WHITE MOUNTAIN TITANIUM CORP - FORM 10-K

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EX-21.1 - EXHIBIT 21.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit21-1.htm
EX-31.1 - EXHIBIT 31.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit31-1.htm
EX-23.1 - EXHIBIT 23.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit23-1.htm
EX-32.2 - EXHIBIT 32.2 - WHITE MOUNTAIN TITANIUM CORP	exhibit32-2.htm
EX-31.2 - EXHIBIT 31.2 - WHITE MOUNTAIN TITANIUM CORP	exhibit31-2.htm
EX-32.1 - EXHIBIT 32.1 - WHITE MOUNTAIN TITANIUM CORP	exhibit32-1.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, 2015

[ ] 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: 000-55441

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: Common Stock, Par Value $0.001

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. [ ]

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, 2015, the aggregate market value of the registrant’s common equity held by non-affiliates was approximately $19,425,341 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 28, 2016, there were 96,114,442 shares of the registrant’s Common Stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

None

TABLE OF CONTENTS

PART I		4

	ITEM 1. BUSINESS	4

	ITEM 1A. RISK FACTORS	13

	ITEM 1B. UNRESOLVED STAFF COMMENTS	18

	ITEM 3. LEGAL PROCEEDINGS	27

	ITEM 4. MINE SAFETY DISCLOSURES	27

PART II		28

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

	ITEM 6. SELECTED FINANCIAL DATA	31

	ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31

	ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	33

	ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	33

	ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	33

	ITEM 9A. CONTROLS AND PROCEDURES	34

	ITEM 9B. OTHER INFORMATION	34

PART III		34

	ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE	35

	ITEM 11. EXECUTIVE COMPENSATION	35

	ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	35

	ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	35

	ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES	35

PART IV		36

	ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES	36

SIGNATURES		40

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; 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; 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 under the symbol “WMTM.” 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 $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 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: 2013
Industry	Percent
Paint and Coatings	61.5%
Plastics and Rubber	24.1%
Paper	10.7%
All Other*	3.7%

* Includes agricultural, building materials, ceramics, coated fabrics and textiles, cosmetics, food, paper and printing ink. Source: U.S. Geological Survey, 2013 Minerals Yearbook, “Titanium”, August 2015. 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 2016

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 2016” the U.S. Geological Survey estimate 2015 world titanium dioxide pigment capacity at 7.20 million tons, up from 6.56 million tons in the previous year.

Titanium Dioxide Prices

The U.S. Geological Survey Mineral Industry Surveys, “Titanium Mineral Concentrates”, January 2016, published prices for bulk rutile mineral concentrates, for Australia, were quoted at $950 in 2014 and $840 in 2015 per tonne. By comparison, published prices for ilmenite concentrates were $155 per tonne, $110 per tonne respectively for the same period. The current price for high grade rutile is approximately $750 per tonne, and for ilmenite approximately $100 per tonne.

Major Developments since December 31, 2014

Industry Perspective

The global paints and pigments industry faced continued challenges during 2015, 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 2016 and into next year. As the preferred TiO₂feedstock, 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.

We received approval for the EIS in May 2015, and are looking to conclude detailed design engineering and a final engineering feasibility study.

Environmental Impact Statement

In February 2013, we filed the EIS with the Chilean Environmental Authority, Servicio de Evaluación Ambiental (“SEA”). In April 2014, we completed and filed a written response with SEA to a first round of questions and comments posed during a public review of our EIS application. In October 2014, we completed and filed a written response with SEA to a second round of questions, which resulted in receiving significantly reduced number of questions and comments from SEA. 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.

After submitting response to address the last round of questions and comments with SEA in early 2015, we received environmental approval from the Chilean Environmental Authority. On May 20, 2015, the definitive Environmental Impact Statement was approved, signed and delivered to us for our Cerro Blanco project.

The approval of the EIS marks a major milestone for the development of our Cerro Blanco project and allows us to advance to Bankable Feasibility Study (the “BFS”). The EIS is also a necessary precursor for future permitting requirements at Cerro Blanco.

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. 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.

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 our 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”). In December 2015, the Board of Directors approved to extend the expiration date of the First Tranche Warrants to December 31, 2017 and the Second Tranche Warrants to December 31, 2018 and reduce the exercise price of the First Tranche Warrants to $0.30 and the Second Tranche Warrants to $0.35.

On April 14, 2014, pursuant to the MOU, we sold 5,000,000 Second Tranche Units for $2,000,000. These 5,000,000 Second Tranche Units included 4,500,000 Second Tranche Warrants.

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, we received $2,500,000 through the sale of 6,250,000 Second Tranche Units. These 6,250,000 Second Tranche Units included 5,625,000 Second Tranche Warrants.

From March to August 2015 we completed the sale of the remaining 8,750,000 Second Tranche Units. The sale price for the 8,750,000 Second Tranche Units was $0.40 per unit for gross proceeds of $3,500,000. Each Second Tranche Unit consisted 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. Pursuant to the MOU, we issued bonus warrants to an investor to purchase 6,000,000 shares of Common Stock at the conclusion of a total sale of 20,000,000 Second Tranche Units. The 7,875,000 Second Tranche Warrants and 6,000,000 bonus warrants were amended by the Board of Directors to expire on December 31, 2018 and exercisable at $0.35 per share.

On March 16, 2016, we completed a debt funding with Nexo WMTM Holdings, LLC (“Nexo”). Under the terms of the Loan Agreement dated and entered into on March 16, 2016 (the “Nexo Loan Agreement”), we borrowed $2,000,000 from Nexo (the “Nexo Loan”) which was evidenced by a 7% Senior Convertible Promissory Note (the “Nexo Note”). The Nexo Note is convertible into shares of our Series A Preferred Stock (the “Series A Preferred Stock”), and the transaction includes demand and piggyback registration rights under the terms of the Registration Rights Agreement entered into on March 16, 2016, with Nexo to register the resale of the common shares issuable upon conversion of the Series A Preferred Stock (the “Nexo Registration Rights Agreement”). Under the terms of the Nexo Loan Agreement, we also issued three-year warrants to purchase up to 8,333,333 common shares of the Company at $0.30 per share (the “Nexo Warrants”). Finally, under the terms of the Nexo Loan Agreement, we entered into an Assignment of Development Rights with Nexo Water Ventures, LLC (“Nexo Water”), an affiliate of Nexo, relating to the proposed desalination plant to be constructed in connection with our Cerro Blanco mining project in Chile (the “Development Assignment Agreement”).

The Nexo Loan Agreement contains designations for the use of the proceeds from the Nexo Loan which pertain primarily to the operations of our Chilean subsidiary, Sociedad Contractual Minera White Mountain Titanium (the “SCM Subsidiary”) on the Cerro Blanco project and limited corporate overhead costs. The Nexo Loan Agreement also provides for the appointment of Andrew Sloop, a current director of the Company, to be appointed as non-executive Chairman of the Board. Nevertheless, Nexo has agreed to permit Mr. Wong to continue as Chairman until the 2016 annual shareholder meeting. The Board also agreed to remove from the bylaws any provision permitting the Chairman to cast the deciding vote in the event of a tie. The Nexo Loan Agreement also contains representations and warranties of the parties common to a transaction of this nature.

