Ann: Jaguar Nickel Sulphide Project Scoping Study, page-81

Here's some positivity ,,, from today's Mining News ...

'Compelling' economics for Centaurus' Jaguar

CENTAURUS Metals hasoutlined the potential for a low-cost, long-life nickel sulphide operation atits Jaguar project in Brazil.

Drilling at CentaurusMetals' Jaguar project in Brazil

• Exploration / Development > Feasibility

• 29 March 2021

Kristie Batten

The scoping study was based on a production target of 275,600 tonnes ofnickel at 0.84%, comprising nearly two thirds indicated resources.

Jaguar is envisaged to produce 203,300t of contained nickel, or about20,000t of 15.5% nickel concentrate per annum, over an initial 10 years at C1costs of US$2.41 per pound and life-of-mine all-in sustaining costs of$2.97/lb.

Pre-production capital costs are estimated at about $178 million,including contingency.

Using a base case nickel price assumption of $7.50/lb, or $16,530/t,life-of-mine revenue is forecast to be $2.42 billion and EBITDA is expected tobe about $1.23 billion, with average annual pre-tax free operating cashflow of$109 million.

The study generates a post-tax net present value of $453 million, at an8% discount rate, or about A$604 million, a post-tax internal rate of return of54% and a payback period of 1.9 years.

"The $604 million project NPV is approximately 30% higher than ourown estimate ($458 million) for the base case Jaguar developmentscenario," Argonaut Securities said.

"Project development parameters mostly in line with ourexpectations. AISC were slightly lower than expected and a lower discount rateused."

Centaurus managing director Darren Gordon described the economics ascompelling.

"Our goal is to transform Centaurus into a new-generation nickelsulphide mining company in Brazil, capable of delivering more than 20,000 tonneper annum of Class-1 nickel sulphides to global markets for many years to come,"he said.

"The scoping study clearly shows that Jaguar has all the attributesrequired to achieve this goal, and to do so in a sustainable and responsiblemanner that ensures we meet the highest possible ESG standards."

Gordon said the low C1 costs meant Jaguar would be profitable under anyfuture nickel price scenario.

"The low C1 cash costs reflect both the significant open pitvolumes and the low operating cost environment in Brazil, and results in highoperating margins that will be resilient to fluctuations in the nickel priceand exchange rates," he said.

A value-added scoping study into the inclusion of a pressure oxidisationcircuit will be released in April.

The company will move to a prefeasibility study, which will beginimmediately, and will aim for a definitive feasibility study and finalinvestment decision next year.

Centaurus is targeting first production at the end of 2024. The projectwill employ 1000 people during construction as close to 700 people duringoperations.

"Most major investment bank research suggests that the demand forClass-1 nickel at this time will be strongly outstripping supply - which shouldbe favourable for nickel producers, particularly those like Centaurus that cansustainably produce nickel from sulphide sources at very low operatingcosts," Gordon said.

"At a nickel price of US$9/lb, which is forecast by a number of theinvestment banks for the middle of this decade when operations at Jaguar aretargeted to commence, the project's post tax NPV would rise to circa A$1.01billion, with an IRR of about 80%."

Centaurus is also confident of further resource growth with more than65,000m of drilling targeted in 2021.

Four diamond rigs are currently operating, with a reverse circulationrig to be added in the next few weeks to focus on greenfields targets.

Argonaut has a speculative buy rating and $1.27 price target forCentaurus but is reviewing its models in light of today's news.

Centaurus shares were up1.3% to 82.5c, valuing the company at about $270 million