CENTAURUS METALS LIMITED — Investor Presentation 2014

Sep 29, 2014

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Closing in on first production and cash‐flow in Brazil
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Resources Rising Stars – 1 October 2014

Disclaimer

This presentation does not constitute investment advice. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction. This presentation does not take into account any person's particular investment objectives, financial resources or other relevant circumstances and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

To the fullest extent permitted by law, the Company does not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.

This presentation may include forward looking statements. Forward looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Centaurus Metals. These risks, uncertainties and assumptions include commodity prices, currency fluctuations, economic and financial market conditions in various countries and regions, environmental risks and legislative, fiscal or regulatory developments, political risks, project delay or advancement, approvals and cost estimates. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, readers are cautioned not to place reliance on forward looking statements. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Centaurus Metals does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by Roger Fitzhardinge, a Competent Person who is a Member of the Australasia Institute of Mining and Metallurgy and Volodymyr Myadzel, a Competent Person 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 that 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 2012 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, a Competent Person 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 that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken 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 Reserve’. Beck Nader consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

All information included in this presentation regarding Exploration Results, Mineral Resources and Ore Reserve estimates was prepared and first disclosed under the JORC Code 2004. This information has been updated to the JORC 2012 Code for the Jambreiro Mineral Resource, the Candonga Mineral Resource and the Candonga Ore Reserve. The information in relation to the Jambreiro Ore Reserve has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported.

Refer to the ASX announcements dated 20 December 2013 and 13 January 2014 for details of the material assumptions underpinning the production target and forecast financial information included in this presentation for the Jambreiro Iron Ore Project. The Company confirms that all the material assumptions underpinning the production target and forecast financial information derived from the production target continue to apply and have not materially changed.

All information included in this presentation regarding the Ore Reserve estimate for the Jambreiro Iron Ore Project should be read in conjunction with the ASX announcement dated 5 November 2012. Given the conservatism built into the pit optimisation parameters used for the current Ore Reserve estimate, the Company is confident that the revised 1Mtpa production strategy will not result in a material change to the Reserve estimate. As a result of the change in production strategy, the Company intends to complete an updated Ore Reserve estimate during Q1 2015.

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Centaurus – The Snapshot

Capital Structure

Shares on Issue	240.0m
Options & Performance Rights	5.2m
Share Price	A$0.09
Market Capitalisation	A$21.6m
Cash at bank (30 June 2014)	A$5.0m
Enterprise Value	A$16.6m
Top 10 Shareholders	57%

Top 5 Shareholders

Developing low capital and operating cost mines near existing infrastructure + customers in SE Brazil

– Candonga DSO Project low‐risk entry to production:

• Positive Feasibility Study completed on 300,000tpa DSO operation

• Permitting well advanced: targeting first production in April 2015

• Forecast EBITDA of A$23.1M over three years

• Low CAPEX of A$3.6M, strong operating margins with C1 cash costs of just A$12.5 a tonne

– Jambreiro Project fully‐permitted, development‐ ready, awaiting off‐take:

• Initial 1Mtpa Project targeting domestic market

• Fully‐permitted for development and operations of up to 3Mtpa

• High‐grade, low impurity consistent quality product

• Discussions with off‐take groups continuing

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Breaking News….

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Brazilian Domestic Project Hub

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Major Ports Existing Rail Lines MRS EVFM FCA/Other

Rail Line Under Construction Ferrovia Oeste‐Leste City Centaurus Project

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Brazilian Domestic Project Hub

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Domestic Project Hub – Candonga Project

• 214Mt JORC Resource base – five projects

• Start‐up project with near‐term cash flow = Candonga (1.2Mt DSO Ore Reserve)

• Cornerstone = Jambreiro Project (128Mt) – 110km from Ipatinga steel‐making region

• Initial JORC Ore Reserve at Jambreiro of 48.5Mt

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Major Ports
Existing Rail Lines
MRS
EVFM
FCA/Other
Rail Line Under Construction
Ferrovia Oeste‐Leste
City
Centaurus Project
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Candonga – Overview

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Feasibility Study completed – September 2014:

• Production: 300,000tpa

• Mine Life: 3 years

• C1 cash costs: A$12.5/tonne product sold

• EBITDA: A$23.1M, annual free cash flows: A$7.7M

• Pre‐production CAPEX: A$3.6M

Flat‐lying lens of high‐grade itabirite mineralisation

Simple, contract mining operation to produce high‐grade lump (+6.3mm) and sinter feed for domestic market

Approvals on schedule:

• Final Investment Decision in Q4 2014

• First production – April 2015

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Candonga – Local Magnetic Signature

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Candonga – Simple Flat‐Lying Deposit, Easy Mining, Low Costs