The Nexo Loan contains affirmative covenants which require us to notify Nexo upon the occurrence of certain events, use the Nexo Loan proceeds as designated in the budget attached to the Nexo Loan Agreement, maintain adequate insurance to protect the assets of the SCM Subsidiary in the Cerro Blanco project, discharge all tax obligations on a timely basis, and perform and comply with all other terms and conditions of the Nexo Loan Agreement. It also contains negative covenants which, without the prior consent of Nexo, prevent us from creating any liens on the assets of the Company, including those used in connection with the Cerro Blanco project, incurring any debt senior to the Nexo Note, creating or issuing any preferred stock equal to or senior to the Series A Preferred Stock, transferring material assets, or otherwise performing any acts which would affect the ability of the Company to repay the Nexo Note.

The Nexo Loan Agreement also specifies the events of default by us or any of its subsidiaries and the effects of any event of default on the Nexo Loan.

In order to evidence the repayment of the Nexo Loan, we issued the Nexo Note. The Nexo Note matures on March 16, 2018, and bears interest at the rate of 7% per annum. The principal amount of the Nexo Loan and any accrued but unpaid interest thereon is due upon maturity of the Nexo Note. In the event of a default, the interest rate increases to 25% per annum. Subject to certain exceptions, the Nexo Note is senior to any other indebtedness of the Company. The Nexo Note may be converted at any time by Nexo into Series A Preferred Stock at a conversion rate of $0.12 per share. The Nexo Note will automatically convert into Series A Preferred Stock if we successfully raise an additional $8,000,000, the proceeds of which are allocated for certain qualified milestones relating to the Cerro Blanco project, or if we secure a water offtake agreement for its proposed desalination plant with volume and price components that are mutually satisfactory to both the Company and Nexo. The Nexo Note can be prepaid by us at any time upon 30 days’ prior notice. In the event that of a change in control of the Company as defined in the Nexo Note, Nexo would be entitled to immediately demand repayment of all amounts due and owing on the Nexo Note with a premium equal to 25% of all amounts due and owing. In the event of certain default provisions, we have authorized our legal counsel to execute a confession of judgment in favor of Nexo.

As additional consideration for the Nexo Loan, we issued to Nexo the Nexo Warrants to purchase up to 8,333,333 shares of common stock at $0.30 per share. The number of shares issuable under the Nexo Warrants is adjustable in the event of any stock split-ups, stock dividends or other increases or reductions of the number of shares of our Common Stock. The Nexo Warrants expire on March 16 2019, but will expire earlier upon (i) the sale of all or substantially all of the assets of the Company, or (ii) the merger or consolidation of the Company after which our stockholders own less than a majority of the voting stock of the surviving entity.

As part of the Nexo Loan transaction, we have granted one-time demand and unlimited piggyback registration rights for the shares issuable upon conversion of the Series A Preferred Stock. The costs of the registration statement will be borne by us. The Nexo Registration Rights Agreement includes standard indemnification provisions in favor of both parties.

Under the terms of the Development Assignment Agreement, we have granted to Nexo Water the exclusive right to fund and develop our proposed desalination plant in connection with the Cerro Blanco project. The agreement provides that if Nexo Water secures investment financing for the desalination project, equity interest would be split up to 80/20 between Nexo Water and us. If Nexo Water is able to secure debt financing for the project, the parties would negotiate in good faith to determine an equity split within industry standards. If Nexo Water abandons our desalination project, Nexo has agreed that it would convert its Series A Preferred Stock in to Common Stock. The Development Assignment Agreement has a principal term of four years with an option for Nexo Water to extend the agreement for one additional year. During the term of the agreement, the parties have agreed that Nexo Water would continue to have development rights only as long as it continues to work and perform under good faith. In the event that Nexo Water does not provide the funding for the project as required in the agreement for phase one for the desalination plant within 18 months, Nexo Water would lose the right to develop the project unless otherwise agreed to in writing by the parties.

Other Corporate Matters

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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. We started to adopt this new standard when we filed our first quarterly report of 2015.

	•	In April 2015, we entered into an agreement with Shenzhen New JunAn Investment Management, Ltd. (the “New JunAn”), a Shenzhen, China based financial advisory firm for services including merger and acquisition, private equity placements, financial advisory and investor relations. Besides compensation of cash commissions of between 3% and 5% and warrants representing 25% of the units sold in the offering payable upon successful completion of a financing, New JunAn was also paid an upfront fee of $245,000, which is refundable for non-performance by New JunAn if, within ten months of the agreement, they fail to provide us an effective plan and adequate investor relation services to effect listing of our Common Stock on a senior US stock exchange, or if, within a reasonable time, they fail to raise a minimum of $10 million for us.

	•	On August 19, 2015, we entered into a non-binding and non-exclusive letter of intent (the “LOI”) with Nexo Capital Partners, LLC (“Nexo”) to fund, construct and manage a desalination plant which forms part of our Cerro Blanco mining project in Chile. Nexo is a US private equity firm which specializes in the business development of new technologies through strategic project acquisition and technology- implementation opportunities. Nexo proposes to use the services of an innovative US water technology company based out of Boston, MA.

		The LOI anticipates that the desalination plant, together with inflow and outflow seawater piping, would be constructed with no cash contribution by us. We would contribute the land, right of ways and environmental permit to construct the project and Nexo would provide the funding. It is further anticipated that prior to construction of the Cerro Blanco mining project, any water produced from the desalination plant would be sold to third parties in the Huasco Valley region and that excess water, if any, from the amount ultimately required by the mine would continue to be sold to third parties after construction of the mine.

	•	On October 12, 2015, we entered into a non-binding Memorandum of Understanding (the “Sinosteel MOU”) with Sinosteel Equipment & Engineering Co., Ltd. (“Sinosteel MECC”), a publicly listed company with majority of shares controlled by a major Chinese state-owned metallurgy and resources group, Sinosteel Corporation Limited. The broad terms of the Sinosteel MOU stipulate that Sinosteel MECC is willing to cooperate with us in the development of the Cerro Blanco project, including an ancillary desalination plant. This cooperation includes engineering, procurement, and construction of the rutile concentrator plant, rutile products off-take and helping us get financial support from certain financial service firms, as well as major Chinese banks. Direct equity investment by Sinosteel MECC in the Cerro Blanco project, and/or the desalination project, would also be considered, subject to the completion of a final BFS and approval by relevant authorities that oversee Sinosteel MECC. Our engineering staff are working with Sinosteel MECC to support the financial and technical appraisal of the Cerro Blanco project and the desalination plant by Sinosteel MECC and their advisors.

	•	In October 2015, requested and received approval from Canadian regulator to terminate our obligation to file reports on SEDAR.

	•	In November 2015, the Board of Directors passed a resolution to dissolve our Canadian subsidiary, which has been inactive since December 2014.

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 us 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 received approval of the EIS.

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 5,000 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 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 the preparation of 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 sixteen 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

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, 2015 and 2014 were prepared assuming that we would continue as a going concern. Our significant cumulative losses from operations as of December 31, 2015, 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, 2015, 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.

