Centaurus Metals : Annual Report - December 2021

ANNUAL REPORT 2021

www.centaurus.com.au

DIRECTORS

Mr D M Murcia AM, B. Juris, LL.B Non-Executive Chair

Mr D P Gordon B.Bus, FCA, AGIA, ACIS, MAICD Managing Director

Mr B R Scarpelli M.Sc, PMP

Executive Director

Mr M D Hancock B.Bus, CA, FFin Non-Executive Director

Mr C A Banasik B.App.Sc (Physics), M.Sc (Geology), Dip Ed, GAICD Non-Executive Director

COMPANY SECRETARY

Mr J W Westdorp B.Bus, CPA, Grad Dip App Sc, MAICD Chief Financial Officer / Company Secretary

SHARE REGISTRY

Advanced Share Registry Limited

150 Stirling Highway

Nedlands WA 6009 Telephone: [phone]

AUDITORS

KPMG

Chartered Accountants 235 St Georges Terrace Perth WA 6000

BANKERS

Australia

National Australia Bank Level 14, 100 St Georges Tce Perth WA 6000

Brazil

Banco Inter

Avenida Barbacena, 1219 - Santo Agostinho Belo Horizonte - MG - CEP: 30190-924 BRAZIL

Telephone: [phone]

STOCK EXCHANGE LISTING

Centaurus Metals Limited's shares are listed on the Australian Securities Exchange Ordinary fully paid shares (ASX code: CTM)

PRINCIPAL & REGISTERED OFFICE

Australia

Level 2, 1 Ord Street West Perth WA 6005

PO Box 975

West Perth WA 6872

Telephone: [phone] Email:offi[e-mail]:www.centaurus.com.au

Brazil

Avenida Barao Homem de Melo, 4391 Salas 606 and 607 - Estoril

Belo Horizonte - MG - CEP: 30.494.275 BRAZIL

Telephone: [phone]

CENTAURUS METALS ANNUAL REPORT 2021

Highlights ..................................................................................................... 04

Chair's Report ......................................................................................... 06

Focus for the Year Ahead .......................................................... 08

Nickel Market & Price ................................................................... 09

Environmental, Social & Governance ......................... 11

Strategy & Key Assets in Brazil ........................................ 14

Corporate ..................................................................................................... 24

Mineral Resources & Ore Reserves ............................. 26

Tenement List .......................................................................................... 28

Additional Shareholder Information ............................. 29

Corporate Governance Statement .................................. 30

Financial Report 31 December 2021 ............................. 31

Contents

EXPLORATION & DEVELOPMENT

• → In March 2021, the Company lifted the JORC 2012 Mineral Resource Estimate (MRE) at the Jaguar Nickel Sulphide Project to:

  • • GLOBAL MRE: 58.9Mt @ 0.96% Ni for 562,600t of contained nickel

• → The Global MRE at this time included an Indicated component of:

  • • INDICATED: 20.1Mt @ 1.12% Ni for 225,800t of contained nickel

• → This resource supported the delivery of the Value-Add (Nickel Sulphate) Scoping Study for the Jaguar Project and highlighted the potential for outstanding economic returns from the production of battery-grade nickel sulphate.

• → Key Scoping Study results, using conservative nickel price assumption of US$7.50/lb (US$16,530/t) and a sulphate premium of only US$0.50/lb (US$1,102/t), were:

  • • Production of +20,000 tpa of recovered nickel-in-sulphate and +9,600 tpa of a mixed sulphide precipitate (MSP) over an initial 13-year mine life

  • • Post-tax NPV8 of ~A$1.11 billion (~US$831 million) and post-tax IRR of ~52%

  • • Post-tax capital payback of ~1.8 years from first nickel sulphate production

  • • Net Revenue totalling ~A$6.04 billion (~US$4.53 billion)

  • • EBITDA totalling ~A$3.25 billion (~US$2.44 billion)

  • • Average Annual Free Operating Cash Flow (Pre-tax) of ~A$252 million (~US$189 million)

  • • High LOM Cash Operating Margin of ~US$4.27/lb of Ni

  • • Pre-production CAPEX of ~US$288 million (including contingency)

• → The Jaguar Project has significant leverage to the nickel price given the extensive amount of nickel metal available in the MRE. At US$11/lb, the scoped project would see the post-tax NPV lift to over A$2.5 billion, the post-tax IRR lift to over 100% and the EBITDA rise to over A$500m per annum.