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Environmental and Mines Department (DNPM) approval applications lodged for 300,000tpa operation

Flat‐lying, high grade mineralisation close to surface

• Average strip ratio of 0.25:1 for first two years of operations. Life‐of‐mine strip ratio of 0.6:1 to keep operating costs low

High‐grade material only requires simple dry crush and screen process

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Candonga Project – Emerging Near‐Term Cash Flow

Maiden JORC 2012 Proved and Probable Ore Reserve of 1.2Mt grading 60.5% Fe

• Ore Reserve to produce 0.9Mt of lump and sinter feed products at average grade of 63.5%

• Work completed to date:

• Trenching and 800m of diamond drilling on high‐grade zone

• Classification testwork

• Resource/Reserve Estimation

• Feasibility Study

Brazilian pig iron industry relies on lump (hematitinha) product which is in short supply in the domestic market

Land clear of native vegetation – simple approvals process

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Candonga – Ore Reserves

		Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014	Candonga Project JORC 2012 Ore Reserve Estimate ‐ September 2014
Ore Category		JORC Category	Tonnes ('000)		Fe (%)	SiO2 (%)		Al2O3 (%)		P (%)		LOI (%)
DSO*		Proved	446		64.8	4.5		1.3		0.03		0.2
		Probable	280		64.8	5.2		0.9		0.03		0.1
		TOTAL	726		64.8	4.6		1.3		0.03		0.1
LBO**		Proved	362		53.9	17.9		2.5		0.04		1.4
		Probable	121		53.9	18.0		2.5		0.04		1.2
		TOTAL	483		53.9	17.9		2.5		0.04		1.3
GRAND TOTAL		Proved	808		59.9	10.5		1.9		0.03		0.7
		Probable	401		61.5	9.1		1.4		0.03		0.4
		TOTAL	1,209		60.5	10.0		1.7		0.03		0.6
Ore Reserves (kt)		Low Grade Fines (kt)		Saleable Product (kt)					Fe (%)		SiO2 (%)		P (%)	Al2O3 (%)	LOI (%)
				Lump (+6.3mm)			433		62.8		6.8		0.03	2.0	0.6
				Sinter Feed (‐6.3mm)			465		64.0		5.7		0.03	1.2	0.2
1,209		311					898		63.5		6.2		0.03	1.6	0.4

Approximately 50% of the high grade saleable product from Candonga is a lump product (+6.3mm), which is highly sought after in the Brazilian domestic market.

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Candonga – Capital and Operating Costs

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Candonga Project – Capital Cost Schedule	Candonga Project – Capital Cost Schedule
Capital Equipment	Total (A$ m)
DIRECT COSTS
Pre Strip & Mine Preparation	0.4
Infrastructure	1.2
Crushing & Screening	1.6
TOTAL DIRECT CAPEX	3.2
INDIRECT COSTS
Owner’s Costs	0.2
TOTAL INDIRECT CAPEX	0.2
CONTINGENCY	0.2
TOTAL CAPEX	3.6
Candonga Project – Life‐of‐Mine Operating Costs
Operating Costs	A$ per wet tonne product
Mining	8.7
Processing	2.1
General & Administration	1.7
SITE OPERATING CASH COST (C1)	12.5
Royalties – Government and Other	2.4
TOTAL OPERATING CASH COSTS (C1 + Royalties)	14.9

Candonga capital cost estimates based on acquisition of all‐new equipment.

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Candonga – Financial Evaluation from Feasibility Study

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Key Financial Outcomes Life‐of‐Mine Revenue A$36.5M EBITDA A$23.1M Capital Costs A$3.6M Annual Average Operating Cash Flow (Pre‐Tax) A$7.7M Operating Cash Cost (including royalties) A$14.9/t*

The Candonga Project can be brought on stream quickly and cheaply, with high‐grade lump and sinter feed ore sold into the domestic market. This will enable Centaurus to become an iron ore producer within six months.

• Estimates based on an average estimated domestic iron ore price of A$41/tonne.

