Centaurus Metals (CTM)

Transcription

1 8 th December 2010 RECOMMENDATION Speculative Buy DCF Valuation 19.8 cps 12 month volume 345m 12 month share low A4.5c 12 month share high A13.0c Market Risk Liquidity Risk Infrastructure Risk Country Risk ISSUED CAPITAL High High Med Med IRESS & DJC Research ASX CTM Share price 10.5c Mkt cap 1 $88.9m Ordinary shares on issue 846.9m Unlisted Options 122.3m 1 Undiluted Source: IRESS 2 Various dates and strike prices DIRECTORS Darren Gordon Didier Murcia Peter Freund Geoff Clifford Keith McKay Richard Hill Managing Director Non.Ex Chairman Executive Director Non-Exe Director Non-Exe Director Non-Exe Director MAJOR SHAREHOLDERS Darren Gordon 6.21% Lujeta Pty Ltd 4.52% Bridgelane Pty Ltd 3.93% UBS Nominees Pty Ltd 3.07% HSBC Custody Nominees 2.01% 12 MONTH PERFORMANCE $0.14 $0.12 $0.10 $0.08 $0.06 $0.04 $0.02 $0.00 Dec-09 Mar-10 May-10 Aug-10 Nov-10 Source: IRESS. Troy Flannery Senior Resource Analyst +61 (8) tflannery@djcarmichael.com.au Centaurus Metals (CTM) Initiating Coverage - Brazilian Iron Ore Explorer RESEARCH CTM has an emerging portfolio of near term production iron ore assets located in Southeastern Brazil (one of the world s major iron ore provinces). CTM s overall JORC compliant resource is now 131 Mt at an average grade of 30.9%Fe. We note beneficiation is expected to produce +63%Fe product. CTM is one of the few ASX-listed companies offering exposure to the anticipated rapid development and growth of Brazil ahead of the 2014 Soccer World Cup and 2016 Olympic Games. CTM s Brazilian focus is to produce from numerous low capex iron ore mines selling to the domestic steel mills; and in the medium term to develop an iron ore export business. We derive a DCF valuation of 19.8c per share for CTM and initiate coverage with a Speculative Buy recommendation contingent to the granting of relevant approvals and positive feasibility study results. Key Points Main Projects: CTM has three domestic iron ore projects (Jambreiro, Itambé & Passabem) and some potential export projects. High calibre experienced team- The board and key personnel all have significant iron ore experience from their time at Gindalbie Metals (GBG), Portman Mining or Atlas Iron (AGO). They are experienced in financing, development and operation of iron ore projects. Low Capital Expenditure requirement: CTM s domestic production projects will require low capital expenditure to take each mine into production. This is due to the project s close proximity to Brazil s third largest city of Belo Horizonte and the major Brazilian steel making infrastructure which is within 150km trucking distance. CTM selling their product domestically eliminates the requirement for any rail or port infrastructure (a necessity for all Australian Iron ore miners). Low Operating costs: CTM s shallow deposits and friable itabirite ore should result in low operating costs, as there will not be any port handling or shipping costs. CTM expects low strip ratios and initially mining at Jambreiro will be by free digging (i.e. not require drilling or blasting). Highly prospective iron ore prospects: CTM has a strong domestic project resource base, along with 100% ownership of some highly prospective tenements that may support an iron ore export business. Risks associated with CTM (as for most exploration companies) include: Additional funds most likely be required prior to production commencing i.e. future capital raising maybe required and / or debt funding. Uncertainty as to the outcome of the pre-feasibility studies and beneficiation test work. Still to obtain mining and environmental approvals Yet to have a memorandum of understanding with the steel mills. Low grade itabirite deposits require beneficiation to upgrade the ore, with an estimated mass recovery of 48% produced. This means that around two tonnes need to be mined to produce one tonne of high grade iron ore feed. During the beneficiation process a small quantity (<7%) of the total iron ore mined will be lost to the tails (or waste pile). D J Carmichael Pty Limited ABN AFSL Market Participant of ASX Limited Telephone: Facsimile: info@djcarmichael.com.au Webpage:

