CENTAURUS METALS LIMITED — Interim / Quarterly Report 2014

Sep 4, 2014

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Centaurus Metals Limited ABN 40 009 468 099 and its controlled entities

Interim Financial Report

30 June 2014

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Contents

Directors’ Report ..................................................................................................................................... 3
 Directors ........................................................................................................................................... 3
 Review of Operations ....................................................................................................................... 3
Auditor’s Independence Declaration ...................................................................................................... 7
Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income ................... 8
Condensed Consolidated Statement of Financial Position ..................................................................... 9
Condensed Consolidated Statement of Changes in Equity ................................................................... 10
Condensed Consolidated Statement of Cash Flows ............................................................................. 12
Notes to the Condensed Consolidated Interim Financial Statements .................................................. 13
 Note 1. Reporting Entity ................................................................................................................. 13
 Note 2. Basis of Preparation ........................................................................................................... 13
 Note 3. Significant Accounting Policies .......................................................................................... 14
 Note 4. Impairment Loss ................................................................................................................ 15
 Note 5. Other Income ..................................................................................................................... 15
 Note 6. Share Capital ...................................................................................................................... 16
 Note 7. Operating Segments .......................................................................................................... 16
 Note 8. Subsequent Events ............................................................................................................ 16
Directors’ Declaration ........................................................................................................................... 17
Independent Auditor’s Review Report ................................................................................................. 18

Page 2 of 19

Interim Financial Report ‐ 30 June 2014

Directors’ Report

Your directors present their report on the Consolidated Entity (“Group”) consisting of Centaurus Metals Limited (“Centaurus” or “the Company”) and the entities it controlled at the end of, or during, the half‐year ended 30 June 2014 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 M Hancock R G Hill (resigned 4 July 2014) S Zaninovich (resigned 4 July 2014)

Review of Operations

Financial Position

The total comprehensive consolidated loss for the half‐year was $5.9m. Included in the loss is exploration expenditure of $3.2m.

At the end of the half‐year the Group had a net cash balance of $5.0m and net assets of $11.3m.

Jambreiro Project

During the period discussions for offtake and debt funding continued and have progressed to an advanced stage, however, in June the Company announced, in light of the deterioration in market sentiment and conditions in the iron ore sector, it did not expect to be able to finalise a debt and equity funding package in time to meet its previously announced mid‐2014 construction timeline.

From ongoing discussions with potential financiers, it has become evident that debt funding for Jambreiro will remain conditional on securing off‐take. The finalisation of a long‐term off‐take agreement has been awaiting the re‐commencement of construction and the finalisation of development of the Sudeste port development in south‐eastern Brazil. Construction activity on the port ramped up significantly in the latter half of the period.

The new port is an important asset for many resource groups in the region and, in the case of Centaurus, provides the opportunity to establish long‐term supply arrangements with potential off‐ takers for lower cost Jambreiro supply as a substitute for some of their existing integrated supply which is likely to be more profitably delivered into the export market. The commencement of export operations at Sudeste will be an important catalyst in promoting the completion of a suitable off‐ take arrangement for Jambreiro as existing domestic supply is diverted to the export market.

Page 3 of 19

Interim Financial Report ‐ 30 June 2014

During the period work on a re‐interpretation of the Jambreiro geology was carried out which has resulted in the preparation of an updated JORC 2012 Mineral Resource estimate for the Jambreiro Project.

The overall JORC Mineral Resource (combined Measured, Indicated and Inferred) reflected a minor increase in Fe grade from the July 2013 estimate of 128.0Mt grading 27.2%[(1) ] Fe to 128.5Mt grading 28.0% Fe[ (2)] .

Candonga Project

During the period the Company commenced a drilling program at its 100% owned Candonga Iron Ore project with the purpose of providing further geological and process understanding of the mineralisation in order to support the commencement of a feasibility study into the development of a project around the Direct Shipping Ore (DSO) component of the Mineral Resource. The updated JORC 2012 compliant Candonga Mineral Resource estimate now stands at 9.4 million tonnes (Mt) grading 43.7% Fe[(3)] . The high grade component of the Resource is expected to produce a DSO product with a simple crush and screen process and has the potential to supply high grade lump and sinter feed products into the Brazilian domestic market.

