ANNUAL REPORT 2022 AUSTRALIA Level 2, 1 Ord Street West Perth, WA 6005 PO Box 975, West Perth, WA 6872 T: +61 8 6424 8420 BRAZIL Edifício Century Tower Rua Maria Luiza Santiago, 200 Santa Lúcia, 17ª Andar - Sala 1703 Belo Horizonte - MG - CEP: 30360-740 BRAZIL T: +55 31 3194 7750 ACN 009 468 099 www.centaurus.com.au Highlights ....................................................................................4 Chair’s Report ............................................................................5 Focus For The Year Ahead .....................................................7 Nickel Market & Price .............................................................8 Environmental, Social & Governance ................................9 Strategy & Key Assets In Brazil .......................................11 Jaguar Nickel Sulphide Project .........................................12 Greenfields Exploration Pipeline ......................................23 Jambreiro Iron Ore Project .................................................24 Corporate ..................................................................................25 Tenement List ...........................................................................30 Additional Shareholder Information ................................31 Corporate Governance Statement ....................................32 Financial Report 31 December 2022 ............................. 33 CENTAURUS METALS ANNUAL REPORT 2022 Corporate Directory DIRECTORS Mr D M Murcia AM, B. Juris, LL.B Non-Executive Chair Mr D P Gordon B.Bus, FCA, AGIA, ACG, MAICD Managing Director Mr B R Scarpelli M.Sc, PMP Executive Director Mr M D Hancock B.Bus, CA, F Fin Non-Executive Director Mr C A Banasik B.App.Sc (Physics), M.Sc (Geology), Dip Ed, GAICD Non-Executive Director Dr N Streltsova MSc, PhD(Chem Eng), GAICD Non-Executive Director COMPANY SECRETARY Mr J W Westdorp B.Bus, CPA, Grad Dip App Sc, MAICD Chief Financial Officer / Company Secretary SHARE REGISTRY Advanced Share Registry Limited 110 Stirling Highway Nedlands WA 6009 Telephone: (08) 9389 8033 AUDITORS KPMG Chartered Accountants 235 St Georges Terrace Perth WA 6000 BANKERS Australia National Australia Bank Level 14, 100 St Georges Tce Perth WA 6000 Brazil Banco Inter Avenida Barbacena, 1219 – Santo Agostinho Belo Horizonte - MG – CEP: 30190-924 BRAZIL Telephone: +55 31 2101 7006 STOCK EXCHANGE LISTING Centaurus Metals Limited’s shares are listed on the Australian Securities Exchange and the OTC Ordinary fully paid shares (ASX code: CTM OTC: CTTZF.) PRINCIPAL & REGISTERED OFFICE Australia Level 2, 1 Ord Street West Perth WA 6005 PO Box 975 West Perth WA 6872 Telephone: (08) 6424 8420 Email: office@centaurus.com.au Website: www.centaurus.com.au Brazil Edifício Century Tower Rua Maria Luiza Santiago, 200 Santa Lúcia, 17ª Andar - Sala 1703 Belo Horizonte - MG - CEP: 30360-740 BRAZIL Telephone: +55 31 3194 7750 2 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 3 CENTAURUS METALS ANNUAL REPORT 2022 Contents Highlights ......................................................................................4 Chair’s Report ...............................................................................5 Focus for the Year Ahead ............................................................7 Nickel Market & Price ..................................................................8 Environmental, Social & Governance .......................................9 Strategy & Key Assets in Brazil .............................................. 11 Jaguar Nickel Sulphide Project ................................................12 Greenfields Exploration Pipeline ............................................21 Jambreiro Iron Ore Project ......................................................22 Corporate ....................................................................................23 Mineral Resources & Ore Reserves .......................................24 Tenement List..............................................................................27 Additional Shareholder Information ........................................28 Corporate Governance Statement...........................................29 Financial Report 31 December 2022 ..................................... 30 2 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT CENTAURUS METALS LIMITED ANNUAL REPORT 3 3 CENTAURUS METALS ANNUAL REPORT 2022 CENTAURUS METALS ANNUAL REPORT 2022 Highlights EXPLORATION & DEVELOPMENT → Updated JORC 2012 Mineral Resource Estimate (MRE) delivered in November 2022, confirming the Jaguar Nickel Sulphide Project as one of the world’s premier near-surface nickel sulphide development projects, with the Jaguar Global MRE growing to now contain an estimated: • GLOBAL: 108.0Mt @ 0.87% Ni for 938,500 tonnes of contained nickel. → Measured and Indicated component of the Global MRE increased by over 100% to: • MEASURED & INDICATED: 85.8Mt @ 0.85% Ni for 730,300 tonnes of contained nickel. → High-grade component of the MRE increased to 28.6Mt @ 1.51% Ni for 431,800 tonnes of contained nickel, with 30% of this resource located within 100m of surface. → Key work programs for the Jaguar Definitive Feasibility Study (DFS) were well advanced during the year, with the DFS delivery date scheduled for late Q4 2023. Key work programs during 2022 have included: • Industry‐leading engineering firm Ausenco appointed as Lead Engineer to deliver both the process and non‐process plant infrastructure components of the DFS. • Pricing proposals have been received from mining contractors to support the development of the DFS OPEX, open pit optimisations and mine planning work. Commercial and technical evaluation of the proposals is underway. • Process design for the concentrator circuit of the processing facility has been finalised and major equipment pricing received from suppliers. Commercial and technical evaluation is well advanced. • Process design and the layout of the refinery circuit and non-process plant infrastructure (NPI) has commenced. • Set-up of the pilot plant at ALS Laboratories in Perth for the refinery circuit was completed just prior to year-end, with initial results from the multi-phase pilot testwork program (post year end) confirming high leach extraction of nickel at 98.6%. • Initial design and licencing work has commenced to connect to the 230kV national power grid for the Project’s integrated concentrator and refining circuit power requirements. Figure 1: Jaguar Project Site • Geotechnical drilling for the final design of the roads and bridges from Tucumá and Ourilândia do Norte to site is complete. • Jaguar Nickel Sulphide Project was selected as a Strategic Minerals Project by the Brazilian Federal Government as part of a new program designed to support projects deemed strategic to Brazil. ENVIRONMENT, SOCIAL & GOVERNANCE (ESG) → Meetings and site visits have been held with the Environmental Agency in Para State to progress the environmental licensing program. → Positive adherence across all activities to the Company’s formal environmental, social and governance (ESG) policy framework, which was based on the recommendations and principles of two key ESG authorities, Towards Sustainable Mining (TSM) and Principles of Responsible Investment (PRI). → Continued assessment of project greenhouse gas (GHG) emissions. The Jaguar Project currently represents a carbon sink, removing about 12,000 tonnes of GHG annually from the atmosphere, which is equivalent to removing ~2,570 internal combustion engine vehicles from the roads each year. → Construction training programs launched for local residents, with the intention of training 1,500 people in various trades to enable them to seek work at the Jaguar Project when construction commences. → Plant nursery established on site to facilitate the revegetation of some previously cleared farmland. This will allow new forest corridors to be established around the site to assist with the movement, protection and biodiversity of flora and fauna. → Progressive upgrades to the road between the town of Tucumã and the Jaguar site, making travel for local residents significantly safer and less time consuming, particularly during the annual wet season. CORPORATE → Cash at 31 December 2022 of $34 million. → Former Vale, WMC and BHP executive, Dr Natalia Streltsova, appointed as a Non-Executive Director. → Orimco appointed to provide independent financial advisory services in relation to the debt financing of the Jaguar Project development. 4 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 5 CENTAURUS METALS ANNUAL REPORT 2022 “ I am pleased to say that all of our work programs throughout the year have continued to reinforce the Jaguar Project’s credentials as one of the most significant and robust new nickel sulphide development projects anywhere in the world. Chair’s Report I am pleased to report on what has been another exceptionally busy and productive year for Centaurus Metals. Despite, at-times, a challenging macro-economic global and market environment, the Centaurus team has made outstanding progress towards our ambition of establishing a major new nickel sulphide mining and processing operation at our flagship Jaguar Nickel Sulphide Project, located in the world-class Carajás mining district of north-eastern Brazil. Our focus throughout the year has been on the continued advancement of feasibility studies to support the Project development, as well as on drilling and exploration programs to further expand the Mineral Resource base. I am pleased to say that all of our work programs throughout the year have continued to reinforce the Jaguar Project’s credentials as one of the most significant and robust new nickel sulphide development projects anywhere in the world. Over the past 12 months, we have maintained the focus on our drilling programs which delivered a landmark update to the Jaguar Mineral Resource base in November 2022. This saw the global Mineral Resource Estimate increase to 108.0Mt @ 0.87% Ni for 938,500 tonnes of contained nickel, with the higher confidence Measured & Indicated Resource categories more than doubling to over 730,000 tonnes of contained nickel metal – a very significant de-risking step for the Project. This Resource will form the basis of a maiden Ore Reserve estimate for Jaguar, which will be announced as part of the forthcoming Definitive Feasibility Study (DFS). Work to complete the DFS was also significantly progressed during the course of 2022, with the mine design and scheduling well advanced and pit optimisations and strategic schedules completed. The open pits (based on the previous December 2021 Mineral Resource) now extend over a continuous strike length of 3km along the strike extent of the Jaguar Deposits. Recent drilling has also provided compelling evidence to support a potential future underground mining operation, delivering exceptionally high nickel grades from some of the deepest holes ever drilled within the Jaguar Project area. A major drilling program targeting the “Jaguar Deeps” is set to kick-off in May. Our pilot testwork program is also well advanced, with results to underpin the design of a final process flowsheet for the refinery circuit. Results to date have shown very high levels of metal extraction from the refining of flotation concentrates, with nickel extraction in the leach circuit of over 98%. This metallurgical testwork is a pivotal component of the DFS, providing us with vital data to ensure we maximise the value of the Jaguar Project and deliver a premium, high-value product to market. Unfortunately, bottlenecks at the pilot plant laboratory saw a delay to the start of this testwork program, which has had a flow-on impact on the overall DFS schedule. As a result, we now expect to complete the Jaguar DFS in late Q4 2023, with a Final Investment Decision (FID) targeted for Q3 2024. While these delays are frustrating, they are an increasing feature of the current global resources industry, which is operating at capacity in the face of lingering labour and supply chain shortages. 4 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 5 CENTAURUS METALS ANNUAL REPORT 2022 Fortunately, the delay in the DFS does not detract in any way from the exceptional fundamentals of the Jaguar Project and we are confident that the decision to focus on the quality of the work is the right one for shareholders. We are diligently checking off the remaining elements of the DFS and we are confident the final Study will be delivered by year-end. We also plan to maintain a strong focus on exploration in 2023, in parallel with the completion of the DFS. Development drilling at Jaguar has recently been completed, meaning our drill rigs are now focused exclusively on Resource growth. We are confident that we can upgrade the Jaguar MRE to more than one million tonnes of contained nickel metal firmly cementing the Project’s status as a truly world-scale nickel sulphide deposit. In light of its size and scale, the Jaguar Project has been selected as a Strategic Minerals Project by the Brazilian Federal Government, recognising its strategic importance for Brazil’s growth and providing Centaurus with access to tailor-made assistance to navigate the steps required implement and develop the Jaguar Project in an environmentally sustainable manner. We remain extremely confident in our ability to deliver the Project with class-leading ESG credentials, including very low levels of greenhouse gas emissions. This stems from the relatively high-grade nature of the ore, the very high proportion of Brazilian power generated from renewable sources (currently exceeding 80% of the nation’s total power supply) and our plan to produce a value-added nickel sulphate product on site. This will make the nickel sulphate we produce highly attractive to EV auto-makers who are increasingly focused on where their Class-1 nickel comes from and how it contributes to their overall carbon footprint. Centaurus maintains a strong focus on our Environmental, Social and Governance (ESG) performance and you can find full details of our initiatives in our inaugural Sustainability Report to be released around the time of the Annual Report. During the year, we have further strengthened our corporate governance with the appointment of Dr Natalia Streltsova to the board as an independent non-executive Director. Natalia is a highly credentialled chemical engineer with a wealth of experience in the international resources industry, including extensive experience working with nickel in Brazil. She has made an invaluable contribution to the Centaurus board since her appointment in August, particularly as we have progressed our ongoing metallurgical testwork and pilot plant programs. With our work programs progressing across multiple fronts, Jaguar remains one of the few large-scale nickel sulphide projects currently being prepared for development anywhere in the world. Excitingly, this development is set to coincide with an exceptionally strong supply/ demand forecast for Class 1 nickel as the world transitions to a low carbon economy. As always, I would like to sincerely acknowledge the outstanding efforts of the Centaurus team, ably led by our Managing Director Darren Gordon, for their hard work and dedication over the past 12 months. I would also like to thank you – our shareholders – for your ongoing support. Didier Murcia CHAIR 6 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 7 CENTAURUS METALS ANNUAL REPORT 2022 Focus for the Year Ahead To continue to advance the Jaguar Nickel Sulphide Project towards development Figure 2: Revegetation activity at Jaguar → Undertake all activities safely in an environmentally and socially sustainable manner. → Complete a Definitive Feasibility Study and inaugural Ore Reserve Estimate. → Maintain aggressive drilling program at the Jaguar Nickel Sulphide Project to continue to build the global Resource as well as maximise the existing Resource into Measured and Indicated categories and make new discoveries. → Complete offtake agreement in respect to the supply of nickel sulphate from the Jaguar Project. → Approval of Environmental Impact Assessment (EIA/RIMA) and Mining Lease Application. → Deliver value to Shareholders in respect to the Jambreiro Iron Ore Project. 