2 Centaurus Metals Ltd (CTM) 10.5c PROFIT & LOSS ($USm) 2010A 2011F 2012F 2013F 2014F PRICE ASSUMPTIONS Unit 2010A 2011F 2012F 2013F LT Revenue Iron Ore - Sinter (Domestic) US$/t Other Income Iron Ore - Non-Sinter US$/t EBITDA Exchange Rate (AUS: USD) Depreciation & Amortisation Exploration Write down Other EBIT & RESERVES Mt % Fe Interest (Expense) benefit Resources and Reserves (Pre-Beneficiation) Abnormals Jambreiro % Profit before Tax Itambe % Tax (Expense) benefit Passabem % NPAT DJC Adjusted NPAT Total % CASHFLOW ($USm) 2010A 2011F 2012F 2013F 2014F PRODUCTION PROFILE 2010A 2011F 2012F 2013F 2014F Receipts from customers Jambreiro (Mt) Less tax paid(received) Itambe (Mt) Net interest (expense) income Passabem (Mt) Other Operating cashflow Total (Mt) Purchase of Plant & Equipment Development & Exploration RATIOS 2010A 2011F 2012F 2013F 2014F Divestments/Investments Number of shares m Investing cashflows EPS cps Equity raised PER x Proceeds from borrowings EPS growth % 0% -9% -120% NA 54% Repayment of borrowings CFPS cps Financing Cashflow DPS cps Cash at start of period EBITDA Margin % NA NA NA 66% 68% Net change in cash ROE % -13% -11% -80% 46% 28% Cash at end of period VALUATION BALANCE SHEET ($USm) 2010A 2011F 2012F 2013F 2014F DCF (fully diluted) - 14% A$m cps Cash Receivables Jambreiro Other Itambe Total current assets Passabem Property Plant & Equipment Other Exploration Exploration & development Cash Other Corporate Total non-current assets Total Assets Valuation (AU) 19.8 Payables Borrowings Other Total current liabilities Non-current debt Corporate Summary Other CTM is a mining company with projects in the Brazil, South America. CTM is targeting Total non-current liabilities production from a number of low Opex, low Capex mines in close proximity to established infrastructure. CTM's Iron Ore is to be sold into Brazil's domestic steel Total Liabilities mills. There is also good potential for additional resources and reserves. Net Assets th December 2010

3 Valuation We derive a DCF valuation (using a discount rate of 14%) of 19.8 cps for CTM s combined projects, cash and investments. We have risked our 12 month valuation in accordance with project development timetable factoring in the development of Jambreiro in 2012, Passabem in 2013 and Itambé in We have not assigned any value to CTM s regional exploration tenements located in various parts of the Minas Gerais state. Hence we have been conservative in our valuation as we have only considered projects with resources defined. The primary risk for CTM in our valuation at this stage is the uncertainty of the pre-feasibility studies and beneficiation test work results. CTM will need to obtain mining and environmental approvals, and are yet to have a memorandum of understanding with their potential customers. Additional funds may also be required prior to production commencing in FY Project Value (A$M) cps Jambreiro Itambe Passabem Other Exploration Cash Corporate Valuation Figure 1 Valuation Matrix Source: DJC Investment Highlights CTM provides direct exposure to Brazil s rapidly growing economy. CTM s board and key personnel are high calibre professionals who are experienced in financing, development and operation of iron ore projects. CTM is currently well funded with $17m cash in the bank, having raised $18m earlier in the year (@ 7.5c per share). CTM s domestic production projects will require low capital expenditure (capex) to take each mine into production. This is due to the project s close proximity to Brazil s third largest city of Belo Horizonte and the well establish Brazilian steel industry in Minas Gerais which is within a trucking distance of 150km. CTM selling their product domestically eliminates the requirement for any rail or port infrastructure (a necessity for Australian iron ore miners). CTM s shallow deposits and friable itabirite ore should result in low operating costs. Itabirite ore is a major source of Brazil s iron ore production; it is well suited to low cost beneficiation and can reliably be upgraded to between 63% & 68% Fe. Also, not having any port handling or shipping costs will keep costs low. CTM has a strong domestic project resource base, along with 100% ownership of some highly prospective tenements that may support an iron ore export business. 6 th December