The Company commenced the simple approval processes which are required to develop a low‐cost operation producing 300,000tpa of DSO. The intention is to secure the necessary approvals and commence a small operation as soon as possible to generate early cash flow.

Corporate

In July 2014, following the decision to defer the development of Jambreiro, the Company made changes to its Board and senior management team, consistent with its focus on reducing costs and optimising its organisational structure while it finalises off‐take and funding arrangements. As a result Mr Peter Freund has stepped down from an executive role but remains a non‐executive director. Mr Steven Zaninovich and Mr Richard Hill have stepped down from the Board as non‐ executive Directors.

During the period the Company completed a $5.5m capital raising.

The Annual General Meeting of Centaurus Metals Limited was held on Thursday 29 May 2014. All resolutions were passed on a show of hands.

Events Subsequent to Reporting Date

There have not been any other events that have arisen in the interval between the end of the financial half‐year and the date of this report any item, transaction or event of a material or unusual nature likely, in the opinion of the directors of the Group, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial periods.

1 Refer to ASX announcement on 29 July 2013 for full details of the Resource estimate.

2 Refer to ASX announcement on 30 July 2014 for full details of the JORC 2012 Resource estimate.

3 Refer to ASX announcement on 1 September 2014 for full details of the JORC 2012 Resource estimate.

Page 4 of 19

Interim Financial Report ‐ 30 June 2014

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 30 June 2014 is set out on page 7.

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D P Gordon Managing Director

Perth

4 September 2014

Page 5 of 19

Interim Financial Report ‐ 30 June 2014

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 Micromine Consultoria Limited, independent resource consultants engaged by Centaurus Metals.

Roger Fitzhardinge and Volodymyr Myadzel have sufficient experience which is relevant to the style of mineralization and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. 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.

Page 6 of 19

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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 30 June 2014 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

4 September 2014

KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

Interim Financial Report ‐ 30 June 2014

Condensed Consolidated Statement of Profit or Loss and Other

Comprehensive Income

For the half‐year ended 30 June 2014

Note	30 June 2014 $ 30 June 2013 $
Profit or Loss Other income 5 Exploration expenditure Impairment of available for sale investments 4 Impairment of exploration and evaluation 4 Employee benefits expense Share based payments Occupancy expenses Listing and share registry fees Professional fees Depreciation Other expenses Results from operating activities Finance income Finance expenses Loss before income tax Income tax benefit 4 Loss for the period Other Comprehensive Income Items that may be reclassified subsequently to profit or loss Net change in fair value of available‐for‐sale financial assets Exchange differences arising on translation of foreign operations Income tax on other comprehensive income Other comprehensive income (loss) for the period Total comprehensive loss for the period Earnings per Share Basic loss per share Diluted loss per share	6,655 112 (3,190,482) (7,623,991) (175,937) (413,000) ‐ (18,456,023) (1,562,117) (1,331,968) 63,368 29,996 (206,250) (187,083) (36,911) (27,656) (353,237) (265,494) (113,316) (76,229) (387,257) (692,091)
	(5,955,484) (29,043,427) 102,755 434,201 (2,646) (336)
	(5,855,375) (28,609,562)
	‐ 3,202,719
	(5,855,375) (25,406,843)
	(68,924) (110,972) 41,599 855,294 ‐ ‐
	(27,325) 744,322
	(5,882,700) (24,662,521)
	Cents Cents (2.66) (12.98) (2.66) (12.98)

The above Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.

Page 8 of 19

Interim Financial Report ‐ 30 June 2014

Condensed Consolidated Statement of Financial Position

As at 30 June 2014

Note	30 June 2014 $ 31 December 2013 $
Current assets Cash and cash equivalents Other receivables and prepayments Total current assets Non‐current assets Other receivables Other investments including derivatives 4 Property, plant and equipment Exploration and evaluation assets 4 Total non‐current assets 7 Total assets Current liabilities Trade and other payables Employee benefits Total current liabilities Non‐current liabilities Deferred tax liabilities Provisions Total non‐current liabilities Total liabilities Net assets Equity Share capital 6 Reserves Accumulated losses Total equity	4,979,316 4,843,508 426,732 722,336
	5,406,048 5,565,844
	1,891,471 1,607,353 333,869 578,730 1,283,153 1,413,551 4,557,367 4,523,348
	8,065,860 8,122,982
	13,471,908 13,688,826
	1,136,274 1,207,301 750,138 469,385
	1,886,412 1,676,686
	3,901 3,872 250,000 ‐
	253,901 3,872
	2,140,313 1,680,558
	11,331,595 12,008,268
	104,035,437 98,766,042 (167,395) (76,702) (92,536,447) (86,681,072)
	11,331,595 12,008,268