The granting of governmental permits to commence mining operations is subject to compliance with stringent national and local environmental laws and regulations. Our Environmental Approval from the Chilean government is revocable and, if revoked, our business would be adversely affected

Our ability to place our Cerro Blanco project into production is contingent upon environmental approval received from the Chilean government. Although we received environmental approval from the Chile Environment Authority in May 2015, the approval is revocable. If we fail to meet our responsibilities, including social resettlement obligations and other environmental commitments, as stipulated in the EIS, or the Chilean government believes we have no intention to advance the project to final production, the EIS could be revoked. If we are unable to keep the EIS valid, we will not be granted necessary mining permits to commence operations or we will have to re-obtain the EIS with significantly increased cost in the future.

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 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 $8,000,000 to complete all intended exploration of the Cerro Blanco property, and advance to final feasibility. 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 deficit of $59,653,661 from these activities through December 31, 2015, 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; however, they may do so at any time. It is our intention to renegotiate 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 year the exchange rate of Chilean Peso to the U.S. dollar has fluctuated from 635 to 708. 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.

As an exploration stage company, we are wholly dependent on outside financing to meet our operating needs. Without additional capital raised, we will no longer be able to advance our Cerro Blanco project to the BFS and subsequent production or continue to operate our business. Our current funds can only support our operations into early 2016. However, our ability to raise capital is challenged by the overall mining sector conditions. According to market commentators, weakening commodity price and sluggish outlook for demand growth have turned investors away from the mining sector. In such a challenging environment, we may not be able to raise enough funds to support our operations or we may have to accept capital at less than favorable terms, which may cause decrease in asset values that are deemed to be other than temporary.

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. Although we received approval of the EIS, if we are unable to meet the standards for airborne particles set forth in the EIS, 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.

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 28, 2016, we had 96,114,442 shares of Common Stock issued and outstanding, outstanding warrants to purchase up to 35,362,585 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 2,875,000 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, 100 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.

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 2013, 2014 and 2015 were $107,275, $66,897, and $77,571, 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 and 2015. We anticipate that the tax payment for 2016 will be slightly higher due to inflation adjustment.

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.

A significant portion of the surface rights for the Cerro Blanco project is owned by Agrosuper, a large Chilean agricultural concern, as well as local communities. In 2010, we 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, our 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%to 3.0%; two samples from high grade vein material reported results in excess of 21% TiO₂and 25% TiO₂, respectively. We 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, we 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 us, was filed on SEDAR.

In 2010, our 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, we 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 us by other independent experts in their fields, was 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, our 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% TiO₂at 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% TiO₂. 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 $117 million in direct costs and $42 million in indirect costs, for a total of $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 $190 million. With respect to processing plant operating costs, AMEC-Cade Idepe estimated site and transportation costs to port of $3.60 per tonne processed ($184 per tonne of rutile concentrate) in Year 1, dropping to $3.50 per tonne processed ($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 we 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% TiO₂to a grade of approximately 5.0% TiO₂. Upgradedmaterial 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, we completed and submitted the EIS to the Chilean Environmental Authority. In July 2013 we received 550 comments on our submission.

In April 2014, we 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 our EIS application. On July 1, 2014, SEA sent us 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, we were 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, we received less than 100 comments and questions from the environmental authorities, and these questions have been addressed and submitted immediately.

In May 2015, we received environmental approval from the Chilean Environmental Authority for our Cerro Blanco project. On May 20, 2015, the definitive Environmental Impact Statement (the “EIS”) for the project was approved, signed and delivered to us. This approval marks a major milestone for the development of the project and allows the project to advance to the BFS and subsequent production.

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	$0.44	$0.43
DECEMBER 31, 2014	Second	$0.37	$0.37
	Third	$0.43	$0.32
	Fourth	$0.34	$0.29

FISCAL YEAR ENDED	First	$0.34	$0.20
DECEMBER 31, 2015	Second	$0.42	$0.29
	Third	$0.33	$0.24
	Fourth	$0.26	$0.12

Holders

At March 28, 2016, we had approximately 172 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.

Unregistered Sales of Equity Securities

There were no equity securities sold by us during the year ended December 31, 2015, 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 Prefered 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 Prefered 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 Prefered Stock) and in lieu thereof, an adjustment in cash will be made based on the market price of the Prefered 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 Prefered 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 productions, 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, 2015, of $4,119,781 ($0.05 per weighted average common share outstanding) compared to a loss of $7,751,071 ($0.10 per weighted average common share outstanding) for 2014, representing a decrease in amount of $3,721,297.

Excluding other items such as interest and foreign exchange, our loss from operations was $4,066,781 for the year ended December 31, 2015 (2014: $6,205,330), a decrease of $2,138,549.

A significant decrease in operating expenses in 2015 compared to 2014 was primarily due to decrease in exploration expense and management fees, and a decrease in amortization expense. The analysis of these expenses is as follows:

Exploration expense of $1,036,235 for 2015 as compared to $2,403,199 for 2014, a 57% decrease of $1,366,964. The decrease is due to less consulting and geological works necessary to complete the EIS. In May 2015, the EIS project was completed and approval of the EIS was received on May 20, 2015.
Management and Consulting fees for directors and officers decreased by $526,644 to $1,136,721 for 2015 from $1,663,365 for 2014. The decrease was primarily due to less stock based compensation expense in 2015, compared to that in 2014 in which $163,892 for options granted to directors and officers pursuant to our 2010 Stock/Option Plan and $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.
Amortization expense decreased by $334,239 to $55,334 for 2015 as compared to $389,573 for 2014. The decrease is a result of writing off intangible assets for impairment loss in 2014.
Engaging marketing and investor relations firm in the first half of 2015 caused increase of $267,288 in Marketing and Promotion expense to $303,574 for 2015 from $36,286 for 2014.

Professional fees were $431,734 for 2015, at the same approximate level as for 2014 ($425,368).

Travel expense decreased by 17% to $236,606 for 2015 from $284,913 for 2014 reflecting less travel activity by management.

Liquidity and Cash Flow

As of December 31, 2015, we had working capital of $460,651 (2014: $747,390) including $396,878 (2014: $949,806) of cash.

In 2015, cash used in operating activities totaled $3,744,192 (2014: $5,130,308). As discussed earlier on the results of operation, the decrease of cash used in operating activities is primarily a result of decreased activities in completion of the EIS. For the cash used, $856,223 of this amount was spent on exploration and technical work related activities in association with the EIS, $802,374 on management fees, $334,613 on consulting, $318,443 on professional services in legal, audit, and taxation, $167,669 on marketing to promote the Company to investors, $215,591 on rent, $236,606 on travel and vehicle, and the balance on general and administrative expenditures during the current year.

Cash used in investing activities was $63,736 (2014: $161,882) for acquiring land nearby our mine sites.

In 2015, we raised a total of $3,255,000 in net cash through financing activities (2014: $4,185,000). The Second Tranche Units sale was closed for gross proceeds of $3,500,000 less selling commissions of $245,000. The proceeds were used to support our operating activities during the year.

We anticipated that we need to raise additional funds of $1,500,000 to $2,000,000 to fulfill our commitments stipulated in the EIS as well as finance the necessary corporate general and administrative expenses in 2016. If we are able to raise additional $8,000,000, we will complete work necessary for the BFS. For 2016, we prepared a flexible annual operating budget open to adjustment depending on our ability to raise capital and the overall Titanium Dioxide market conditions.