6 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 7 CENTAURUS METALS ANNUAL REPORT 2022 Nickel Market & Price Nickel has outstanding physical and chemical properties, which make it essential in many thousands of products. Today, its biggest use is in producing metal alloys, with approximately 70% of global nickel production currently used to manufacture stainless steel. However, it is nickel’s vital contribution to the production of lithium-ion (Li-ion) batteries that is expected to deliver exceptional demand growth for the metal over the coming years. Li-ion batteries – used in Electric Vehicles – are a key element of the global transition to ‘green energy’. Concern over climate change, the drive towards energy efficiency and the adoption of carbon dioxide emissions targets by governments are all helping to increase interest in renewable energy technologies involving batteries and energy storage. While nickel is not always in the name, its presence in many battery technologies is helping to reduce greenhouse gas emissions - enabling clean energy solutions to be a central part of our effort to tackle global warming. According to a recent report by the International Energy Agency (IEA), global sales of Electric Vehicles (EVs) increased by around 60% in 2022, surpassing 10 million units for the first time. As a result, one in every seven passenger cars bought globally in 2022 was an EV – compared to just one in 70 in 2017. EV sales increased in every region of the world as production increased, oil prices rose, and targeted policies were introduced aimed at supporting their take-up in the market. The European Union has announced a ban on the sale of new Internal Combustion Engine (ICE) vehicles from 2035 unless they can operate only on carbon-neutral fuels. Most major car manufacturers have now announced plans to aggressively transition away from the production of internal combustion engine vehicles to electric, with key targets including: → Audi: Targeting 30% electrified range by 2025, with ICEs planned to be phased out in 2033. → BMW: Targeting 50% electrification across the BMW and Mini model ranges by 2030. → Ford: US$50B investment to target the delivery of an all-EV line-up in Europe by 2030 and 40% of total sales in the US by 2030. → Hyundai: Aim to sell EVs only by 2040. → Mazda: Targeting 25% of its model range to be EV by 2030. → Mercedes-Benz: Moving to a fully electric line-up by 2030. → Mitsubishi: Goal for hybrid and electric cars to account for 50% of sales by 2030 and 100% of global sales by 2035, mostly comprised of full battery-powered vehicles. → Nissan: 100% of all new vehicle offerings electrified in the key markets of Japan, China, the US and Europe by the early 2030s. → Porsche: Aims to be carbon neutral over its entire value chain by 2030, with 80% of its production output to be more than 80% pure electric. → Toyota: Incoming President Koji Sato has signaled he will make pivoting to electrics a priority, with plans to produce about 200,000 EVs in the US annually from 2026 onward. Toyota-owned Lexus will become an EV-only brand by 2035. → Volkswagen: The last purely internal combustion-powered platform will be developed in 2026, after which VW will be all in on EV development. → Volvo: Half of all sales will come from EVs by 2025 before the entire model line-up goes all-electric by 2030. British market research firm LMC Automotive forecasts global EV sales of 36.71 million vehicles in 2030, roughly quintupling from 2022 and representing 35% of the new-car market. Until recently, nickel sulphate represented a relatively niche product, with production of the material amounting to less than 50ktpa of contained nickel up until 2010, or approximately 3% of the total nickel market. Since then, demand for class 1 nickel has driven a fundamental change in the market for nickel sulphate given its key role in the chemistry of cathode active materials for use in batteries. Lithium-ion batteries utilising nickel-rich cathodes require high purity nickel, typically in the form of nickel sulphate. One of the primary issues facing the nickel industry is the need to develop new high-grade sulphide nickel deposits, which are the most economic and cleanest way to deliver class 1 nickel. Centaurus’s goal is to have the Jaguar Nickel Sulphide Project in production by 2027, which is expected to coincide with the surging demand for nickel from EV production across the globe. Figure 3: Total Nickel Demand by Sector and Scenario, 2020-2040. Source International Energy Agency 8 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 9 CENTAURUS METALS ANNUAL REPORT 2022 Environmental, Social & Governance Figure 4: Breast Cancer Awareness Day with Centaurus Niquel team in Tucumã The Company adopted its formal environmental, social and governance (ESG) policy framework late in 2021. The framework is based on the recommendations and principles of two key ESG authorities: → Towards Sustainable Mining (TSM) Principles; and → Principles of Responsible Investment (PRI). TSM is the Mining Association of Canada’s commitment to responsible mining. It is a set of tools and indicators to drive performance and ensure that key mining risks at any operation are managed responsibly. The PRI defines responsible investment as a strategy and practice to incorporate environmental, social and governance factors in investment decisions and active ownership. The PRI is a global organisation that encourages and supports the uptake of responsible investment practices in the investment industry. IBRAM (the Brazilian Mining Institute) is a national mining industry group representing most of the major mining companies operating in Brazil. IBRAM adopted TSM as the reference for ESG matters in 2019. Centaurus’ ESG program combines the TSM and PRI principles with actions to be implemented during exploration and operations. The following initiatives have already been undertaken by the Company to date at the Jaguar Project region: → All of Centaurus employees working on the Jaguar Project live in the local town with their families, strengthening the relationship between the Company and the local community; → more than 90% of the current project workforce, including employees and outsourced labour, are from the south-eastern region of the State of Pará, where the Jaguar Project is located; → more than 80% of the Company’s investment expenditure relating to exploration and development work at the Jaguar Project to date has been awarded to the local community through drilling contracts, engagement of consultants and services and purchase of equipment and supplies; and → during the collection of social data, more than 95% of the local community interviewed was in favour of the project. GHG EMISSIONS Since January 2022, the Company has been monitoring scope 2 greenhouse gas (GHG) emissions and sinks associated with the Jaguar Project. The main carbon sink is the standing forest. The main source of carbon from the Project at present is the combustion of diesel to run drill rigs. The Jaguar Project currently represents a carbon sink, removing about 12,000 tonnes of GHG annually from the atmosphere, which is equivalent to removing circa 2,570 internal combustion engine vehicles (4.6 tonne GHG per vehicle per year) from the roads each year. The Jaguar Project is expected to have GHG emissions less than 97% of global nickel production once in operation. Work done during the DFS on the pressure oxidation circuit indicates that, as a result of the nickel sulphides at Jaguar being able to be oxidised at lower temperatures and pressure than that assumed in the Scoping Study, the amount of oxygen and limestone for residue neutralisation can be reduced, with the benefit being lowering operating costs and lowering GHG emissions. 8 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 9 CENTAURUS METALS ANNUAL REPORT 2022 PLANT NURSERY & REVEGETATION PROGRAM CONSTRUCTION TRAINING PROGRAMS The Company has established a plant nursery on site to facilitate the revegetation of some previously cleared farmland. The revegetation program commenced in November 2022 (at the start of the wet season) and will allow new forest corridors to be established around the site to assist with the movement, protection and biodiversity of flora and fauna. Figure 5: Plant Nursery at Jaguar Project Site WATER WELLS The Company has drilled five water bores to test the presence and flow of groundwater and to assess whether this water can be used for drinking water purposes during exploration and construction. Bore hole pumping tests on the bores have indicated that low flow rates are to be expected, which is very positive for the overall project development. Hydrogeological modelling of pump test results commenced in December to quantify the flows and aquifer characteristics. Groundwater quality is good and can be discharged to surface water bodies without prior treatment. Groundwater is not required for process water. The Company intends to train up to 1,500 people in various trades that will allow them to be able to seek employment once construction of the Jaguar Project commences. The training programs are intended to be conducted in conjunction with local industry training college SENAI, with general skills and OH&S training programs to commence in H2 2023 followed by specific trade training in H1 2024. Interest by local residents was confirmed by the number of applications received for the various courses, with over 1,900 registrations to date. The courses are expected to be 3 months long on average and residents of the local community will be prioritised in the selection process. COMMUNITY CONSULTATION In December 2022, detailed information on the Jaguar Project was presented to the mayors and councillors of the three municipalities in the Project’s locality. The presentations were designed to prepare the local authorities for the official public hearings which will be held as part of the environmental approvals process. The same presentations were also made to the broader community in all three municipalities in January 2023. COMMUNITY SUPPORT – BRIDGE CONSTRUCTION In September, an old wooden bridge that connects the village of Ladeira Vermelha to the town of Tucumã (closest urban centre) collapsed. The São Félix do Xingu administration requested for the Company’s support to build a new bridge. The Company supported the work with a donation and the bridge was rebuilt by the local administration, as shown in Figure 6 below. Figure 6: Bridge Restoration Ladeira Vermelha Township 1 Refer to ASX Release dated 10 November 2022 10 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 11 CENTAURUS METALS ANNUAL REPORT 2022 Strategy & Key Assets in Brazil The Company’s key focus throughout the 2022 calendar year was on the exploration and development of the advanced Jaguar Nickel Sulphide Project, located in the world-class Carajás Mineral Province in Brazil, which was acquired from global mining giant, Vale S.A. (“Vale”) in April 2020. 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 standards. The Company plans to develop a long life nickel sulphate business which will be implemented via a process flowsheet that starts with a conventional nickel flotation plant and is followed by a refining circuit which at its core is a pressure oxidation circuit. Drilling and exploration programs continued throughout the reporting period targeting Resource in-fill, Resource extensions and new discoveries. The 2022 exploration program underpinned the delivery of an updated MRE for the Jaguar Project in November 2022 totalling 108.0Mt @ 0.87% Ni for 938,500 tonnes of contained nickel1. This confirms Jaguar’s status as one of the largest nickel sulphide resources held by an ASX-listed company and the largest outside of the major mining companies. The Jaguar Definitive Feasibility Study (DFS) was significantly advanced over the course of the year with the timeline for completion of the DFS being driven by the completion of pilot plant testwork on the refinery circuit that is required to produce a high quality nickel sulphate product. The pilot plant test program is scheduled for completion in late April 2023. The completion of the Definitive Feasibility Study (DFS) is targeted for late Q4 2023, with a Final Investment Decision (FID) scheduled for Q3 2024. In addition to Jaguar, the Company also holds the advanced Jambreiro Iron Ore Project. Environmental licensing for the Jambreiro Project is currently being refreshed and the Company continues to pursue options to deliver value from this asset. 10 ANNUAL REPORT CENTAURUS METALS LIMITED 1 Refer to ASX Release dated 10 November 2022 CENTAURUS METALS LIMITED ANNUAL REPORT 11 CENTAURUS METALS ANNUAL REPORT 2022 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. The Jaguar Project is ideally located close to existing infrastructure, just 35km north of the regional centre of Tucumã (population +35,000) and only 15km north-west of Vale’s large scale Onça Puma Ferronickel operation, which is powered by 230kV power from the national grid. The Company plans to connect to this 230kV power grid as part of the Jaguar Project development. JAGUAR SELECTED AS A STRATEGIC MINERALS PROJECT The Jaguar Nickel Sulphide Project has been selected as a Strategic Minerals Project by the Brazilian Federal Government. The Strategic Minerals Policy is part of the Investment Partnership Program – PPI (Programa de Parcerias de Investimento), a relatively new Brazil governmental initiative designed to support companies while developing their projects across the country. The PPI program supports projects that are identified as strategic mineral projects for Brazil. This government initiative is an important step in encouraging mining projects that are significant for Brazil’s growth and to provide project proponents with tailor-made assistance to navigate the steps required towards implementation and development of their ventures in an environmentally sustainable manner. UPDATED JORC MINERAL RESOURCE ESTIMATE Centaurus announced a further substantial increase in the MRE for the Jaguar Project in November 2022, confirming Jaguar’s position as a Tier-1 global nickel sulphide development project with class-leading greenhouse gas (GHG) emission credentials. The updated MRE, comprising 108.0Mt @ 0.87% Ni for 938,500 tonnes of contained nickel (Table 1), confirms Jaguar as one of the largest nickel sulphide resources held by an ASX-listed company and the largest outside of the major mining companies. Importantly, the success of the in-fill resource development rogram completed over the last 12 months has resulted in a 100% increase in the Measured & Indicated component of the Resource According to the Ministry of Mines and Energy, the Policy confirms strategic priority to be given to projects selected by the Inter-ministerial Committee of Analysis of Strategic Minerals Projects – CTAPME, providing proponents with specialised governmental support for the development of their projects. CTAPME has members from several governmental agencies, including the Ministry of Mines and Energy, the Science, Technology and Innovation Ministry and the Special Secretariat of Strategic Affairs of the Presidency. The goal is to provide both government and proponents a more efficient and effective pathway to the development of the country’s strategic projects. Figure 7: The Jaguar JORC MRE Growth Classification* Measured Indicated Measured & Indicated Inferred Total Mt 14.0 71.7 85.8 22.2 108.0 Grade Ni % 1.06 0.81 0.85 0.94 0.87 Cu % 0.07 0.06 0.06 0.09 0.07 Co ppm 391 238 263 291 269 Zn% 0.48 0.31 0.34 0.24 0.32 Contained Metal Co Cu Ni 149,400 580,900 730,300 208,200 938,500 9,800 42,300 52,000 19,700 71,700 5,500 17,000 Zn 67,300 223,300 22,500 290,700 6,500 53,700 29,000 344,400 * Within pit limits cut-off grade 0.3% Ni; below pit limits cut-off grade 0.7% Ni; Totals are rounded to reflect acceptable precision, subtotals may not reflect global totals. All oxide material is considered as waste and therefore not reported as Resources. Table 1: The Jaguar JORC MRE November 2022 12 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 13 CENTAURUS METALS ANNUAL REPORT 2022 to 85.8Mt @ 0.85% Ni for 730,300 tonnes of contained nickel, representing more than 75% of the Global MRE. The Measured and Indicated component of the MRE is set to underpin the Company’s maiden Ore Reserve Estimate and Definitive Feasibility Study (DFS), due for completion in mid-2023. The global MRE at Jaguar has increased by 28% since the previous Resource Estimate that was announced in December 2021 and 80% since the Company’s maiden Resource was announced in June 2020 (Figure 7). Continued successful step-out and extensional drilling has contributed to delivering an exceptional 421,000 tonnes of additional contained nickel metal since the Company’s maiden Resource in June 2020 (Figure 7), reflecting an impressive track record of defining new resources at the rate of ~165,000 tonnes of contained nickel per annum through a sustained and focused drilling program at Jaguar. Underpinned by a 0.87% Ni Resource head-grade, Jaguar is expected to be one of the highest grade open-pit nickel sulphide operations globally. The successful 2022 in-fill drilling program at the Jaguar and Onça Deposits means that more than 75% of the Global MRE is now classified in the higher-confidence Measured and Indicated categories. Measured and Indicated Resources will be available for conversion to Ore Reserves as part of the DFS due for completion in 2023. Figure 8: Jaguar Deposit – Nickel grade-tonnage curve. (Nickel cut-off grade is variable for in-pit resources but not less than 0.7% Ni for below-pit Resources). Ni% Cut-off Grade Tonnes Grade Metal Tonnes In-pit Below pit 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 1.1 1.2 1.3 0.7 0.7 0.7 0.7 0.7 0.7 0.8 0.9 1.0 1.1 1.2 1.3 Mt 111.2 108.0 98.5 85.1 72.0 61.1 47.2 36.6 28.6 22.8 18.4 15.2 Ni % Cu % Co ppm Zn % 0.85 0.87 0.92 0.99 1.07 1.15 1.27 1.39 1.51 1.63 1.74 1.85 0.06 0.07 0.07 0.08 0.08 0.09 0.10 0.11 0.11 0.12 0.13 0.13 263 269 282 304 327 348 377 406 435 460 486 507 0.31 0.32 0.34 0.36 0.37 0.38 0.40 0.43 0.45 0.46 0.48 0.49 Ni 946,800 938,500 904,600 843,800 772,300 701,400 597,500 507,900 431,800 371,400 321,100 280,900 Cu 72,100 71,700 69,400 64,800 62,300 54,200 45,900 38,800 32,500 27,100 23,100 19,800 Co Zn 29,300 29,000 27,800 25,800 24,800 21,300 17,800 14,900 12,400 10,500 9,000 7,700 347,900 344,400 330,400 302,400 276,400 231,600 191,100 156,400 129,100 105,700 88,800 74,200 • Totals are rounded to reflect acceptable precision, subtotals may not reflect global totals. Table 2: The Jaguar JORC MRE at various Ni% Cut-Off Grades – November 2022 12 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT CENTAURUS METALS LIMITED ANNUAL REPORT 13 13 CENTAURUS METALS ANNUAL REPORT 2022 In-fill drilling targeting the first three years of operation at Jaguar Central and Onça Preta has returned a Measured Resource estimate of 14.0Mt @ 1.06% Ni for 149,400 tonnes of contained nickel metal. The high-grade and higher confidence resources will be an important part of the early mine plan during the project pay-back period. The Jaguar mineralisation remains open down-dip at all deposits and locally along strike, with outstanding potential to continue strong resource growth driven by step-out and extensional drilling targeting DHEM conductor plates and greenfields drilling of the extensive regional exploration pipeline. Importantly, within the Jaguar Global MRE there is a significant high-grade component of 28.6Mt @ 1.51% Ni for 431,800 tonnes of contained nickel metal, which has been estimated using a 1.0% nickel cut-off grade across the total Mineral Resource (see Table 2). The grade-tonnage curve for the project is shown in Figure 8. Within the High-Grade MRE, around 30% of the contained nickel sits less than 100m from surface. This demonstrates that near-surface high-grade resources are available to assist in optimising the project in the early years of operations to support rapid capital payback. The resource category development has also been very successful in correlating well with the interpretation of the previous Inferred Resource. In addition to providing increasing control on the s also helped develop an important structural model for the Project, which will support resource extension drilling and potential new discoveries. The Jaguar MRE covers the six Jaguar deposits, two Onça deposits and the Tigre Deposit. The Project also hosts an outstanding pipeline of greenfields targets, and the Company expects to make more discoveries to continue to contribute to the organic growth of the Jaguar Resource. The Jaguar South, Jaguar Central and Onça Preta Deposits contain the majority of the MRE and are expected to underpin the bulk of the Jaguar DFS Reserve. Figure 9: 3D view of the Jaguar and Onça Deposits showing Resource Categories. Figure 10: 3D view of the Jaguar and Onça Deposits showing nickel grade of ore blocks. 