outstanding - beginning of year	12,762,585		$	0.69		4,716,862		$	1.01
Issued	10,725,000			0.55		8,081,723			0.51
Expired	-			-		(36,000	)		-
Cancelled	(2,000,000	)		(1.50	)				(1.18	)

Outstanding - end of year	21,487,585		$	0.55		12,762,585		$	0.69

As at December 31, 2014 and 2013, the following share purchase warrants were outstanding:

			December 31,	December 31,
Expiry Date		Exercise Price	2014	2013

December 31, 2015	$	1.50	-	2,000,000
December 31, 2015	$	0.65	1,770,328	1,770,328
December 31, 2015	$	0.65	910,534	910,534
December 31, 2015	$	0.65	2,367,437	2,367,437
December 31, 2016	$	0.45	5,714,286	5,714,286
December 31, 2017	$	0.65	600,000	-
December 31, 2017	$	0.55	4,500,000	-
December 31, 2017	$	0.55	5,625,000	-
			21,487,585	12,762,585

9.	LOSS PER SHARE

Potentially dilutive securities not included in diluted weighted average shares outstanding include shares underlying 1,225,000 (2013 – 150,000; 2012 – 315,000) in outstanding options and 21,487,585 (2013 –12,762,585; 2012 – 4,716,862) warrants. For the years ended December 31, 2014, 2013 and 2012, potentially dilutive securities are anti-dilutive, therefore, diluted loss per common share equals basic loss per common share.

F-22

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

10.

INCOME TAXES

Income tax provisions are determined as follows:

		December 31,			December 31,			December 31,
		2014			2013			2012

Income tax benefit computed at statutory tax rate	$	(2,712,876	)	$	(1,572,836	)	$	(2,954,126	)
Stock-based-compensation		320,547			57,719			539,443
Other timing differences		533,182			1,488,526			778,992
Adjustment due to effective rate attributable to income taxes of other countries		309,282			132,287			202,581
Effect of change in tax rate		-			(265,583	)		(174,857	)
		(1,549,865	)		(159,887	)		(1,607,967	)
Change in valuation allowance		1,549,865			159,887			1,607,967
	$	-		$	-		$	-

Deferred income taxes reflect the tax effect of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes. The applicable tax rate to be expected is 35% (2013 – 35%; 2012 – 35%). The components of the net deferred income tax assets are approximately as follows:

		December 31,			December 31,			December 31,
		2014			2013			2012
Deferred income tax assets
Net operating losses and credit carry-forwards	$	9,116,917		$	7,746,334		$	7,246,586
Technology rights		626,110			-			-
Property and Equipment		121			-			-
Resource properties		2,828,546			3,114,223			3,113,862
		12,571,694			10,860,557			10,360,448
Valuation allowance		(12,571,694	)		(10,860,557	)		(10,360,448	)

	$	-		$	-		$	-

The valuation allowance reflects the Company’s estimate that the deferred tax assets more likely than not will not be realized.

To date, the Company has paid a total of 690,765,000 CLP (US $1,140,209) (2013 - $639,231,000 CLP (US $1,217,753)) related to value added tax (“VAT”), which the Company will be able to credit against future VAT amounts payable generated on Chilean revenue-producing operations. Since the collection of the amount is not certain, the amount is not capitalized, but is expensed each year.

During the year ended December 31, 2012, the Company filed amended tax returns in the US relating to taxation years ended December 31, 2007, 2008, 2009 and 2010. To date, the Company has received a $Nil assessment on the 2007 taxation year. Notices of assessment on the other years have yet to be received.

F-23

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

10.	INCOME TAXES (Continued)

	The Company has available approximate net operating losses that may be carried forward to apply against future years' income for income tax purposes in all jurisdictions. The losses expire as follows:

Available to		USA		Foreign		Total

2015	$	-	$	81,000	$	81,000
2018		9,000		-		9,000
2019		10,000		257,000		267,000
2020		2,000		-		2,000
2021		5,000		-		5,000
2022		1,000		-		1,000
2023		22,000		-		22,000
2024		783,000		-		783,000
2025		691,000		-		691,000
2026		410,000		181,000		591,000
2027		2,161,000		166,000		2,327,000
2028		349,000		475,000		824,000
2029		1,007,000		1,047,000		2,054,000
2030		1,816,000		518,000		2,334,000
2031		8,272,000		573,0 00		8,845,000
2032		1,209,000		611,000		1,820,000
2033		1,191,000		554,000		1,745,000
2034		1,153,000		569,000		1,722,000
Non-expiring carry-forward losses		-		6,591,000		6,591,000

	$	19,091,000	$	11,623,000	$	30,714,000

11.