Information from industry experts and our observation indicate that commodity prices in general and Titanium Dioxide product in particular remain low range and the overall mining industry downturn may be longer than we originally estimated. Cash used in our operating activities in 2015 decreased significantly from the level of 2014 reflecting the completion of the EIS and reduced fundamental geological/engineering work. As we proceed into 2016, we plan to further downsize operations to save cash to meet future challenges.

In near future, the most likely source of new funds would be an equity placement of common shares, some form of strategic alliance, or obtaining unsecured loan. Given the low level of our cash position, we believe that a failure to raise funds in a timely manner would likely to adversely affect our ability to keep the EIS in place while likely increasing future costs and affect our ability to continue as a going concern.

Off-Balance Sheet Arrangements

During the year ended December 31, 2015, we did not have any off-balance sheet arrangements.

Critical Accounting Estimates

We account 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 us 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 our statement of operations. We use 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, 2015, we granted stock options to an officer to purchase the Common Stock of the Company. We recognized share-based compensation in accordance with ASC 718.

The assumption that we will be able to continue as a going concern is subject to critical judgments of management with respect to assumptions surrounding the short and long-term operating budget, expected profitability, investing and financing activities and our management’s strategic planning. Should those judgments prove to be inaccurate, our management’s continued use of the going concern assumption could be inappropriate.

The recoverability of the carrying value of the mineral properties: the assessment of the impairment indicators involves the application of a number of significant judgments and estimates to certain variables, including commodity price trends, plans for properties, and the results of exploration and evaluation to date.

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, Michael P. Kurtanjek, 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 13a-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 our 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, 2015, 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 13a-15(f) under the Exchange Act) that occurred during the quarter ended December 31, 2015, 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 information required by Item 10 is included under the captions “Directors, Executive Officers and Corporate Governance,” “Audit and Compensation Committees” “Nominating Procedures “ and “Section 16(a) Beneficial Ownership Reporting Compliance” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 is included under the captions “Executive Compensation Summary,” “Equity Awards,” “Compensation Committee,” and “Director Compensation” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

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

The information required by Item 12 is included under the captions “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters” and “Securities Authorized for Issuance under Equity Compensation Plans” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

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

The information required by Item 13 is included under the captions “Director Independence” and “Related Person Transactions” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by Item 14 is included under the caption “Fees Paid” and “Audit Committee” in our definitive information statement, which will be filed with the Commission within 120 days after the close of the fiscal year, and is incorporated herein by reference.

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, 2015 and 2014

	Consolidated Statements of Operations for the years ended December 31, 2015, 2014, and 2013

	Consolidated Statements of Cash Flows for the years ended December 31, 2015, 2014, and 2013

	Consolidated Statements of Stockholders’ Equity from December 31, 2013 through December 31, 2015

	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
3.3	Certificate of Designation, Preferences, and Rights of Series A Convertible Preferred Stock of the Company filed March 16, 2016	8-K	000-55441	3.1	3/22/16
3.4	Amended and Restated Bylaws dated March 16, 2016	8-K	000-55441	3.2	3/22/16
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	2015 Stock Incentive Plan*	8-K	000-55441	4.1	6/15/15
10.7	Management Services Agreement dated February 6, 2006, with Michael P. Kurtanjek*	SB-2/A	333-129347	10.9	5/30/06
10.8	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
10.9	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
10.10	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
10.11	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
10.12	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
10.13	Management Services Agreement dated effective 1 January 2016, with Michael P. Kurtanjek*	8-K	000-55441	10.5	12/23/15
10.14	Warrant agreement dated February 7, 2010, with Michael P. Kurtanjek*	S-1	333-164963	10.33	2/12/10
10.15	Option Agreement dated August 31, 2007, with Michael Kurtanjek*	10-K	333-129347	10.12	3/15/13
10.16	Brokerage Representation Agreement dated November 26, 2007, with Beacon Hill Shipping Ltd.*	SB-2	333-148644	10.24	1/14/08
10.17	Business Consulting Agreement dated August 1, 2005, with Crosby Enterprises, Inc.*	SB-2	333-129347	10.7	10/31/05
10.18	Renewal dated February 6, 2006, of Business Consulting Agreement with Crosby Enterprises, Inc.*	SB-2/A	333-129347	10.7(a)	5/30/06
10.19	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

10.20	Investor Relations Services Agreement dated effective 1 January 2016, with Crosby Enterprises, Inc.*	8-K	000-55441	10.4	12/23/15
10.21	Option Agreement dated August 18, 2005, with Crosby Enterprises, Inc.*	SB-2	333-129347	10.6	10/31/05
10.22	Option Agreement dated August 31, 2007, with Howard M. Crosby*	10-K	333-164963	10.23	3/29/12
10.23	Option Agreement dated March 5, 2008, with John J. May*	10-K	333-164963	10.24	3/29/12
10.24	Warrant Agreement dated June 30, 2009, with John J. May*	10-Q	333-129347	10.1	8/10/09
10.25	Option Agreement dated March 5, 2009, with Wei Lu*	10-K	333-164963	10.26	3/29/12
10.26	Warrant Agreement dated June 30, 2009, with Wei Lu*	10-Q	333-129347	10.2	8/10/09
10.27	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
10.28	Form of Warrant Agreement Unit Offering	8-K	333-129347	10.1	5/10/13
10.29	Binding Memorandum of Understanding dated December 3, 2013	10-K	333-129347	10.31	3/14/14
10.30	Amendment to Binding Memorandum of Understanding, dated September 11, 2014	10-Q/A	333-129347	10.1	2/27/15
10.31	Form of First Tranche Warrant (Included in Exhibit 10.30)	10-K	333-129347	10.32	3/14/14
10.32	Form of Second Tranche Warrant (Included in Exhibit 10.30)	10-K	333-129347	10.33	3/14/14
10.33	Management Services Agreement effective July 1, 2014 with Rich Top Management Limited*	8-K	333-129347	99.3	10/3/14
10.34	Amendment No. 1 dated effective 1 January 2016 to the Management Services Agreement with Rich Top Management Services Limited*	8-K	000-55441	10.1	12/23/15
10.35	Management Services Agreement effective April 1, 2014 with The W Formation Group Inc.*	8-K	333-129347	99.4	10/3/14
10.36	Amendment No. 1 dated effective 1 January 2016 to the Management Services Agreement with The W Formation Group Inc. *	8-K	000-55441	10.2	12/23/15

10.37	CFO Management Services Agreement dated effective November 1, 2014*	8-K	333-129347	99.1	1/29/15
10.38	Amendment No. 1 dated effective January 2016 to the Management Services Agreement with JPES Inc. *	8-K	000-55441	10.3	12/23/15
10.39	Loan Agreement dated March 16, 2016	8-K	000-55441	10.1	3/22/16
10.40	7% Senior Convertible Promissory Note dated March 16, 2016	8-K	000-55441	10.2	3/22/16
10.41	Common Stock Purchase Warrant dated March 16, 2016	8-K	000-55441	10.3	3/22/16
10.42	Registration Rights Agreement dated March 16, 2016	8-K	000-55441	10.4	3/22/16
10.43	Development Assignment dated March 16, 2016	8-K	000-55441	10.4	3/22/16
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 13a-14(a) Certification by Principal Executive Officer					X
31.2	Rule 13a-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 28, 2016	By:	/s/ Michael P. Kurtanjek
		Michael P. Kurtanjek, Chief Executive Officer
		(Principal Executive Officer)

Date: March 28, 2016	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 28, 2016
Kin Wong

/s/ Michael P. Kurtanjek	Director	March 28, 2016
Michael P. Kurtanjek

/s/ Andrew G. Sloop	Director	March 28, 2016
Andrew G. Sloop

/s/ Bobby Cooper	Director	March 28, 2016
Bobby Cooper

/s/ John J. May	Director	March 28, 2016
John J. May

/s/ Yee Y (Sue) Pei	Director	March 28, 2016
Yee Y (Sue) Pei

/s/ Weigang Greg Ye	Director	March 28, 2016
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, 2015.