14 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 15 CENTAURUS METALS ANNUAL REPORT 2022 RESOURCE IN-FILL, STEP-OUT AND EXTENSIONAL DRILLING PROGRAM Resource in-fill, extensional and step-out drilling continued at the Jaguar Project throughout the reporting period, with drilling completed up to July 2022 feeding into the MRE update outlined above, and subsequent drilling set to feed into the next MRE Update. As of the end of February 2023, there were 7 rigs on site (6 diamond and 1 RC) drilling double shift with drilling focused exclusively on step-out, extensional and greenfields drilling targeting resource growth. A new program of drilling targeting the exciting Jaguar Deeps is set to commence in May 2023. TARGETS FOR ONGOING MINERAL RESOURCE GROWTH DEFINITIVE FEASIBILITY STUDY (DFS), PROJECT DEVELOPMENT AND INFRASTRUCTURE INITIATIVES Significant activity was undertaken during the year in respect to the DFS, project development initiatives and future infrastructure access. The pilot plant test work for the refinery circuit commenced in January 2023 (at ALS Metallurgy in Balcatta, Western Australia) when the pilot facilities were made available to Centaurus following extensions of piloting work programs of other companies in the piloting queue. The scope of the Refinery piloting is split into four phases of work as follows: → Phase 1: Concentrate feed preparation, pressure leaching, and copper solvent extraction. The November 2022 JORC MRE update for the Jaguar Nickel Project is from the six Jaguar deposits, two Onça deposits and the Tigre deposit (refer to detailed MRE Statement on Page 24). Importantly, significant potential remains to expand the Resources from within the current deposits primarily through down-dip drilling, but also though extensional drilling along strike at some of the deposits. → Phase 2: Zinc and calcium extraction via solvent extraction. → Phase 3: Cobalt/magnesium extraction and nickel purification via solvent extraction circuit. → Phase 4: Nickel sulphate crystallisation plus zinc and cobalt hydroxide production. The nature of the hydrothermal mineralisation at the Jaguar Project points to a deep plumbing system which remains to be tested beyond current drill depths. The average drill-hole depth to date is only 230m, with less than 5% of diamond holes (30 out of a total of 601) completed to end-of-hole depths of more than 500m, with all deep holes intersecting stringer to semi-massive nickel mineralisation. DHEM surveys continue to indicate that the high-grade mineralisation is continuous and open at depth across all deposits. There is also significant potential to extend some of the key deposits along strike in some directions. Drilling for 2023 will focus on both project development (including in-fill, geotechnical and metallurgical drilling) as well as resource growth on multiple target areas. Subsequent to the end of the reporting period, the Company announced strong results from step-out and deeper drilling at the Jaguar Project, confirming the potential for further significant Resource growth towards one million tonnes of contained nickel metal and beyond (see ASX Announcement dated 6 February 2023). With the delayed start of the pilot, the delivery of the DFS will now occur in late Q4 2023 with FID targeted for Q3 2024, after front-end engineering design (FEED) work is sufficiently advanced to place long-lead orders and the second stage of the environmental approval process (Installation Licence) has been completed. The environmental approval process is progressing without issue. Several meetings, including an initial site visit, have been held with the Environmental Agency in Para State (SEMAS) to keep them informed on project development activities. The Company is targeting first production in 2027, subject to confirmation of delivery timelines for long-lead items once the DFS is finalised. Figure 10: 3D view of the Jaguar and Onça Deposits showing nickel grade of ore blocks. 14 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 15 CENTAURUS METALS ANNUAL REPORT 2022 APPOINTMENT OF AUSENCO AS LEAD ENGINEER Centaurus appointed global engineering group Ausenco as Lead Engineer for the completion and delivery of the Jaguar Project Definitive Feasibility Study. Ausenco will provide the majority of study services through its Perth office, with technical and engineering support from its Belo Horizonte office, to ensure that engineering designs conform to Brazilian standards and to ensure that capital and operating costs reflect local supply and installation costs. Ausenco’s key global hydrometallurgical subject matter experts are based in the Perth office. MINING Following the completion of open pit optimisations, designs and strategic schedules during the reporting period (based on the December 2021 MRE), the open pits now extend over a continuous strike length of 3km along the strike extent of the Jaguar Deposits. The separate pits identified in the Scoping Study have coalesced into a single pit (Figure 11) up to 1km wide and with depths that extend to over 300m. The Onça pits remain as two separate pits with over 1.5km strike length, with Onça Preta now up to 245m deep. The overall project strip ratio remains low at approximately 7.5 to 1. New pit optimisation work commenced in March 2023 based on new costs and the MRE delivered in November 2022. This optimisation work will cornerstone the mine design and schedule for the DFS. Pricing proposals for mining activities at Jaguar have been received from five earthmoving contractors and two explosives suppliers to support the open pit planning work for the DFS. These proposals are under commercial and technical evaluation to select pricing for use in open pit planning for the DFS, utilising the November 2022 MRE orebody model. Deposit Jaguar South Jaguar Central Jaguar North Jaguar Central North Jaguar North-East Jaguar West Onça Preta Onça Rosa Tigre Total Mt 34.6 12.5 3.2 14.2 16.8 8.7 14.2 1.8 2.0 108.0 %Ni 0.92 0.81 1.15 0.62 0.75 0.72 1.23 0.98 0.77 0.87 Table 3: Jaguar Nickel Project Mineralogy Origins Figure 11: Project Layout at Jaguar MINERALOGY Centaurus has undertaken comprehensive testing and analysis of the mineralogy of the Jaguar Nickel Project as part of which 3km of core, drilled by the Company, was selected for mineralogical testing. The core was selected from geologically important areas across the entirety of the Project’s Resource base, including Jaguar South, Jaguar Central, Jaguar West, Jaguar Central North, Jaguar North, Jaguar North-East, Onça Preta and Onça Rosa. A summary of the location of the samples taken for the mineralogy work is set out in Table 3 below. The mineralogy work has provided significant understanding of the ore zones at Jaguar, including: → the distribution of ore hardness across ore zones; → the relative proportions of nickel sulphides (millerite, pentlandite or violarite – see Figure 13); Ni t % Ni t Samples Metres Analysed 316,500 100,400 36,600 88,100 126,200 63,100 173,900 18,600 15,100 33.7 10.7 3.9 9.4 13.4 6.7 18.5 2.0 1.6 91 54 15 13 19 23 23 9 - 1,091 837 180 149 244 205 190 69 - 938,500 100.0 247 2,965 16 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 17 CENTAURUS METALS ANNUAL REPORT 2022 Global Project Average Sulphides Figure 12: Jaguar Ore Sample – Fresh sulphides within 3 meters of surface Figure 13: Average Sulphide Mineralogy of the Jaguar Nickel Project’s Ore Zones → the proportions of recoverable nickel sulphides from the ore zones; → the average mineral grain size and associations of the target minerals; → important geometallurgical relationships (flotation metal and mass recovery expectations); and → for Jaguar ore zones, nickel sulphide recovery is independent of nickel head grade. From this work the Company has developed a detailed understanding of the ore types at the Jaguar Project, with how to best process them and the resultant concentrate quality produced. Of particular importance for the concentrator circuit is the determination of sulphide nickel (which is recoverable by flotation). Figure 14 illustrates the sulphide nickel to total nickel relationship for the Jaguar and Onça deposits. There is a consistent background of non-sulphide nickel across the different deposits and, as such, the higher the total nickel grade the lower proportion of non-sulphide nickel losses and the higher nickel flotation recovery that will be achieved. FLOTATION TESTWORK Extensive flotation testwork has been completed on the Jaguar nickel sulphide ore, with over 800kg of high-quality concentrate produced for feed to the Jaguar pilot plant. Variability composites were also prepared and tested. The flotation work has provided an extensive geometallurgical understanding for optimisation of the mining schedule. The testwork and geometallurgical analysis of the data has defined the following key parameters; → concentrate mass recovery; → nickel sulphide recovery; → copper recovery; → sulphur recovery; → zinc recovery; → cobalt recovery; and → ore hardness parameters. 16 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 17 Figure 14: Average Sulphide Mineralogy of the Jaguar Nickel Project’s Ore Zones CENTAURUS METALS ANNUAL REPORT 2022 From the flotation testwork, Centaurus estimates that it will be able to recover approximately 94% of the sulphide nickel processed to a concentrate (which is approximately 78% of the total nickel at the average head grade in the MRE). Phase 1 of the pilot plant performed well and generated extensive chemistry and engineering data for the completion of the process design of the refinery, as planned. Of note were the following observations and results: The 800kg of bulk concentrate used as feed for piloting of the refinery had the following product specification: → the established flowsheet was able to produce high extractions continuously; Ni (%) 11.2 Cl (%) <0.01 Cu (%) 0.72 As (%) <0.01 Ca (%) 0.31 F (%) <0.01 MgO (%) Fe/Mgo (%) Pb (%) 2.56 11.9 0.05 Zn (%) 3.07 Fe (%) 30.3 S (%) 36.7 Al (%) 0.44 K (%) 0.13 P (%) 0.42 Table 4: Pilot Bulk Concentrate Sample Analysis PILOT PLANT Centaurus’ piloting program for the Jaguar Project has been developed to provide detailed chemistry and process engineering data for the DFS and FEED requirements, as well as to ensure a high-quality nickel product is achieved for marketing and offtake discussions. The pilot program will also confirm the by-products that can be produced from the Jaguar process flowsheet so that all viable revenue streams from Jaguar can be considered in the project economics of the DFS. The pilot plant testwork commenced in January 2023 (at ALS Metallurgy) when the pilot facilities were made available to the Company following extensions of piloting work programs of other companies in the piloting queue. The scope of the refinery piloting is split into four phases of work as follows: → phase 1: Concentrate feed preparation, pressure leaching, and copper solvent extraction. → phase 2: Zinc and calcium extraction via solvent extraction. → phase 3: Cobalt/magnesium extraction and nickel purification via solvent extraction circuits. → phase 4: Nickel sulphate crystallisation plus zinc and cobalt hydroxide production. Phases 1 – 3 have been completed with Phase 4 underway (due for completion by the end of April 2023). Phase 1 Phase 1 treated the flotation concentrate, the specification of which is outlined above in Table 4. The flowsheet included oxidative pressure leaching (POX) in an autoclave with cooling by flash recycling, primary neutralisation, copper solvent extraction and secondary neutralisation. → the extractions of nickel, copper, zinc, and cobalt sulphides were better than anticipated at 98.6%, 96.6%, 95.6% and 60.8% respectively; → only 45% of the sulphides need to be oxidised to achieve the metal extractions which will translate into reduced oxygen consumption and acid generation and savings in neutralisation costs; → a 3.5-hour retention time was achieved which was better than the 4-hour leach previously indicated from batch testwork; and → the thickening and filtration design data provided better than expected settling/filtration rates and solute recovery. Further bench scale testwork has been completed by ALS on the pilot feed concentrate to positively verify the scale up relationship between the bench scale tests and the results achieved in continuous piloting. This provides the Company with confidence in using small-scale batch testing for concentrate variability. Phase 2 & 3 Phase 2 & 3 of the pilot work defines the solvent extraction requirements of the flowsheet. Phase 2 was designed to extract zinc (for a by-product revenue stream) and soluble calcium from the Phase 1 leach solution with minimal nickel loss, whilst Phase 3 was designed to initially extract cobalt (again for a by-product revenue stream) and magnesium followed by the purification of the nickel solution to produce nickel sulphate. Figure 15: Jaguar Pilot Test Facility 18 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 19 CENTAURUS METALS ANNUAL REPORT 2022 From the Phase 2 solvent extraction work, three product/waste streams are produced: INFRASTRUCTURE → a raffinate primarily containing nickel, cobalt, magnesium and manganese; → a zinc strip solution; and → a calcium strip solution for waste deposition. The piloting of zinc and calcium solvent extraction has been completed using D2EPHA extractant and a solvent extraction circuit configuration that was successful in extracting over 99% of the zinc and calcium whilst losing less than 0.8% of the nickel (Table 5). Solution Ca (mg/L) Co (mg/L) Mg (mg/L) Mn (mg/L) Ni (mg/L) Zn (mg/L) Product to Phase 3 Future Testing Zinc Product Solution 7 772 2,940 54 37,670 3 382 <1 0.1 0.6 0.3 43,290 Table 5: Phase 2 Product Average Solution Concentrations While the product testing has not been fully completed yet, the test work shows that a high purity zinc hydroxide product can be generated providing an additional revenue stream not considered in prior economic assessments of the project. The results from Phase 2 confirmed the initial laboratory scale batch test work results. Phase 3 was recently completed in March 2023. Phase 3 was successful in extracting cobalt and magnesium from the Phase 2 raffinate to allow production of a cobalt hydroxide product as well as the purification of the nickel solution to produce nickel sulphate. Phase 4 is underway and due for completion by the end of April 2023. The successful completion of the pilot testwork will deliver all necessary data for the completion of the important refinery process design for the DFS as well as producing battery grade nickel product for marketing and offtake discussions. PROCESS PLANT ENGINEERING The concentrator section of the processing facility, consisting of crushing, grinding and flotation and thickening circuits, has been finalised and capital equipment packages progressively issued for pricing. Pricing for the major equipment