Centaurus Metals : 2018-12-11 Soils Program Expands IOCG Target Pipeline at Salobo West | 704KB

11 December 2018

CENTAURUS CONTINUES TO EXPAND ITS PIPELINE OF QUALITY IOCG

COPPER‐GOLD TARGETS AT SALOBO WEST

Soils program at SW2 Prospect outlines an additional two high priority copper‐gold anomalies covering +4.5km and +2.0km - Salobo West now boasts five distinct large‐scale copper prospects

Highlights:

•  Two extensive new IOCG anomalies delineated by recently re‐commenced mapping and soil sampling on the SW2 tenement at Salobo West. The anomalies have a geochemical signature comparable to other known world‐class IOCG deposits in the Carajás Mineral Province ("Carajás").

•  The Dom Prospect is an extensive +4.5km long copper‐gold soils anomaly that is up to 800m wide locally with soil values of up to 650ppm Cu and 137ppb Au. The Cu‐Au soil anomaly is coincident with a discrete 3.0km long magnetic anomaly, indicative of the Itacaiúnas Supergroup (host to all known IOCG deposits in the Carajás).

•  The Gov Prospect is delineated by a +2.0km long copper‐in‐soils anomaly that is up to 400m wide with soil values of up to 502ppm Cu.

•  EM conductors occur on both Prospects which represent excellent targets for the potential identification of semi‐massive to massive sulphides.

•  The SW2 tenement covers a regional shear zone that runs WNW from Vale's giant Salobo Copper‐Gold Mine, arguably the second‐biggest IOCG in the world, located just 12km away. This shear is thought to be one of the controlling events of the Salobo mineralisation.

Centaurus Metals (ASX Code: CTM) is pleased to announce that it has further expanded its pipeline of outstanding copper‐gold exploration targets at the 100%‐owned Salobo West Project in the world‐class Carajás Mineral Province ("Carajás") of northern Brazil, with results from a recently completed program of soil sampling and field mapping on the SW2 tenement generating further large IOCG targets.

Three prospects have already been delineated on the SW1 tenement (SW1‐A, SW1‐B and Serendipidade) with the recently completed soil sampling and mapping on the SW2 tenement identifying two additional large‐scale, and highly prospective, prospects - the Dom and Gov Prospects (see Figure 1 below).

Centaurus' Salobo West 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. Salobo has Reserves of 1.2 billion tonnes at 0.61% Cu and 0.3g/t Au and produced 193kt of copper and 346koz1 in calendar year 2017. In recent days Vale announced a US$1.1 billion expansion of its Salobo mine to 250ktpa (Salobo III)2.

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

• 2 Refer the Vale's Vale Day 2018 ‐ Presentation, 4 December 2018

Australian Office

Brazilian Office

ASX: CTM

Centaurus Managing Director, Mr Darren Gordon, said that the quality of new targets being generated at the Salobo West Project highlighted the opportunity for the Company to make a significant discovery once drilling commences.

"Vale has just announced a commitment to spend US$1.1 billion on the Salobo III mine expansion and this continuous investment in their world‐class mine demonstrates the quality of the IOCG deposits and ore that are found in the Carajás region," he said. "The recently announced Salobo expansion will result in the addition of a third Concentrator (Salobo III), lifting the mine's capacity to around 250ktpa of copper.

"Just 15km along strike from this world‐class mining operation, we now have five large‐scale, high‐quality prospects over the SW1 and SW2 tenements, with each prospect hosting multiple walk‐up drill targets. This is a huge opportunity for a junior company like Centaurus, and we are very much looking forward to being able to commence drilling at Salobo West next year.

"We are continuing to work with the relevant authorities to expedite the drilling licences in line with the end of the regional wet season so that we can have rigs on the ground at the earliest possible time in 2019" he said.

The Salobo West Project (comprising the SW1 and SW2 tenements) covers an area of approximately 120km2 and, importantly, comprises more than 70km2 of tenements covering the Itacaiúnas Supergroup, which hosts all known IOCG deposits in the Carajás. IOCG deposits usually occur along fault splays off crustal scale extension faults and the Salobo West Project hosts multiple prospects that fit precisely this scenario within the favourable geological context of the Itacaiúnas Supergroup.

Figure 1 - Salobo West (SW1 and SW2 Prospects) copper‐in‐soils geochemistry anomaly over Regional

Aeromagnetics (AS) image in the background, pink circles represent +200 ppm Cu.

Structural control is particularly important with IOCG mineralisation in the Carajás, with most deposits - especially those in the Cinzento Shear Zone - being associated with fault splays/shear zones and intersections of major W‐NW and SW‐trending lineaments.

The SW2 tenement covers, what is regionally described as a sliver of the Itacaiúnas Supergroup, associated with a major regional shear zone that runs WNW from the Salobo Cu‐Au Mine and through the northern portion of the SW2 tenement. This shear zone is identified in regional radiometric data as well as in the field by a small ridge that separates the Dom and Gov Prospects.

The Dom Prospect

The Dom Prospect is delineated by an extensive +4.5km long Cu‐Au‐in‐soils anomaly that is up to 800m wide locally with soil values of up to 650ppm Cu and 137ppb Au. The soil signature for the Dom Prospect is comparable to a number of the known IOCG deposits in the Carajás.

