CENTAURUS METALS LIMITED — Interim / Quarterly Report 2012

Mar 11, 2012

Centaurus Metals Limited ABN 40 009 468 099

And it’s controlled entities

Interim Financial Report 31 December 2011

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Centaurus Metals Limited ABN 40 009 468 099

Contents	Page
Directors' Report	3
Auditor’s Independence Declaration	6
Interim Financial Report
Condensed Consolidated Statement of Comprehensive Income	7
Condensed Consolidated Statement of Financial Position	8
Condensed Consolidated Statement of Changes in Equity	9
Condensed Consolidated Statement of Cash Flows	11
Notes to the Condensed Consolidated Interim Financial Statements	12
Directors’ Declaration	17
Independent Review Report to Members	18

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CENTAURUS METALS LIMITED

Directors’ Report

Your directors present their report on the Consolidated Entity (“Group”) consisting of Centaurus Metals Limited (“Centaurus” or “Company”) and the entities it controlled at the end of, or during, the half-year ended 31 December 2011 together with the consolidated financial report and review report thereon.

Directors

The following persons were directors of Centaurus Metals Limited during the half-year and up to the date of this report:

D M Murcia D P Gordon P E Freund K G McKay R G Hill M D Hancock G T Clifford (Resigned 12 August 2011)

Review of Operations

Financial Position

The net consolidated loss for the half-year was $8,153,989. Included in the loss is exploration expenditure of $5,273,544 and impairment of available for sale investments of $1,088,297.

At the end of the half-year the Group had net cash balances of $19,963,074 and net assets of $42,053,997.

Exploration

During the half-year the Group carried out exploration programs on a number of its iron ore exploration projects in Brazil. At Centaurus’ flagship Jambreiro Iron Ore Project, an in-fill drilling program was completed together with beneficiation testwork and the Company announced in October 2011 a 65 per cent increase in the JORC compliant Resource estimate to 116.5 million tonnes grading 26.8% Fe. A maiden Ore Reserve estimate was announced in November 2011 with a Proven and Probable Ore Reserve estimate of 49.0 million tonnes at an average grade of 28.2% for the friable component of the ore body.

The updated Resource estimate provided the platform for a Pre-Feasibility Study (“PFS”) which was completed in November 2011. The PFS results outlined a 2Mtpa project of 66% Fe final product, capable of generating revenues of A$1.25 billion and EBITDA of A$858 million over an initial 8.5 year life.

The strong results of the PFS facilitated the Board’s approval to commence a Bankable Feasibility Study (“BFS”) which is scheduled to be completed by the end of the third quarter of calendar year 2012. In December 2011, a new in-fill drilling program commenced as part of the BFS work program to convert the first 3 years of friable ore production into Proven Reserves.

At the Serra da Lontra Iron Ore Project, a detailed mapping and exploration program was completed followed by a ground magnetic survey. Following the strong assay and survey results received, the Company commenced a maiden drill program in January 2012.

At the Itambé Iron Ore Project, beneficiation testwork was carried out together with environmental data collection work in the areas of flora, fauna and water monitoring.

At the Passabém Iron Ore Project, the Company completed its obligations to the original vendor and paid the final consideration owing to remove the advanced royalty from the Project.

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CENTAURUS METALS LIMITED

Directors’ Report

Corporate

On 27 July 2011, the Company announced it had entered into a strategic alliance with Atlas Iron Limited (“Atlas”) pursuant to which Atlas agreed to take a strategic 19.9% stake in the Company, and for Atlas to provide technical, development and product marketing support as the Company looks to develop its export and domestic iron ore businesses in Brazil. Centaurus and Atlas entered into a subscription agreement with respect to the strategic alliance (“Agreement”).

Under the Agreement, Atlas subscribed for a share placement comprising 26.5 million shares at 70.4 cents per share (post-consolidation basis), raising a total of $18.7 million. In addition, Atlas subscribed for 3.75 million options at an exercise price of $1.20 per share (post-consolidation basis), expiring on 31 August 2014. The share and option placement was approved by Shareholders on 22 September 2011.

As part of the strategic alliance, Atlas was entitled to nominate a representative to the Centaurus Board of Directors. On 23 September 2011, the Company appointed Atlas Iron’s Chief Commercial Officer, Mr Mark Hancock to the Board.

Pursuant to the strategic alliance, and subject to meeting various conditions including Atlas continuing to hold a 5% interest in the share capital in the Company, ASX Limited have granted Centaurus a waiver from the listing rules to permit Atlas to have a right to maintain its equity interest in the Company in the event that further equity issues are undertaken for future funding requirements or as a means of securing further assets (other than by a takeover bid or scheme of arrangement). Atlas will be given the opportunity to participate in these future equity issues of the Company on the same terms as those being offered to third parties.

