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Centaurus Metals (ASX Code: CTM) is pleased to report outstanding new results from ongoing resource development drilling at its 100%-owned Jaguar Nickel Sulphide Project in the Carajás Mineral Province of northern Brazil. The results are expected to further increase confidence in the Mineral Resource before delivery of the Definitive Feasibility Study (DFS) and initial Ore Reserve estimate due by the end of calendar 2022.
- Significant shallow results received from ongoing in-fill drilling at the Jaguar Central (JC), Jaguar South (JS) and Jaguar Northeast (JNE) deposits, demonstrating the continuity of the mineralisation within the current Mineral Resource model. New assay results include:
- 46.0m at 2.17% Ni from 128.0m including 23.2m at 2.82% Ni from 148.0m in JAG-DD-22-274 (JC)
- 49.3m at 1.20% Ni from 31.9m including 13.2m at 2.37% Ni from 53.5m in JAG-DD-22-262 (JC)
- 38.3m at 1.16% Ni from 87.7m in JAG-DD-22-246 (JS)
- 15.2m at 2.12% Ni from 187.8m including 2.6m at 9.14% Ni from 200.4m in JAG-DD-22-260 (JS)
- 33.3m at 0.89% Ni from 136.3m in JAG-DD-22-282 (JC)
- 26.9m at 0.93% Ni from 91.6m in JAG-DD-22-265 (JC)
- 22.5m at 1.01% Ni from 116.5m including 6.0m at 2.29% Ni from 133.0m in JAG-DD-22-272 (JC)
- 15.0m at 1.42% Ni from 122.0m including 5.5m at 2.82% Ni from 126.0m in JAG-DD-22-260 (JS)
- 20.3m at 0.93% Ni from 62.5m in JAG-DD-22-265 (JC)
- 13.1m at 1.40% Ni from 116.2m in JAG-DD-22-271 (JS)
- 14.9m at 1.22% Ni from 90.4m in JAG-DD-22-277 (JS)
- 9.3m at 1.51% Ni from 183.5m including 3.5m at 2.86% Ni from 183.5m in JAG-DD-22-282 (JC)
- 14.0m at 0.86% Ni from 40.2m in JAG-DD-22-259 (JS)
- 13.2m at 0.94% Ni from 162.0m in JAG-DD-22-260 (JS)
- 12.6m at 1.05% Ni from 28.4m in JAG-DD-22-265 (JC)
- 11.7m at 0.93% Ni from 88.0m in JAG-DD-22-259 (JS)
- The Jaguar December 2021 Mineral Resource Estimate (MRE), comprising 80.6Mt @ 0.91% Ni for 730,700 tonnes of contained nickel, is already one of the largest nickel sulphide resources held by an ASX-listed company and the largest outside of the majors.
- The next Mineral Resource update scheduled for Q3 2022 will underpin the Definitive Feasibility Study (DFS) and the Project’s first Ore Reserve estimate.
- There are currently 15 rigs on site (13 diamond and two RC) drilling double-shift with the drilling currently focused on upgrading as much of the MRE into the Measured and Indicated categories as possible.
- Centaurus is well-funded with cash reserves of approximately $65 million.
The resource definition drilling program currently underway is expected to upgrade more of the Jaguar MRE into the Measured and Indicated categories in advance of Ore Reserve estimation as part of the DFS.
Centaurus’ Managing Director, Mr Darren Gordon, said: “We are extremely pleased with how the resource definition drilling program is progressing, with the ongoing drilling continuing to de-risk the project by demonstrating the continuity of the mineralisation within the cornerstone Jaguar deposits.
“Seeing high-grade, shallow intersections like 46.0m at 2.17% Ni within a constrained US$22,000/t nickel price pit shell gives us a lot of confidence that the early stages of a future mining operation at Jaguar can support robust capital payback on the project.
“The target pit we are using for the in-fill drilling has expanded considerably since the Scoping Study was delivered, and this has resulted in most of the diamond rigs on site now being swung onto in-fill drilling so we can deliver the planned MRE upgrade by the end of Q3 2022. This updated MRE will, in turn, underpin the initial Ore Reserve for the DFS.
