Centaurus Metals : Financial Report 31 December 2021

ABN 40 009 468 099

Financial Report

31 December 2021

Centaurus Metals Limited ABN 40 009 468 099

And its controlled entities

Contents

Directors' Report .................................................................................................................................................................. 3

Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................................................... 21

Consolidated Statement of Financial Position .................................................................................................................... 22

Consolidated Statement of Changes in Equity .................................................................................................................... 23

Consolidated Statement of Cash Flows .............................................................................................................................. 24

Notes to the Consolidated Financial Statements ............................................................................................................... 25

Directors' Declaration ......................................................................................................................................................... 49

Independent Auditor's Report ............................................................................................................................................ 50

Directors' Report

Your directors present their report on the Consolidated Entity ("Group") consisting of Centaurus Metals Limited ("Centaurus" or "the Company") and the entities it controlled at the end of, or during, the year ended 31 December 2021 together with the consolidated financial report and audit report thereon.

1 Directors

The directors of the Company at any time during or since the end of the year are:

	Mr D M Murcia	Independent Non-Executive Chair
	Mr D P Gordon	Managing Director
	Mr B R Scarpelli	Executive Director
	Mr M D Hancock	Independent Non-Executive Director
	Mr C A Banasik	Independent Non-Executive Director

Unless otherwise disclosed, all directors held their office from 1 January 2021 until the date of this report.

2

Directors and Officers

Mr Didier M Murcia, AM, B.Juris, LL.B Non-Executive Chair, Age 59

Independent non-executive director appointed 16 April 2009 and appointed Chair 28 January 2010. Lawyer with over 30 years' legal and corporate experience in the mining industry. Mr Murcia is currently Honorary Australian Consul for the United Republic of Tanzania. He is Chair and founding director of Perth-based legal group MPH Lawyers. He is Chair of Strandline Resources Limited.

During the last three years Mr Murcia has held directorships in the following ASX listed companies:  Alicanto Minerals Limited (appointed 30 May 2012) - Non-Executive Director  Strandline Resources Limited (appointed 23 October 2014) - Non-Executive Chair

Mr Darren P Gordon, B.Bus, FCA, AGIA, ACG, MAICD

Managing Director, Age 50

Managing Director appointed 4 May 2009. Chartered Accountant with over 25 years' resource sector experience as a senior finance and resources executive. Mr Gordon was formerly Chief Financial Officer for Gindalbie Metals Limited (1999-2008).

Mr Bruno R Scarpelli, M.Sc., PMP Executive Director, Age 44

Executive Director appointed 3 September 2015. Mr Scarpelli is an engineer with over 15 years' experience in the mining sector, specifically in the environmental approvals, health and safety and human resources fields. He was formerly environmental manager for Vale's world class S11D Iron Ore Project.

Mr Scarpelli is Administrator of Centaurus' Brazilian subsidiaries and the Country Manager - Brazil.

Mr Mark D Hancock, B.Bus, CA, F Fin

Non-Executive Director, Age 53

Independent non-executive director appointed 23 September 2011. Mr Hancock is a Company Director and consultant to the resource industry with a focus on commercial advisory and commodity marketing. He has over 30 years' experience in senior commercial and financial roles across a number of leading companies in Australia and South East Asia, including most recently spending 13 years with Atlas Iron as CFO and CCO and prior to that with oil and gas industry participants Woodside Petroleum Ltd and Premier Oil Plc.

During the last three years Mr Hancock has held directorships in the following ASX listed companies:

•  Cyclone Metals Ltd (formerly Cape Lambert Resources Ltd, appointed 11 February 2020; resigned 4 August 2020)

•  CuFe Ltd (Appointed 1 September 2019)

•  Strandline Resources (Appointed 11 August 2020)

Mr Hancock is Chair of the Audit & Risk Committee

Mr Chris A Banasik, B.App.Sc (Physics), M.Sc (Geology), Dip Ed, GAICD Non-Executive Director, Age 60

Independent non-executive director appointed 28 February 2019. Mr Banasik is a geologist with more than 30 years' experience across multiple disciplines and commodities. He was a founding Director of WA gold producer Silver Lake Resources (ASX: SLR), where he held the key role of Director of Exploration and Geology from 2007 to 2014. He has held a range of senior geological and executive roles for companies including Consolidated Minerals, Reliance Nickel and Western Mining Corporation. He has extensive experience in nickel exploration, project development and operations, having held several geological and management positions with WMC (1986-2001). He was also Senior Mine Geologist with Goldfields Mine Management (2001-2004) and Chief Geologist at the Beta Hunt nickel operations (2004-2007).

Mr Banasik is the Chair of the Remuneration Committee

Mr Johannes W Westdorp, B.Bus, CPA, MAICD, GradDip App Sc Chief Financial Officer & Company Secretary, Age 58

Mr Westdorp was appointed as Chief Financial Officer on 11 November 2019 and Company Secretary on 15 January 2020. Mr Westdorp is a Certified Practicing Accountant. He was previously Chief Financial Officer and Company Secretary of Centaurus between 2012 and 2015. He has over 30 years' experience in the resources sector and has most recently held the roles of Chief Financial Officer and Interim Chief Executive Officer of mineral sands producer, MZI Resources Ltd. Mr Westdorp has held senior roles with Murchison Metals Ltd and Burrup Fertilisers Pty Ltd and has financial, commercial and operations experience across a number of commodities including iron ore, gold, base metals and mineral sands.