has been received from suppliers, with the commercial and technical evaluation process well advanced. Layout of the refinery and non-process plant infrastructure commenced towards the end of the reporting period and is expected to be finalised in H1 2023. Road Upgrades Early works to facilitate the construction of the project will include the upgrade of up to 60km of gravel roads, drainage culverts and two bridges between the townships of Ourilândia do Norte and Tucumã and site. Geotechnical drilling for the final design of the roads and bridges from Tucumá and Ourilândia do Norte to site has been completed and laboratory analysis of samples for foundation design and construction materials was nearing completion at the end of the reporting period. Power Supply The generation of power for the national power grid in north-eastern Brazil consists of hydro, solar, wind and thermal power generation facilities supplying the national network through a fully interconnected distribution system. An assessment of power supply options for site during the reporting period determined that the preferred solution to ensure long term supply with better upgrade potential (should project demand increase in the future) is to access the 230kV national distribution system. Initial design and licencing work commenced to connect to the 230kV national grid, including the assessment of the preferred route and interconnection options. Initial meetings with the Ministry of Mines & Energy were held in January 2023 to formally discuss the Project and its power requirements and to commence electrical engineering and permitting processes. Tailings Storage Facility Designs Two tailings storage facilities will be built on site to contain processing tailings because of differing geochemical characteristics and risk classification. The flotation tailings, comprising approximately 90% of the process tailings stream, will be stored in an Integrated Waste Landform (IWL) style facility. Residue from the pressure oxidation circuit, which accounts for approximately 10% of the process waste stream and which will contain elevated levels of some metals and sulphates, will be stored in a separate POX residue facility. Due to limited suitable construction material (mostly suitable clays) at Jaguar, the IWL will be constructed with a partial HDPE lining (walls only) to limit potential for seepage. The POX residue will be dewatered using a filter press to produce a filter cake product with lower moisture content before being stacked inside a fully HDPE plastic lined facility to ensure no loss of potential leachates from this facility. The POX residue facility will comprise four cells, with cells to be progressively built over the life of the mine as production dictates. 18 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 19 CENTAURUS METALS ANNUAL REPORT 2022 Figure 16: Jaguar Project Core Shed Figure 17: Canaã Camp & Core Layout Facility New Site Core Shed The Company completed the construction of a new site core shed, (Figure 16) which has the capacity to store close to 300,000 metres of core. Centaurus commenced the process of setting up of the shelving system at the new shed and moving the core from the existing shed in Tucumá to site. On Site Accommodation Following the purchase of the possession rights for the third land parcel in 2021, the Company is now using the farmhouse that came as part of the acquisition as a base for new on-site accommodation. Upgrade work of this site was completed in July 2022. This work has increased the on-site housing capacity at Jaguar (across two sites) to over 160 people. Sterilisation Drilling of Major Infrastructure Areas More than 6,000m of RC sterilisation drilling has been completed covering all areas at the project where major infrastructure is proposed to be located. Sterilisation drilling first tested priority exploration targets over planned infrastructure as well as pattern drilling. Importantly, no economic mineralisation has been intersected in the sterilisation drilling and the Company is satisfied that that the major infrastructure sites have been sterilised. Key Appointments – Project Execution Team The Company has made several key personnel appointments to support the delivery of the DFS and future FEED work. The appointments bring a wealth of additional experience in the resource sector and significantly add to the existing process engineering, metallurgy and hydrometallurgical experience within the group. Key appointments include Mick Ryan as Project Manager, Sarah Mitchell as Consultant Metallurgist, Barun Dutta as Engineering Manager, Glenn Firth as Environmental and Compliance Specialist, and Richard Kelly as Project Engineer. 20 ANNUAL REPORT CENTAURUS METALS LIMITED OFF-TAKE DISCUSSIONS Off-take discussions are continuing in relation to the products to be produced from Jaguar. Vale has the right to product at arm’s length market-based pricing under the original acquisition agreement for the Jaguar Project. Centaurus retains discretion over what nickel products will be produced at Jaguar. The introduction of the Inflation Reduction Act by the US Government has highlighted the strategic importance of energy metals like nickel and, in particular, those that can be sourced in geopolitically stable jurisdictions with a low-emission footprint. Brazil fits these criteria well as it is South America’s largest pro-mining jurisdiction, the 8th largest global economy and currently more than 80% of the country’s grid power is delivered from renewable sources. It is anticipated that the Jaguar Project will be able to secure 100% renewably sourced power by the time it is in production. With its very large metal endowment, the Jaguar Project is extremely well placed to capitalise on the fast-growing EV and battery metals market. PROJECT FINANCE Centaurus has appointed Orimco Pty Ltd to provide independent financial advisory services in relation to the debt financing of the Jaguar Project. Orimco is a leading advisory firm providing services to resource companies and wholesale investors focused on the global mining industry. The Orimco team has extensive experience arranging and managing debt and hedging transactions for both resource companies and financiers. Orimco has provided advisory services to resource companies across a broad range of projects, commodities (including recent nickel experience), and jurisdictions. The team is led by highly experienced mining executives Nick Harch, Brett Gossage and John Fitzgerald. The appointment of Orimco will ensure that the outcomes and deliverables of the ongoing DFS meet the requirements of debt financiers and support a competitive financing process. Greenfields Exploration Pipeline The Jaguar Project sits at the intersection of two of the most important mineralising structures in the Carajás Mineral Province, the Canãa and McCandless Faults. At Jaguar, the close association of semi-massive and massive sulphides with magnetite means that, when targeting new mineralisation, coincident geochemical, electromagnetic and magnetic anomalies are the highest priority targets. This is evidenced in the Ground Magnetics surveys in Figure 18 below. Multiple prospects and targets which are located along the main mineralisation structures and characterised by ground magnetic and airborne and/or ground electromagnetic (EM) anomalies coincident with significant soil geochemical anomalies remain to be drill tested. During the year, the Company commenced greenfields exploration on two recently granted Exploration Licenses. Both projects are located within 30km of the proposed Jaguar plant site and if a nickel sulphide discovery was made could contribute to the Jaguar project as a simple satellite operation. Both tenements are 100%-owned by the Company. SANTA INÊS PROJECT Located 15km2 north-west of the Jaguar Project. The 18 km2 exploration lease is positioned on a strand of the regionally significant Canaã Fault which is the same structure that is understood to have been critical in the mineralisation processes of the Jaguar Deposit. Mapping has identified a mafic intrusion on the project. Rock-chip and soil geochem assays are expected in the coming months. TERRA ROXA PROJECT The 29km2 exploration lease is located 30km south-west of the Jaguar Project. The project is located on the McCandless Fault which traverses the Jaguar Project through the Puma Layered Mafic-Ultramafic Complex and is understood to be the source of nickel for the hydrothermal mineralisation seen at Jaguar. Terra Roxa is located immediately south of Vale’s Mundial nickel-laterite deposit which is the laterite cap of another mafic-ultramafic intrusion. The Company has completed landowner access agreements and started early-stage exploration including mapping, rock-chip and soil sampling on the 100%‐owned projects. Geophysical surveys and first-pass RC-drilling will be planned once exploration targets have been determined. Drilling of the greenfields exploration pipeline will be undertaken systematically over the next 18 months using the RC rig, and diamond rigs will be dedicated to projects once a discovery is made. CURIONÓPOLIS PROJECT The Company’s 100%‐owned Curionópolis Project is a group of four recently granted exploration leases covering 51km2 located 15km east of Oz Minerals Antas Norte Cu-Au operation in the Eastern Carajás. The tenements cover more than 15km of strike of the highly prospective Itacaiúnas Supergroup (which hosts all IOCG deposits within the Carajás Mineral Province) coincident with a strong continuous aeromagnetic anomaly. The Company has started landowner access agreements and once all agreements are complete will start early-stage exploration including mapping, soil sampling and geophysical surveys. Figure 18: The Jaguar Nickel Project – Soils Geochemistry (Ni) over Ground Magnetics (Analytic Signal) CENTAURUS METALS LIMITED ANNUAL REPORT 21 CENTAURUS METALS ANNUAL REPORT 2022 CENTAURUS METALS ANNUAL REPORT 2022 Jambreiro Iron Ore Project The 100%‐owned Jambreiro Project is located in south‐east Brazil, close to the Company’s head office in the city of Belo Horizonte. The Company has commenced the process to refresh all environmental licences required to develop the project. As part of this process, Supram (the Minas Gerais environmental agency) has advised that new wet and dry season environmental data will need to be collected to support a new Installation Licence (LI) application given the age of the data used in the originally approved LI. The new data has been collected over the last 3 months, with the new application targeted for lodgement in July 2023. Approval is anticipated to be 12 months from lodgement. The Company has also lodged the documentation to re-apply for all water permits necessary to operate the project. 22 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 23 CENTAURUS METALS ANNUAL REPORT 2022 Corporate APPOINTMENT OF NON-EXECUTIVE DIRECTOR During the year, the Company appointed highly experienced mining executive and company director, Dr Natalia Streltsova, to its board as an independent non-executive Director. Dr Streltsova brings a wealth of international experience at senior executive levels in the resource industry – including in Brazil and with a particular focus in nickel – making her an ideal addition to the Centaurus board as the Company continues to advance the development of the Jaguar Project. The appointment is consistent with the Company’ commitment to continue to strengthen and evolve its senior leadership team to ensure it has the appropriate level of skills, experience and diversity at both board and senior management levels to oversee its next stage of growth as a sustainable international mining company. During her 29-year career, Dr Streltsova has spent over 12 years in various technical and senior executive roles with major mining houses including Vale, BHP Billiton and WMC Resources. A Chemical Engineer with both an MSc and PhD, Dr Streltsova spent the early part of her career working in chemical research before taking on several mining industry roles where she had considerable interaction with operations to provide support and to identify technical opportunities for efficiency improvements and cost reductions. She was Program Leader – Hydrometallurgy and Project Manager for WMC Resources between 2000 and 2005, working on a range of projects including Mt Keith and Olympic Dam; Team Leader – Hydrometallurgy and Technology Development Manager for BHP Billiton between 2005 and 2008; Manager Development and Technical Solutions for GRD Minproc (2008) and Director, Technical Development, for Vale SA in Brazil between 2008 and 2012. In the past ten years her focus has been on non-executive board memberships and consulting. She is a non-executive Director of Ramelius Resources (ASX: RMS), non-executive director of Neometals (ASX: NMT) and non-executive Chair of Australian Potash (ASX: APC). She was a non-executive Director of Western Areas (ASX: WSA) from 2017 until its takeover by IGO Limited during the year. $75M INSTITUTIONAL SHARE PLACEMENT Centaurus completed an institutional share placement in January 2022 which raised $75 million to underpin the growth and development of the Jaguar Project. There was very strong demand for the placement from Australian and international institutional investors as well as existing substantial shareholders, including affiliates of the Sprott Group, McCusker Holdings, Dundee Goodman Merchant Partners and Harmanis Holdings. CASH POSITION At 31 December 2022, the Company held cash reserves of A$34 million. 22 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT CENTAURUS METALS LIMITED ANNUAL REPORT 23 23 CENTAURUS METALS ANNUAL REPORT 2022 Mineral Resources & Ore Reserves TOTAL MINERAL RESOURCES & ORE RESERVES STATEMENT The Company’s Mineral Resource for its nickel holding is shown in the following tables. Grade Contained Metal Ni % 0.87 Cu % 0.05 Co ppm Zn % 0.13 198 Cu Ni 240,300 Deposit Jaguar South Jaguar Central Jaguar North Classification Indicated Inferred Total Measured Indicated Inferred Total Indicated Inferred Total Indicated Jaguar Central North Inferred Jaguar Northeast Jaguar West Jaguar Deposits Onça Preta Onça Rosa Tigre Jaguar MRE Total Indicated Inferred Total Indicated Inferred Total Measured Indicated Inferred Total Measured Indicated Inferred Total Indicated Inferred Total Indicated Inferred Total Measured Indicated Inferred Total Mt 27.6 7.0 34.6 8.9 2.9 0.7 12.5 2.7 0.5 3.2 10.2 4.0 14.2 13.3 3.5 16.8 7.8 0.9 8.7 8.9 64.5 16.5 89.9 5.1 4.5 4.5 14.2 1.9 0.04 1.9 0.8 1.2 2.0 14.0 71.7 22.2 108.0 1.10 0.92 0.88 0.61 0.68 0.81 1.14 1.19 1.15 0.61 0.66 0.62 0.71 0.89 0.75 0.72 0.75 0.72 0.88 0.78 0.91 0.81 1.39 1.19 1.08 1.23 0.98 0.92 0.98 0.86 0.70 0.77 1.06 0.81 0.94 0.87 0.07 0.05 0.05 0.04 0.05 0.05 0.17 0.23 0.18 0.04 0.04 0.04 0.09 0.21 0.11 0.03 0.04 0.03 0.05 0.06 0.09 0.06 0.10 0.09 0.08 0.09 0.08 0.05 0.07 0.09 0.06 0.07 0.07 0.06 0.09 0.07 262 211 252 207 210 239 383 387 383 189 197 191 269 317 279 168 157 167 252 216 254 226 636 517 436 534 281 304 282 303 248 271 391 238 291 269 0.09 0.13 0.56 0.24 0.19 0.47 1.19 1.16 1.19 0.62 0.44 0.57 0.50 0.55 0.51 0.13 0.05 0.12 0.56 0.33 0.31 0.35 0.33 0.15 0.07 0.19 0.03 0.02 0.03 0.04 0.02 0.03 0.48 0.31 0.24 0.32 13,000 4,600 76,300 316,500 17,600 78,600 17,300 4,500 100,400 30,900 5,700 36,600 62,000 26,100 88,100 95,100 31,200 4,900 1,000 300 6,200 4,500 1,100 5,600 3,600 1,700 5,300 11,700 7,200 126,200 18,900 56,200 6,900 63,100 78,600 501,800 150,500 2,300 300 2,600 4,900 36,100 15,200 Co Zn 5,500 1,800 7,300 2,300 600 100 3,000 1,000 200 1,200 1,900 800 37,200 6,400 43,600 50,400 6,700 1,200 58,400 32,200 5,600 37,800 63,500 17,600 2,700 81,100 3,600 1,100 4,700 1,300 100 1,500 2,300 66,100 19,300 85,400 9,800 400 10,200 50,400 13,900 215,500 4,200 50,500 730,900 56,200 20,400 316,400 70,800 53,800 49,200 4,900 4,100 3,700 3,200 2,300 2,000 17,000 6,900 3,000 173,900 12,700 7,600 26,900 18,200 400 1,400 20 18,600 1,400 7,100 8,100 15,100 149,400 580,900 208,200 700 700 1,400 9,800 42,300 19,700 500 10 500 200 300 500 500 10 500 300 300 600 5,500 67,300 17,000 223,300 6,500 53,700 938,500 71,700 29,000 344,400 * Within pit limits cut-off grade 0.3% Ni; below pit limits cut-off grade 0.7% Ni; Totals are rounded to reflect acceptable precision, subtotals may not reflect global totals. All oxide material is considered as waste and therefore not reported as Resources. 