On 22 September 2011, Shareholders approved the consolidation of the Company’s capital on a 1-for-8 basis. The consolidation took effect from 5 October 2011. The consolidation reduced the number of shares on issue from 1.068 billion to 133.5 million.

Events Subsequent to Reporting Date

There has not arisen in the interval between the end of the half year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future years.

Auditor’s Independence Declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 for the half-year ended 31 December 2011 is set out on page 6.

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D P Gordon Managing Director

Perth 12 March 2012

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CENTAURUS METALS LIMITED

Directors’ Report

Competent Person’s Statement

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Roger Fitzhardinge who is a Member of the Australasia Institute of Mining and Metallurgy and Volodymyr Myadzel who is a Member of Australian Institute of Geoscientists. Roger Fitzhardinge is a permanent employee of Centaurus Metals Limited and Volodymyr Myadzel is the Senior Resource Geologist of BNA Consultoria e Sistemas Limited, independent resource consultants engaged by Centaurus Metals.

Roger Fitzhardinge and Volodymyr Myadzel have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserve’. Roger Fitzhardinge and Volodymyr Myadzel consent to the inclusion in the report of the matters based on their information in the form and context in which it appears.

The information in this report that relates to Ore Reserves is based on information compiled by Beck Nader who is a professional Mining Engineer and a Member of Australian Institute of Geoscientists. Beck Nader is the Managing Director of BNA Consultoria e Sistemas Ltda and is a consultant to Centaurus.

Beck Nader has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity, which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserve’. Beck Nader consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

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Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

To: the directors of Centaurus Metals Limited

I declare that, to the best of my knowledge and belief, in relation to the review for the half-year ended 31 December 2011 there have been:

• (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the review; and

• (ii) no contraventions of any applicable code of professional conduct in relation to the review.

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KPMG

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Graham Hogg Partner

Perth 12 March 2012

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

CENTAURUS METALS LIMITED

Condensed Consolidated Statement of Comprehensive Income For the half-year ended 31 December 2011

Note	31 December 2011 $ 31 December 2010 $
Other income Exploration expenditure Impairment of exploration and evaluation Impairment of available for sale investments Employee benefits expense Share based payment Occupancy expenses Listing and share registry fees Professional fees Depreciation Other expenses Results from operating activities Finance income – interest income Loss before income tax Income tax expense Loss for the period 5 Other comprehensive income Net change in fair value of available-for-sale financial assets reclassified to profit and loss Exchange differences arising on translation of foreign operations Income tax on other comprehensive income Other comprehensive income for the period Total comprehensive income for the period Earnings per share: Basic loss per share Diluted loss per share	34,139 85,594 (5,273,544) (4,215,402) - (1,544,049) (1,088,297) - (965,392) (922,381) (266,384) (489,075) (131,733) (147,012) (104,092) (87,113) (258,140) (257,386) (112,314) (87,333) (609,083) (481,813)
	(8,774,840) (8,145,970) 620,851 271,320
	(8,153,989) (7,874,650) - -
	(8,153,989) (7,874,650)
	265,625 156,945 (3,550,333) (1,217,975) - -
	(3,284,708) (1,061,030)
	(11,438,697) (8,935,680)
	Cents Cents (7.05) (9.55) (7.05) (9.55)

The above Condensed Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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CENTAURUS METALS LIMITED

Condensed Consolidated Statement of Financial Position As at 31 December 2011

	31 December 2011 $ 30 June 2011 $
Current assets Cash and cash equivalents Other receivables and prepayments Total current assets Non-current assets Other investments, including derivatives Property, plant and equipment Exploration and evaluation assets Total non-current assets Total assets Current liabilities Trade and other payables Employee benefits Total current liabilities Non-current liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Net assets Equity Share capital Reserves Accumulated losses Total equity	19,963,074 10,351,397 859,671 1,933,937
	20,822,745 12,285,334
	995,138 1,829,071 905,834 878,739 24,251,237 27,537,808
	26,152,209 30,245,618
	46,974,954 42,530,952
	1,174,459 4,016,265 281,133 229,722
	1,455,592 4,245,987
	3,465,365 3,927,604
	3,465,365 3,927,604
	4,920,957 8,173,591
	42,053,997 34,357,361
	72,720,395 53,851,446 1,544,033 4,562,357 (32,210,431) (24,056,442)
	42,053,997 34,357,361

The above Condensed Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.

