Euroz sets 55c price target for Centaurus, says Jaguar a possible “company-maker”

Perth-based institutional broker Euroz Securities has become the latest financial institution to commence research coverage on fast-growing nickel developer Centaurus Metals (ASX: CTM)...
29th May 2020
Resources Rising Stars

Perth-based institutional broker Euroz Securities has become the latest financial institution to commence research coverage on fast-growing nickel developer Centaurus Metals (ASX: CTM).

Highly respected Euroz resource analyst Andrew Clayton has issued a Speculative Buy recommendation and set a 55c price target for the stock in his initiation note, released on 20 May. That compares with a recent trading price of 27-29c.

At the heart of the broking firm’s positive outlook for the stock was its landmark transaction last year to acquire the Jaguar Nickel Sulphide Project from Vale which Clayton describes as an “innovative deal” including an asset swap on its Salobo West copper-gold project.

“Jaguar is an advanced project with a significant drilling database, a foreign resource estimate and preliminary metallurgical testwork,” he wrote.

The global foreign resource of 315kt of contained nickel at 0.78% Ni was established while Vale was looking for a Tier-1 deposit.

CTM has focused on a potential high-grade zone of 1.5%-2.0% Ni within the low-grade resource.

“Work completed by CTM has confirmed continuous, high-grade zones across 600m of strike at the Jaguar South deposit alone. This should be quantified with an updated resource by mid-year followed by a Scoping Study in Q3 CY2020.

“Based on the extensive drill results, we believe that a 10-15mt resource of 1.5-2.0% Ni could be defined to form the basis of a potential mine producing between 16-22kt of Ni per annum for at least 8 years,” Clayton says,

“Due to the size of the orebody, Jaguar is likely to support either a bulk low-grade open pit mine or a smaller open pit/underground scenario targeting the higher-grade zones of the resource.

“We see excellent exploration upside with a number of untested satellite geochemical and geophysical prospects and the potential depth extensions at the known deposits.”

Euroz has initiated coverage 55c per share price target, but says “we believe that Jaguar can become a mine and ultimately CTM could be worth closer to $1/share once in production.”

Upcoming catalysts include the mid-year maiden resource estimate, continued regional exploration, the commencement of a Scoping Study in Q3 and the commencement of a PFS.

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