24 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 25 CENTAURUS METALS ANNUAL REPORT 2022 Classification* Measured Indicated Measured & Indicated Inferred Total Mt 14.0 71.7 85.8 22.2 108.0 Grade Ni % 1.06 0.81 0.85 0.94 0.87 Cu % 0.07 0.06 0.06 0.09 0.07 Co ppm 391 238 263 291 269 Zn% 0.48 0.31 0.34 0.24 0.32 Contained Metal Co Cu Ni 149,400 580,900 730,300 208,200 938,500 9,800 42,300 52,000 19,700 71,700 5,500 17,000 Zn 67,300 223,300 22,500 290,700 6,500 53,700 29,000 344,400 * Within pit limits cut-off grade 0.3% Ni; below pit limits cut-off grade 0.7% Ni; Totals are rounded to reflect acceptable precision, subtotals may not reflect global totals. All oxide material is considered as waste and therefore not reported as Resources. The Company’s Ore Reserves and Mineral Resource for its iron ore holdings are shown in the following tables. Ore Reserves as at 31 December 2022 Ore Reserves as at 31 December 2021 Project Million Tonnes Jambreiro Project * Proved Probable TOTAL 35.4 13.1 48.5 Fe % 28.5 27.2 28.1 SiO2 % Al2O3 % 49.6 49.0 49.4 4.3 5.3 4.6 P % 0.04 0.04 0.04 *20% Fe cut-off grade applied; Mine Dilution - 2%; Mine Recovery - 98%; LOI % Million Tonnes Fe % SiO2 % Al2O3 % 1.7 2.4 1.9 35.4 13.1 48.5 28.5 27.2 28.1 49.6 49.0 49.4 4.3 5.3 4.6 P % 0.04 0.04 0.04 Mineral Resources as at 31 December 2022 Mineral Resources as at 31 December 2021 Project Million Tonnes Fe % SiO2 % Al2O3 % Jambreiro Project * Measured Indicated Inferred TOTAL Canavial Project* Indicated Inferred TOTAL Passabém Project** Indicated Inferred TOTAL TOTAL COMBINED 44.3 37.7 45.1 127.1 6.5 21.1 27.6 2.8 36.2 39.0 193.7 29.2 27.5 27.3 28.0 33.6 29.6 30.5 33.0 30.9 31.0 29.0 50.5 51.1 52.7 51.4 33.6 38.0 37.0 48.8 54.0 53.6 49.8 3.9 3.7 3.3 3.7 7.1 5.7 6.0 1.9 0.7 0.8 3.4 P % 0.04 0.04 0.05 0.05 0.10 0.07 0.07 0.03 0.07 0.07 0.05 LOI % Million Tonnes Fe % SiO2 % Al2O3 % 1.6 1.7 1.3 1.5 7.9 5.9 6.4 0.6 0.1 0.1 1.9 44.3 37.7 45.1 127.1 6.5 21.1 27.6 2.8 36.2 39.0 193.7 29.2 27.5 27.3 28.0 33.6 29.6 30.5 33.0 30.9 31.0 29.0 50.5 51.1 52.7 51.4 33.6 38.0 37.0 48.8 54.0 53.6 49.8 3.9 3.7 3.3 3.7 7.1 5.7 6.0 1.9 0.7 0.8 3.4 P % 0.04 0.04 0.05 0.05 0.10 0.07 0.07 0.03 0.07 0.07 0.05 LOI % 1.7 2.4 1.9 LOI % 1.6 1.7 1.3 1.5 7.9 5.9 6.4 0.6 0.1 0.1 1.9 *20% Fe cut-off grade applied; ** 27% Fe cut-off grade applied; Mineral Resources are reported inclusive of Ore Reserves. Totals are rounded to reflect acceptable precision, subtotals may not reflect global totals. MINERAL RESOURCES AND ORE RESERVES ANNUAL STATEMENT AND REVIEW The Company carries out an annual review of its Mineral Resources and Ore Reserves as required by the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) 2012 edition and the ASX Listing Rules. An update of the Jaguar Nickel Project Mineral Resource was completed on 10 November 2022 and a review was carried out as at 31 December 2022. The Jaguar Resource estimates have been reported in accordance with the JORC Code 2012 edition and the ASX Listing Rules. The review of the iron ore Mineral Resources and Ore Reserves was carried out as at 31 December 2022. The Jambreiro Resources and Reserve estimate have been reported in accordance with the JORC Code 2012 edition and the ASX Listing Rules. The remaining Mineral Resource estimates were prepared and disclosed under the JORC Code 2004 edition. The information prepared for the Canavial, and Passabém Resource estimates have not been updated to comply with the JORC Code 2012 edition on the basis that the information has not materially changed since it was last reported. The Company is not aware of any new information or data that materially affects the information included in this Annual Statement and confirms that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. 24 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 25 CENTAURUS METALS ANNUAL REPORT 2022 ESTIMATION GOVERNANCE STATEMENT The Company ensures that all Mineral Resource and Ore Reserve calculations are subject to appropriate levels of governance and internal controls. Exploration Results are collected and managed by competent qualified staff geologists and overseen by the Exploration General Manager. All data collection activities are conducted to industry standards based on a framework of quality assurance and quality control protocols covering all aspects of sample collection, topographical and geophysical surveys, drilling, sample preparation, physical and chemical analysis and data and sample management. Mineral Resource and Ore Reserve estimates are prepared by qualified independent Competent Persons and further verified by the Company’s technical staff. If there is a material change in the estimate of a Mineral Resource, the modifying factors for the preparation of Ore Reserves, or reporting an inaugural Mineral Resource or Ore Reserve, the estimate and supporting documentation in question is reviewed by a suitably qualified independent Competent Person. APPROVAL OF MINERAL RESOURCES AND ORE RESERVE STATEMENT The Company reports its Mineral Resources and Ore Reserves on an annual basis in accordance with the JORC Code 2012 Edition. The Ore Reserves and Mineral Resources Statement is based on and fairly represents information and supporting documentation prepared by competent and qualified independent external professionals and reviewed by the Company’s technical staff. The Ore Reserves and Mineral Resources Statement has been approved by Roger Fitzhardinge, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Roger Fitzhardinge is a permanent employee of Centaurus Metals Limited. Mr Fitzhardinge has consented to the inclusion of the Statement in the form and context in which it appears in this Annual Report. COMPETENT PERSON’S STATEMENT Jaguar Nickel Project The information in this Annual report that relates to Exploration Results is based on information compiled by Mr Roger Fitzhardinge who is a Member of the Australasia Institute of Mining and Metallurgy. Mr Fitzhardinge is a permanent employee and shareholder of Centaurus Metals Limited. Mr 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’. Mr Fitzhardinge consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this Annual report and the November 2022 Mineral Resources is based on that relates to the Jaguar Mineral Resource is based on information compiled by Mr Lauritz Barnes (consultant with Trepanier Pty Ltd) and Mr Roger Fitzhardinge (a permanent employee and shareholder of Centaurus Metals Limited). Mr Barnes and Mr Fitzhardinge are both members of the Australasian Institute of Mining and Metallurgy. Mr Barnes and Mr Fitzhardinge have sufficient experience of relevance to the styles of mineralisation and types of deposits under consideration, and to the activities undertaken to qualify as Competent Persons as defined in the 2012 Edition of the Joint Ore Reserves Committee (JORC) Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Specifically, Mr Fitzhardinge is the Competent Person for the database (including all drilling information), the geological and mineralisation models plus completed the site visits. Mr Barnes is the Competent Person for the construction of the 3-D geology / mineralisation model plus the estimation. Mr Barnes and Mr Fitzhardinge consent to the inclusion in this report of the matters based on their information in the form and context in which they appear. Jambreiro Iron Ore Project The information in this report that relates to Jambreiro Mineral Resources is based on information compiled by Roger Fitzhardinge who is a Member of the Australasian Institute of Mining and Metallurgy and Volodymyr Myadzel who is a Member of Australian Institute of Geoscientists. Roger Fitzhardinge is a permanent employee of Centaurus Metals Limited and Volodymyr Myadzel was the Senior Resource Geologist of BNA Mining Solutions, independent resource consultants engaged by Centaurus Metals, at the time when the Mineral Resource estimate was first completed. Roger Fitzhardinge and Volodymyr Myadzel have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are 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 and Volodymyr Myadzel consent to the inclusion in the report of the matters based on their information in the form and context in which it appears. The information in this report that relates to Ore Reserves is based on information compiled by Beck Nader who is a professional Mining Engineer and a Member of the Australian Institute of Geoscientists. Beck Nader is the Managing Director of BNA Mining Solutions and was a consultant to Centaurus. Beck Nader 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’. Beck Nader consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. 26 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 27 CENTAURUS METALS ANNUAL REPORT 2022 Tenement List BRAZILIAN TENEMENTS Tenement 831.638/2004 831.639/2004 831.649/2004 833.409/2007 834.106/2010 831.645/2006 830.588/2008 833.410/2007 856.392/1996 850.475/2016 851.571/2021 851.563/2021 850.071/2014 851.767/2021 851.768/2021 851.769/2021 Project Name Canavial Canavial Jambreiro (Mining Lease) Jambreiro (Mining Lease) Jambreiro (Mining Lease) Passabém Passabém Regional Guanhães Jaguar (Mining Lease Application) Itapitanga Terra Roxa (Jaguar Regional) Santa Inês (Jaguar Regional) Curionópolis Project Curionópolis Project Curionópolis Project Curionópolis Project Location Minas Gerais Minas Gerais Minas Gerais Minas Gerais Minas Gerais Minas Gerais Minas Gerais Minas Gerais Pará Pará Pará Pará Pará Pará Pará Pará AUSTRALIAN TENEMENTS Tenement EPM14233 Project Name Mt Isa Location Queensland (1) Subject to a Farm-Out and Joint Venture Exploration Agreement with Summit Resources (Aust) Pty Ltd. Summit has earned a 90% interest in the Project. Aeon Metals Limited has acquired 80% of Summits Interest giving them a total interest of 72% of the tenement. Interest 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Interest 10% (1) 26 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT CENTAURUS METALS LIMITED ANNUAL REPORT 27 27 CENTAURUS METALS ANNUAL REPORT 2022 Additional Shareholder Information The shareholder information set out below was applicable as at 31 March 2023. Number of Holders Number of Options Exercise Price $ Expiry Date Subject to Vesting Conditions SUBSTANTIAL SHAREHOLDERS The Company had the following substantial shareholders. → McCusker Holdings Pty Ltd 13.9% → Sprott Asset Management 6.0% → Regal Funds Mgt 5.9% → Dundee Resources 5.3% → Harmanis Holdings Pty Ltd 5.1% CLASS OF SHARES AND VOTING RIGHTS There were 3,419 holders of ordinary shares in the Company as at the above date. The voting rights attaching to the ordinary shares are that on a show of hands every member present in person or by proxy shall have one vote and upon a poll each share shall carry one vote. As at the above date the Company had the following unlisted options over 10,569,464 ordinary shares. There are no voting rights attached to the unissued ordinary shares. Voting rights will attach to the unissued ordinary shares when the options have been exercised. 1 3 4 1 3 7 8 7 116,667 0.180 31/05/23 1,400,000 0.392 31/05/23 3,952,402 - 31/12/23 233,334 0.180 31/05/24 1,400,000 0.405 31/05/24 1,395,452 1,225,220 846,389 - - - 31/12/24 31/12/25 31/12/26 No No No No No Yes Yes Yes RESTRICTED SECURITIES There are currently no restricted securities or securities subject to voluntary escrow on issue. ON-MARKET BUY BACK There is no current on-market buy back. DISTRIBUTION OF EQUITY SECURITIES The distribution of numbers of equity security holders by size of holding is shown in the table below. There were 379 holders of less than a marketable parcel (being a minimum $500 parcel at $0.94 per share) of ordinary shares. From 1 1,001 5,001 10,001 100,001 To 1,000 5,000 10,000 100,000 and over Ordinary Shares Listed Options Unlisted Options Unlisted Options (ESOP) Performance Rights 647 855 563 1,088 266 3,419 - - - - - - - - - - 3 3 - - - 4 3 7 - - - - 28 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 29 CENTAURUS METALS ANNUAL REPORT 2022 SHAREHOLDERS The names of the twenty largest holders of ordinary shares (CTM) are listed below: Number Held Percentage of Issued Shares (%) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Citicorp Nominees Pty Limited McCusker Holdings Pty Ltd HSBC Custody Nominees Harmanis Holdings Pty Ltd BNP Paribas Noms Pty Ltd Mr Bradley George Bolin UBS Nominees Australia Pty Ltd J P Morgan Nominees Australia Pty Limited Lujeta Pty Ltd Mr Darren Gordon Mr Roger Fitzhardinge Jayleaf Holdings Pty Ltd Atlas Iron Limited Zero Nominees Merrill Lynch (Australia) Nominees Pty Limited Precision Opportunities Fund Ltd BPM Investments Limited HS Superannuation Pty Ltd Neweconomy Com Au Nominees Pty Limited Mr Luigi Reghelin Total Top 20 Shareholders Other Shareholders Total Number of Issued Shares 95,541,852 59,250,000 24,029,126 21,573,569 17,967,475 12,004,706 11,929,469 10,012,556 8,500,000 6,335,546 6,150,724 6,000,000 4,021,351 3,706,429 3,284,451 3,125,374 3,000,000 2,445,392 2,365,564 2,000,000 303,243,584 123,862,689 427,106,273 22.37% 13.87% 5.63% 5.05% 4.21% 2.81% 2.79% 2.34% 1.99% 1.48% 1.44% 1.40% 0.94% 0.87% 0.77% 0.73% 0.70% 0.57% 0.55% 0.47% 71.00% 29.00% Corporate Governance Statement A copy of Centaurus’ 2022 Corporate Governance Statement, which provides detailed information about governance, and a copy of Centaurus’ Appendix 4G which sets out the Company’s compliance with the recommendations in the fourth edition of the ASX Corporate Governance Council’s Principles and Recommendations is available on the corporate governance section of the Company’s website at www.centaurus.com.au/corporate-governance. 28 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 29 CENTAURUS METALS ANNUAL REPORT 2022 FINANCIAL REPORT 31 December 2022 Financial Report – 31 December 2022 Centaurus Metals Limited ABN 40 009 468 099 And its controlled entities Contents Directors’ Report .................................................................................................................................................................. 3 31 Consolidated Statement of Profit or Loss and Other Comprehensive Income ................................................................... 25 53 Consolidated Statement of Financial Position .................................................................................................................... 26 54 Consolidated Statement of Changes in Equity.................................................................................................................... 27 55 Consolidated Statement of Cash Flows .............................................................................................................................. 28 56 Notes to the Consolidated Financial Statements ............................................................................................................... 29 57 Directors’ Declaration ......................................................................................................................................................... 51 79 Independent Auditor’s Report ............................................................................................................................................ 52 80 30 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 31 Page 2 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 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 2022 together with the consolidated financial report and accompanying audit report. 1 Directors The directors of the Company at any time during or since the end of the year are: Mr D M Murcia Mr D P Gordon Mr B R Scarpelli Mr M D Hancock Mr C A Banasik Dr N Streltsova Independent Non-Executive Chair Managing Director Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director (appointed 15th August 2022) Unless otherwise disclosed, all directors held their office from 1 January 2022 until the date of this report. 2 Directors and Officers Mr Didier M Murcia, AM, B.Juris, LL.B Non-Executive Chair, Age 60 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 51 Managing Director appointed 4 May 2009. Mr Gordon is a Chartered Accountant with over 25 years’ resource sector experience as a senior finance and resources executive. He is a member of both the Governance Institute of Australia and the Institute of Company Directors. He has more than 12 years’ experience in Brazil and has developed an extensive network of contacts within Government, the resources industry and the broader business community in country. He has developed significant exposure to a number of different resource commodities as Managing Director of the Company and lead the negotiations with Vale to acquire the Jaguar Project. Mr Gordon was formerly Chief Financial Officer for Gindalbie Metals Limited (1999-2008). Mr Bruno R Scarpelli, M.Sc., PMP Executive Director, Age 45 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 54 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. 30 ANNUAL REPORT CENTAURUS METALS LIMITED Page 3 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 31 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 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) Non- Executive Director CuFe Ltd (Appointed 1 September 2019) Executive Director, part time basis Strandline Resources Ltd (Appointed 11 August 2020) Non-Executive Director 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 61 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). 