Titan Mining: A Undervalued Critical Minerals Asset with Zinc and Graphite Growth

Titan Mining Corporation (TSE:TI) is emerging as a compelling play in the critical minerals sector, driven by operational execution, cost discipline, and strategic growth initiatives in U.S. zinc and graphite markets. Despite its progress, the stock remains undervalued relative to peers like lithium-focused Lithium Americas (LAC.TO), offering investors a rare opportunity to capitalize on two high-demand commodities underpinned by strong fundamentals and improving leverage metrics.

Operational Momentum and Cost Leadership

Titan's first-quarter 2025 results underscore its transition into a leaner, more profitable miner. Revenue surged 37% year-over-year to $16.02 million, while all-in sustaining costs (AISC) fell 4% to $0.96 per pound of payable zinc. This cost discipline has been a cornerstone of Titan's strategy, with C1 cash costs dropping 6% to $0.91 per pound. The company's focus on operational efficiency is paying dividends, as evidenced by a 922% jump in cash flow from operations to $2.7 million and a 20% increase in cash reserves to $12.18 million.

Production expansion plans are equally promising. Titan aims to boost capacity from 1,750 to 2,250 tons per day by year-end, with the N2D zone ramping to 250 tons/day in Q2 and 500 tons/day in Q3. This scale-up, supported by equipment purchases and workforce training, positions the company to capitalize on rising zinc demand. Zinc prices, currently hovering around $1.15 per pound, are buoyed by EV battery applications (used in cathodes) and infrastructure spending, making Titan's low-cost production a key competitive advantage.

Graphite: The Underrated Growth Lever

While zinc remains Titan's core business, its Kilbourne Graphite Project could prove transformative. The project's commercial demonstration facility, slated to produce 1,000–1,200 tonnes annually, could scale to 40,000 tonnes if demand and funding materialize. This would make Titan a rare U.S. supplier of natural flake graphite—a critical mineral used in EV batteries, lubricants, and industrial processes.

The strategic value of U.S. graphite production cannot be overstated. The U.S. imports over 95% of its graphite needs, with China dominating global supply. Titan's project, located within existing mine permits, leverages shared infrastructure to reduce capital and operating costs. Metallurgical tests achieved 98.8% purity with 87.3% recovery rates, signaling scalability. Compare this to lithium plays like Lithium Americas, where projects often face higher permitting hurdles and longer timelines.

Valuation: Titan vs. Lithium Peers

Titan's valuation stands out against lithium-focused peers.

At current prices, Titan trades at an enterprise value/EBITDA of ~4.5x, far below Lithium Americas' 20x+ multiple. Even with Titan's recent stock price recovery (+25% YTD), it remains undervalued given its dual-commodity profile and lower execution risk. Lithium projects often require multi-year development and billions in capital, whereas Titan's zinc production is cash-flow generative today, with graphite offering upside.

Addressing Leverage Concerns

Critics may point to Titan's debt levels, but recent progress is encouraging. Net debt fell 29% year-over-year in Q1, and the company's $12.18 million cash balance provides a buffer for expansion. By contrast, lithium developers often rely on equity dilution or project financing, which can dilute existing shareholders. Titan's focus on free cash flow generation (projected to grow as production scales) suggests debt ratios will continue improving.

Risks and Considerations

Titan is not without risks. Zinc prices could dip if global economic growth slows, though long-term demand from EVs and infrastructure should provide a floor. The graphite project's success hinges on securing offtake agreements and regulatory approvals. Additionally, the company's valuation could rise if peers like Lithium Americas face delays or cost overruns, making Titan's near-term cash flows more attractive.

Investment Thesis: Buy the Dip, Play the Long Game

Titan Mining checks all the boxes for a critical minerals investment: a low-cost, U.S.-based zinc producer with a scalable graphite project, improving leverage, and a management team focused on disciplined execution. While lithium stocks like Lithium Americas trade on speculative future production, Titan generates cash today and offers a path to growth in two critical minerals.

Investors should consider Titan as a “best of both worlds” opportunity: a near-term cash flow generator with long-term upside in graphite. With a market cap of ~$250 million and a projected 2025 EBITDA of $20 million+, the stock offers asymmetric upside. Look for catalysts like production ramp-up data, graphite offtake agreements, and zinc price stability to drive valuation re-rating.

In a sector where lithium stocks often command premium multiples despite execution risks, Titan Mining's operational strength and undervalued profile make it a compelling contrarian play. This is a stock to buy on dips and hold for the critical minerals boom.

Positioning Advice: Accumulate Titan Mining (TI.TO) on weakness below $1.50/share, with a target of $2.50–$3.00 over the next 12–18 months. Pair with a long-term view on U.S. critical minerals infrastructure policies, which could accelerate demand for domestic zinc and graphite production.