Centaurus Metals : 2017-05-24 Chairman's Address to Shareholders | 126KB

24 May 2017

Good morning Ladies and Gentlemen and welcome to Centaurus' 2017 Annual General Meeting.

I am pleased to report on what has been an active and successful year, during which Centaurus completed its repositioning as a gold‐copper explorer, acquired a promising new gold project, and commenced an exploration program which we believe gives us an outstanding opportunity for discovery success. More on that shortly.

While our diversification strategy has been driven by a clear focus on projects that are within our technical and financial capability, it is worth noting we have never lost sight of the significant retained value of our extensive and high quality iron ore portfolio in Brazil. We continued to work diligently through the year to realise value from these assets - particularly against the backdrop of an improved iron ore environment.

Recently, we granted a 12 month option over the Conquista DSO Project to interests associated with the privately‐owned Brazilian mining group, Ecosinter. This marks another milestone in our strategy to realise value from our iron ore projects by partnering with experienced domestic iron ore operators, following the successful divestment of the Candonga Project last year.

Under the terms of this option, the Ecosinter Group will, at their cost, undertake an exploration program, that is to include approximately 1,000 metres of drilling, in conjunction with Centaurus' technical team. Should they exercise the option, Centaurus will receive a 12% gross production royalty on future production, with R$3 million (~A$1.25 million) being immediately payable by way of a non‐refundable pre‐payment of the royalty.

The Company's 100%‐owned Jambreiro Project also remains a potentially valuable asset. It is one of the few shovel‐ready development projects in Brazil, fully licensed for 3Mtpa of wet production - a significant strategic advantage given the recent tightening of the regulatory environment in Brazil.

Turning back to our exploration activities, a key development during the year was the low‐cost farm‐in deal we were able to secure on the highly prospective Pará Exploration Package in Northern Brazil. This opportunity came to us through our broader Strategic Alliance with Terrativa Minerais SA.

As I explained at last year's AGM, this multi‐faceted Strategic Alliance is a significant asset for the Company. Terrativa is one of Brazil's pre‐eminent private exploration groups, and its ability to gain access to a pipeline of high‐quality exploration opportunities is unparalleled. Terrativa has built up a tenement portfolio spanning some 200 tenements across Brazil over the past decade.

Brazil is a relatively under‐explored country compared with Australia, and there are still large tracts of prime exploration ground which are virtually untouched by modern exploration. The Serra Misteriosa Gold Project, which we secured late last year as part of the Pará Exploration Package, is a prime example.

It is located between several world‐class minerals deposits including the 5Moz Volta Grande gold deposit, currently being developed as a 200,000oz per annum operation by TSX‐listed Belo Sun Mining, and the giant Carajás IOCG province to the south. Despite this impeccable geological pedigree, Serra Misteriosa has never had a single drill‐hole put into it.

Building on the excellent historical work of Terrativa, our geological team has over the past few months outlined what can justifiably be described as a world‐class gold exploration opportunity. A major Induced Polarisation survey over the Serra Misteriosa tenement area delivered impressive results which, together with systematic soil sampling programs we have undertaken, have helped define an outstanding +5km long gold‐in‐soils anomaly, including a high grade central zone which extends over 2km.

The high‐grade soils anomaly and coincident IP geophysical targets are located within a much broader 10km long gold anomaly, up to 300m wide. I think it's fair to say that a gold target of this scale and calibre, if it were located in Australia, would have been drilled many years ago.

To assist with our geological review of this exceptional target, Centaurus engaged highly‐respected international geologist Grant "Rocky" Osborne who has strongly endorsed both the quality of the targets we have defined and our exploration strategy.

Mr Osborne's independent review concluded that the Serra Misteriosa Gold Project represents a very robust geological, geochemical and geophysical target for Intrusion‐related gold mineralisation hosted within a shear zone. He recommended that the project be drilled and highlighted a number of high priority drill hole locations to be included in the Company's maiden drill program.

Last week we announced that this eagerly anticipated program had begun, with approximately 3,500m of diamond drilling planned to test a series of outstanding targets to depths of up to 300m below surface. This is an exciting time for the Company and we are very much looking forward to the first results from this program, which should be available in June.

Before closing, I would like to thank our management team and staff, lead by our Managing Director, Darren Gordon. The Centaurus team has worked extremely hard throughout the year to implement the Board's strategy to reposition the Company as a gold‐copper explorer.

In conclusion, I would like to thank all shareholders for their continued support of the Company. With drilling now underway at Serra Misteriosa, Centaurus is at a pivotal point in its history and we are all looking forward to what the next few months, and indeed the year ahead, may bring.

Thank you for your attention.

Nicholas Read Read Corporate M: +61 419 929 046

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Darren Gordon Managing Director Centaurus Metals Limited T: +618 9420 4000