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). During the last three years Mr Banasik has not held directorships in any other ASX listed companies. Mr Banasik is the Chair of the Remuneration Committee Dr Natalia Streltsova, MSc, PhD (Chem Eng), GAICD Non-Executive Director, Age 61 Independent non-executive director appointed 15th August 2022. Dr Streltsova is a Chemical Engineer with both an MSc and PhD. She was Program Leader – Hydrometallurgy and Project Manager for WMC Resources between 2000 and 2005, working on a range of projects including Mt Keith and Olympic Dam; Team Leader – Hydrometallurgy and Technology Development Manager for BHP Billiton between 2005 and 2008; Manager Development and Technical Solutions for GRD Minproc (2008) and Director, Technical Development, for Vale SA in Brazil between 2008 and 2012. During the last three years Dr Streltsova has held directorships in the following ASX listed companies: Australian Potash Limited (Appointed December 2021) Non-Executive Chair Neometals Limited (Appointed April 2016) Non-Executive Director Ramelius Resources Limited, (Appointed October 2019) Non-Executive Director, Chair of the Risk & Sustainability Committee Western Areas Limited (January 2017 until its takeover by IGO on 20 June 2022) Non-Executive Director Dr Streltsova is Chair of the Technical Committee which was formed after the end of the reporting period. Mr Johannes W Westdorp, B.Bus, CPA, MAICD, GradDip App Sc Chief Financial Officer & Company Secretary, Age 59 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 held the roles of Chief Financial Officer and Interim Chief Executive Officer of mineral sands producer, MZI Resources Ltd and senior roles with Murchison Metals Ltd and Burrup Fertilisers Pty Ltd. He has financial, commercial and operations experience across a number of commodities including iron ore, gold, base metals and mineral sands. 32 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 33 Page 4 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 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 2022 and the number of meetings attended by each director are shown in the table below. Director Mr D M Murcia Mr D P Gordon Mr B R Scarpelli Mr M D Hancock Mr C A Banasik Dr N Streltsova Board Audit & Risk Committee Remuneration Committee Held1 Attended Held1 Attended Held1 Attended 6 6 6 6 6 4 6 6 6 6 6 4 2 n/a n/a 2 2 n/a 2 n/a n/a 2 2 n/a 4 n/a n/a 4 4 n/a 4 n/a n/a 4 4 n/a (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. 4 Operating and Financial Review A summary of consolidated results is set out below Interest Income R&D Tax refund Other income 31 December 2022 $ 31 December 2021 $ 1,348,066 517,875 6,256 1,872,197 235,207 265,862 - 501,069 Loss before income tax Loss attributable to members of Centaurus Metals Limited (42,627,555) (42,627,555) (16,994,715) (16,994,715) 4.1 Financial Performance During the year ended 31 December 2022 the Group expensed Exploration and Evaluation costs totaling $36,225,206 (2021: $13,198,599) in accordance with the Group’s accounting policy. The Exploration and Evaluation costs primarily comprise costs in relation to exploration and feasibility study costs at the Jaguar Nickel Sulphide Project in Brazil. 4.2 Financial Position At the end of the year the Group had a cash balance of $34,047,722 (2021: $8,259,389) and net assets of $49,328,699 (2021: $16,750,646). Total liabilities amounted to $8,065,982 (2021: $10,099,118) and consisted of trade and other payables, financial liabilities, lease liabilities and employee benefits. 4.3 Overview Centaurus is an ASX listed company focused on the near term development of the Jaguar Nickel Sulphide Project, located in the world-class Carajás Mineral Province of northern Brazil. The Carajás Mineral Province is one of the world's premier mining addresses, hosting one of the world's largest concentrations of large-tonnage mineral deposits. Centaurus’ goal is to become a new-generation nickel sulphide mining company in Brazil, capable of delivering more than 20,000t 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. The Jaguar Project has nickel resources of 108.0 Mt @ 0.87% Nickel (Ni) for 938,500t1 of contained nickel. Centaurus’ key focus throughout the 2022 calendar year was on the continued development of the Jaguar Project. The Definitive Feasibility Study (DFS) for the Project was advanced during the period. An updated Mineral Resources Estimate (MRE) for the Jaguar Project was released in November 2022, cementing the Project’s position as a Tier-1 global nickel sulphide development project with class-leading greenhouse gas (GHG) emission credentials 1 Refer ASX Release of 10 November 2022. The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the original market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the competent persons findings were presented have not been materially modified from the original announcement. Page 5 of 55 32 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 33 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Activity was underpinned by a strongly supported institutional capital raise of $75m, before costs, which was completed in February 2022. 4.4 Jaguar Nickel Sulphide Project The Jaguar Project was acquired from global mining giant, Vale S.A. (Vale) in August 2019. The 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. Jaguar is ideally located close to existing infrastructure, just 35km north of the regional centre of Tucumã (population +35,000) with access to hydroelectrical grid power (230kV sub-station) 15km south-east of the project at Vale’s Onca Puma ferronickel operations see image below. 34 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 35 Page 6 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Drilling & Exploration Programs The focus of drilling during the first half of the year was on resource development at all the Jaguar Deposits. Extensive in- fill drilling was undertaken, designed to upgrade all Resources within a constrained US$22,000/t nickel price pit shell limit into the higher confidence Measured and Indicated categories. RC drill rigs completed sterilization programs over the Jaguar processing plant area and proposed mine infrastructure areas (tailings dam sites, waste deposit, etc). Mineral Resource Estimate Following the extensive in-fill drilling campaign Centaurus updated its Mineral Resource Estimate (MRE) for the Jaguar Project to 108 Mt @ 0.87% Ni for 938,500 of contained nickel, confirming Jaguar as one of the largest nickel sulphide resources held by an ASX listed company and the largest outside of the majors. The success of the in-fill resource development project during the year resulted in a 100% increase in the Measured and Indicated component of the MRE to 85.8 Mt @ 0.85% Ni for 730,300t of contained nickel, representing more than 75% of the Global MRE. Measured and Indicated Resources will be available for conversion to Ore Reserves as part of the Definitive Feasibility Study (DFS). The November 2022 MRE represented an increase of 28% since the December 2021 MRE and more than 80% since the Company’s maiden MRE in June 2020, adding 421kt of contained nickel in 30 months. In-fill drilling targeting the first three years of operation at Jaguar Central and Onça Preta has returned a Measured Resource estimate of 14.0 Mt @ 1.06% Ni for 149,400t of contained nickel metal. The high-grade and higher confidence resources will be an important part of the early mine plan during the project pay-back period. The Jaguar mineralisation remains open down-dip at all deposits and locally along strike, with outstanding potential to continue strong resource growth driven by step-out and extensional drilling targeting DHEM conductor plates and greenfields drilling of the extensive regional exploration pipeline. Project Development Significant activity was progressed on the DFS. Industry-leading engineering firm Ausenco was appointed as Lead Engineer to deliver both the process and non-process plant infrastructure components of the study. Ausenco possesses strong experience in the processing methods planned for the Jaguar Project as well as experience in project studies and construction in South America through its offices in Belo Horizonte (Brazil), Santiago (Chile) and Lima (Peru). Ausenco has assembled a study team with both strong technical skills and detailed local knowledge of construction in Brazil, and importantly, the Carajás mineral province. Flotation & Pilot Plant Testwork A significant amount of flotation test work has been completed for the design of the flotation part of the overall process flowsheet design. Extensive flotation testwork has been completed on the Jaguar nickel sulphide ore, allowing the Company to prepare over 800kg of concentrate for pilot plant testing of the planned pressure oxidation circuit. Considerable work was completed to finalise the process flowsheet to enable the POX pilot plant program to commence in January 2023. The pilot plant testwork will be carried out by ALS Limited (ALS) in four phases. The first phase will test the pressure oxidation, primary neutralization and copper recovery to solution and will be conducted over a two-week period. This will be followed by the Phase 2 which is designed to extract zinc (for a by-product revenue stream) and soluble calcium from Phase 1 leach solution with minimal nickel loss. Phase 3 is designed to initially extract cobalt (again for a by-product revenue stream) and magnesium followed by the purification of the nickel solution to produce nickel sulphate. Nickel sulphate crystallization and zinc and cobalt hydroxide precipitate production will be piloted in Phase 4. The pilot testwork will culminate with the delivery of nickel sulphate and other final products for product marketing, as well as assisting in providing the design criteria for Ausenco to use in the development of the overall process flowsheet for the DFS. 34 ANNUAL REPORT CENTAURUS METALS LIMITED Page 7 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 35 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Mining Pricing proposals were received from mining contractors to support the development of the DFS opex, open pit optimisations and mine planning work. These proposals are under commercial and technical evaluation to select pricing for use in open pit planning for the DFS, utilising the most recent MRE orebody model. Process Plant Engineering The concentrator section of the processing facility, consisting of crushing, grinding and flotation and thickening circuits, was finalised for the study and capital equipment packages were progressively issued for pricing. Pricing for the major equipment was received from suppliers during the December quarter, with the commercial and technical evaluation process well advanced. The process design and layout of the refinery circuit and non-process plant infrastructure (NPI) commenced. Environmental Approvals The environmental approval process is progressing without issue, albeit at a slightly slower pace than the Company was anticipating. Several meetings, including an initial site visit, have been held with the Environmental Agency in Para State (SEMAS) to keep them informed on project development activities. Off-take Discussions Off-take discussions are continuing in relation to the products to be produced from Jaguar. Vale has the right to purchase product at arm’s length market-based pricing under the original acquisition agreement for the Jaguar Project. Centaurus retains discretion over what nickel products will be produced at Jaguar. The introduction of the Inflation Reduction Act by the US Government and the Critical Raw Materials Act of the European Union has highlighted the strategic importance of energy metals like nickel and those that can be sourced in geopolitically stable jurisdictions with a low-emission footprint. Brazil fits these criteria well as it is South America’s largest pro-mining jurisdiction, the 8th largest global economy and currently more than 80% of the country’s grid power is delivered from renewable sources. It is anticipated that the Jaguar Project will be able to secure 100% renewably sourced power by the time it is in production. With its very large metal endowment, the Jaguar Project is extremely well placed to capitalise on the fast-growing electric vehicle and battery metals market. New Core Shed The Company completed the construction of the new site core shed on site at Jaguar with a capacity to store 300,000m of core. Shelving has been installed and all core from the existing core shed in Tucumã has now been relocated to the new facility on site. The shed will also house new core as drilling on site progresses. 4.5 Carajas Generative Projects The Company is negotiating or has completed landowner access agreements and started early-stage exploration including mapping and soil sampling on a number of new targets in the Carajas region. Geophysical surveys will be planned once exploration targets have been determined. Santa Inês Project The Santa Inês Project is located 15km2 northwest of the Jaguar Project (Figure 1). The recently granted 18 km2 exploration lease is positioned on a strand of the regionally significant Canaã Fault which is the same structure that is understood to have been critical in the mineralisation processes of the Jaguar Deposit. Terra Roxa Project The Terra Roxa Project is a recently granted 29km2 exploration lease located 30km southwest of the Jaguar Project (Figure 1). The project is located on the McCandless Fault which traverses the Jaguar Project through the Puma Layered Mafic- Ultramafic Complex and is understood to be the source of nickel for the hydrothermal mineralisation seen at Jaguar. Terra Roxa is located immediately south of Vale’s Mundial nickel-laterite deposit which is the laterite cap of another mafic-ultramafic intrusion. Page 8 of 55 36 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 37 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Curionópolis Project The Curionópolis Project is a group of four recently granted exploration leases covering 51km2 located 15km east of Oz Minerals Antas Norte Cu-Au operation (Figure 1) in the Eastern Carajás. The tenements cover more than 15km of strike of the highly prospective Itacaiúnas Supergroup (which hosts all IOCG deposits within the Carajás Mineral Province) coincident with a strong continuous aeromagnetic anomaly. 4.6 Jambreiro Iron Ore Project The Company has commenced the process to refresh all environmental licenses required to develop the project. As part of this process, Supram (the Minas Gerais environmental agency) has advised that new wet and dry season environmental data will need to be collected to support a new Installation License (LI) application given the age of the data used in the originally approved LI. The new data is expected to be collected over the next 3-4 months, with the new application targeted for lodgment in July 2023. Approval is anticipated to be 12 months from lodgment. The Company has also lodged the documentation to re-apply for all water permits necessary to operate the project. All water permits and environmental licences to build the Project were previously granted and are therefore expected to be granted after the applications have been duly considered by the relevant agencies. The Company continues to assess opportunities to realise value from the Jambreiro Iron Ore Project and carried out several activities focused on this goal during the year. Realising value from the project remains contingent on the completion of off-take or partnering arrangements and discussions remain open in this regard. 4.7 Health & Safety One Lost Time Injury occurred during the year resulting in an LTIFR 12-month moving average of 4.89. The average LTI Frequency Rate for the West Australian Exploration Industry for the 2020/21 Period was 2. One medical treatment injury occurred during the year. The Total Recordable Injury Frequency Rate for the Group’s operations in Brazil was 9.78, a good improvement compared to the prior year result of 12.50. 4.8 ESG Program The Company adopted its formal environmental, social and governance (ESG) policy framework late in 2021. The framework is based on the recommendations and principles of two key ESG authorities, being: Towards Sustainable Mining Principles (TSM); and Principles of Responsible Investment (PRI) TSM is the Mining Association of Canada’s (MAC) commitment to responsible mining. It is a set of tools and indicators to drive performance and ensure that key mining risks at any operation are managed responsibly. The PRI defines responsible investment as a strategy and practice to incorporate environmental, social and governance factors in investment decisions and active ownership. The PRI is a global organisation that encourages and supports the uptake of responsible investment practices in the investment industry. Centaurus’ ESG program combines the TSM and PRI principles with actions to be implemented during exploration and operations. The following initiatives have already been undertaken by the Company to date at the Jaguar Project region: All Centaurus employees working on the Jaguar Project live in the local town with their families, solidifying the relationship between the Company and the local community. More than 90% of the current project workforce, including employees and outsourced labour, are from the south-eastern region of the State of Pará. More than 90% of the Company’s investment expenditure relating to exploration and development work at the jaguar Project to date has been awarded to the local community through drilling contracts, engagement of consultants and services and purchase of equipment and supplies. During the collection of social data, more than 95% of the local community interviewed were in favour of the project. Construction and operation of a plant nursery on site with a capacity of 10,000 seedlings to support re- vegetation. 