Brazil-focused Centaurus Metals is well on its way to making a final investment decision for the Jaguar nickel project in the third quarter of 2023.
Given the looming shortage of nickel sulphide as battery demand ramps up, Centaurus has rapidly advanced the project since completing its acquisition from Vale in April 2020.
The company reached another milestone earlier this month when it lodged an updated mining lease application (MLA) for Jaguar, which is located in Brazil's tier one Carajás province.
The application, which was an update of Vale's 2013 MLA, contemplates a 2.7 million tonne per annum open pit and underground operation to produce about 20,000 tonnes of nickel in sulphate, plus by-products.
It follows the lodgement of the environmental impact assessment in the September quarter, which has a targeted approval date of the September quarter of 2022 - which should then be followed by an installation licence by the middle of 2023.
Jaguar currently has a globally significant resource of 58.9 million tonnes at 0.96% nickel for 562,600t of contained nickel metal, of which 40% presently falls into the Indicated category.
A May 2021 scoping study forecast the production of 262,100t of nickel sulphate over 13 years at an operating cash margin of US$4.27 per pound of nickel.
Pre-tax life-of-mine annual cashflow was estimated at US$189 million (A$252 million).
The study returned a post-tax net present value (8% discount rate) of A$1.11 billion with an internal rate of return of 52%, based on a conservative nickel price of US$7.50/lb plus a US$0.50/lb premium for nickel sulphate.
At the time of writing, the nickel price was sitting at US$8.70/lb and sulphate premiums are over US$1.00/lb.
Using a US$9/lb nickel price, the post-tax NPV rises to A$1.62 billion with a 70% IRR.
An independent ESG assessment confirmed Jaguar's credentials as a world-leading, low-emission nickel project, with the life-of-mine carbon dioxide footprint estimated to be lower than 97% of global nickel production.
The definitive feasibility study is due in the fourth quarter of 2022.
Alongside project development activities, Centaurus has continued to aggressively explore at the project and expects to deliver an updated resource for Jaguar in December 2021.
In July, the company hit 56.1m at 2.05% nickel from 206m, including 17.6m at 4.86% nickel and 6.7m at 2.09% nickel at the Jaguar South deposit, immediately beneath the limit of the planned open pit.
It was the best intersection to date at the project, coming after more than 300 holes had been drilled.
And earlier this month, the company reported outstanding results from step-out drilling at the Onça Preta deposit including 40.8m at 1.22% Ni from 269m, while initial assays have confirmed a greenfields discovery at the Tigre prospect.
This is now likely to be included in the December 2021 resource upgrade.
Centaurus is working its way through an aggressive 2021 program of development and growth drilling with a total of nine rigs (eight diamond and one RC) on site.
Perth firm Argonaut has a speculative buy rating for Centaurus and a $1.40 price target.
Argonaut this month released its annual ‘Best Undeveloped Projects' report, which elevated Jaguar from a "special mention" in 2020 to the main list of nine projects in 2021.
"Excellent potential exists to extend mine life and or upscale planned production through reserve expansion," Argonaut said.
