Centaurus Metals : 2018-10-22 Itapitanga Discovery Continues To Grow | 826KB

22 October 2018

NEW HIGH‐GRADE NICKEL TARGETS IDENTIFIED AS ITAPITANGA

DISCOVERY CONTINUES TO GROW

Outstanding results of up to 2.44% Ni and 0.22% Co from auger drilling well beyond the current

Exploration Target; planning underway for a second phase of RC drilling

Highlights:

•  Ongoing hand‐held auger drilling from multiple zones outside the current Exploration Target limits has identified new high‐grade nickel‐cobalt mineralisation. Latest results include (all following holes finished in mineralisation):

  •  4.7m @ 2.44 % nickel and 0.03% cobalt from 5.0m to 9.7m (EOH) in ITAP‐AG00076;

  •  4.0m @ 1.13 % nickel and 0.11% cobalt from 1.0m to 5.0m (EOH) in ITAP‐AG00139;

  •  5.0m @ 0.87 % nickel and 0.22% cobalt from 2.0m to 7.0m (EOH) in ITAP‐AG00128;

  •  3.0m @ 0.84 % nickel and 0.21% cobalt from 1.0m to 4.0m (EOH) in ITAP‐AG00127;

  •  5.0m @ 0.73 % nickel and 0.15% cobalt from 2.0m to 7.0m (EOH) in ITAP‐AG00099;

  •  2.7m @ 1.21 % nickel and 0.07% cobalt from 2.0m to 4.7m (EOH) in ITAP‐AG00078; and

  •  2.6m @ 1.09 % nickel and 0.08% cobalt from 2.0m to 4.6m (EOH) in ITAP‐AG00077.

•  Drilling has confirmed the continuation of high‐grade nickel cobalt mineralisation in the Daniel's Creek Fault Zone, where the first phase of RC drilling returned the best results to date including ITAP‐RC‐18‐ 127 (32m at 1.02% Ni and 0.13% Co) and ITAP‐RC‐18‐139 (15.0m at 0.92 % Ni and 0.22% Co).

•  The Daniel's Creek Fault zone represents 300m of untested strike potential.

•  Drilling along 2.5km of strike on the western limits of the Northern Target has also intersected new mineralisation, demonstrating that the main zone remains open to the west and south‐west.

•  A new North‐eastern Target has also been identified which is approximately 500m long and 200m wide and represents the tail of Vale's neighbouring Jacarezinho Nickel Laterite Project.

•  The drilling licence application to undertake further RC drilling in the Daniel's Creek Fault zone and the surrounding wetlands and vegetated areas at Itapitanga is progressing well.

Centaurus Metals (ASX Code: CTM) is pleased to report outstanding new results from ongoing hand‐held auger drilling at the 100%‐owned Itapitanga Nickel‐Cobalt Project discovery in northern Brazil, where exploration continues to expand the scale and potential of the discovery including potential new high‐grade zones.

The new auger results have confirmed that high‐grade laterite mineralisation continues into undrilled areas at the Daniel's Creek fault zone and along the western contact of the Northern Target, as well identifying a new discovery in the north‐east of the tenement package. All three highly prospective areas have not been tested by Reverse Circulation (RC) drilling and lie outside the current Exploration Target.

Australian Office

Brazilian Office

ASX: CTM

The Exploration Target for the Itapitanga Nickel‐Cobalt Project currently stands at 35‐45Mt at 0.80% to 1.10% nickel, 0.07% to 0.12% cobalt and 18g/t to 30g/t scandium. Centaurus cautions that the potential quantity and grade of the Exploration Target is conceptual in nature and to date there has been insufficient exploration to define a JORC compliant Mineral Resource. It is also uncertain if further exploration and resource development work will result in the estimation of a Mineral Resource.

For full details of the Exploration Target please refer to the Company's ASX Release of 1 August 2018.

A Phase 2 drilling program is being planned with the aim of allowing the Company to prepare a maiden JORC Mineral Resource estimate for the project. Any future drilling, however, will only be possible after the Company has secured the appropriate RC drill licence for the wetland and vegetated areas at the project.