36 ANNUAL REPORT CENTAURUS METALS LIMITED Page 9 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 37 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 GHG Emissions Since January 2022, the Company has been monitoring Scope 2 greenhouse gas (GHG) emissions and sinks associated with the Jaguar Project. The main carbon sink is the standing forest. The main source of carbon from the Project at present is the combustion of diesel to run drill rigs. The Jaguar Project currently represents a carbon sink, removing about 12,000t of GHG annually from the atmosphere, which is equivalent to removing approximately 2,570 internal combustion engine vehicles (4.6t GHG per vehicle per year) from the roads each year. Based on the work completed with Skarn Associates previously, the Jaguar Project is expected to have GHG emissions that are less than 97% of global nickel production once in operation. Water Wells Bore hole pumping tests on five bores drilled to assess the quantity and quality of groundwater inflows to the open pit operations have indicated that low flow rates are to be expected, which is very positive for the overall project development. Hydrogeological modelling of the pump test results commenced in December to quantify the flows and aquifer characteristics. This modelling will be completed in January. Plant Nursery The Company established a plant nursery on site to facilitate the revegetation of previously cleared farmland. The planned revegetation will allow new forest corridors to be established around the site to assist with the movement, protection and biodiversity of fauna. Community Consultation In December, presentations about the Jaguar Project were made to the mayors and councilors of the three municipalities in the region. These presentations were designed to prepare the local authorities for the official public hearings planned to be held as part of the environmental approvals process. The same presentations will be made to the broader community in all three municipalities in January 2023. Construction Training Programs During the year, the Company further advanced the enrolment process for construction training with over 1,900 applications to date having been received from local communities. The Company intends to train up to 1,500 people in various trades that will allow them to be able to seek employment once construction of the Jaguar Project commences. The training programs are intended to be conducted in conjunction with local industry training college (SENAI) in 2023 and 2024. 4.9 Corporate The Company completed an institutional share placement in January 2022 which raised $75m to fund the growth and development of the Jaguar Project including progressing the DFS for Jaguar and continuing the significant drilling program for the Project. Funds are being used for pre-development and financing activities ahead of a planned final investment decision (FID) on the Project. During the period, the Jaguar Project was selected as a Strategic Minerals Project by the Brazilian Federal Government. The Strategic Minerals Policy is part of the Investment Partnership Program – PPI (Programa de Parcerias de Investimento), a new Brazil governmental initiative designed to support companies while developing their projects across the country. The PPI program supports projects that are identified as strategic minerals projects in Brazil and provides the titleholder with specialised governmental support for the development of their projects. The Company made a number of key appointments to its Board and senior leadership team during the year as it continued to build its in-house technical, commercial, legal and operational expertise to progress the Jaguar Project towards financing, development and operations. In August 2022 former Vale, WMC and BHP executive, Dr Natalia Streltsova was appointed as a Non-Executive Director. Dr Streltsova’s significant experience in nickel processing has enhanced Board capability in a key area for the business. 38 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 39 Page 10 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 The Company made two key appointments to its senior leadership team during the year as it continued to build its in- house technical, commercial, legal and operational expertise to progress the Jaguar Project towards financing, development and operations. Mr Fabio Borges was appointed in February as Finance Manager Brazil and is a certified accountant with significant experience in mining. Mr Borges is based in the Company’s Belo Horizonte office. Mr Mick Ryan was appointed in November as Project Manager to assist with delivering the Jaguar DFS. Mr Ryan is a metallurgist with considerable experience in studies, project and construction management and operations including in nickel processing and hydrometallurgy. 4.10 Factors and Business Risks Affecting Future Business Performance The current and future activities of the Company are influenced by numerous factors, many of which are impacted by events external to the control of the Company. The following factors and business risks could have a material impact on the Company’s success in delivering its strategy: Access to Funding The Company’s ability to further develop the Jaguar Nickel Sulphide Project and successfully develop future projects is contingent on the ability to fund those projects from operating cash flows or through affordable debt and equity raisings. Ongoing exploration of the Company’s projects is contingent on developing appropriate funding solutions. Commodity Prices Commodity prices fluctuate according to changes in demand and supply. The Company is exposed to changes in the price of a number of commodities, which could affect the future profitability of the Company’s projects. Significant adverse movements in commodity prices could also affect the ability to raise debt and equity to fund future exploration and development of projects. Exchange Rates The Company is exposed to changes in the US Dollar and the Brazilian Real. Sales of most commodities are denominated in US Dollars. The Company’s capital and operating costs will be primarily denominated in Brazilian Real. COVID-19 Disruptions as a result of the requirement to isolate infected or close contact employees has had an impact on some of the Company’s service providers, with laboratories particularly experiencing delays in sample assay turnaround times. These impacts have exposed the Company to delays in the delivery of study programs. 5 Significant Changes in the State of Affairs In the opinion of directors, other than as outlined in this report, there were no significant changes in the state of affairs of the Group that occurred during the financial year under review. 6 Principal Activities During the period the principal activities of the Group consisted of exploration and evaluation activities related to mineral resources in Brazil. There were no significant changes in the nature of the activities of the Group during the year. 7 Events Subsequent to Reporting Date There has not arisen, in the interval between the end of the financial year and the date of this report an item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years. 8 Likely Developments Other than likely developments contained in the “Operating and Financial Review” and “Events Subsequent to Reporting Date”, further information on likely developments in the operations of the Group and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the Group. 38 ANNUAL REPORT CENTAURUS METALS LIMITED Page 11 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 39 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 9 Environmental Regulation The Group is subject to environmental laws and regulations under Brazilian (State and Federal) legislation depending on the activities undertaken. Compliance with these laws and regulations is regarded as a minimum standard for the Group to achieve. There were no known breaches of these regulations during the year. 10 Dividends No dividend was declared or paid by the Company during the current or previous year. 11 Directors’ Interests The relevant interest of each director in the shares and options over such shares issued by the companies within the Group and other related bodies corporate, as notified by the directors to the ASX in accordance with S205G (1) of the Corporations Act 2001, at the date of this report is as follows: Directors Mr D M Murcia Mr D P Gordon Mr B R Scarpelli Mr M D Hancock Mr C A Banasik Dr N Streltsova Ordinary Shares Options 1,771,967 6,335,546 1,166,667 1,112,254 950,001 85,000 1,200,000 2,599,631 1,029,790 800,000 1,150,001 - 12 Share Options At the date of this report unissued ordinary shares of the Company under unlisted option are: Options Expiry Date 31/05/2023 31/05/2023 31/05/2023 31/05/2024 31/05/2024 31/12/2024 31/12/2025 31/12/2026 Exercise Price $0.180 $0.392 - $0.180 $0.405 - - - Vested 116,667 1,400,000 3,952,402 233,334 - 1,395,452 - - 7,097,855 Unvested - - - - 1,400,000 - 1,225,220 846,389 3,417,609 Total Number of Shares Under Option 116,667 1,400,000 3,952,402 233,334 1,400,000 1,395,452 1,225,220 846,389 10,569,464 13 Indemnification and Insurance of Officers and Auditors During the period, the Company paid insurance premiums to insure the directors and executive officers of the Group. The amount of premiums paid has not been disclosed due to confidentiality requirements under the contract of insurance. The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against directors and employees in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by them in connection with such proceedings, other than where such liabilities arise out of conduct involving a willful breach of duty by the officers or the improper use by them of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Group. 40 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 41 Page 12 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 14 Non-Audit Services During the period KPMG, the Company’s auditor, has performed certain other services in addition to their statutory duties. The Board has considered the non-audit services provided during the year by the auditor and in accordance with written advice provided by resolution of the Board, is satisfied that the provision of those non-audit services during the year by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: all non-audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor; and the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards. Details of the amounts paid to the auditor of the Company, KPMG, and its related practices for audit and non-audit services provided during the year are set out below. Audit services Auditors of the Company Audit and review of financial reports Services other than statutory audit Taxation compliance services Other consulting services 31 December 2022 $ 31 December 2021 $ 60,000 58,861 7,576 10,590 18,166 6,986 - 6,986 15 Auditor’s Independence Declaration The auditor’s independence declaration is set out at page 52 and forms part of the directors’ report for the period ended 31 December 2022. 40 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 41 Page 13 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 16 Remuneration Report – Audited 16.1 Principles of Remuneration The primary objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders. The Company’s Remuneration Committee is a sub-committee of the Board. Specialist remuneration advisors are engaged by and report directly to the Remuneration Committee. In selecting remuneration advisors the Remuneration Committee considers any potential conflicts of interest and ensures independence from KMP. During the period, the Remuneration Committee sought advice from external remuneration advisors in relation to remuneration benchmarking for Executive KMP and Non-Executive Directors. During the period, the resources industry experienced significant pressure in relation to remuneration of professionals and the independent reports received from the remuneration advisors indicated that increases in remuneration were warranted in order to maintain market competitiveness for both Non-Executive Directors and KMP. The work undertaken by the remuneration advisors did not involve providing the Remuneration Committee with any remuneration recommendations as defined by the Corporations Act 2001. The Board considers the recommendations of the Remuneration Committee in ensuring that executive reward satisfies the following key criteria: competitiveness and reasonableness; acceptability to shareholders; performance linked executive compensation; transparency; and capital management. The Group has structured an executive remuneration framework that is market competitive and consistent with the reward strategy of the organisation. The Board seeks to align shareholder and participant interests by ensuring the Company’s remuneration framework applies the following principles; focuses on the creation of shareholder value and returns; attracts and retains high calibre executives with an inherent knowledge of the Company’s ongoing business and activities; rewards capability and experience; reflects competitive reward for contribution to growth in shareholder wealth; provides a clear structure for earning rewards; provides recognition for contribution; and seeks to retain experienced and competent individuals in key executive roles. The remuneration framework consists of base salary, superannuation and short and long-term incentives. Whilst intended to be settled in cash, the Board retains the discretion to settle short term incentives with equity. An Employee Share Incentive Plan (ESIP) was approved by shareholders at the AGM in May 2022 and incentives settled in equity may be offered under this plan. The ESIP replaces the Employee Share Option Plan (ESOP) which was approved by shareholders at the 2019 AGM. The overall level of executive reward takes into account the performance of the Group over a number of years, with greater emphasis given to the current and prior year. Over the past 5 years, the Group was involved in mineral exploration and pre-development activities and therefore growth in earnings is not considered a relevant measure. Shareholder wealth is currently primarily dependent upon exploration and development success in addition to being influenced by broader market factors. The performance of the Group in respect of the current period and the previous four financial years is set out below: 2022 $ 2021 $ 2020 $ 2019 $ 2018 $ Net Loss (42,627,555) (16,994,715) (11,468,825) (4,275,397) (4,197,361) Change in share price (1) Change in share price $0.010 1% $0.290 35% $0.625 321% $0.090 86% $0.000 - (1) In April 2020 the Company completed a 15-for-1 share consolidation, comparatives have been restated. Page 14 of 55 42 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 43 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 16.2 Remuneration Framework The executive remuneration and reward framework currently has four components: base salary; short term incentives (STIs); long term incentives (LTIs); and other remuneration such as superannuation and insurances. The combination of these components comprises the executive’s total remuneration. 16.2.1 Base Salary Executives are offered a competitive base salary that is reflective of current market conditions. Base salary for senior executives is reviewed annually to ensure the executive’s remuneration is competitive with the market. An executive’s base salary is also reviewed on promotion. There are no guaranteed base salary increases included in any senior executive contracts. 16.2.2 Short Term Incentives The Short Term Incentive (STI) Plan is designed to reward executives for the achievement of annual performance targets. The STI Plan and the annual performance objectives under the STI Plan are reviewed annually by the Remuneration Committee and approved by the Board. All awards to Key Management Personnel (KMP) are assessed and recommended by the Remuneration Committee and approved by the Board. For 2022, KMP other than the Managing Director, can earn up to 35% of Total Fixed Remuneration (TFR) under the STI Plan whilst the Managing Director can earn up to 50% of TFR. Other Managers of the Group can earn up to 15-25% of TFR under the Plan. The annual performance targets are based on challenging goals with a mix of both Company performance and project specific targets. Given its status as a pre-revenue exploration entity focused on the development of its key projects, the Company does not consider that financial targets such as net profit are relevant measures for a STI program. The Group’s key STI performance measures for the year ending 31 December 2022 are summarised below; effective management of environmental conditions and safety performance; community and land owner engagement in Brazil; achievement of defined targets for the Jaguar Project with respect to exploration activity performance and mineral Resource definition; achievement of a number of capital projects; achievement of a number of key deliverables in relation to the licensing, definitive feasibility study, offtake and other development activities of the Jaguar Nickel Project; achievement of value adding outcome for the Jambreiro Iron Ore project; and market capitalisation growth targets. Details of STI incentives awarded during the year are provided in Section 16.6.4. 