ASX: CTM Share Price: 88c
Shares on Issue: 428.6M Market Cap: $385.8M
Shares in Centaurus Metals (ASX: CTM) have climbed over 20% in the past week, buoyed by news that its flagship Jaguar Nickel Sulphide Project in Brazil is now fully unencumbered with 100% of future nickel production now open to offtake.
Leading stockbrokers believe the news delivers huge upside for Centaurus, with recent broker research from SCP Securities, Argonaut and Canaccord Genuity setting price targets of between of $1.60 and $2.30 per share – well above the latest traded price of 88 cents.
Unencumbered offtake – what does it mean for Centaurus?
The pivotal agreement opens up new opportunities for Centaurus to secure strategic funding and partnerships on unencumbered future nickel sulphate production from the Jaguar Project for the rapidly growing battery materials sector.
Offtakes for battery raw materials are in increasingly high demand from OEMs, battery manufacturers and traders, and this interest is anticipated to open up a wide variety of new funding options for the Jaguar Project. Centaurus says it has already received notable interest in securing physical offtake of nickel products with a low carbon footprint and strong ESG credentials, as is the case with Jaguar.
Following the transaction, Centaurus now has full control and optionality over the sale and marketing of Jaguar’s strategic, long-life, low-greenhouse gas emission nickel sulphate product, which is expected to be strongly aligned with the rapidly growing Western battery market.
What do the brokers say?
Centaurus has attracted plenty of positive coverage from leading brokers, with recent reports from Argonaut Securities, SCP Equity Research and Canaccord Genuity. Download these reports below:
- Argonaut Securities – price target $2.02
- SCP Securities – price target $2.30
- Canaccord Genuity – price target $1.60
The Nickel Sulphide Story
These battery applications require higher purity Class-1 nickel, which typically comes from nickel sulphide deposits.
Centaurus’ Jaguar Project represents one of the largest nickel sulphide resources held by an ASX-listed company and the largest outside of the major mining companies, with a current Mineral Resource Estimate of 938,500 tonnes of contained nickel (and expected to grow to over one million tonnes by the end of the year).
Recent metallurgical testwork has confirmed the ability of Jaguar ore to produce a high-quality nickel sulphate product that will be highly attractive to the battery market.
This means first production from the Jaguar Project is expected to coincide with an exceptionally strong demand outlook for its product.
What’s next for Centaurus?
With full control over future offtake deals, Centaurus will now commence active discussions with potential offtake partners, with the opportunity to explore a much wider variety of funding options for the Jaguar Project development at both a corporate and project level.
A Definitive Feasibility Study is well underway, targeted for completion in the December 2023 Quarter, putting Centaurus on track for a Final Investment Decision in Q3 2024.
In parallel with these ongoing studies, Centaurus is also progressing a major drilling campaign aimed at expanding its existing Resource base at Jaguar and making new discoveries in the surrounding area. This regional program recently led to the new high-grade Twister greenfields discovery, located less than 5km from the proposed Jaguar processing plant.
Hear an update from the MD
Centaurus Managing Director Darren Gordon recently featured on The Hole Truth podcast, where he discussed the Company’s current work programs, the demand outlook for nickel sulphides and the opportunities that unencumbered nickel production from Jaguar could provide. Listen to the podcast here.
Please note that Read Corporate does not provide investment advice and investors should seek personalised advice before making any investment decisions.