• → Extensive ongoing drilling programs since the delivery of the Scoping Study underpinned a significant increase in the JORC 2012 Mineral Resource Estimate (MRE) at the Jaguar Nickel Sulphide Project in December 2021, confirming Jaguar as the world's premier near-surface nickel sulphide development project and highlighting the opportunity to increase the currently scoped production rate:

  • • GLOBAL MRE: 80.6Mt @ 0.91% Ni for 730,700t of contained nickel

• → Importantly, the Indicated component of the Global MRE has increased to:

  • • INDICATED: 43.4Mt @ 0.92% Ni for 397,000t of contained nickel

• → A Nickel Sulphate Definitive Feasibility Study (DFS) is now advancing on multiple fronts and on-track for completion by the end of 2022. Leading global engineering group Ausenco has been appointed as Lead Engineer for the study.

• → Key environmental approval document, the Environmental Impact Assessment ("EIA/RIMA"), lodged with the Pará State environmental authority (SEMAS), with approval targeted for Q3 2022.

• → Updated Mining Lease Application lodged, meaning all key statutory reports required for the development of the Jaguar Project have now been submitted.

• → Three key properties secured at Jaguar, providing security of land possession. Centaurus now has possession rights and access to over 2,000 hectares of land at Jaguar.

• → Jaguar Nickel Sulphide Project selected as a Strategic Minerals Project by the Brazilian Federal Government as part of a new program designed to support projects deemed strategic to Brazil.

ENVIRONMENT, SOCIAL & GOVERNANCE (ESG)

CORPORATE

• → Independent ESG assessment confirms Jaguar's credentials as a world-leading, low-emission nickel project, with a life-of-mine CO2 footprint estimated to be lower than 97% of global nickel production.

• → Adoption of a formal ESG policy framework, based on the recommendations and principles of the Towards Sustainable Mining (TSM) Principles and the Principles of Responsible Investment (PRI).

• → Positive contributions to local communities in Brazil, with key programs including:

  • • Public road infrastructure upgrade completed by Centaurus between the municipalities of São Félix do Xingu and Tucumã, delivering a significantly better road for local residents.

  • • New 20,000L water tank donated to the village of Minerasul.

  • • Contribution to the local municipal health services of Tucumã and São Félix do Xingu through the purchase of masks, gowns, hand sanitiser and COVID-19 test kits to better equip them for the delivery of health services in these communities.

  • • More than 90% of the current project workforce, including employees and outsourced labour, are from the south-eastern region of the State of Pará.

  • • More than 80% of the Company's investment expenditure relating to exploration and development work at the Jaguar Project to date has been awarded to the local community through drilling contracts, engagement of consultants and services and the purchase of equipment and supplies.

• → Effective controls maintained in response to the COVID-19 pandemic to help protect the health and safety of Centaurus' in-country workforce, their families and the local community, as well as to help maintain business continuity, which can be seen by the extensive work completed on the Project since the start of the COVID-19 pandemic.

• → Cash at 31 December 2021 of $8.3 million, with a $75 million institutional placement completed subsequent to the end of the reporting period to drive the continued growth and development of the Jaguar Project.

• → Centaurus shares commenced trading in the US on the OTCQX platform under the ticker OTCQX: CTTZF on 30 December 2021.

• → Centaurus continued to build its senior leadership team, with the appointment of experienced international executives Wayne Foote as General Manager - Operations, Júlia Oliveira as Legal and Commercial Manager in Brazil and Fabio Borges as Finance Manager in Brazil.