“In-fill drilling is a clear focus of our drilling effort right now. We expect a steady flow of results from this work over the next couple of months as reflected in the number of drill holes currently in the laboratory for assay. We currently have a total of 15 rigs operating on-site, with two rigs currently continuing to focus on resource growth step-out drilling and the balance currently dedicated to in-fill drilling. Once the MRE upgrade is complete, we will swing most of the rigs back to resource growth and discovery drilling.”
Resource Development In-fill Drilling
The December 2021 Mineral Resource Estimate (MRE) comprised 80.6Mt @ 0.91% Ni for 730,700t of contained nickel (Table 2), with an Indicated component of the Resource being 43.4Mt @ 0.92% Ni for 397,000t of contained nickel, representing 54% of the Global MRE. The total MRE at Jaguar has increased by 30% since the Scoping Study Resource Estimate was announced in March 2021 and more than 40% since the Company’s maiden Resource was announced in June 2020 (Figure 1).
The focus of drilling during the first half of 2022 has shifted to resource development in-fill drilling at all of the Jaguar Deposits. In-fill drilling is designed to upgrade all resources within a constrained US$22,000/t nickel price pit shell limit into the Measured and Indicated categories.
The US$22,000/t pit shell limit is considerably bigger than the shell used for the Scoping Study, which was generated using a US$13,800/t nickel price. The Company is targeting more than 500,000t of contained nickel in the Measured and Indicated categories of the next MRE based on the extensive in-fill drill currently being undertaken and the MRE already in place.
Figure 1 – The Jaguar JORC Mineral Resource Estimate (MRE) Growth
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CTM:AU
Nickel Price 2024 Year-End Review
Nickel price in Q4
Nickel reached its 2024 peak of US$21,615 per metric ton on May 20, but was back below the US$16,000 mark by the end of July. Following some volatility in August and September, the price of nickel gained momentum at the end of Q3, reaching US$18,221 on October 2.
However, the increased prices were not to last, and nickel spent much of the final quarter in a downward trend.
By the end of October, the price had fallen to US$15,732 before climbing back to US$16,607 on November 7.
Since then, the nickel market has seen some volatility but has continued its downward trend. On December 19, it slumped to its 2024 low of US$15,090. However, it saw some small gains, ending the year at US$15,300 on December 31.
Nickel price, Q4 2024.
Chart via Trading Economics.
Nickel’s weak prices are largely due to high output from Indonesia and low demand, particularly from Asian markets, as China’s recovery has failed to gain traction.
As a result, on December 19, it was reported that Indonesia is considering implementing cuts to mining quotas to boost prices. The move would see the country cut output by nearly half, from 272 million metric tons of ore produced in 2024 to 150 million metric tons in 2025.
Additionally, Indonesia is looking to tighten environmental regulation compliance for miners in the new year and could introduce increased volatility into metals markets, including nickel. The move comes not long after it signed several new agreements in November with Chinese companies that would see billions invested in nickel operations in Indonesia.
Indonesia had previously worked to distance itself from China’s partnerships as it sought to improve relations with the United States and be included under the US Inflation Reduction Act (IRA).
The new agreements emerged shortly after Donald Trump won the US presidential election on November 7. Trump’s return to the Oval Office is unlikely to bode well for Indonesian officials seeking to secure a trade deal with the United States. However, a loosening of rules in the IRA might create new inroads for Indonesian nickel producers.
How did nickel perform for the rest of the year?
Nickel price in Q1
The story since the start of the year has been high output from Indonesian operations.
Low prices saw some nickel producers, including First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) and Australia’s Wyloo Metals, cut production. However, New Caledonia was most affected. The country is more dependent on the nickel sector, with industry giants like Glencore (LSE:GLEN,OTC Pink:GLCNF), Eramet (EPA:ERA) and raw materials trader Trafigura owning significant stakes in nickel producers in the country.