4 Brazil A Growing Economy Brazil's economy outweighs that of all other South American countries and is expanding its presence in world markets. Since 2003, Brazil has steadily improved its macroeconomic stability, building up foreign reserves, reducing its debt profile by shifting its debt burden towards real (R$) denominated and domestically held instruments, adhering to an inflation target and committing to fiscal responsibility. In 2008, Brazil became a net external creditor and two ratings agencies awarded investment grade status to its debt. The Brazilian economy is predicted to become one of the five largest economies in the world in the coming decades. After record growth in 2007 and 2008, the onset of the global financial crisis hit Brazil in September However, Brazil was one of the first emerging markets to begin a recovery. Consumer and investor confidence revived and GDP growth returned to positive in the second quarter, The Central Bank expects growth of 5% for 2010 and above 7% for The Brazilian government has recently committed to spending US$830 Billion on the country s infrastructure in the coming years. In 2014 Brazil will host the FIFA World cup and then in 2016 it will hold the Olympic Games. Brazil is a global steel producer and the world s largest Merchant Pig Iron producer. There are a number of major steel companies, with steel mills within a 150km radius of CTM s projects. These steel mills are large domestic producers that are expanding in order to meet Brazil s increasing demand. Domestic Iron ore pricing Figure Quarterly Iron Ore Price for 62% Fe Source: Reuters The sale price CTM expect to obtain from the Brazil domestic market is based on what is currently achieved by local Brazilian suppliers. The price the domestic producers receive for sinter feed is approximately 65% of the export FOB price (140 US$/t); we have used $US 91 per tonne for 63% Fe product. CTM will differentiate itself from the local competition by ensuring they supply a high quality and consistent product. This should make CTM the supplier of choice to the domestic steel mills and help maintain their sale price. 4 6 th December 2010

5 Globally iron ore prices are not expected to drop in the near future, as stockpiles within China are currently at low levels and the iron ore market is expected to remain undersupplied for at least the next two years. Itabirite ore from Brazil s Iron Quadrangle Itabirite is a term widely used in Brazil to denote a metamorphosed iron formation composed of iron oxides (hematite in CTM s case), abundant quartz, very rarely mica and other accessory minerals. Itabirite ore is a major source of Brazil s iron ore production. It is well suited to low cost beneficiation and can reliably be upgraded to between 63% & 68% Fe. This is done by standard crushing, classification and concentration steps to produce sinter feed, lump ore and pellet feed. Figure 3 Friable itabirite at Itambe 6 th December

6 Board of Directors & Management It is unusual to see such a high calibre experienced team at an exploration company such as the one at CTM. The board and key personnel have had iron ore experience from their time at Gindalbie Metals (GBG), Portman Mining or Atlas Iron (AGO). They are experienced in financing, development and operation of iron ore projects. Mr Didier M Murcia (Non-Executive Chairman) Mr Murcia was appointed on 16 April 2009 as an independent non-executive director and was later appointed as CTM s Chairman on 28 January Mr Murcia is a lawyer with over 25 years of legal and corporate experience in the mining industry. He is currently Honorary Australian Consul for the United Republic of Tanzania and a director of London listed Aminex plc. Mr Murcia is also the Chairman and founding director of Perth-based legal group Murcia Pestell Hillard. During the last three years Mr Murcia held directorships in Gindalbie Metals Limited (GBG), Gryphon Minerals Limited (GRY) & Target Energy Limited (TEX). Mr Darren P Gordon (Managing Director) Mr Gordon was appointed as CTM s Managing Director on 4 May He is a Chartered Accountant with over 15 years experience in the mining industry as a senior finance and resources executive. Formerly Mr Gordon was the Chief Financial Officer of Gindalbie Metals Limited for 9 years. During this time Mr Gordon was part of the senior management team that was able to secure Ansteel as Joint Venture partner for the multi-billion tonne Karara Iron Ore Project. Over the last three years Mr Gordon has held directorships initially in Centaurus Resources Limited and then CTM. Mr Peter E Freund (Executive Director) Mr Freund was appointed as CTM s Operations director on 28 January A Mechanical Engineer, who has almost 40 years of experience in the resources industry with considerable experience in iron ore mining and steel-making. Prior to joining CTM, Mr Freund completed a four year role as GM of the JV between Gindalbie Metals Limited (ASX: GBG) and Ansteel, where he managed the Bankable Feasibility Study for the A$1.8 billion Karara Iron Ore Project in Western Australia, which is based on an initial 8Mtpa mining, processing and infrastructure Project. Previous experience includes working for BHP at the Whyalla steelworks and Iron Ore Pellet Plant in South Australia, BHP Minerals Division in Melbourne and the Groote Eylandt manganese mine in the Northern Territory as Operations Superintendent and Deputy Manager. Mr Freund has experience in the development, construction and commissioning of large mining operations, including in South America. Mr Freund held several senior positions with the MIM Holdings Limited group, including its Queensland coal division, McArthur River Mining, and was President of the subsidiary responsible for the $1.2 billion Alumbrera Copper-Gold Mine Development in Argentina. Mr Keith G McKay (Non-Executive Director) Mr McKay was appointed as an Independent non-executive director on 26 August He is a Geologist with 40 years technical and corporate experience in the mining industry as a senior executive, director and chairman. Previously Mr McKay was the Chairman of Glengarry Resources Limited and Gindalbie Metals Limited and former Managing Director of Gallery Gold Limited and Battle Mountain (Aust.) Inc. Mr Geoffrey T Clifford (Non-Executive Director) Mr Clifford was appointed as an Independent non-executive director on 22 August He is an Accountant with over 30 years experience in senior accounting, finance, administration and company 6 6 th December 2010

