Centaurus targeting a “globally significant nickel sulphide camp”, says Sydney analyst

17th April 2020
Resources Rising Stars

Centaurus Metals (ASX: CTM) has embarked on a new exploration and development strategy for a “globally significant” nickel sulphide camp in north-eastern Brazil, according to veteran Sydney-based analyst Jean-François Bertincourt from independent research outfit Terra Studio.

Bertincourt – whose previous roles included as a Senior Mining Analyst with Canaccord Genuity, Special Advisor to Helmsec Global Capital and a Vice President with BNP Paribas and Société Générale Corporation – has completed an initial note on Centaurus following its acquisition of the Jaguar nickel sulphide project from Vale.

The company reached agreement to acquire the project, which includes a non-JORC global foreign resource of 57.6Mt at 0.77% Ni for 445,000t of contained nickel, in August last year and has recently completed the acquisition of a 100% interest.

Centaurus is well advanced with an 8,500m diamond drilling program, building on the +55,000m of historical (Vale) diamond drilling available to underpin a new JORC resource estimate.

Bertincourt says the key expected outcomes if the company’s strategy is successful will be to define a high-value project more suited to a junior/mid-cap company, attract development funding to permit, build and operate a new nickel sulphide mine and the potential for “high value creation” in the context of global nickel sulphide production with limited expansion capacity.

The current drilling is aimed at defining “tighter resource envelopes” leading to a JORC compliant resource, while also evaluating the potential for further high-grade and shallow discoveries – such as the recent Onça Rosa discovery.

Bertincourt says the historical foreign mineral resource estimate was likely driven by a bulk mining scenario, envisaged by Vale, with Centaurus focusing now on the opportunity to delineate a “significant high-grade resource”.

He adds that the mining scenario is most likely to be open pit initially considering that wide, high-grade mineralisation starts close to surface.

“There should be an opportunity to generate strong cash flow early to pay back pre-production CAPEX and result in higher project Net Present Value (NPV),” he said.

To view Terra Studio’s full note on Centaurus Metals, click here.


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