Centaurus Metals : 2018-12-03 Multiple New Copper-Gold Geophysical Targets at Salobo West | 1,182KB

3 December 2018

MULTIPLE NEW HIGH‐PRIORITY COPPER‐GOLD GEOPHYSICAL TARGETS IDENTIFIED AT SALOBO WEST, NORTHERN BRAZIL

Strong EM conductor plates represent outstanding targets for high‐grade copper‐gold mineralisation as Centaurus continues to make strong progress with licencing for drilling and clearing

Highlights:

•  3D VTEM modelling by geophysical specialist consulting group, Southern Geoscience, has generated multiple EM conductor plates that represent outstanding targets for the discovery of high‐grade copper‐gold mineralisation.

•  Distinct EM conductors set within broad magnetic and IP chargeability anomalies are excellent vectors towards high‐grade breccia zones where interconnected semi‐massive to massive sulphides are commonly found within Carajás IOCG deposits.

•  The EM conductor plates are located in the SW1‐B Prospect (+6.5km long Cu‐Au(‐Co) soil anomaly) and SW1‐A Prospect (+3.5km long Cu‐Au(‐Co) soil anomaly). Both prospects are hosted in the Itacaiúnas Supergroup - which hosts all known IOCG deposits in the Carajás.

•  The vegetation inventory survey field work required as part of the environmental licensing process to drill and clear at Salobo West was completed in November and the survey report has now been lodged with ICMBio.

•  Based on the results of the vegetation inventory, Centaurus believes that there should be no impediment to ICMBio granting the required environmental licence for clearing and drilling, with the Company planning for the licence to be secured before the end of the regional wet season.

•  Non‐ground disturbing exploration has also resumed at the Salobo West Project in the form of a detailed soil sampling and mapping program on the southern tenement (SW2) with first results imminent.

Centaurus Metals (ASX Code: CTM) is pleased to announce that it has identified multiple new high‐priority iron oxide copper‐gold (IOCG) exploration targets at its Salobo West Copper‐Gold Project in Northern Brazil following the processing of historical Versatile Time Domain Electromagnetic (VTEM) data over the project area.

The Salobo West Copper‐Gold Project is located just 12km along strike from Vale's giant Salobo Copper‐Gold Mine, arguably the second‐biggest IOCG in the world behind BHP's Olympic Dam Mine. Salobo has Reserves of 1.2 billion tonnes at 0.61% Cu and 0.3g/t Au and produced approximately 193kt of copper and 346koz1 in calendar year 2017.

1 Vale Data sourced from "Vale Production in 4Q17" Report, its 20‐F Annual Report for 2017 and other public reports

Australian Office Centaurus Metals Limited Level 3, 10 Outram St WEST PERTH WA 6005

Brazilian Office

ASX: CTM

Centaurus Brasil Mineração Ltda Avenida Barão Homem de Melo, 4391 Salas 606 e 607 ‐ Estoril

ACN 009 468 [e-mail]: [phone]

Belo Horizonte ‐ MG ‐ CEP: 30.494.275 BRAZIL

Centaurus Managing Director, Mr Darren Gordon, said the Company had made excellent recent progress at the Salobo West Project, both with preliminary exploration activities and the licensing and permitting process.

"Notwithstanding the licensing delay encountered earlier this year, our team has done an excellent job in advancing our understanding of the potential of the project by re‐processing historical geophysical data while at the same time resuming and successfully advancing the licensing process in a relatively short timeframe.

"There is now a clear path forward with our planned work activities to unlock the huge potential of the Project and we are pleased that non‐ground disturbing exploration activities are also well underway at Salobo West with first results imminent," Mr Gordon said.

"Salobo West is a world‐class exploration project with multiple large‐scale discovery opportunities. We will continue to work closely with the relevant authorities to expedite the drilling licenses so that we can be ready to drill at the end of the regional wet season in Q2 2019. Until then we will continue with our non‐ground disturbing exploration activities, where rainfall conditions permit, to work up further priority drill targets on the Project.

"Given the quantity, scale and quality of the drill targets we have defined so far at Salobo West, this Project is shaping up as a genuine game‐changer for Centaurus, and we are really looking forward to being able to get on the ground next year to drill it."

Salobo West Overview

The Salobo West Copper‐Gold Project is located in the same geological and structural context as the Salobo mine and field work to date has demonstrated that the project hosts multiple targets that display similar geochemical and geophysical characteristics to the world‐class Salobo mine.

Because the overburden cover in the Carajás makes exposure of the bedrock limited, geophysics plays a fundamental role in exploration.

Traditionally, Induced Polarisation (IP) has been the geophysical survey of choice for targeting of IOCG deposits in the Carajás as it responds well to the broad disseminated sulphide mineralisation styles. However, the Carajás IOCG deposits often have high‐grade breccia zones within the deposits, consisting of interconnected semi‐massive to massive sulphides. These zones are conductive and return discrete EM anomalies within the broader IP anomaly.