7 secretarial roles in the mining, retail and wholesale industries. Mr Clifford is the current Non Executive Chairman of Australian iron ore producer; Atlas Iron Ltd. Previously Mr Clifford was a non-executive director of Aztec Resources Limited and former Chairman of Sino Gas and Energy Limited. Also Mr Clifford was formerly the General Manager Administration and Company Secretary of Portman Limited. During the last three years Mr Clifford held directorships Atlas Iron Limited (AGO), Fox Resources Limited (FXR) & RMA Energy Limited (RMT). Mr Richard Hill (Non-Executive Director) Mr Hill has over 16 years experience in the resource industry as both a solicitor and a geologist. He has also founded two ASX listed mining companies. He has a diversity of practical geological experience as a mine based and exploration geologist. In his commercial and legal roles, he has been involved in project generation and evaluation, acquisition and joint venture negotiation, mining law and land access issues as well as local and overseas marketing and fund raising. 6 th December

8 History and Overview of CTM CTM has come about through the merger of Glengarry Resources Ltd and Centaurus Resources Ltd. Glengarry changed its name to Centaurus Metals Limited to more accurately reflect the Company s focus on developing a long-term iron ore business in Brazil, as well as to benefit from the significant goodwill associated with the Centaurus name in Brazil. CTM is one of the few ASX-listed companies offering exposure to the anticipated rapid development and growth of Brazil ahead of the 2014 Soccer World Cup and 2016 Olympic Games. CTM is attempting to capitalise on the growth opportunities within Brazil. They have put in place a twopronged strategy to build a substantial new international iron ore production company. CTM will leverage off the existing team of professionals in the company s Belo Horizonte office, the substantial tenement and project position in and around the Iron Quadrangle and the strong network of business contacts established over the last four years. The first limb of the business is the Domestic Iron & Steel Strategy ( Domestic Strategy ) which is based on CTM achieving targeted annualised production of at least 3Mtpa of iron ore grading +63% Fe by the end of The product will be sold into the substantial domestic steel industry in Brazil. The second limb of the company s business is to capitalise on the very high quality of iron ore products produced in the country, which supports the medium term intention of CTM to implement an Export Market Strategy. The world s highest grade, lowest silica sinter feed comes out of Brazil. The Export Market Strategy, will leverage off the cash flow to be generated by CTM from the Domestic Iron & Steel Strategy. CTM aims to acquire or identify a project capable of producing 12-15mtpa of 64-69% Fe product for a minimum project life of 10 years. CTM Projects Presently CTM has 3 key projects, with a total JORC Resource of 131.6mt. Figure 4 CTM s Resource Summary Table 8 6 th December 2010

9 Location of CTM s Projects & various companies steel mills Figure 5 - Map showing CTM s Projects in Brazil Jambreiro CTM s priority target is the Jambreiro prospect; which is located within Cenibra s (a Brazilian Pulp and Forestry Company) substantial land holdings. These tenements are around Brazil s world-renowned Iron Quadrangle where most of the country s world-class iron ore mines are located. CTM has a contract with Cenibra to take on 100% ownership of the mineral rights to the tenements CTM selects, subject to undertaking agreed exploration plans. CTM has the right to acquire the tenements of its choice through the active exploration and development of economic resources and the making of resource based payments on the In-situ Measured and Indicated Mineral Resources as defined in the Plan of Economic Exploitation (PAE), which is required to be completed and lodged with the Mines Department prior to the grant of a mining lease. The future resource-based payment is a one-off calculation for each Mining Lease and will be determined according to a schedule of rates and the grade of the in situ Measured and Indicated Resources. It will be paid in three instalments: 20% within thirty days after the lodging of the PAE; 30% within two years of lodging the PAE; and 50% within four years of lodging the PAE. To date CTM has completed 3,500m of a resource definition drill program at Jambreiro. A JORC Inferred Resource of 77.1 million tonnes grading 29.5% Fe has been defined at Jambreiro. Tonnes (M) Fe% SiO2% Al2O3% P% Mn% LOI% n.p *n.p. = data not provided Figure 6 Jambreiro JORC Inferred Resource 6 th December

