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Centaurus Metals Limited (ASX:CTM) is pleased to present the company's June 2022 quarterly activities report.
JAGUAR NICKEL SULPHIDE PROJECT
- 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 and demonstrating the continuity of the mineralisation both down-dip and along strike. New assay results include:
- 46.0m at 2.17% Ni from 128.0m incl. 23.2m at 2.82% Ni (JC)
- 49.3m at 1.20% Ni from 31.9m incl. 13.2m at 2.37% Ni (JC)
- 38.3m at 1.16% Ni from 87.7m (JS)
- 15.2m at 2.12% Ni from 187.8m incl. 2.6m at 9.14% Ni (JS)
- 33.3m at 0.89% Ni from 136.3m (JC)
- 26.9m at 0.93% Ni from 91.6m (JC)
- 22.5m at 1.01% Ni from 116.5m incl. 6.0m at 2.29% Ni (JC)
- 15.0m at 1.42% Ni from 122.0m incl. 5.5m at 2.82% Ni (JS)
- Extensive infill and step out drilling completed during the quarter. Over 120 drill holes currently in laboratory awaiting assay.
- 15 rigs currently on site (13 diamond and 2 RC) drilling double shift, with the drilling focused on upgrading the maximum amount of the Mineral Resource Estimate (MRE) into the Measured and Indicated categories.
- Next MRE update to be delivered at the end of September will underpin the Definitive Feasibility Study (DFS) and the Project’s maiden Ore Reserve estimate.
- Definitive Feasibility Study (DFS) progressing well, though completion now Q1 2023 due, in part, to the expansion in the overall Project design flowing from a significantly larger Jaguar Resource base and project footprint and in part due to delays in being able to start the pilot program as originally scheduled.
- A Final Investment Decision (FID) remains on track for the end of Q3 2023, after relevant environmental approvals have been secured.
CORPORATE
- Cash at 30 June 2022 of $60.1 million.
JAGUAR NICKEL PROJECT
The Jaguar Nickel Sulphide Project, located in the world-class Carajás Mineral Province of northern Brazil (Figure 1), was acquired from global mining giant, Vale S.A. (“Vale”) in April 2020.
Figure 1: Jaguar Nickel Sulphide Project Location Map
DRILLING & EXPLORATION PROGRAMS
Resource in-fill, extensional and step-out drilling continued at the Jaguar Project throughout the reporting period, with the drilling results to feed into the next MRE update scheduled for the end of Q3 2022.
Resource Development In-fill Drilling
The December 2021 MRE comprised 80.6Mt @ 0.91% Ni for 730,700t of contained nickel, 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 focus of drilling during the first half of 2022 was resource development in-fill drilling at all 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 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.
The MRE planned for the end of Q3 2022 will underpin the Jaguar DFS and maiden Ore Reserve estimate. The current resource definition in-fill drilling is important as it will ensure that as much of the in-pit Resource as possible will be upgraded to the higher-confidence Indicated category, which in turn increases the potential production target and anticipated conversion of Resource to Ore Reserves.
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This article includes content from Centurus Metals, 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.
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.
Click here for the full ASX Release
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.
