Centaurus’ study was largely in line with Canaccord’s expectations, albeit with even lower costs than tipped by the firm and a more conservative nickel price estimate.
Canaccord in March forecast all-in sustaining costs of US$5.87 per pound for Jaguar versus Centaurus’ forecast of $3.57/lb.
Nickel prices in Centaurus’ study are tipped at an average of $8.98/lb for the life of the mine versus Canaccord’s $9.15/lb.
Centaurus’ forecast production is lower than Canaccord’s prediction, at 335,000 tonnes of recoverable nickel against the firm’s 437,000t over the mine life.
“We expect lower production to be offset by the very lower operating costs in terms of overall project economics,” Canaccord said.
“A 34% lower strip ratio compared to CGe, coupled with cheap local hydropower, has aided costs pushing well into the lowest quartile among global producers.
“Capex is also lower than our expectations at $371 million versus CGe of $400 million. Sustaining capex is in line at $237 million over LOM.”
Canaccord said it expected the $25 million in the Centaurus bank to fund it through to a final investment decision by mid-year.
It expected construction and early mine works to take 24 months, with steady-state production slated for 2028 – neatly lining up with Canaccord’s predicted nickel supply deficit.
Given the Jaguar economics, Canaccord has maintained a ‘speculative buy’ rating for Centaurus and assigned it a price target of A80c.
Centaurus’ feasibility study is underpinned by an open-pit ore reserve of 63Mt at 0.73% nickel for 459,000t of contained nickel.
Centaurus shares were down 1% to 45c on Wednesday morning, capitalising the company at $228 million. It has traded between 24-96c over the past 12 months.