Daniel's Creek Fault Zone

The focus of the recent hand‐held auger drilling has been on the Daniel's Creek Fault Zone (the central part of the Northern Target), where the first phase of RC drilling returned some of the project's best assay results, including ITAP‐RC‐18‐127 (32m at 1.02% Ni and 0.13% Co) and ITAP‐RC‐18‐139 (15.0m at 0.92 % Ni and 0.22% Co).

Mineralised intercepts are broader and of higher nickel and cobalt grades in association with structural features. These structures facilitate the supergene process, which furthers the concentration of the nickel and cobalt mineralisation and deepens the mineralised profile.

RC drilling was not possible in the Daniel's Creek Fault Zone during the maiden campaign under the existing drilling permit. Auger drilling has been able to continue in areas where no vegetation clearing is required and was successful in intersecting high grade nickel‐cobalt laterite mineralisation (represented by the red triangles in Figure 1).

While numerous auger holes were able intersect the top of high‐grade nickel and cobalt mineralisation, many of the auger holes, which started in alluvium (stream sediment), could not advance due to water influx into the holes. In those areas where auger drilling has been ineffective, further RC drilling will be required to test beneath the alluvium.

Some of the better assay results from the recent auger drilling at the Daniel's Creek Fault Zone include:

•  5.0m @ 0.87 % nickel and 0.22% cobalt from 2.0m to 7.0m (EOH) in ITAP‐AG00128;

•  3.0m @ 0.84 % nickel and 0.21% cobalt from 1.0m to 4.0m (EOH) in ITAP‐AG00127;

•  5.0m @ 0.73 % nickel and 0.15% cobalt from 2.0m to 7.0m (EOH) in ITAP‐AG00099;

•  5.0m @ 0.70 % nickel and 0.11% cobalt from 1.0m to 6.0m (EOH) in ITAP‐AG00163;

•  4.0m @ 0.69 % nickel and 0.11% cobalt from 2.0m to 6.0m (EOH) in ITAP‐AG00096;

•  4.0m @ 0.51% nickel and 0.12% cobalt from 2.0m to 6.0m (EOH) in ITAP‐AG00100; and

•  3.0m @ 0.79 % nickel and 0.13% cobalt from 3.0m to 6.0m (EOH) in ITAP‐AG00105.

All of these intersections finished in mineralisation (see Figure 1 and attached Table 1 for a full list of auger assay results).

The results indicate that the high‐grade mineralisation does extend beneath Daniel's Creek between the North and South zones of the Northern Target. In this area there is more than 300m of untested strike potential to be tested with further RC drilling.

Northern Target (Western Contact)

Wetlands also cover the western margins of the Northern Target (see Figures 1 and 2). The mineralisation at the Northern Target remains open to the west and south‐west along roughly 2.5km of the 3.5km strike extent of the Northern Target.

Auger drilling has been carried out along these limits and has successfully identified high‐grade nickel and cobalt mineralisation beyond the current limits of the Exploration Target. As with some of the auger drilling in the Daniel's Creek Zone, many of the auger holes did not pass through the alluvium and, as such, will require RC drilling to fully test the extent of the mineralisation.

The following assay results are from the western contact north of Daniel's Creek:

•  2.7m @ 1.21 % nickel and 0.07% cobalt from 2.0m to 4.7m (EOH) in ITAP‐AG00078;

•  2.6m @ 1.09 % nickel and 0.08% cobalt from 2.0m to 4.6m (EOH) in ITAP‐AG00077;

•  3.3m @ 1.28 % nickel and 0.04% cobalt from 3.0m to 6.3m (EOH) in ITAP‐AG00080;

•  1.2m @ 1.04 % nickel and 0.08% cobalt from 2.0m to 3.2m (EOH) in ITAP‐AG00074;

•  2.0m @ 1.16 % nickel and 0.05% cobalt from 1.0m to 3.0m (EOH) in ITAP‐AG00201; and

•  7.0m @ 0.94 % nickel and 0.07% cobalt from 6.0m to 13.0m (EOH) in ITAP‐AG00079.