WHITE MOUNTAIN TITANIUM CORPORATION
Consolidated Financial Statements
December 31, 2015, 2014 and 2013
(Expressed in US dollars)

Index	Page

Report of Independent Registered Public Accounting Firm	43

Consolidated Financial Statements

Consolidated Balance Sheets	44

Consolidated Statements of Operations	45

Consolidated Statements of Cash Flows	46

Consolidated Statements of Stockholders’ Equity (Deficit)	47

Notes to Consolidated Financial Statements	47 - 67

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

TO THE DIRECTORS AND STOCKHOLDERS OF WHITE MOUNTAIN TITANIUM CORPORATION

We have audited the accompanying consolidated balance sheets of White Mountain Titanium Corporation as at December 31, 2015 and 2014, and the related consolidated statements of operations, stockholder’s equity (deficit) and cash flows for the years ended December 31, 2015, 2014, and 2013. 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 audits 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, 2015 and 2014, and the result of its operations and its cash flows for the years ended December 31, 2015, 2014, and 2013 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/ Smythe LLP

Chartered Professional Accountants

Vancouver, Canada
March 25, 2016

WHITE MOUNTAIN TITANIUM CORPORATION

Consolidated Balance Sheets

(Expressed in US dollars)

As at		December 31, 2015			December 31, 2014

Assets
Current
Cash	$	396,878		$	949,806
Prepaid expenses		196,924			89,631
Receivables		2,203			25,468
Total Current Assets		596,005			1,064,905
Property and Equipment (Note 5)		286,416			278,015
Mineral Properties (Note 6)		651,950			651,950
Technology Rights (Note 7)		-			-

Total Assets	$	1,534,371		$	1,994,870

Liabilities

Current
Accounts payable and accrued liabilities (Note 11)	$	135,354		$	317,515

Total Liabilities		135,354			317,515

Stockholders’ Equity

Prefered Stock and Paid-in Capital in Excess of $0.001 Par Value (Note 8)
100,000,000 shares authorized Nil (2014 – Nil) shares issued and outstanding		-			-
Common Stock and Paid-in Capital in Excess of $0.001 Par Value (Note 8)
500,000,000 shares authorized 96,114,442 (2014 – 85,905,392) shares issued and outstanding		61,052,678			57,211,235

Deficit Accumulated During the Exploration Stage		(59,653,661	)		(55,533,880	)

Total Stockholders’ Equity		1,399,017			1,677,355

Total Liabilities and Stockholders’ Equity	$	1,534,371		$	1,994,870

See notes to consolidated financial statements.

WHITE MOUNTAIN TITANIUM CORPORATION

Consolidated Statements of Operations

(Expressed in US dollars)

		Years Ended December 31,
		2015			2014			2013
Expenses
Advertising and promotion	$	303,574		$	36,286		$	35,367
Amortization		55,334			389,573			374,821
Bank charges and interest		16,254			19,140			17,974
Consulting fees (Note 8(c))		529,088			570,985			204,057
Consulting fees – directors and officers (Notes 8(c) and 11)		994,127			889,118			463,579
Exploration (Note 6)		1,036,235			2,403,199			1,725,190
Filing fees		22,660			16,981			26,400
Insurance		37,689			37,418			42,046
Investor relations, net		32,929			56,475			7,500
Licenses and taxes		(98,867	)		(36,765	)		-
Management fees (Notes 8(c) and 11)		142,594			774,247			404,912
Office (Note 8(c))		78,661			95,003			117,992
Professional fees (Note 8(c))		431,734			425,368			275,756
Rent (Note 11)		215,591			195,857			170,217
Research and development (Note 7)		-			8,197			335,188
Telephone		25,979			33,321			30,477
Transfer agent fees		6,593			6,014			9,005
Travel and vehicle		236,606			284,913			165,181

Loss Before Other Items		(4,066,781	)		(6,205,330	)		(4,405,662	)
Impairment Loss on Long-Lived Asset (Note 7)		-			(1,477,774	)		-
Foreign Exchange		(53,000	)		(68,026	)		(88,206	)
Interest Income					59			51
Net Loss and Comprehensive Loss for Year	$	(4,119,781	)	$	(7,751,071	)	$	(4,493,817	)
Basic and Diluted Loss Per Common Share (Note 9)	$	(0.05	)	$	(0.10	)	$	(0.07	)
Weighted Average Number of Shares of Common Stock Outstanding		90,150,069			80,416,077			65,297,413

See notes to consolidated financial statements.

WHITE MOUNTAIN TITANIUM CORPORATION

Consolidated Statements of Cash Flows

(Expressed in US dollars)

		Years Ended December 31,
		2015			2014			2013

Operating Activities
Net loss for year	$	(4,119,781	)	$	(7,751,071	)	$	(4,493,817	)
Items not involving cash
Amortization		55,334			389,573			374,821
Stock-based compensation		475,443			588,248			164,912
Common stock issued for services		111,000			327,600			-
Write-off of intangible assets		-			1,477,774			-
Changes in non-cash working capital
Prepaid expenses		(107,293	)		(11,828	)		15,972
Receivables		23,265			8,051			31,328
Accounts payable and accrued liabilities		(182,160	)		(158,655	)		164,568

Cash Used in Operating Activities		(3,744,192	)		(5,130,308	)		(3,742,216	)
Investing Activities
Additions to property and equipment		(63,736	)		(161,882	)		(78,259	)
Cash Used in Investing Activities		(63,736	)		(161,882	)		(78,259	)
Financing Activities
Issuance of common stock for cash		3,255,000			4,185,000			4,750,751
Cash Provided by Financing Activities		3,255,000			4,185,000			4,750,751
Foreign Exchange Effect on Cash		-			-			-
Outflow of Cash		(552,928	)		(1,107,190	)		930,276
Cash, Beginning of Year		949,806			2,056,996			1,126,720
Cash, End of Year	$	396,878		$	949,806		$	2,056,996

Supplemental Cash Flow Information
Common shares issued for services	$	111,000		$	327,600		$	-
Income tax paid	$	-		$	-		$	-
Interest paid	$	-		$	-		$	-

See notes to consolidated financial statements.