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

Page 9 of 19

Interim Financial Report ‐ 30 June 2014

Condensed Consolidated Statement of Changes in Equity

For the half‐year ended 30 June 2014

	Issued Capital $ Option Reserve $ Share‐Based Payments Reserve $ Available‐for‐ Sale Investments $ Foreign Currency Translation $ Accumulated Losses $ Total Equity $
Balance at 1 January 2014 Loss for the period Net change in fair value of available‐for‐sale financial assets Foreign currency translation difference for foreign operation Total comprehensive income for the period Issue of Ordinary Shares Share issue costs Share‐based payment transactions Total transactions with owners Balance at 30 June 2014	98,766,042 2,966,597 2,711,201 68,924 (5,823,424) (86,681,072) 12,008,268
	‐ ‐ ‐ ‐ ‐ (5,855,375) (5,855,375) ‐ ‐ ‐ (68,924) ‐ ‐ (68,294) ‐ ‐ ‐ ‐ 41,599 ‐ 41,599
	‐ ‐ ‐ (68,924) 41,599 (5,855,375) (5,882,700)
	5,530,000 ‐ ‐ ‐ ‐ ‐ 5,530,000 (260,605) (260,605) ‐ (63,368) (63,368)
	5,269,395 ‐ (63,368) ‐ ‐ ‐ 5,206,027
	104,035,437 2,966,597 2,647,833 ‐ (5,781,825) (92,536,447) 11,331,595

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

Page 10 of 19

Interim Financial Report ‐ 30 June 2014

Condensed Consolidated Statement of Changes in Equity

For the half‐year ended 30 June 2013

	Issued Capital $ Option Reserve $ Share‐Based Payments Reserve $ Available‐for‐ Sale Investments $ Foreign Currency Translation $ Accumulated Losses $ Total Equity $
Balance at 1 January 2013 Loss for the period Net change in fair value of available‐for‐sale financial assets Foreign currency translation difference for foreign operation Total comprehensive income for the period Share‐based payment transactions Total transactions with owners Balance at 30 June 2013	98,766,042 2,966,597 2,791,614 110,972 (6,323,157) (53,966,085) 44,345,983
	‐ ‐ ‐ ‐ ‐ (25,406,843) (25,406,843) ‐ ‐ ‐ (110,972) ‐ ‐ (110,972) ‐ ‐ ‐ ‐ 855,294 ‐ 855,294
	‐ ‐ ‐ (110,972) 855,294 (25,406,843) (24,662,521)
	‐ ‐ (29,996) ‐ ‐ ‐ (29,996)
	‐ (29,996) ‐ ‐ ‐ (29,996)
	98,766,042 2,966,597 2,761,618 ‐ (5,467,863) (79,372,928) 19,653,466

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

Page 11 of 19

Interim Financial Report ‐ 30 June 2014

Condensed Consolidated Statement of Cash Flows

For the half‐year ended 30 June 2014

	30 June 2014 $ 30 June 2013 $
Cash flows from operating activities Exploration and evaluation expenditure Payments to suppliers and employees (inclusive of indirect taxes) Interest received Net cash used in operating activities Cash flows from investing activities Payments for plant & equipment Acquisition of exploration assets Proceeds from sale of plant & equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of equity securities Capital Raising Costs Net cash used in financing activities Net increase/(decrease) 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	(3,009,281) (7,548,240) (2,236,830) (2,448,489) 88,405 586,869
	(5,157,706) (9,409,860)
	(24,158) (441,295) ‐ (961,467) 41,475 35,397
	17,317 (1,367,365)
	5,530,000 ‐ (260,605) ‐
	5,269,395 ‐
	129,006 (10,777,225) 4,843,508 23,402,755 6,802 91,744
	4,979,316 12,717,274

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

Page 12 of 19

Interim Financial Report ‐ 30 June 2014

Notes to the Condensed Consolidated Interim Financial Statements

For the half‐year ended 30 June 2014

Note 1. Reporting Entity

Centaurus Metals Limited is a company domiciled in Australia. These condensed consolidated interim financial statements (‘interim financial statements’) as at and for the six months ending 30 June 2014 comprise the Company and its subsidiaries (together referred to as the ‘Group’). The Group is primarily involved in the exploration for and development of iron ore resources.