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Brazilian Domestic Project Hub

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Domestic Project Hub

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• Cornerstone =
Jambreiro
Project 350km
(128Mt) –
110km from 110km
Ipatinga steel‐
making region
• Initial JORC
140km
Ore Reserve
at Jambreiro
of 48.5Mt
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Jambreiro – Fully Permitted and Ready‐to‐Go

Positive Bankable Feasibility Study completed in November 2012

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Initial production rate revised to 1Mtpa to reduce start‐up CAPEX to A$53M

Forecast C1 cash operating costs of A$20/tonne Ideally positioned to be a consistent and reliable supplier of high‐quality, low impurity iron ore to domestic steel mills In‐pit friable Ore Reserve: 48.5Mt @ 28.1% Fe

• ~

• • 18Mt of high grade product = 18‐year mine life

Environmental and Mines Department approvals received

Mining Leases granted

10‐year land access agreement signed

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Jambreiro – Engineering Well Advanced

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Engineering Activities

• Modularised plant designed and costed for 1Mtpa

• Cofferdam constructed but stored water has now been released

• Significant basic engineering completed

• Detailed mine plan and schedule to be reworked in Q4 2014 for 1Mtpa project

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Jambreiro – Product and Off‐take

Off‐take

General acceptance of the high‐quality Jambreiro product specification by potential domestic customers

Negotiations for long‐term off‐take continue to advance to underpin project finance

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Off‐take pricing = international market‐based price with adjustment for higher Jambreiro quality and net‐back to mine for domestic logistic costs

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Jambreiro – Export Potential

Jambreiro located within 150km of bulk cargo EFVM rail line

EFVM rail line provides opportunity to access port capacity in and around Vitόria

Various ports also exist within close proximity to Vitόria

Major Ports Existing Rail Lines MRS EVFM FCA/Other Rail Line Under Construction Ferrovia Oeste‐Leste

50Mt of new port capacity is being brought on line at Acu and Sudeste

MRS rail line provides third party access to the Sudeste Port

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Candonga: production and cash flow commencing within six months Very low capital intensity – A$3.6M to first ore Very low cash operating costs – just A$12.5 a tonne Low risk, strong margin business Simple open pit, contract mining operation Delivering a high‐grade product which is in strong demand in Brazil Jambreiro: longer term growth potential to build critical mass One of the few fully‐permitted new mid‐sized iron ore projects in SE Brazil Strong relationships developed with off‐takers and financiers

A FOCUSED AND STAGED APPROACH TO BUILDING A LONG‐TERM IRON ORE BUSINESS.

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Centaurus Metals – Mineral Resource Inventory Schedule

Project	JORC Category	Million Tonnes	Fe (%)	SiO2 (%)	Al2O3 (%)	P (%)	LOI (%)
Jambreiro* (1)	Measured	45.3	29.2	50.3	3.9	0.04	1.6
	Indicated	37.7	27.5	51.0	3.7	0.04	1.7
	Measured + Indicated	83.0	28.4	50.6	3.8	0.04	1.3
	Inferred	45.5	27.3	52.6	3.4	0.05	1.3
	TOTAL	128.5	28.0	51.3	3.7	0.05	1.5
Candonga* (1)	Measured	0.8	60.4	10.1	1.7	0.03	0.6
	Indicated	3.1	43.8	29.0	3.5	0.08	2.7
	Measured + Indicated	3.9	47.2	25.1	3.1	0.07	2.3
	Inferred	5.5	41.3	30.9	4.1	0.08	3.3
	TOTAL	9.4	43.7	28.5	3.7	0.07	2.9
Carnavial* (2)	Indicated	6.5	33.6	33.6	7.1	0.10	7.9
	Inferred	21.1	29.6	38.0	5.7	0.07	5.9
	TOTAL	27.6	30.5	37.0	6.0	0.07	6.4
Guanhães Region	Measured	46.1	29.7	49.6	3.9	0.04	1.6
	Indicated	47.3	29.4	47.2	4.2	0.05	2.6
	Measured + Indicated	93.4	29.6	48.4	4.0	0.05	2.1
	Inferred	72.1	29.0	46.7	4.1	0.06	2.8
	TOTAL	165.5	29.3	47.6	4.1	0.05	2.4
Itambé** (2)	Indicated	4.7	37.1	37.0	4.5	0.06	2.7
	Inferred	5.3	36.2	40.9	3.5	0.04	2.1
	TOTAL	10.0	36.6	39.1	4.0	0.05	2.4
Passabém(2)*	Indicated	2.8	33.0	48.8	1.9	0.03	0.6
	Inferred	36.2	30.9	54.0	0.7	0.07	0.1
	TOTAL	39.0	31.0	53.6	0.8	0.07	0.1
Grand Total	Measured	46.1	29.7	49.6	3.9	0.04	1.6
	Indicated	54.8	30.2	46.4	4.1	0.05	2.5
	Measured + Indicated	100.9	30.0	47.9	4.0	0.05	2.1
	Inferred	11306	30.0	48.8	3.0	0.06	1.9
	GRAND TOTAL	214.5	30.0	48.3	3.5	0.05	2.0

*** 20% Fe cut‐off grade applied; ** 25% Fe cut‐off grade applied; *** 27%Fe cut‐off grade applied (1) JORC 2012 (2) JORC 2004**

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