WHITE MOUNTAIN TITANIUM CORPORATION

Consolidated Statements of Stockholders’ Equity (Deficit)

(Expressed in US dollars)

			Common Stock					Total
			and Paid-In					Stockholders’
	Shares of		Capital In Excess		Accumulated			Equity
	Common Stock		of Par Value		Deficit

Balance, December 31, 2012	63,836,689	$	47,194,724	$	(43,288,992	)	$	3,905,732
Stock-based compensation			164,912					164,912
Shares issued for cash
Private placement	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(c))			588,248					588,248
Shares issued for services	800,000		327,600					327,600
Private placement (Note 8(a))	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		57,211,235		(55,533,880	)		1,677,355
Stock-based compensation (Note 8(c))	1,159,050		475,443		-			475,443
Shares issued for service (Note 8(a))	300,000		111,000		-			111,000
Private placements net of issuance
cost (Note 8(a))	8,750,000		3,255,000		-			3,255,000
Net loss for the year	-		-		(4,119,781	)		(4,119,781	)
Balance, December 31, 2015	96,114,442	$	61,052,678	$	(59,653,661	)	$	1,399,017

See notes to consolidated financial statements.

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 $59,653,661 (2014 - $55,533,880) and incurred a loss of $4,119,781 (2014 - $7,751,071), 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 substantial 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 and invest in other business opportunities.

	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 (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

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.

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)	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 consolidated 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 consolidated 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.

	(i)	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.

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.

	(j)	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 income (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.

	(k)	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.

	(l)	Use of estimates

		The preparation of consolidated financial statements in conformity with US GAAP requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. Management believes the estimates are reasonable; however, actual results could differ from those estimates and could impact future results of operations. The areas where assumptions, estimates and judgments are significant to the consolidated financial statements relate to, but are not limited to, the following:

	i)	The assumption that Company will be able to continue as a going concern is subject to critical judgments of management with respect to assumptions surrounding the short and long-term operating budget, expected profitability, investing and financing activities and management’s strategic planning. Should those judgments prove to be inaccurate, management’s continued use of the going concern assumption could be inappropriate
	ii)	The recoverability of the carrying value of the mineral properties: the assessment of the impairment indicators involves the application of a number of significant judgments and estimates to certain variables, including metal price trends, plans for properties, and the results of exploration and evaluation to date;
	iii)	Fair value of share-based payments: the fair value of share based payments resulting from issuing instruments that are not traded in an active market is determined by using a valuation technique. Management makes estimates and utilizes assumptions in determining the fair value for share-based payments in determining inputs to be used for the Black-Scholes option pricing model;

3.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	iv)	The Company applies judgment in assessing the functional currency of each entity consolidated in these financial statements;
	v)	Deferred tax assets: the assessment of availability of future taxable profits involves judgment. A deferred tax asset is recognized to the extent that it is probable that taxable profits will be available against which deductible temporary differences and the carry- forward of unused tax credits and unused tax losses can be utilized.
	vi)	The estimated useful lives of property, plant and equipment, which are included in the consolidated statements of financial position and the related depreciation included in the consolidated statements of income; and
	vii)	The inputs used in determining the net present value of the liability for provisions related to decommissioning and restoration included in the consolidated statements of financial position.

(m)

Future accounting pronouncements

	(i)	In September 2015 the FASB issued Update No. 2015-16 Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments.

		The amendments in this Update require that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in this Update require that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date.

		The amendments in this Update require an entity to present separately on the face of the income statement or disclose in the notes the portion of the amount recorded in current-period earnings by line item that would have been recorded in previous reporting periods if the adjustment to the provisional amounts had been recognized as of the acquisition date.

		The amendments are effective for fiscal years beginning after December 15, 2015, including interim periods within those fiscal years. The amendments should be applied prospectively to adjustments to provisional amounts that occur after the effective date of this Update with earlier application permitted for financial statements that have not been issued.

	(ii)	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.

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

3.	SIGNIFICANT ACCOUNTING POLICIES (Continued)

	(iii)	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.

	(iv)	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.

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, 2015 and 2014, for assets and liabilities measured at fair value on a recurring basis.

	December 31, 2015		Level 1			Level 2			Level 3			Total
	Cash	$	396,878		$	-		$	-		$	396,878

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

	(b)	Credit risk

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

The Company mitigates credit risk by maintaining its cash with high credit quality US, Chilean and Chinese financial institutions. The receivables consist of VAT tax credits from the Government of Chile.

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, 2015 totaled $396,878 (2014 - $949,806). At December 31, 2015, the Company had accounts payable and accrued liabilities of $135,354 (2014 - $317,515), 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 this financial instrument, 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, 2015.

	(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 Chilean pesos (“CLP”), “Chinese Yuan (“CNY”), and Hong Kong dollars (“HKD”)). The Company has net monetary liabilities of $44,693 (2014 - $155,120) denominated in CLP, net monetary assets of $7,678 in HKD (2014 - $44,938) and $152,095 in CNY (2014 - $122,760).

		For the year ended December 31, 2015, the Company’s sensitivity analysis suggests that a change in the absolute rate of exchange in CLP by 17% 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 CNY and HKD by 6% will also not have a material impact.

4.	FINANCIAL INSTRUMENTS AND RISKS (Continued)

		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.

5.	PROPERTY AND EQUIPMENT

		December 31, 2015
				Accumulated
		Cost		Amortization		Net
Land held for future development	$	146,636 $		-	$	146,636
Vehicles		129,439		117,590		11,849
Office furniture and fixtures		175,048		81,779		93,269
Office equipment		33,574		22,818		10,756
Computer equipment		7,553		7,553		-
Computer software		68,995		68,995		-
Field equipment		154,150		130,244		23,906

	$	715,395	$	428,979	$	286,416

		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		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

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.

6.	MINERAL PROPERTIES (Continued)

	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 southwest of the city of Vallenar and 17 kilometres southwest of the Cerro Blanco project, consists of six registered exploration concessions. Concession fees and other costs incurred in staking the property have been expensed.

	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, 2015, 2014 and 2013 were as follows:

		2015		2014		2013

Assaying	$	-	$	104,499	$	3,371
Concession fees		75,661		103,022		107,275
Drilling		-		-		97,233
Environmental		227,086		1,070,392		568,361
Equipment rental		11,326		37,520		50,634
Geological consulting fees		46,020		447,059		135,028
Maps and miscellaneous		-		-		-
Site costs		652,177		618,911		745,680
Transportation		23,965		21,796		17,608

Exploration expenditures for the year	$	1,036,235	$	2,403,199	$	1,725,190

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);
	•	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

7.	TECHNOLOGY RIGHTS (Continued)

•

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.

	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	$	-

	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 the 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)	Common stock

		During the year ended December 31, 2015, the Company:

	•	Issued 859,050 shares of Common Stock out of the Company’s 2014 compensation pool to directors, officers, and employees based on 2014 performance. In addition, the Company issued 300,000 shares of Common Stock to a former executive director for the completion of the EIS and participation of the Company’s 2014 compensation pool. These shares were issued under the 2015 Stock Option Stock Issuance Plan.