Ultimately, cuts there led to a 200 million euro bailout package from the French government, which exacerbated tensions over New Caledonia's independence from France. Opponents of the agreement argued it risks the territory's sovereignty and that the mining companies aren’t contributing enough to bail out the mines, which employ thousands.
Nickel price in Q2
The second quarter was defined by a surge in nickel prices.
Positive momentum began to work its way into the market at the end of Q1, as Indonesia experienced delays in approving mining output quotas and speculation grew that Russian nickel could be sanctioned by the US and UK.
On April 12, news broke that Washington and London had banned US and UK metal exchanges from admitting new aluminum, copper and nickel from Russia. Taking immediate effect, the prohibitions also halted the import of those metals causing the price to soar to a year-to-date high of US$21,615 on May 20.
At the time Joe Mazumdar, editor of Exploration Insights, suggested this move would have little impact on the sector.
“That nickel is still going to make it into the market, it’s just going to go to a different exchange, probably Shanghai … So I could still see that nickel moving and getting consumed in the global market — it’s just not coming to the west,” he explained to the Investing News Network in an interview.
Ultimately, by the end of the quarter, the price was trending toward US$17,000.
Nickel price in Q3
Nickel saw a strong end to the third quarter with the price rising above the US$18,000 mark.
Nickel found pricing support in September as the Chinese government introduced a raft of stimulus measures intended to boost economic growth in the country. Among the measures were a 0.5 percent interest rate cut on existing mortgages and a reduction in the downpayment required to purchase a home to 15 percent from 25 percent.
The announcement came alongside cuts at Chinese smelters as they were forced to deal with a shortage in feeder supply due to more delays to Indonesia’s permitting and quota system.
Investor takeaway
The nickel market is expected to remain oversupplied for some time.
With China’s economy on a slow path to recovery, demand will remain weak. Meanwhile, supply will likely hinge on if Indonesia chooses to make significant cuts to supply output.
While demand for nickel in electric vehicle batteries is expected to be up 27 percent year-on-year in 2024, producers have also been looking to alternatives that don’t require as much nickel. Additionally, more consumers are looking to plug-in hybrid vehicles with smaller batteries that require less nickel.
Even with the increased demand from the battery sector, nickel is primarily used in stainless steel products, which are still dominated by the Chinese manufacturing and real estate sectors.
Perhaps the most significant factors to consider are political. A new administration in the United States and a shift in the IRA's approach to sourcing critical metals like nickel could alter the landscape for nickel producers in 2025.
Don’t forget to follow us @INN_Resource for real-time news updates.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Accelerated Non-Renounceable Entitlement Offer Results
Under the Entitlement Offer, eligible shareholders were invited to subscribe for one (1) New Share for every four (4) existing Shares held at an offer price of $0.03 per share.
The Company has now closed the retail component of the Entitlement Offer with applications totalling 2,767,788 shares including additional acceptances to be issued at $0.03 on top of the 18,650,023 shares issued under the institutional component of the Entitlement Offer on 15 November 2024. In accordance with the timetable, the New Shares will be issued on or before 4 December 2024.
The retail component of the Entitlement Offer is partially underwritten by Nanjia Capital Limited “(Nanjia”) for the amount of approximately $1.09m. Accordingly, Nanjia will now subscribe for 36,349,900 New Shares in accordance with the underwriting arrangements summarised in section 7.4(b) of the Prospectus and the Company expects to finalise this process within the next week.
Shortfall Share Placement
A total of 74,946,591 New Shares were not taken up under the Entitlement Offer by eligible securityholders or issued to Nanjia as underwriter (“Shortfall Shares’”) The directors will work with the lead manager to the Entitlement Offer and the major shareholders to place the shortfall within three (3) months of the closing date, subject to requirements of the ASX Listing Rules and Corporations Act 20021 (Cth) continuing to be met. Please refer to the Prospectus dated 4 November 2024 for further details on the issue of the shortfall.
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This article includes content from Blackstone Minerals, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