Note 2. Basis of Preparation

Statement of Compliance

The condensed consolidated interim financial statements are general purpose financial statements prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act 2001, and with IAS 34 Interim Financial Reporting.

They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group’s financial position and performance since the last annual consolidated financial statements as at and for the year ended 31 December 2013.

These interim financial statements were authorised for issue by the Company’s Board of Directors on 4 September 2014.

Judgements and Estimates

In preparing these interim financial statements, Management make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgements made by Management in applying the Group’s accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended 31 December 2013.

Going Concern

The interim financial statements for the period ended 30 June 2014 have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

During the period, the Group incurred a loss after tax of $5,855,375 with net cash inflows of $129,006 including a capital raising of net $5,269,395. The Group has a working capital surplus of $3,519,636.

The Group’s strategy is to develop its iron ore projects in south ‐ eastern Brazil. The Group is focused on the development of its 100% owned Candonga Iron Ore Project whilst continuing negotiations for offtake and a funding package for its Jambreiro project. The Group plans to continue exploration work on its other iron ore projects during 2014. The Group has the ability to accelerate its work programs or to reduce or defer expenditure.

Page 13 of 19

Interim Financial Report ‐ 30 June 2014

The Group expects it will require further funding in order to continue its exploration and evaluation activities and fund development of the Candonga Iron Ore Project. The Group will consider the appropriate mix of funding required to progress its activities upon the completion of the Feasibility Study for Candonga. Should the Group be unable to secure required funding, interests in the Group’s projects can be sold or farmed out as required in order to maintain sufficient cash reserves.

The Directors believe that the Group will be able to secure funding sufficient to meet requirements to continue as a going concern due to the following:

• The Group has successfully raised capital in the past;

• Candonga is a low capex cost, small scale project and the amount of funding required is consequently low and;

• The Group has briefed key investors and is confident that the market will support a future capital raising for the development of the project

Should the Group not secure additional funding, there are material uncertainties as to whether the Group will be able to continue as a going concern and realise its assets and extinguish its liabilities in the normal course of business at the amounts stated in the financial report.

The financial report does not include adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern.

Note 3. Significant Accounting Policies

Changes in Accounting Policy

There have been no changes in accounting policies for the half‐year ended 30 June 2014. The accounting policies applied in these interim financial statements are the same as those applied in the Group’s consolidated financial statements as at and for the year ended 31 December 2013.

Accounting Standards

The Consolidated Entity has adopted the following new and amended to standards, including any consequential amendments to other standards, with a date of initial application of 1 January 2014.

• AASB 2011‐4 Amendment to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (AASB 124)

• This amendment removes the individual KMP disclosure requirements for all disclosing entities in relation to equity holdings, loans and other related party transactions.

• AASB 2012‐3 Amendments to Australian Accounting Standards – Offsetting Financial Assets and Financial Liabilities

AASB 2012‐3 adds application guidance to AASB 132 Financial Instruments: Presentation to address inconsistencies identified in applying some of the offsetting criteria of AASB 132, including clarifying the meaning of “currently has a legally enforceable right of set off” and that some gross settlement systems may be considered equivalent to net settlement.

The adoption of the new and revised Standards and Interpretations has not resulted in any changes to the Group’s accounting policies and has no effect on the amounts reported for current or prior periods.

Page 14 of 19

Interim Financial Report ‐ 30 June 2014

Note 4. Impairment Loss

Exploration and Evaluation Assets

During the half‐year ending 30 June 2013 the Group recognised an impairment loss on the carrying values of two of its Iron Ore Projects, Itambé and Passabém. The Projects were assessed for impairment as a result of the Group’s intent to focus on the Jambreiro project.