	•	Closed the sale of 8,750,000 second tranche units (the “Second Tranche Units”). The sale of the units was pursuant to a binding Memorandum of Understanding (the “MOU”) the Company entered into with Grand Agriculture Investment Limited (the “Investor”) dated December 3, 2013, amended September 11, 2014, whereby the Investor agreed to purchase a total of 20,000,000 Second Tranche Units. The sale price for the 8,750,000 Second Tranche Units was $0.40 per unit for gross proceeds of $3,500,000. 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 exercisable immediately upon issuance through December 31, 2017 (the “Second Tranche Warrants”). The Company paid $245,000 in finder’s commissions. In addition, pursuant to the MOU, the Company issued bonus warrants to an investor to purchase 6,000,000 shares of Common Stock to conclude a total sale of 20,000,000 Second Tranche Units. Each whole warrant is exercisable at $0.55 until December 31, 2017 (Note 8 (d)).

	•	In March and June 2015, the Company issued 300,000 shares of Common Stock to a marketing and consulting service provider as non-cash compensation in exchange for services. Those shares were measured at a fair value of $0.35 and $0.38 per common share.

8.	CAPITAL STOCK (Continued)

	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 EIS.

	•	Closed the sale of 5,000,000 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 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 an 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 one warrant to purchase 90% of one share of Common Stock at a $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.

	(b)	Stock options

		The Company has a stock option plan, adopted in 2005, and a stock option/stock issuance plan, adopted in 2010, which has been replaced by a stock incentive plan adopted in June 2015 (individually, the “2005 Plan”, the “2010 Plan”, and the “2015 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, and the 2015 Plan was originally authorized to issue 4,641,040 shares, which amount is increased at the end of each year to represent 10% of the total number of shares of Common Stock outstanding on the last trading day in December of the immediately preceding calendar year less 3,949,500 shares. The terms of any stock options granted under the 2005 Plan may not exceed five years and the exercise price of any stock option granted may not be discounted below the maximum discount permitted under the policies of the Toronto Stock Exchange. The terms of any stock options granted under the 2015 Plan may not exceed ten years and the exercise price of any stock option plan is fixed by the plan administrator.

8.	CAPITAL STOCK (Continued)

	The Company originally also adopted a management compensation pool for the benefit of officers, directors and employees of the Company. The pool consists of 1% of the outstanding shares at the end of each year. The shares granted under the compensation pool program are issued under the 2015 Plan.

	In January 2015, the Company granted 300,000 (2014 - 1,075,000) stock options to an officer 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 2015 Plan. The options were fully vested and immediately exercisable with expiration dates of December 31, 2017.

The fair value of the options granted during the year ended December 31, 2015 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 65.00%; (iii) risk-free interest rate of 0.87%; and (iv) expected life of three years. The fair market value was determined to be $30,371 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 $0.10.

The following table represents service-based stock option activity during the years ended December 31, 2015 and 2014:

	December 31, 2015				December 31, 2014
				Weighted			Weighted
				Average			Average
	Number of			Exercise	Number of		Exercise
	Shares			Price	Shares		Price

Outstanding - beginning of year	1,225,000		$	0.55	150,000	$	1.30
Granted	300,000		$	0.45	1,075,000	$	0.45
Expired /Cancelled	(150,000	)	$	-	-	$	-

Outstanding and exercisable – end of year	1,375,000		$	0.45	1,225,000	$	0.55

As at December 31, 2015 and 2014, the following stock options were outstanding and exercisable:

		Exercise	December 31,	December 31,
Expiry Date		Price	2015	2014

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

The shares under option at December 31, 2015, 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	1,375,000	$ -	1.94

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

8.	CAPITAL STOCK (Continued)

	^(c)	Stock-based compensation

		During the year ended December 31, 2015, the following stock-based compensation was recognized:

	(i)	1,159,050 shares of Common Stock issued out of the Company’s 2014 compensation pool to directors, officers, and employees based on 2014 performance (Note 8 (a)); the cost was measured at $354,849 using market price of $0.37 per common share at the issuance date.
	(ii)	300,000 stock options granted in March 2015 to an officer (Note 8 (b)); the cost was estimated to be $30,371 using the Black-Scholes option pricing model.
	(iii)	300,000 shares of Common Stock were issued to a marketing and consulting service provider in exchange for services (Note 8 (a)); expense of $111,000 was recognized using market price $0.35 and $0.38 per common share at the issuance dates.
	(iv)	Amortization of 700,000 Common Stock shares issuable upon the market performance of the Company’s stock. $75,222 was recognized at $0.36 per common share at the contract date. The remaining unamortized balance of $129,008 (2014 - $204,232) will be amortized through July 2019.
	(v)	$15,000 was recognized for common shares issuable for consulting service received at contract rate.

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(d)). 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 (Notes 11). As a result, $47,768 was recognized as stock-based compensation measured at $0.36 per common share as at the contract dates.

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

		December 31,		December 31,		December 31,
		2015		2014		2013

Management fees	$	142,594	$	630,248	$	164,912
Consulting fees – directors and officers		191,753		155,400		-
Consulting fees		225,086		96,600		-
Professional fees		27,010		21,000		-
Office		-		12,600		-

	$	586,443	$	915,848	$	164,912

	(d)	Warrants

		During the year ended December 31, 2015, the Company issued warrants to purchase 13,875,000 shares of Common Stock including bonus warrants issued to an investor to purchase 6,000,000 shares of Common Stock, as part of a private placement offering (Note 8 (a)). Each whole warrant is exercisable at $0.55 per share until December 31, 2017. These warrants were extended to expire on December 31, 2018 and exercise price was re-priced at $0.35 per share on a resolution of the Board of Directors.

8.	CAPITAL STOCK (Continued)

In December 2015, the Board of Directors amended all outstanding warrants (except those held by a current and a former member of management) to extend the expiration date and re-priced the exercise price. Warrants to purchase 5,048,299 shares Common Stock were extended to April 30, 2016 from expiration date of December 31, 2015 and the exercise price was re-priced from $0.65 to $0.30. Warrants to purchase 5,714,286 shares of Common Stock were extended to December 31, 2017 from expiration date of December 31, 2016 and exercise price was re-priced from $0.45 to $0.30. Warrants to purchase 10,125,000 shares of Common Stock were extended to December 31, 2018 from expiration date of December 31, 2017 and exercise price was re-priced from $0.55 to $0.35.

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 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(a)). Each whole warrant is exercisable at $0.55 until December 31, 2017. These warrants were extended to expire on December 31, 2018 and the exercise price was re-priced at $0.35 per share on a resolution of the Board of Directors.