The following assay results are from the western contact south of Daniel's Creek:

•  4.0m @ 1.13 % nickel and 0.11% cobalt from 1.0m to 5.0m (EOH) in ITAP‐AG00139;

•  1.0m @ 1.10 % nickel and 0.08% cobalt from 4.0m to 5.0m (EOH) in ITAP‐AG00130; and

•  3.0m @ 0.67 % nickel and 0.02% cobalt from 3.0m to 6.0m (EOH) in ITAP‐AG00132.

All of the intersections reported above finished in mineralisation (see Figure 1 and attached Table 1 for a full list of auger assay results).

The result from auger hole ITAP‐AG00139 (4m at 1.13% Ni and 0.11% Co) is particularly interesting as it indicates the presence of high‐grade mineralisation at the south‐western limit of the current Exploration Target, showing that the mineralisation may trend further to the south‐west than originally thought. Additional auger drilling has been planned for this area (see Figure 1 - yellow triangles).

Northern Target (Eastern Contact)

The auger drilling beyond the current limits of the Eastern Contact has extended the high‐grade nickel‐cobalt mineralisation with ITAP‐AG00076 intersecting 4.7m @ 2.44 % nickel and 0.03% cobalt from 5.0m to the end‐of‐ hole (EOH). Further RC drilling will also be required in this area.

New North‐eastern Target

The exploration team has also identified a new target in the north‐eastern portion of the project area (see Figure 1). The mineralisation represents the tail of Vale's neighbouring Jacarezinho Nickel Laterite Project.

Drilling at the North‐eastern Target returned multiple intersections of nickel‐cobalt laterite mineralisation. The target area is roughly 500m long and 200m wide. The best results from initial auger drilling in this area include:

•  2.0m @ 0.86 % nickel and 0.04% cobalt from 9.0m to 11.0m (EOH) in ITAP‐AG00239; and

•  1.0m @ 0.41 % nickel and 0.05% cobalt from 2.0m to 3.0m in ITAP‐AG00237.

See Figure 1 and attached Table 1 for a full list of auger assay results.

The North‐eastern Target area is partially covered by vegetation and the appropriate clearing licenses will be required to test the new target with RC drilling. An RC program has been designed for this target to be completed in the next phase of work.

Next Steps

The auger program is continuing at the Itapitanga Nickel‐Cobalt Project. In parallel, the Company has lodged the appropriate applications for RC drilling of the vegetated wetland that covers both the Daniel's Creek Fault Zone and the Western Contact of the Northern Zone and is working with the local agencies to expedite this licence.

Once this licence is approved, the Company is positioned to be able to commence a second phase of RC drilling. Planning for this next phase of work is underway and would include brownfields exploratory drilling over the new targets identified in the latest auger program as well as a number of undercover targets following the positive results from RC drill hole ITAP‐RC‐18‐114, which intersected 30.0m @ 0.90% Ni and 0.04% Co underneath 12.0m of granite country rock.

The Phase 2 drilling program currently being planned would also involve resource definition drilling to allow for the estimation of a maiden JORC Mineral Resource estimate.

‐ENDS‐

Released by:	On behalf of:
Nicholas Read	Darren Gordon
Read Corporate	Managing Director
M: [phone]	Centaurus Metals Limited
T: [phone]

Competent Person Statement

The information in this report that relates to Exploration Results and Exploration Targets is based on information compiled by Roger Fitzhardinge who is a Member of the Australasian Institute of Mining and Metallurgy. Roger Fitzhardinge is a permanent employee of Centaurus Metals Limited. Roger Fitzhardinge 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 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Roger Fitzhardinge consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Exploration Target

This report comments on and discusses Centaurus Metals Limited's exploration in terms of target size and type. The information relating to Exploration Targets should not be misunderstood or misconstrued as an estimate of Mineral Resources or Ore Reserves. The potential quantity and quality of material discussed as Exploration Targets is conceptual in nature since there has been insufficient work completed to define them as Mineral Resources or Ore Reserves. It is uncertain if further exploration work will result in the determination of a Mineral Resource or Ore Reserve.

Figure 1 - Itapitanga Nickel‐Cobalt Project - Recent Auger Drilling Results

(Completed Auger hole - by EOH lithology (see legend); Planned Auger holes - yellow triangles;

Completed RC drill holes - green circles)