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CENTAURUS METALS LIMITED

Condensed Consolidated Statement of Changes in Equity For the half-year ended 31 December 2011

	Issued Capital $ Option Reserve $ Share-based payments reserve $ Available- for-sale- investments revaluation reserve $ Foreign currency translation reserve $ Accumulated losses $ Total Equity $
Balance at 1 July 2011 Loss for the period Other comprehensive income Net change in fair value of available-for-sale financial assets reclassified to profit and loss Foreign currency translation difference for foreign operation Total comprehensive income for the period Transactions with owners, recorded directly in equity Issue of ordinary shares Share issue costs Issue of ordinary shares on exercise of options Share-based payment transactions Total transactions with owners Balance at 31 December 2011	53,851,446 2,966,597 2,064,756 (265,625) (203,371) (24,056,442) 34,357,361 - - - - - (8,153,989) (8,153,989) - - - 265,625 - - 265,625 - - - - (3,550,333) - (3,550,333)
	- - - 265,625 (3,550,333) (8,153,989) (11,438,697)
	18,656,000 - - - - - 18,656,000 (54,551) - - - - - (54,551) 267,500 - - - - - 267,500 - - 266,384 - - - 266,384
	18,868,949 - 266,384 - - - 19,135,333
	72,720,395 2,966,597 2,331,140 - (3,753,704) (32,210,431) 42,053,997

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CENTAURUS METALS LIMITED

Condensed Consolidated Statement of Changes in Equity For the half-year ended 31 December 2011

	Issued Capital $ Option Reserve $ Share-based payments reserve $ Available- for-sale- investments revaluation reserve $ Foreign currency translation reserve $ Accumulated losses $ Total Equity $
Balance at 1 July 2010 Impact of change in accounting policy Balance at 1 July 2010 (restated) Loss for the period Other comprehensive income Net change in fair value of available-for-sale financial assets Foreign currency translation difference for foreign operation Total comprehensive income for the period Transactions with owners, recorded directly in equity Issue of ordinary shares net of capital raising costs Issue of ordinary shares on exercise of options Share-based payment transactions Total transactions with owners Balance at 31 December 2010	36,553,428 2,966,597 951,846 (100,000) 606,706 (10,135,336) 30,843,241 - - - - (77,764) (1,716,888) (1,794,652)
	36,553,428 2,966,597 951,846 (100,000) 528,942 (11,852,224) 29,048,589
	- - - - - (7,874,650) (7,874,650) - - - 156,945 - - 156,945 - - - - (1,217,975) - (1,217,975)
	- - - 156,945 (1,217,975) (7,874,650) (8,935,680)
	17,155,563 - - - - - 17,155,563 140,000 - - - - - 140,000 - - 489,075 - - - 489,075
	17,295,563 - 489,075 - - - 17,784,638
	53,848,991 2,966,597 1,440,921 56,945 (689,033) (19,726,874) 37,897,547

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CENTAURUS METALS LIMITED

Condensed Consolidated Statement of Cash Flows For the half-year ended 31 December 2011

	31 December 2011 $ 31 December 2010 $
Cash flows from operating activities Payments to suppliers and employees Exploration and evaluation expenditure Proceeds from court settlement Interest received Net cash used in operating activities Cash flows from investing activities Payments for plant & equipment Payment for investment Refunds (payments) for security deposits Payments for acquisition of exploration assets Net cash used in investing activities Cash flows from financing activities Proceeds from issue of equity securities net of capital raising costs Net cash from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the half-year Effect of exchange rate fluctuations on cash held Cash and cash equivalents at the end of the half-year	(1,753,329) (1,664,753) (6,162,724) (4,486,032) 970,438 - 448,157 199,130
	(6,497,458) (5,951,655)
	(164,756) (222,584) - (88,888) 39,246 (20,267) (1,855,879) -
	(1,981,389) (331,739)
	18,868,949 17,295,563
	18,868,949 17,295,563
	10,390,102 11,012,169 10,351,397 4,920,035 (778,425) (42,031)
	19,963,074 15,890,173

The above Condensed Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.

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CENTAURUS METALS LIMITED

Notes to the Condensed Consolidated Interim Financial Statements For the half-year ended 31 December 2011

Note 1. Reporting entity

Centaurus Metals Limited is a company domiciled in Australia. The condensed consolidated interim financial report of the Company as at 31 December 2011 comprises the Company and its subsidiaries (together referred to as the “Consolidated Entity” or “Group”).