The Group engaged the services of valuation experts both in Brazil and Australia to assist in the calculation of the recoverable amount of the underlying assets. The method applied to calculate the recoverable amount (being the fair value less cost to sell) was the Enterprise Value method using a peer group of companies. This method calculated a fair value per resource tonne based on comparable market data which was applied to the assets. This resulted in the recognition of an impairment loss as follows:

	30 June 2013
Project	Carrying Amount Recoverable Amount Impairment Charge
Passabém Itambé Total	12,251,433 1,570,000 10,681,433 8,254,590 480,000 7,774,590
	20,506,023 2,050,000 18,456,023

The impairment charge also resulted in a reversal of a recognised deferred tax liability of $3,202,719 resulting in a net impact on the Condensed Consolidated Statement of Profit or Loss of $15,253,304. These assets are part of the Brazil geographical reporting segment. For the six months to 30 June 2014 no impairment triggers have been identified under AASB 6 Exploration for and Evaluation of Mineral Reources.

Other Investments Including Derivatives

Significant and prolonged declines in the market value of available‐for‐sale financial instruments resulted in the recognition of an impairment loss of $175,937 (2013:$413,000) in the Condensed Consolidated Statement of Profit or Loss for the 6 months ending 30 June 2014.

Note 5. Other Income

Other Income comprises the following items for the half‐year.

	30 June 2014 $ 30 June 2013 $
Net gain on disposal of plant and equipment Proceeds on court settlement Total	6,655 ‐ ‐ 112
	6,655 112

Page 15 of 19

Interim Financial Report ‐ 30 June 2014

Note 6. Share Capital

	30 June 2013 Number of Shares 31 December 2013 Number of Shares
On issue at the start of the period Issue of ordinary shares at $0.125 per share On issue at the end of the period	195,747,919 195,747,919 44,240,000 ‐
	239,987,919 195,747,919

Note 7. Operating Segments

The Group operates in the iron ore exploration industry. For management purposes the Group is organised into one main operating segment which involves the exploration of minerals. All of the Group’s activities are interrelated and financial information is reported to the Managing Director (Chief Operating Decision Maker) as a single segment. Accordingly, all significant operating decisions are based upon an analysis on the Group as one segment.

The financial results and financial position from this segment are largely equivalent to the financial statements of the Group as a whole, with the exception of corporate administration expenses in Australia and Brazil of $2,579,354 (30 June 2013: $2,256,431) and deferred tax liabilities of $3,901 (31 December 2013: $3,872) which are reviewed separately from the Group’s operating segment.

Geographical Segment Information	30 June 2014 Revenue $ 30 June 2014 Non‐Current Assets $	30 June 2013 Revenue $ 31 December Non‐Current Assets $
Brazil Australia Total	‐ 7,548,710 ‐ 517,150	‐ 7,467,332 ‐ 655,650
	‐ 8,065,860	‐ 8,122,982

Note 8. Subsequent Events

There have not been any other events that have arisen in the interval between the end of the financial half‐year and the date of this report representing any item, transaction or event of a material or unusual nature likely, in the opinion of the directors of the Group, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial periods.

Page 16 of 19

Interim Financial Report ‐ 30 June 2014

Directors’ Declaration

For the half‐year ended 30 June 2014

In the directors’ opinion:

• (a) The financial statements and notes set out on pages 8 to 16 are in accordance with the Corporations Act 2001, including:

• i. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements, and

• ii. giving a true and fair view of the consolidated entity’s financial position as at 30 June 2014 and of its performance for the half‐year ended on that date, and

• (b) there are reasonable grounds to believe that Centaurus Metals Limited will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the directors.

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D P Gordon Managing Director

Perth

4 September 2014

Page 17 of 19

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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 30 June 2014, condensed consolidated statement of profit or loss and other comprehensive income, condensed consolidated statement of changes in equity and condensed consolidated statement of cash flows for the half-year ended on that date, notes 1 to 8 comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the Group comprising the company and the entities it controlled at the half-year’s end or from time to time during the half-year.

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 30 June 2014 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 audit 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 Cooperative (“KPMG International”), a Swiss entity.

Liability limited by a scheme approved under Professional Standards Legislation.

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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 Group’s financial position as at 30 June 2014 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 .

Material uncertainty regarding continuation as a going concern

Without modifying our conclusion above, we draw attention to Note 2 ‘Going Concern’ of the interim financial report. The matters set forth in note 2 indicate the existence of material uncertainty that may cast significant doubt on the Group’s ability to continue as a going concern and therefore, the Group may be unable to realise its assets and discharge its liabilities in the normal course of business and at the amounts stated in the interim financial report.

KPMG

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Graham Hogg Partner

Perth

4 September 2014