Details of stock purchase warrant activity for the year ended December 31, 2015 and 2014 are as follows:

	December 31, 2015			December 31, 2014
			Weighted				Weighted
			Average				Average
	Number		Exercise	Number			Exercise
	of Warrants		Price	of Warrants			Price

Outstanding - beginning of year	21,487,585	$	0.55	12,762,585		$	0.69
Issued	13,875,000		0.35	10,725,000			0.55
Expired	-		-	-			-
Cancelled				(2,000,000	)		(1.50	)

Outstanding - end of year	35,362,585	$	0.34	21,487,585		$	0.55

As at December 31, 2015 and 2014, the following share purchase warrants were outstanding:

8.	CAPITAL STOCK (Continued)

			December 31,	December 31,
Expiry Date		Exercise Price	2015	2014

April 30, 2016	$	0.30	1,770,328	1,770,328
April 30, 2016	$	0.30	910,534	910,534
April 30, 2016	$	0.30	2,367,437	2,367,437
December 31, 2017	$	0.30	5,714,286	5,714,286
December 31, 2017	$	0.65	600,000	600,000
December 31, 2018	$	0.35	4,500,000	4,500,000
December 31, 2018	$	0.35	5,625,000	5,625,000
December 31, 2018	$	0.35	13,875,000	-
			35,362,585	21,487,585

9.	LOSS PER SHARE

	Potentially dilutive securities not included in diluted weighted average shares outstanding include shares underlying 1,375,000 (2014 – 1,225,000; 2013 – 150,000) in outstanding options and 35,362,585 (2014 – 21,487,585; 2013 – 12,762,585) warrants. For the years ended December 31, 2015, 2014 and 2013, potentially dilutive securities are anti-dilutive, therefore, diluted loss per common share equals basic loss per common share.

10.	INCOME TAXES

	Income tax provisions are determined as follows:

		December 31,			December 31,			December 31,
		2015			2014			2013

Income tax benefit computed at statutory tax rate	$	(1,441,924	)	$	(2,712,876	)	$	(1,572,836	)
Stock-based-compensation		205,255			320,547			57,719
Other timing differences		(761,849	)		533,182			1,488,526
Adjustment due to effective rate attributable to income taxes of other countries		561,103			309,282			132,287
Loss carry-forward – overprovided in prior years		(647,274	)
Effect of change in tax rate		(529,175	)		-			(265,583	)
		(2,613,864	)		(1,549,865	)		(159,887	)
Change in valuation allowance		2,613,864			1,549,865			159,887
	$	-		$	-		$	-

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% (2014 – 35%; 2013 – 35%). The components of the net deferred income tax assets are approximately as follows:

10.

INCOME TAXES (Continued)

		December 31,			December 31,			December 31,
		2015			2014			2013

Deferred income tax assets
Net operating losses and credit carry-forwards	$	10,504,313		$	9,116,917		$	7,746,334
Technology rights		517,221			626,110			-
Property and Equipment		4,943			121			-
Resource properties		2,902,066			2,828,546			3,114,223
		13,928,543			12,571,694			10,860,557
Valuation allowance		(13,928,543	)		(12,571,694	)		(10,860,557	)

	$	-		$	-		$	-

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 CLP 772,994,000 (US $1,091,583) (2014 - CLP 690,765,000 (US $1,140,209)) 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.

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

2018		9,000		-		9,000
2019		10,000		257,000		267,000
2020		2,000		290,000		292,000
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		-		410,000
2027		2,161,000		-		2,161,000
2028		349,000		-		349,000
2029		1,007,000		-		1,007,000
2030		1,816,000		-		1,816,000
2031		8,272,000		-		8,272,000
2032		2,886,000		-		2,886,000
2033		612,000		-		612,000
2034		1,905,000		-		1,905,000
2035		1,511,000		-		1,511,000
Non-expiring carry-forward losses		-		6,650,398		6,650,398

	$	22,452,000	$	7,197,398	$	29,649,398

11.

RELATED PARTY TRANSACTIONS

		December 31,			December 31,			December 31,
		2015			2014			2013
Amounts payable	$	(24,603	)	$	(77,196	)	$	(186,886	)

Expenditures in the year:
Consulting fees – directors and officers	$	802,374		$	733,718		$	463,579
Management fees	$	142,594		$	144,000		$	240,000
Rent	$	-		$	23,772		$	29,989

	Amounts payable 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 $191,753 stock-based compensation.

	Management fees consist of stock-based fees paid to a former executive vice president and options granted to management.

	Related party transactions were conducted on terms equivalent to those at arm’s-length.

	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.

	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 2015 Stock Option/Stock Issuance Plan. The options shall be fully vested, exercisable at $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.

On December 10, 2015, both parties agreed to reduce the monthly fee from $12,500 to $11,250, effective January 1, 2016.

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;

11.

RELATED PARTY TRANSACTIONS (Continued)

	(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.	200,000 shares upon listing of the Common Stock on a senior exchange; and
	b.	200,000 shares upon completion of a final feasibility study.

This agreement expired December 31, 2015 and a new agreement was entered by both parties to extend the service to March 31, 2016 with monthly compensation of $10,000.

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.

In December 2015, this agreement was amended to reduce the monthly fee to $10,500, effective January 1, 2016.

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;

11.

RELATED PARTY TRANSACTIONS (Continued)

(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.

	In December 2015, this agreement was amended to reduce the monthly fee to $9,000, effective January 1, 2016.

	On December 14, 2015, the Company amended management service agreement with a company that owned by a director of the Company for the director to provide investor relation service on a month-by-month basis with compensation of $5,000 per month, effective January 1, 2016.

12.	SEGMENTED INFORMATION

	The Company operates in a single industry segment. At December 31, 2015 and 2014, total non-current assets by geographic location are as follows:

		2015		2014
US	$	-	$	-
Chile		844,443		811,256
China		93,923		118,709
	$	938,366	$	929,965

13.	COMMITMENTS

	The Company entered into a lease agreement for office premises in China that commenced July 1, 2014 and expires June 30, 2021. The total lease payment pursuant to the agreement is $584,018, of which the remaining balance at December 31, 2015 is $458,872. If the Company terminates the lease prior to the end of the lease term, a deposit of $14,000 will not be returned.

	The Company’s lease payments for office premises in China for the next five years are as follows:



2016	$	83,431
2017		83,431
2018		83,431
2019		83,431
2020		83,431
	$	417,155

14.

SUBSEQUENT EVENTS

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

On March 16, 2016, the Company and its wholly-owned subsidiary Sociedad Contractual Minera White Mountain Titanium Corporation entered into a loan agreement and issued a 7% Senior Convertible Promissory Note for a total of $2,000,000. The terms of the agreement are as follows:

	(i)	A 7% Senior Convertible Promissory Note (the “Note”) shall be issued to evidence the loan.
	(ii)	The Note bears simple interest of 7% per annum on the unpaid principal amount until the principle amount is paid in full.
	(iii)	The Note is convertible into shares of the Company’s Series A Prefered Stock (the “Series A Shares”) at the rate of $0.12 per share, par value of $0.001 per share.
	(iv)	The Series A Shares are convertible into Common Stock at conversion price of $0.12 per share. The Series A Shares holders have the same voting rights as Common Stockholders.
	(v)	At the time of receipt of the proceeds, the Company shall issue to the Lender 100 Series A Shares evidenced by a single stock certificate
	(vi)	The term of the loan shall be for a period of two years from the effective date of the agreement unless renewed or extended by mutual agreement in writing.
	(vii)	As additional consideration for the loan, at the time of receipt of the proceeds, the Company shall issue to the Lender warrants to purchase up to 8,333,333 shares of Common Stock of the Company. The warrants shall have a term of three years from the issuance date and be exercisable at $0.30 per share.

On March 22, 2016, the Company received proceeds in amount of $2,000,000 from the Lender.

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WHITE MOUNTAIN TITANIUM CORP Reports