RELATED PARTY TRANSACTIONS

		December 31,			December 31,			December 31,
		2014			2013			2012
Amounts payable	$	(77,196	)	$	(186,886	)	$	(29,147	)

Expenditures in the year:
Consulting fees – directors and officers	$	733,718		$	463,579		$	426,004
Management fees	$	144,000		$	240,000		$	240,000
Rent	$	23,772		$	29,989		$	27,312

Amounts payable at December 31, 2014 consist of unpaid balance of consulting fees, director fees and travel expenditures owed by the Company to its officers and directors for services rendered and expenses incurred during the year on behalf of the Company. The amounts payable are included in accounts payable and accrued liabilities.

Consulting fees include payments to officers and directors of the Company for services rendered, and include payments to the President, CFO and VP Investor Relations.

Management fees and rent consist of fees paid to a company, in which the former Executive VP is a shareholder.

Related party transactions are recorded at the exchange amount, which is the amount agreed to between the parties.

On January 27, 2015, the Company entered into a Management Service Agreement, effective November 1, 2014 with JPES, Inc., a California, US corporation (the “Service Provider”) to engage Eric Gan, to provide certain management services on a part-time basis, including the service of Eric Gan as the Company’s Chief Financial Officer.

F-24

WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

11.	RELATED PARTY TRANSACTIONS (Continued)

	Pursuant to the agreement, the Company will compensate the Service Provider with terms as follows:


i)	A monthly fee of $12,500, plus reimbursable out-of-pocket expense shall be paid. Until the month during which the Company receives regulatory approval of the EIS for its Cerro Blanco project, $1,500 of the monthly fee will not be paid, but will accrue, without interest, and be paid promptly, but not later than the last business day of the calendar month next following receipt of the EIS.

ii)	As a signing bonus, the Company shall grant to the Service Provider options to purchase up to 300,000 shares of common stock of the Company pursuant to the terms in the Company’s 2010 Stock Option/Stock Issuance Plan. The options shall be fully vested, exercisable at US$0.45 per share and will expire December 31, 2017.

iii)	In addition, the Company shall grant the Service Provider stock bonus under the Plan of (i) 200,000 shares upon the Company signing the first definitive strategic alliance agreement and/or arrangement of project capital; and (ii) 200,000 shares upon the Company obtaining a listing on a senior stock exchange.

iv)	The Service Provider shall be entitled to participate in the Company’s annual share compensation pool.

Effective August 1, 2014, the Company amended an original agreement dated February 6, 2006, with a company owned by an officer of the Company which includes the following future commitments:

(i)	A monthly salary of $20,000, of which $5,000 per month is withheld until the completion of the EIS. The unpaid portion will accrue, without interest, and be paid not later than the last business day of the calendar month next following receipt of the EIS;

(ii)	In the event of termination upon a change of control by which the officer would receive a severance payment equal to three times the highest annual base salary, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination.

(iii)	The following bonus shares, issuable upon achieving certain milestones:

	a.	300,000 shares upon the signing of the first definitive strategic alliance agreement and/or arrangement of project capital;

	b.	200,000 shares upon listing of the common stock on a senior exchange; and

	c.	200,000 shares upon completion of a final feasibility study.

This agreement expires December 31, 2015 and automatically extends for an additional year term unless it is terminated by the company six months prior to December 31, 2015.

Effective July 1, 2014, the Company retroactively applied an agreement dated August 1, 2014, with a company owned by an officer of the Company which includes the following future commitments:

(i)	A monthly salary of $13,500, of which $1,700 per month is withheld until the completion of the EIS. The unpaid portion will accrue, without interest, and be paid not later than the last business day of the calendar month next following receipt of the EIS;

(ii)	The agreement also provides for severance payments in the event of termination upon a change of control by which the officer would receive a severance payment equal to the highest annual base amount, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination. The agreement may be terminated by either party without cause upon three months’ written notice.

(iii)	The following bonus shares, issuable upon achieving certain milestones:

	a.	300,000 shares after the closing price of the Company’s stock has been maintained at or above the price of $1.00 per share for at least two thirds of the trading days during any 30- consecutive-trading-days’ period;

	b.	500,000 shares upon the Company signing the first definitive strategic alliance agreement and/or arrangement of project capital of not less than $10,000,000, excluding the current funding as provided in the Binding MOU, as amended; and

	c.	200,000 shares upon obtaining a listing for the Company’s stock on a senior stock exchange in Asia.