10 Best results from four diamond holes drilled recently by CTM include: 29.8% Fe, 3.9% Al 2 O 3 & 0.05% P from 28m; 31.5% Fe, 5.5% Al 2 O 3 & 0.04% P from 9m; 31.8% Fe, 3.3% Al 2 O 3 & 0.03% P from 41m; 32.2% Fe, 2.0% Al2O3 & 0.03% P from 0.5m. In the next 6 months an additional 3,500m of infill drilling is to be completed to lift the resource category to indicated. Also during this period a pre-feasibility study will be performed on Jambreiro. The fact that this land has already been disturbed through forestry, has had triple road trains operating on existing roads and only has one land owner could result in rapid development of the project. Itambé The Itambé project area consists of 14 tenements (granted and under application) totalling 186 km2. The Itambé-1 tenement occupying an area of approximately 16 km2 is located approximately 20 kilometres north of the town of Itabira and approximately 80 kilometres north east of Belo Horizonte. A JORC Inferred Resource of 15.5 million tonnes grading 37.2% Fe has been defined at Itambé-1. Tonnes (M) Fe% SiO2% Al2O3% P% Mn% LOI% Figure 7 Itambé- 1 JORC Inferred Resource Recently there has been further infill drilling completed in order to lift the resource category to indicated. The new resource estimation for Itambé-1 is due at the end of December Passabem The Passabem Project lies approximately 100 kilometres north east of Belo Horizonte, the capital city of the State of Minas Gerais. The project consists of two granted tenements totalling approximately 28 km 2. Exploration to date has consisted of detailed geological mapping, a high resolution ground magnetic survey and an resource extension drilling campaign over the entire 5km strike extent of the deposit. A JORC Resource (Inferred & Indicated) of 39.0 million tonnes grading 31.0% Fe has been defined at Passabem. Tonnes (M) Fe% SiO2% Al2O3% P% Mn% LOI% Figure 8 Passabem JORCResource Preliminary beneficiation test work indicates that the Passabem mineralisation can be cost effectively upgraded to a high-grade (65.8% Fe) iron product via a simple and low cost magnetic separation process th December 2010

11 Production targets We forecast that CTM will reach their initial production target of 2mtpa by 2013, with mining first commencing at the Jambreiro Project. Mining at a rate of 3 Mtpa is then scheduled for 2014, with the Passabem Project contributing 1 Mtpa. The Itambé Project is expected to add another 0.5 Mtpa to CTM s mining rate in This over all iron ore production rate of 3.5 Mtpa is expected to be sustained for at least 10 years after mining starts. Production Jambreiro (Mt) Itambe (Mt) Passabem (Mt) Total (Mt) Figure 9 CTM production expansion timetable Source: DJC Regional Export Projects CTM holds a number of highly prospective tenement packages with the potential to host resources of sufficient size to allow the company to establish an iron ore export business from Brazil. Some of CTM s projects include Rio Pardo, Serra Do Bicho, Itamarandiba and Guanhães. CTM owns 100% of the tenements at each of the above listed projects. Over the coming year CTM will continue significant work programs on their regional export orientated projects. Figure 10 - Project Map of Minas Gerais, Brazil 6 th December