Furthermore, smaller high‐grade deposits such as Oz Minerals' Antas Norte mine and Pedra Branca deposit have also been discovered by targeting discrete EM anomalies.

With this knowledge, the Company engaged highly‐experienced geophysical consultants, Southern Geoscience, to carry out 3D modelling on a selection of profiles from the VTEM survey that was flown by Anglo American in 2009. The survey covered 322 line‐kilometres and was run on 200m‐spaced profiles with a base frequency of 30Hz.

Preliminary work has been carried out on four select sections that cover the SW1‐A and SW1‐B Prospects on the SW1 tenement (see Figures 1 and 2 below). In some cases, the sections are coincident with IP survey lines (also completed by Anglo American in 2009). Given the outstanding results achieved from the analysis to date, the Company intends to process additional EM profiles over the coming months.

The results of the first four sections have highlighted a number of outstanding potential high‐grade drill targets where the magnetic and EM conductor plates are coincident with IP chargeability anomalies and previously defined Cu‐Au(‐Co) soil anomalies.

The results of the 3D plate modelling across the SW1‐A and SW1‐B Prospects are discussed in more detail below.

Figure 1 - Salobo West Project (SW1‐A and SW1‐B Prospects on the SW1 Tenement) Analytical signal from project aeromagnetic survey with modelled EM plates (Yellow).

Figure 2 - Salobo West 1 Project (SW1‐A and SW1‐B Prospects)

VTEM (Channel 20), white profile line shows selected sections that were processed

SW1‐B Prospect

The SW1‐B Prospect is delineated by an extensive +6.5km long Cu‐Au(‐Co) soil anomaly that is up to 600m wide and hosted in the key Carajás geological sequence, the Itacaiúnas Supergroup - which hosts all known IOCG deposits in the Carajás.

Within the SW1‐B Prospect there are multiple targets: the Cruzamento Zone, the Central Zone and the Western Zone (see Figure 1). The EM modelling work was carried out on the following north‐south VTEM sections:

Section 534800mE

Section 534800mE is located on the eastern limit of the Central Zone of the SW1‐B Prospect. The section demonstrates a clear relationship between the modelled magnetic and EM conductor plates that dip sub‐ vertically to the south. The magnetic plates represent the response from the magnetite, which can be from either the magmatically sourced iron‐oxide mineralisation that is associated with the copper‐sulphides or from an iron‐ oxide rich host rock.

The occurrence of two discrete EM conductor plates within the broader magnetic and IP anomalies creates a very strong exploration target for the Company. In IOCG deposits, the copper sulphide mineralisation (chalcopyrite and/or bornite) is commonly zoned, with the disseminated and veinlet zones trending towards a stockwork zone and eventually a high‐grade breccia zone.

Interconnected semi‐massive to massive sulphides are common in the breccia zone and, as such, the breccia zone is expected to be the most conductive region and most likely to return an EM response.

Furthermore, the EM plates are coincident with some of the best copper‐gold soil anomalies from the Prospect area (see Figure 3 below). The EM plates are oblique to the magnetic plates, which suggests that the response is not from the host stratigraphy but more likely from the copper‐gold sulphide mineralisation.

Figure 3 - Section 534800mE looking towards the west‐northwest EM plates (Dark Yellow); Magnetic plates (red); IP‐Chargeability section.

Section 536000mE

Section 536000mE is located in the Cruzamento Zone of the SW1‐B Prospect. The Cruzamento zone is structurally very interesting. IOCG deposits usually occur along fault splays off crustal‐scale extension faults and the Cruzamento zone represents precisely this scenario.

The Cruzamento zone is located exactly where the east‐west Banded Iron Formation (BIF) unit is intersected by the north‐west trending BIF unit of the SW1‐A Prospect (Figure 1), which is interpreted to be part of the north‐ west extension of the same Itacaiúnas Supergroup that hosts the massive Salobo Mine.

A discrete EM conductor plate has been modelled coincidently with the IP chargeability anomaly, magnetic plates and Cu‐Au(‐Co) soil geochemistry anomaly (see Figure 4 below).

This represents an excellent first priority drill target for the Company.

Interestingly, there is a strong IP chargeability anomaly that is associated with the copper‐in‐soils anomaly but not the EM or magnetic anomalies. This target will also require drill testing.

The EM plate to the north is interpreted to be part of the graphite‐pyrite rich sedimentary sequence that has been identified in historical drilling at the Serendipidade copper‐cobalt sedimentary‐style target. It should be noted there is no magnetic signature or geochemical anomalies associated with these EM plates and hence they are not considered an IOCG target priority.

Figure 4 - Section 536000mE looking towards the west‐northwest EM plates (Dark Yellow); Magnetic plates (red); IP‐Chargeability section.

Section 536800mE

Section 536800mE, also located in the Cruzamento Zone at SW1‐B, is host to the only historical drill hole on the SW1‐B Prospect. Drill‐hole DRI10‐FD0010 was drilled on Section 536800mE near the main convergent point of the Cruzamento Zone.