The consolidated annual financial report of the Consolidated Entity as at and for the year ended 30 June 2011 is available upon request from the Company’s registered office or at http://www.centaurus.com.au/.

Note 2. Statement of compliance

The condensed consolidated interim financial report is a general purpose financial report which has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001, and with IAS 34 Interim Financial Reporting.

The condensed consolidated interim financial report does not include all of the information required for a full annual financial report and should be read in conjunction with the consolidated annual financial report of the Consolidated Entity as at and for the year ended 30 June 2011.

The condensed consolidated interim financial report was approved by the Board of Directors on 12 March 2012.

Note 3. Significant accounting policies

The accounting policies applied by the Consolidated Entity in this condensed consolidated interim financial report are the same as those applied by the Consolidated Entity in its consolidated annual financial report as at and for the year ended 30 June 2011.

The Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current reporting period.

The adoption of these amendments has not resulted in any changes to the Consolidated Entity’s accounting policies and have no effect on the amounts reported for the current or prior periods.

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CENTAURUS METALS LIMITED

Notes to the Condensed Consolidated Interim Financial Statements For the half-year ended 31 December 2011

Note 4. Estimates

The preparation of the interim financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of those assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing the consolidated interim financial report, the significant judgements made by management in applying the Consolidated Entity’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated annual financial report as at and for the year ended 30 June 2011.

Note 5. Loss for the half year

Note 5. Loss for the half year
	31 December	31 December
	2011	2010
	$	$
The following revenue and expenses are relevant in explaining the financial
performance for the interim period:
Net gain on disposal of mineral tenements	-	85,594
Write-off of capitalised exploration expenditure due to relinquishment of	-	(1,544,049)
tenements
Impairment of available for sale investments	(1,088,297)	-

Note 6. Share based payments

During the half-year a total of 37,500 options were issued to employees. The options were issued with an exercise price of $0.80 per option. The options expire in 4 years. The fair value of the options was $0.4491 per option. The basis of measuring fair value is consistent with that disclosed in the consolidated annual financial report as at and for the year ended 30 June 2011.

The terms and conditions of the options granted during the half-year ended 31 December 2011 are as follows:

Grant date	Expiry date	Exercise price	Number of Options	Value per option atgrant date(a)	Vesting date
29/08/2011	29/08/2015	$0.80	37,500	$0.4491	See note (b) below

(a) Fair value as determined using an option pricing model.

(b) 6,250 options vested on grant date, 15,625 options vest on commencement of iron ore production on a mining lease from the Company’s iron ore projects in Brazil, 15,625 options vest on achievement of iron ore production from the Company’s iron ore projects at an average rate of 250,000 tonnes per month over a consecutive 3 month period.

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CENTAURUS METALS LIMITED

Notes to the Condensed Consolidated Interim Financial Statements For the half-year ended 31 December 2011

Note 6. Share based payments (continued)

The assessed fair value at grant date of options granted is allocated equally over the period from grant date to vesting date. Fair values at grant date are determined using an option pricing model that takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

The option pricing model inputs for options granted during the half-year ended 31 December 2011 included:

Grant date	29/08/2011
Expirydate	29/08/2015
Exerciseprice	$0.80
Consideration	Nil
Shareprice atgrant date	$0.73
Expected price volatility of the Company’s shares	88.25%
Expected dividendyield	Nil
Risk-free interest rate	4.01%
Fair valueper option atgrant date	$0.4491

Note 7. Share capital

Date Details Issue Price Balance at 1 July 2011 27 July 2011 Share placement $0.08800 1 Sept 2011 Issue of ordinary shares upon exercise of options $0.03125 1 Sept 2011 Issue of ordinary shares upon exercise of options $0.08000 27 Sept 2011 Share placement $0.08800 5 Oct 2011 Consolidation Share issue costs Balance at 31 December 2011 Date Details Issue Price* Balance at 1 July 2010 20 Sept 2010 Share placement $0.07500 5 Oct 2010 Share placement $0.07500 26 Oct 2010 Share placement $0.07500 22 Dec 2010 Share placement $0.07500 Share issue costs Balance at 31 December 2010	Number of Shares $ 848,998,637 53,851,446 110,000,000 9,680,000 6,000,000 187,500 1,000,000 80,000 102,000,000 8,976,000 (934,498,807) - - (54,551)
	133,499,830 72,720,395
	Number of Shares $ 604,398,639 36,553,428 88,400,000 6,630,000 50,524,998 3,789,375 103,600,000 7,770,000 2,000,000 140,000 - (1,036,980)
	848,923,637 53,845,823

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CENTAURUS METALS LIMITED

Notes to the Condensed Consolidated Interim Financial Statements For the half-year ended 31 December 2011

Note 7. Share capital (continued)

*On 22 September 2011, Shareholders approved the consolidation of the Company’s capital on a 1-for-8 basis. The consolidation took effect from 5 October 2011. The consolidation reduced the number of share on issue from 1.068 billion to 133.5 million.