12 Positives Low Capital Expenditure Requirement CTM s domestic production projects will require low capital expenditure (capex) to take each mine into production. This is due to the project s close proximity to Brazil s third largest city of Belo Horizonte and the Brazilian Steel Market being within trucking distance. Access to domestic customers means that CTM does not have to rail their product to a port; note that some of the highest capex infrastructure is the ship loading facility and railway construction. Capex of between $15-20M is CTM s estimate for a million tonnes of iron ore production. Hence the capex cost for CTM s 3 Mtpa operation is estimated at $45 60m, much lower than most junior iron ore companies in the Pilbara. Low Operating costs CTM s shallow deposits and friable itabirite ore should result in low operating costs. Although the prefeasibility study is yet to be performed, CTM expect their pit s to have low strip ratios and initially mining will be by free digging (i.e. not requiring drilling or blasting). Early stage beneficiation test work shows the friable mineralisation can be cost effectively upgraded to a high grade product. Opex costs will also be free from rail and port handling charges, unlike their Pilbara counterparts. Risks Low Mass Recovery and reduced Iron recovery The relatively low grade itabirite deposits (31% Fe versus +40% Fe for Vale) require beneficiation to upgrade the ore. Early stage beneficiation test work performed on the Jambreiro Project indicated a mass recovery of 48%. This means that around two tonnes need to be mined to produce 1 tonne of iron ore feed. The cost of mining these extra tonnes reduces the margin between CTM s sale price and their overall costs. Another negative to consider is that during the beneficiation process a small quantity of the total iron ore mined will be lost to the tails (or waste pile). Early beneficiation test work indicates a high metal recovery of at least 93% iron can be achieved. Projects still at an early stage Risks associated with CTM (as for most exploration companies) include: Additional funds will most likely be required prior to production commencing i.e. future capital raising maybe required or debt funding (we note that CTM is eligible for debt funding from the Brazilian development bank). Uncertainty as to the outcome of the pre-feasibility studies and beneficiation test work. Still to obtain mining and environmental approvals. Yet to have a memorandum of understanding with the steel mills th December 2010

13 Disclosure Disclaimer RCAN0910 This Research report, accurately expresses the personal view of the Author. DJ Carmichael Pty Limited, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly from client transactions in companies mentioned in this report. Associates DJC is a subsidiary of WHI Australia Pty Ltd ACN (WHIA), which is owned 37.28% by a public company listed on the London Stock Exchange named WH Ireland Group plc (WHIG) and 62.72% by our previous and new shareholders. WHIA receives benefits from the financial services we provide in WHIA s capacity as a shareholder who holds shares in us, along with all of our other shareholders In accordance with Section 949A of the Corporations Act 2001 D J Carmichael Pty Limited advise this contains general financial advice only. In preparing this document D J Carmichael Pty Limited did not take into account the investment objectives, financial situation and particular needs ( financial circumstances ) of any particular person. Accordingly, before acting on any advice contained in this document, you should assess whether the advice is appropriate in light of your own financial circumstances or contact your D J Carmichael Pty Limited adviser. D J Carmichael Pty Limited, its Directors employees and advisers may earn brokerage or commission from any transactions undertaken on your behalf as a result of acting upon this information. D J Carmichael Pty Limited, its directors and employees advise that they may hold securities, may have an interest in and/or earn brokerage and other benefits or advantages, either directly or indirectly, from client transactions. D J Carmichael Pty Limited believe that the advice herein is accurate however no warranty of accuracy or reliability is given in relation to any advice or information contained in this publication and no responsibility for any loss or damage whatsoever arising in any way for any representation, act or omission, whether express or implied (including responsibility to any persons by reason of negligence), is accepted by DJ Carmichael Pty Limited or any officer, agent or employee of D J Carmichael Pty Limited. This message is intended only for the use of the individual or entity to which it is addressed and may contain information that is privileged, confidential and exempt from disclosure under applicable law. If you are not the intended recipient or employee or agent responsible for delivering the message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication and its attachments is strictly prohibited. The Author of this report made contact with Centaurus Metals Limited for assistance with verification of facts, admittance to business sites, access to industry/company information. No inducements have been offered or accepted by the company. The recommendation made in this report is valid for four weeks from the stated date of issue. If in the event another report has been constructed and released on Centaurus Metals Limited, the new recommendation supersedes this and therefore the recommendation in this report will become null and void. Recommendation Definitions BUY 10% or more outperformance HOLD 10% underperformance to 10% over performance SELL 10% or more underperformance Period: During the forthcoming 12 months, at any time during that period and not necessarily just at the end of those 12 months. Stocks included in this report have their expected performance measured relative to the ASX All Ordinaries index. DJ Carmichael Pty Limited s recommendation is made on the basis of absolute performance. Recommendations are adjusted accordingly as and when the index changes. To elect not to receive any further direct marketing communications from us, please reply to this and type 'opt out ' in the subject line. Please allow two weeks for request to be processed No part of this report may be reproduced or distributed in any manner without permission of DJ Carmichael Pty Limited. 6 th December