The prospect sits on the northern side of the ridge that represents a highly siliceous regional shear zone that is understood to be an important structural feature in the mineralisation of Vale's Salobo deposit (see Figure 2).

Importantly, the Cu‐Au soil anomaly is coincident with a discrete 3.0km magnetic anomaly, indicative of the iron‐rich metavolcanic‐sedimentary rocks of the Itacaiúnas Supergroup.

Multiple EM conductors occur on the southern limits of the Dom Prospect that may indicate the presence of semi‐massive to massive sulphides. The Dom Prospect hosts numerous walk‐up priority one drill targets and these target areas were included in the recently completed vegetation survey for the drill permitting process.

Figure 2 - SW2 Prospects copper‐in‐soils geochemistry anomaly over Regional Aeromagnetics (AS) image in the background, pink circles represent +200 ppm Cu and blue triangles represent EM conductors.

The Company plans to drill the Dom Prospect as part of its maiden drill program in 2019.

The Gov Prospect

The Gov Prospect is delineated by a 2.0km long copper‐in‐soils anomaly that is up to 400m wide with soil values of up to 502ppm Cu. The Gov Prospect sits on the southern side of the regional shear zone which, as noted above, is understood to be an important structural feature in the mineralisation of Vale's Salobo deposit.

Although the copper‐in‐soil anomaly is not coincident with any magnetic anomalies, it is located between the magnetic anomaly associated with the Dom Prospect and a 1.0km long magnetic anomaly immediately to the south. An EM conductor occurs in the centre of the Gov Prospect and, when considered with the other exploration data in the immediate vicinity, this represents an outstanding drill target for potential semi‐ massive to massive sulphides.

Mapping by Centaurus geologists has identified the ferruginous soils of meta‐sedimentary rocks intercalated within granitic soils, consistent with the regional interpretation. This mapping is consistent with information that was observed by the Vale geologists in their historical work programs.

The following are comments on the SW2 tenement geology that was translated from Vale's historical exploration report for the tenement:

"From a geological point of view, the regional structures that cross the area are interesting, as it seems to coincide with the Salobo trend, with strong silicification (felsic‐breccia), bordered by granitoids with iron formations and hydrothermally‐ altered schists intercalations and cataclastic rocks with quartz‐magnetite‐chlorite alteration ± chalcopyrite" - translated from DNPM 850.399/95 Partial Exploration Report dated December 2000.

Importantly, the Vale geologists identified lithologies and alteration styles similar to those seen at the Salobo Mine on the SW2 prospect area. Below is an additional extract from the report:

"This anomalous belt represents an association of several EM anomalies with distinct magnetic anomalies and a geological environment favourable to mineralisation, with many characteristics that resemble those observed in the Salobo Cu‐Au deposit." - translated from DNPM 850.399/95 Partial Exploration Report dated December 2000.

The southern 70% of the SW2 tenement remains un‐sampled (see Figure 2). Multiple EM conductors (digitized from Vale's historical exploration reports to the DNPM) and discrete magnetic anomalies are present throughout this area, and this highlights the potential for additional quality exploration targets to be generated in the future. The Company is currently operating under a non‐ground disturbing exploration licence and, as such, additional soil sampling and mapping over these southern targets can be undertaken in upcoming field campaigns.

Drilling of the SW1 and SW2 Prospects will only be undertaken with an ICMBio approved clearing and drilling licence. The Company is working to expedite this for Q2 2019 in line with the end of the regional wet season.

‐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.

SALOBO WEST ‐ COPPER IN THE CARAJÁS

The Carajás contains one of the world's largest known concentrations of large tonnage iron oxide copper‐gold (IOCG) deposits. More than 20 world‐class mineral deposits lie within an area of just 300 x 100km; including 10 Iron Oxide Copper Gold ("IOCG") deposits with resources of +100 million tonnes of copper‐gold ore.

These IOCG mines and deposits - in addition to several other IOCG prospects that are under exploration - collectively contain resources of more than 4.0 billion tonnes of copper‐gold ore. Table 2 below outlines a number of these world class deposits with geologically analogous Australian counterparts (IOCG and nickel‐cobalt laterite deposits) for resource and reserves comparison.

Three of the top five known IOCG deposits in the Carajás (all with resources +300Mt Cu‐Au ore), as well as multiple exploration targets, are located along the Cinzento Shear Zone (see Figure 3). These deposits are structurally controlled by regional‐scale W‐NW striking, brittle‐ductile shear zones hosted within the highly prospective volcanic and sedimentary rocks of the Itacaiúnas Supergroup.

Vale's giant Salobo Copper‐Gold Mine is one of these deposits and is 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 346koz of gold in calendar year 2017. More recently it announced a US$1.1 billion expansion of its Salobo mine to 250ktpa (Salobo III).

The prospectivity of the Carajás Mineral Province, and Brazil as a favourable mining jurisdiction, was also recognised earlier in 2018 when Oz Minerals acquired Avanco Resources in a $418 million takeover.

Figure 3 - Tier‐1 IOCG deposits in the Cinzento Shear Zone over the Regional Magnetics (AS).