Weighted average number of shares:	31 December	31 December
	2011	2010
Weighted average number of ordinary shares used in calculating basic
earnings per share	115,647,775	82,490,951

Potential ordinary shares were not considered to be dilutive as the consolidated entity made a loss for the half year ended 31 December 2011 and the exercise of potential ordinary shares would not increase that loss.

The weighted average number of shares in 2010 are calculated on a post-consolidation equivalent basis.

On 27 July 2011, the Company announced it had entered into a strategic alliance with Atlas Iron Limited (“Atlas”) pursuant to which Atlas agreed to take a strategic 19.9% stake in the Company, and for Atlas to provide technical, development and product marketing support as the Company looks to develop its export and domestic iron ore businesses in Brazil. Centaurus and Atlas entered into a subscription agreement with respect to the strategic alliance (“Agreement”). Under the Agreement, Atlas subscribed for a share placement comprising 26.5 million shares at 70.4 cents per share (post-consolidation basis), raising a total of $18.7 million. In addition, Atlas subscribed for 3.75 million options at an exercise price of $1.20 per share (post-consolidation basis), expiring on 31 August 2014. The share and option placement was approved by Shareholders on 22 September 2011. The cash consideration of $18.7 million received exceeds the assessed fair value of the shares and options issued to Atlas. Therefore no share based payment should be recognised in relation to the shares and free options issued to Atlas and the $18.7m cash received has been recorded as an increase in equity.

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CENTAURUS METALS LIMITED

Notes to the Condensed Consolidated Interim Financial Statements For the half-year ended 31 December 2011

Note 8. Operating segments

The Group has one reportable segment, being iron ore exploration and evaluation in Brazil.

	31 December 2011 $ 31 December 2010 $
Reportable Segment Information – Iron Ore Exploration For the half year ended 31 December Segment loss before income tax Segment loss before income tax Unallocated corporate expenses Unallocated other income Net finance income – interest income Interest income Segment interest income Unallocated interest income Depreciation Segment depreciation expense Unallocated depreciation expense Reportable segment assets Segment assets Unallocated other assets Total assets	(5,176,575) (6,019,191) (3,598,265) (2,212,373) - 85,594 620,851 271,320
	(8,153,989) (7,874,650)
	226,132 40,254 394,719 231,066
	620,851 271,320
	81,832 46,712 30,482 40,621
	112,314 87,333
	31 December 2011 30 June 2011 24,661,660 26,557,102 22,313,294 15,973,850
	46,974,954 42,530,952

Note 9. Operating commitments

The Company has operating commitments in respect to drilling contracts in Brazil totalling $1.9 million (2010 – nil).

Note 10. Subsequent events

There has not arisen in the interval between the end of the half year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future years.

16

CENTAURUS METALS LIMITED

Directors’ Declaration

For the half-year ended 31 December 2011

In the opinion of the directors of Centaurus Metals Limited (the “Group”):

• (a) The financial statements and notes set out on pages 7 to 16 are in accordance with the Corporations Act 2001 , including:

• (i) Giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2011 and of its performance for the six month period ended on that date; and

• (ii) Complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 ; and

• (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

Signed in accordance with a resolution of the directors.

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D P Gordon

Managing Director

Perth 12 March 2012

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Independent auditor’s review report to the members of Centaurus Metals Limited

Report on the financial report

We have reviewed the accompanying interim financial report of Centaurus Metals Limited, which comprises the condensed consolidated statement of financial position as at 31 December 2011, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the halfyear ended on that date, notes 1 to 10 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Consolidated Entity comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year period.

Directors’ responsibility for the interim financial report

The directors of the company are responsible for the preparation of the interim financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the interim financial report that is free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the interim financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the interim financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the Group’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As auditor of Centaurus Metals Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the review of the annual financial report.

A review of an interim financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act 2001 .

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International, a Swiss cooperative.

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the interim financial report of Centaurus Metals Limited is not in accordance with the Corporations Act 2001 , including:

• (a) giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• (b) complying with Australian Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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KPMG

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Graham Hogg Partner

Perth 12 March 2012