3

Director & Committee Meetings

The number of meetings of the Company's Board of Directors and its Committees held during the year ended 31 December 2021 and the number of meetings attended by each director are shown in the table below.

Board

Audit & Risk Committee

Remuneration Committee

Director	Held1	Attended	Held1	Attended	Held1	Attended
Mr D M Murcia	7	7	2	2	2	2
Mr D P Gordon	7	7	n/a	n/a	n/a	n/a
Mr B R Scarpelli	7	7	n/a	n/a	n/a	n/a
Mr M D Hancock	7	7	2	2	2	2
Mr C A Banasik	7	7	2	2	2	2

(1)

Denotes the number of meetings held during the time the director held office (excluding circular resolutions)

The Company does not have a formal Nomination Committee. The function is performed by the full Board. There is no additional remuneration for committee members.

The Company's remuneration policy consists of:

•  a clear structure that distinguishes remuneration of non-executive directors from that of executive directors and senior management;

•  balancing the Company's desire to attract and retain personnel with the need to manage financial resources;

•  providing an appropriate balance between fixed and incentive pay to reflect short and long term performance objectives appropriate to the Company's circumstances and goals;

•  motivating personnel to pursue the long-term growth and success of the Company; and

•  demonstrating a clear relationship between employee performance and remuneration.

Further information on directors' and executives' remuneration is set out in the Remuneration Report.

4 Operating and Financial Review

A summary of consolidated results is set out below

31 December 2021 $

31 December 2020 $

Interest Income	235,207	174,436
Other Income	265,862	487,289
501,069	661,725
Loss before income tax	(16,994,715)	(11,468,825)
Loss attributable to members of Centaurus Metals Limited	(16,994,715)	(11,468,825)

4.1

Financial Performance

During the year ended 31 December 2021 the Group expensed Exploration and Evaluation costs totalling $13,198,599 (2020: $7,288,408) in accordance with the Group's accounting policy. The Exploration and Evaluation costs primarily comprise costs in relation to exploration at the Jaguar Nickel Sulphide Project in Brazil.

Subsequent to year end the Group raised $71,959,044 net of fees, increasing the cash balance and net assets by the same amount.

4.2

Financial Position

At the end of the year the Group had a cash balance of $8,259,389 (2020: $24,089,281) and net assets of $16,750,646 (2020: $26,118,316). Total liabilities amounted to $10,099,118 (2020: $7,734,426) and consisted of trade and other payables, financial liabilities, lease liabilities and employee benefits.

4.3

Strategy

Centaurus' key focus throughout the 2021 calendar year was on the continued exploration and development of the advanced Jaguar Nickel Sulphide Project, located in the world-class Carajás Mineral Province in Brazil. Scoping studies were completed for both a base case concentrate production scenario and a value-add case producing nickel sulphate with both cases returning exceptional economic results. A JORC Resource update was completed in December 2021 and resulted in a significant increase in contained nickel metal. Early development activities continued and included securing possession of key land holdings and completing access road upgrades.

4.4

Jaguar Nickel Sulphide Project

Centaurus' key focus throughout the 2021 calendar year was on the continued exploration and development of the advanced Jaguar Nickel Sulphide Project. The Jaguar Nickel Sulphide Project hosts multiple nickel sulphide deposits and exploration targets within a 30km2 land package in the western portion of the world-class Carajás Mineral Province in Brazil.

The Company delivered a positive Value-Added Scoping Study in May 2021 confirming strong technical parameters and outstanding financial returns from the production of nickel sulphate from a 13-year open pit and underground mining operation. The production of nickel sulphate is proposed to be delivered by a conventional nickel flotation plant, followed by a pressure oxidation circuit to produce +20,000 tonne of nickel per annum over the initial 13-year mine life.

Following the robust and compelling economics delivered by the Jaguar Value-Add Scoping Study, the Company elected to move straight to a Definitive Feasibility Study (DFS) focused on the production of a nickel sulphate product.

At the end of 2021, Centaurus updated its Mineral Resource Estimate (MRE) for the Jaguar Project to 80.6Mt @ 0.91% Ni for 730,700t of contained nickel, with 54 per cent of the MRE in the higher-confidence Indicated Resource category (43.4Mt grading 0.92% Ni for 397,000 tonnes of contained nickel).

Through the development of the Jaguar Project, Centaurus' goal is to become a new-generation nickel sulphide mining company in Brazil, capable of delivering more than 20,000 tonne per annum of Class-1 nickel to global markets over the long term, and to do so in a sustainable and responsible manner that ensures the Company meets the highest possible ESG (Environmental, Social and Governance) standards.