Street Talk (AFR) Centaurus Metals shows battery metals still...

Street Talk (AFR)
Centaurus Metals shows battery metals still hot in 2022
Anthony Macdonald, Sarah Thompson and Kanika Sood
Jan 19, 2022 – 9.34pm
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Investors are chasing listed battery metal exposures, and nickel explorer Centaurus Metals is the latest one to hitch a ride.

Street Talk Louie Douvis
Centaurus was out in the market securing a $65 million equity injection at $1.16 per share (a 9.7 per cent discount to last close) on Wednesday, to help fund a definitive feasibility study for its Brazilian nickel sulphide project called Jaguar.
Perhaps delayed by the Christmas holidays, the raise followed its December 13 ASX announcement of a 30 per cent upgrade to its global mineral resource estimate to 80.6Mt at 0.91 per cent nickel for a 730,700t total.


While relatively small in stature, the deal launched fully covered and shows the new year hasn’t dampened institutional investor interest for battery metals plays.


Nickel is used for making alloys needed for lithium-ion batteries, which powers electric vehicles, mobile phones, laptops and the like. Stock market investors have been chasing battery metal exposures hard (lithium being the other favourite).
To name a few, Liontown ran a $450 million placement for its Kathleen Valley project, Firefinch picked up $100 million and AVZ Minerals raise $50 million. All three stocks had enjoyed spectacular run up in share prices before the raises.
Centaurus hasn’t enjoyed the same level of investor attention in recent years. It traded near all-time lows for half a decade until picking up the Brazilian nickel project.
Centaurus goes back to the late 1990s. But the current iteration of the company can be traced to November 2009, when it merged with still listed Glengarry Resources as the target in an off-market takeover.
At the time, Glengarry had been looking for copper, gold and uranium in Queensland, Northern Territory and Western Australia. But it found Centaurus’s iron ore assets in Brazil more enticing. (Centaurus Metals managing director Darren Gordon is a former Glengarry director).
For the next decade, iron ore remained Centaurus’ focus, primarily via its Jambreiro mine.

But in 2019, Centaurus pivoted and bought 100 per cent of the Brazilian Jaguar nickel sulphide project via an asset swap agreement with Vale, trading in its copper-gold project Salobo West. At the time, Mr Gordon said “there simply aren’t many nickel sulfide projects globally of this quality”.
Centaurus started drilling at Jaguar shortly after, and posted the first update in May 2020. The most recent one is the December 13 resource upgrade.
This time around, brokers think, Centaurus’s fortunes are about to improve. Canaccord Genuity, following the December 13 upgrade, said Centaurus now ranked as the world’s eleventh largest undeveloped nickel sulphide resource based on contained nickel tonnes.
It made the world’s top 25 and ASX’s top 15 by grade, by Canaccord’s calculations.
The broker was also heartened by IGO’s $1.1 billion acquisition of Western Areas in December, saying Centaurus’s Jaguar was comparable to Western Areas’s Cosmos (Odusseus) development.
Centaurus wants to get Jaguar into production in 2024, and the definitive feasibility study is expected at 2022 end.