The agreement may be terminated by either party without cause upon three months’ written notice.

Effective July 1, 2014, the Company retroactively applied an agreement dated August 1, 2014, with a company owned by a director of the Company which includes the following future commitments:

(i)

A monthly salary of $13,500, of which $1,700 per month is withheld until the completion of the EIS. The unpaid portion will accrue, without interest, and be paid not later than the last business day of the calendar month next following receipt of the EIS;


(ii)	The agreement also provides for severance payments in the event of termination upon a change of control by which the consultant would receive a severance payment equal to the highest annual base amount, immediate vesting of any unvested options, warrants or other convertible instruments, the pro rata amount of any bonuses or share compensation pool, and the extension of the exercise period of any options, warrants or other convertible instruments for at least six months following termination.

(iii)	The following bonus shares, issuable upon achieving certain milestones:

	a.	200,000 shares after the closing price of the Company’s stock has been maintained at or above the price of $1.00 per share for at least two thirds of the trading days during any 30- consecutive-trading-days’ period;

	b.	350,000 shares upon the Company signing the first definitive strategic alliance agreement and/or arrangement of project capital of not less than $10,000,000, excluding the current funding as provided in the Binding MOU, as amended; and

	c.	150,000 shares upon obtaining a listing for the Company’s stock on a senior stock exchange in Asia.

The agreement may be terminated by either party without cause upon three months’ written notice.

12.	SEGMENTED INFORMATION

	The Company operates in a single industry segment. At December 31, 2014 and 2013, total assets by geographic location are as follows:

		2014		2013
US	$	-	$	1,791,899
Chile		811,256		843,531
China		118,709		-
	$	929,965	$	2,635,530

13.

COMMITMENTS

On December 4, 2013, the Company entered into a $10,000,000 financing by means of a binding MOU dated December 3, 2013 with the Investor (Note 8(c)). Pursuant to the MOU, the Company closed the sales of 5,714,286 First Tranche Units and 11,250,000 Second Tranche Units, for total gross proceeds of $6,500,000.

The closing for the sale of the remaining balance of 8,750,000 Second Tranche Units is scheduled to occur within 30 days after the date upon which the Environmental Impact Statement for the Company’s Cerro Blanco project is completed, or such other date as the Company and the Investor may agree. The MOU provides for 7% selling commission in connection with the sale of the Second Tranche Units to non-US purchasers.

In connection with the completion of the closing of the sale of the Second Tranche Units, the Company has agreed to grant to the Investor at no additional cost warrants to purchase up to 6,000,000 shares of common stock at $0.50 per share exercisable immediately upon issuance and through December 31, 2017 (the “Bonus Warrants”). The Bonus Warrants will be in a form substantially identical to the Second Tranche Warrants.

Pursuant to the agreement entered into with Chapelle Capital Corp., a company owned by former Executive Vice President, who is a shareholder, the Company obligates to issue 200,000 shares of common stock to the former Executive Vice President upon the completion of EIS in Chile.

14.

SUBSEQUENT EVENTS

Management has evaluated subsequent events through the date of this report, which represents the date the consolidated financial statements were issued. The following subsequent events have occurred:

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WHITE MOUNTAIN TITANIUM CORPORATION

(An Exploration Stage Company)
Notes to Consolidated Financial Statements
Years ended December 31, 2014 and 2013
(Expressed in US dollars)

	i)	On March 4, 2015, the Company entered into a marketing and consulting agreement to engage Born2Invest, Ltd, a London, United Kingdom, based firm for investor relations and marketing consulting service. Terms of the agreement include a payment of $25,000 per month for up to a three-month period. In addition, we subsequently issued 100,000 restricted common stock shares to Born2Invest, Ltd for the firm to initiate the service. Additional 200,000 shares of common stock will be issued in exchange for its service.

	ii)	On March 12, 2015, pursuant to the MOU dated December 3, 2013, amended September 11, 2014, the Company:

	•	Sold 500,000 shares of common stock as part of the Second Tranche Units to the Investor for a price of $0.40 per share. In connection with the sale of the Second Tranche Units, the Company granted to the Investor at no additional cost warrant to purchase 450,000 shares of common stock at $0.55 per share. The warrant expires December 31, 2017; and
	•	Sold 375,000 shares of common stock as part of the Second Tranche Units to the Investor for a price of $0.40 per share. In connection with the sale of the Second Tranche Units, the Company granted to the Investor at no additional cost warrant to purchase 337,500 shares of common stock at $0.55 per share. The warrant expires December 31, 2017.

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