16.2.3 Long Term Incentives LTIs may be granted from time to time to reward performance in the realisation of strategic outcomes and long-term growth in shareholder wealth. Options or performance rights may be utilised to deliver long term incentive awards. The Board has discretion to grant options or performance rights for no consideration. Options or performance rights do not carry voting or dividend entitlements. Information on share options granted during the year is set out in Section 16.6. During the period, KMP were granted options with no exercise price which are subject to vesting conditions related to achieving performance targets measured over a three-year period. The options were issued under the Company’s ESIP and under ASX Listing Rule 10.11 for Executive Directors. KMP, other than the Managing Director, were issued with options up to the value of 50% of TFR whilst the Managing Director was issued with options up to the value of 100% of TFR. Whilst the ESIP is approved by shareholders for a 3 year period, vesting conditions are set by the Board on an annual basis in order to ensure responsiveness to changes in business circumstances. Page 15 of 55 42 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 43 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 The 3 year Assessment Period for the 2 tranches of options issued under the LTIP in 2020 closed at the end of the reporting period being 31 December 2022. The vesting condition for tranche 1 was based on Total Shareholder Return relative to a peer group of companies determined by the Board and disclosed in the 2020 Annual Report while the vesting condition for tranche 2 was expressed as entry into the ASX 300 index, which at the time was expressed to the recipients as achieving a market capitalisation of at least $200 million. During the reporting period, the exercise condition for tranche 2 was clarified by the Board to reflect the underlying intention at the time of issue of the incentives that the Company achieve a market capitalisation of at least $200 million and with this market capitalisation, the Company would be in the 300 largest companies with a primary listing of ordinary shares on the ASX by market capitalisation. All other terms and conditions of the grant remained the same and there was no increase in the value of the award. The market capitalisation of the Company at the commencement of the Assessment Period on 1 January 2020 was $45.5m and increased to $478.4m as at 31 December 2022, representing an increase of $433.9m or 952% and placing the Company in the 300 largest companies with a primary listing of ordinary shares on the ASX by market capitalisation. Following the close of the Assessment Period, the Board determined that the vesting conditions on the tranche 1 & 2 options had been met and as such the options vested with the KMP and are capable of being exercised. The terms and conditions of the zero exercise priced options affecting remuneration during the reporting period are set out below. Grant Date Executive Directors 23 March 2022 23 March 2022 19 February 2021 19 February 2021 29 May 2020 29 May 2020 Performance Measurement period 1 January 2022 to 31 December 2024 1 January 2022 to 31 December 2024 1 January 2021 to 31 December 2023 1 January 2021 to 31 December 2023 1 January 2020 to 31 December 2022 1 January 2020 to 31 December 2022 Expiry Date Vesting Conditions 31 December 2025 31 December 2025 50% of Options vest based on Total Shareholder Return relative to a peer group of companies determined by the Board 50% based upon Absolute Total Shareholder Return. 31 December 2024 31 December 2024 31 December 2023 31 December 2023 50% of Options vest based on Total Shareholder Return relative to a peer group of companies determined by the Board. 50% based upon Absolute Total Shareholder Return. 50% of Options vest based on Total Shareholder Return relative to a peer group of companies determined by the Board. 50% based on achieving a market capitalisation at the close of the Assessment Period that was greater than $200 million and which places and the Company in the 300 largest companies with a primary listing of ordinary shares on the ASX by market capitalisation. Executives 23 March 2022 23 March 2022 13 July 2021 13 July 2021 25 January 2021 25 January 2021 14 February 2020 14 February 2020 1 January 2022 to 31 December 2024 1 January 2022 to 31 December 2024 1 January 2021 to 31 December 2023 1 January 2021 to 31 December 2023 1 January 2021 to 31 December 2023 1 January 2021 to 31 December 2023 1 January 2020 to 31 December 2022 1 January 2020 to 31 December 2022 31 December 2025 31 December 2025 31 December 2024 31 December 2024 31 December 2024 31 December 2024 31 December 2023 31 December 2023 50% of Options vest based on Total Shareholder Return relative to a peer group of companies determined by the Board 50% based upon Absolute Total Shareholder Return. 50% of Options vest based on Total Shareholder Return relative to a peer group of companies determined by the Board. 50% based upon Absolute Total Shareholder Return. 50% of Options vest based on Total Shareholder Return relative to a peer group of companies determined by the Board. 50% based upon Absolute Total Shareholder Return. 50% of Options vest based on Total Shareholder Return relative to a peer group of companies determined by the Board. 50% based on achieving a market capitalisation at the close of the Assessment Period that was greater than $200 million and which places and the Company in the 300 largest companies with a primary listing of ordinary shares on the ASX by market capitalisation. Value per Option at grant date $1.1485 $1.0496 $0.7833 $0.6756 $0.2482 $0.2013 $1.1485 $1.0496 $0.6900 $0.5774 $0.7188 $0.6212 $0.1582 $0.1174 Each milestone will be assessed at the end of the 3-year assessment period and the options will not vest or be capable of being exercised until after this assessment period has closed, other than in the case of a successful change of control transaction in which case the options will immediately vest. Page 16 of 55 44 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 45 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 The Board considers that this feature of the LTIP provides an appropriate level of protection for KMP and is in alignment with the interests of shareholders who are likely to benefit from a change in control transaction. Participants in the LTI plan must remain in employment during the assessment period. To achieve the relative Total Shareholder Return (TSR) performance measure, the Company must outperform, on a TSR basis, at least 49.9% of the peer group established by the Board. The peer group for the LTI granted during the year ended 31 December 2022 is comprised of the following companies. Adriatic Metals PLC Blackstone Minerals Limited Core Lithium Ltd Emerald Resources NL Lake Resources NL Legend Mining Limited Mincor Resources NL Rumble Resources Limited Sovereign Metals Limited Stavely Minerals Limited New Century Resources Limited Syrah Resources Limited Energy Transition Minerals Limited OreCorp Limited Talga Group Ltd Galan Lithium Limited Jervois Global Limited Panoramic Resources Limited Tietto Minerals Limited Poseidon Nickel Limited Develop Global Limited The assessment of the relative TSR performance measure will be made at the end of the assessment period with vesting to occur in accordance with the table below. Percentile Ranking compared to Peers <50th Percentile Amount of ZEPO to Vest Zero B/t 50th and 75th Percentile Pro Rata B/t 50% and 100% >75th percentile 100% TSR is defined as the financial gain that results from a change in the Company’s share price plus any dividends paid by the Company during the assessment period divided by the share price at the start of the assessment period. The achievement of the absolute TSR performance measure will be made at the end of the assessment period, with vesting to occur in accordance with the table below. Threshold TSR Level over Assessment Period Amount of ZEPOs which will vest and become exercisable Less than 30% B/t 30% and 40% B/t 40% and 50% 50% or greater Zero 50% 75% 100% Vested options can be exercised any time between vesting and the expiry date. 16.2.4 Superannuation In accordance with regulatory requirements, Directors and employees are permitted to nominate a superannuation fund of their choice to receive superannuation contributions. 16.3 Employment Agreements Remuneration and other terms of employment for executives are formalised in employment agreements which are reviewed annually. The agreements provide for the provision of other benefits and participation, at the discretion of the Board in short and long-term incentive plans (refer to sections 16.2.2 and 16.2.3). Other major provisions of the current employment agreements, as at the date of this report, relating to remuneration are set out below: 44 ANNUAL REPORT CENTAURUS METALS LIMITED Page 17 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 45 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Name D P Gordon W E Foote J W Westdorp B R Scarpelli Salary Incl of Superannuation $533,000 pa $425,000 pa $390,000 pa $372,000 pa R J Fitzhardinge $273,600 pa Maximum STI Potential 50% 40% 40% 45% 40% Maximum LTI Potential Notice Period Company Notice Period Employee 100% 12 months 60% 60% 70% 60% 3 months 6 months 2 months 2 months 6 months 3 months 2 months 2 months 2 months Redundancy 12 months 6 months 6 months 6 months 6 months 16.4 Non-Executive Directors Fees and payments to Non-Executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-Executive directors’ fees and payments are reviewed at least annually by the Board. The Chair’s fees are determined independently to the fees of Non-Executive directors based on comparative roles in the external market and prevailing market conditions. The advice of independent remuneration consultants is sought on an annual basis. Non-Executive directors’ remuneration consists of set fee amounts. The current level of fees, applicable from 1 January 2023, for Non-Executive directors is $77,000 per annum. The Non-Executive Chair’s fees are $115,000 per annum. Directors do not receive additional committee fees. Non-Executive directors’ fees are subject to an aggregate pool limit, which is periodically recommended for approval by shareholders. The approved pool limit is currently $400,000. There is no provision for retirement allowances for Non-Executive directors. Non-Executive Directors may be granted options from time to time to provide a meaningful additional incentive for their ongoing commitment and dedication to the continued growth of the Group and to assist the Company in attracting and retaining the highest calibre of Non-Executive Director, whilst maintaining the Group’s cash reserves. There were no options granted or issued to Non-Executive Directors in the current period, with the cost reported relating to prior period issues which are progressively vesting. Refer to Section 16.6 for options issued during prior periods. Prior to issuing incentives the Board considers whether the issue is reasonable in the circumstances. 46 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 47 Page 18 of 55 CENTAURUS METALS ANNUAL REPORT 2022 p u o r G e h t f o l e n n o s r e p t n e m e g a n a m y e k r e h t o d n a e v i t u c e x e y n a p m o C d e m a n d n a r o t c e r i d h c a e r o f n o i t a r e n u m e r f o t n e m e e l j r o a m h c a e f o t n u o m a d n a e r u t a n e h t f o s l i a t e D n o i t a r e n u m e R ’ s r e c i f f O e v i t u c e x E d n a ’ s r o t c e r i D 5 . 6 1 2 2 0 2 r e b m e c e D 1 3 – t r o p e R l a i c n a n i F ) i v ( ) e ( ) 1 ( A 0 0 3 S ) i ( ) e ( ) 1 ( A 0 0 3 S f o n o i t r o p o r P f o n o i t r o p o r P s a e c n a m r o f r e P s n o i t p O f o e u a V l n o i t a r e n u m e R % n o i t a r e n u m e R % d e t a e R l $ l a t o T $ ) 3 ( s n o i t p O $ ) 2 ( e v a e L e c i v r e S g n o L $ n o i t a u n n a r e p u S $ ) 1 ( s t i f e n e B r e h t O $ s e s u n o B I T S $ s e e F & y r a a S l r a e Y d e s a B e r a h S s t n e m y a P m r e T g n o L s t i f e n e B t s o P t n e m y o p m E l s t i f e n e B s t i f e n e B m r e T t r o h S % 6 . 1 3 % 7 6 5 . % 6 . 1 3 % 8 6 5 . % 6 . 1 3 % 4 8 5 . - - % 5 . 6 3 % 3 6 2 . % 5 . 6 2 % 9 0 2 . % 2 . 8 2 % 8 9 1 . % 5 . 5 2 % 2 8 1 . % 5 . 9 1 % 1 0 1 . - - - - - - - - % 1 . 1 5 % 0 7 4 . % 0 . 0 4 % 4 . 8 3 % 1 . 9 3 % 1 . 6 3 % 5 . 7 3 % 0 . 5 3 % 4 . 2 3 % 4 . 5 3 1 0 6 , 3 5 1 3 5 1 , 3 7 1 1 0 4 , 2 0 1 5 3 2 , 5 1 1 1 0 4 , 2 0 1 5 2 8 , 9 1 1 - 3 3 8 , 6 2 4 2 0 , 4 1 9 5 6 8 , 6 0 1 , 1 6 0 1 , 5 8 5 8 5 2 , 9 6 4 4 9 7 , 6 6 4 2 4 9 , 2 9 3 7 5 4 , 3 8 5 6 1 2 , 1 9 4 2 4 2 , 1 8 5 1 8 7 , 3 3 2 0 0 7 , 8 0 7 , 3 , 4 3 4 9 0 9 2 , 1 0 6 , 8 4 3 5 1 , 8 9 1 0 4 , 2 3 5 3 4 , 5 6 1 0 4 , 2 3 5 2 0 , 0 7 - - 2 8 5 , 3 0 4 2 0 3 , 0 4 2 1 4 1 , 8 9 3 2 0 , 5 5 1 1 6 9 , 7 7 8 0 5 , 1 3 1 0 2 6 , 9 8 1 6 5 , 8 4 1 2 1 6 , 3 2 5 0 1 , 3 1 1 9 4 2 , 3 6 7 2 8 1 , 5 6 0 , 1 - - - - - - - - - - 7 6 6 , 6 2 2 1 7 , 0 2 3 1 3 9 , 2 2 4 , 6 1 - - - - 9 8 0 , 3 4 5 2 0 , 0 3 - - - - - - - - - - 0 0 5 , 7 2 0 5 2 6 2 , 0 5 6 , 3 2 2 9 9 , 1 2 0 0 5 , 7 2 0 5 2 , 6 2 0 0 5 , 7 2 3 5 0 , 2 1 5 4 5 , 6 8 0 5 1 , 6 0 1 - - - - - - - - 1 4 1 , 9 2 4 2 9 , 7 2 6 4 4 , 1 1 7 6 0 , 9 1 0 3 3 , 3 1 ) 7 6 3 6 ( , 1 8 3 4 , 6 4 5 , 4 1 4 0 8 2 , 3 6 9 , 8 1 6 2 4 , 7 8 9 0 8 , 7 4 - - - - - - - - 5 7 4 , 2 6 1 6 8 4 , 9 8 1 4 1 2 , 9 7 5 1 2 , 2 8 4 3 1 , 1 5 8 6 8 , 3 6 0 5 3 , 0 7 5 1 2 , 2 8 4 7 1 , 5 7 0 6 1 , 9 5 7 4 3 , 8 3 4 4 4 9 , 6 7 4 0 0 0 , 5 7 0 0 0 , 5 0 1 0 0 0 , 0 7 0 0 8 9 4 , 0 0 0 , 0 7 0 0 8 9 4 , - 3 3 8 , 6 2 0 0 5 , 7 5 4 0 5 3 , 9 0 4 3 2 4 , 9 3 3 5 3 8 , 9 6 2 0 5 7 , 0 3 2 5 7 1 , 6 2 2 0 0 5 , 2 2 3 0 5 7 , 8 8 2 0 0 5 , 6 4 3 2 5 1 , 6 3 1 6 0 5 , 8 6 9 , 1 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 2 2 0 2 1 2 0 2 , 2 6 8 4 0 5 1 , s r o t c e r i D e v i t u c e x E - n o N a i c r u M M D r M k c o c n a H D M r M k i s a n a B A C r M s r o t c e r i D e v i t u c e x E n o d r o G P D r M ) 4 ( a v o s t l e r t S N r D i e g n d r a h z t i F J R r M s e v i t u c e x E i l l e p r a c S R B r M p r o d t s e W W J r M ) 5 ( e t o o F E W r M 2 2 0 2 l a t o T 1 2 0 2 l a t o T : e r a 5 5 f o 9 1 e g a P m o r f d o i r e p e h t r e v o y l n e v e d o i r e p g n i t r o p e r h c a e o t d e t a c o l l a s i l e u a v r i a f e h t d n a l e d o m g n i c i r p - n o i t p o s e o h c S k c a B e h t l l r o o l r a C e t n o M e h t r e h t i e g n i s u t n a r g f o e t a d e h t t a d e t a u c l a c l s i s n o i t p o e h t f o e u a v l r i a f e h T . s i s a b s l a u r c c a n a n o d e r u s a e m e v a e l e c i v r e s g n o l a t a r o r p o t s e t a e R l . d o i r e p g n i t r o p e r s i h t n i d e s n e p x e s n o i t p o e h t f o e u a v r i l a f e h t f o n o i t r o p e h t s i l d e s o l c s i d e u a v e h T . e t a d g n i t s e v o t e t a d t n a r g . 2 2 0 2 t s u g u A 5 1 d e t n o p p A i . 1 2 0 2 y l u J 6 2 d e t n o p p A i . l i z a r B n i d e t a c o l s e v i t u c e x e r o f s t i f e n e b r o n m i r e h t o d n a , s i s a b s l a u r c c a n a n o d e r u s a e m , d o i r e p h t n o m - 2 1 e h t r e v o s t n e m e l t i t n e e v a e l l a u n n a n i t n e m e v o m e h t e d u l c n i s t i f e n e b r e h t O ) 1 ( ) 2 ( ) 3 ( ) 4 ( ) 5 ( 46 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 47 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 16.6 Equity Instruments Options may be granted under the ESIP which was approved by shareholders at the 2022 Annual General Meeting. Eligibility to participate in the ESIP (including participation by Executive and Non-Executive directors) is determined by the Board in its absolute discretion. The vesting and exercise conditions of options granted are also determined by the Board in its absolute discretion. Employees must remain in employment during the vesting period. Options may also be granted by the Company outside of the ESIP, but under similar terms and conditions. The Group has a policy that prohibits directors and employees who are granted share options as part of their remuneration from entering into arrangements that limit their exposure to losses that would result from share price decreases. 16.6.1 Analysis of Options over Equity Instruments Granted as Compensation Details of vesting profiles of the options granted as remuneration both during the current and prior years to KMP of the Group are detailed below. There were no options forfeited during the year. A total of 3,750,002 options previously granted as compensation with a weighted average exercise price of $0.28 were exercised in 2022 raising $1,052,700. Directors Mr D M Murcia Mr D P Gordon Mr B R Scarpelli Mr M D Hancock Mr C A Banasik Number of Options Issued 600,000 600,000 841,479 841,479 235,307 235,307 223,030 223,029 339,992 339,991 97,234 97,234 77,670 77,669 400,000 400,000 116,667 233,334 400,000 400,000 400,000 Grant Date Expiry Date Exercise Price Fair value per option at grant date 29/05/20 29/05/20 31/05/23 31/05/24 29/05/20 29/05/20 19/02/21 19/02/21 23/03/22 23/03/22 29/05/20 29/05/20 19/02/21 19/02/21 23/03/22 23/03/22 31/12/23 31/12/23 31/12/24 31/12/24 31/12/25 31/12/25 31/12/23 31/12/23 31/12/24 31/12/24 31/12/25 31/12/25 29/05/20 29/05/20 31/05/23 31/05/24 31/05/19 31/05/19 29/05/20 29/05/20 29/05/20 31/05/23 31/05/24 31/05/22 31/05/23 31/05/24 $0.392 $0.405 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.392 $0.405 $0.180 $0.180 $0.378 $0.392 $0.405 $0.1461 $0.1667 $0.2482 $0.2013 $0.7833 $0.6756 $1.1485 $1.0496 $0.2482 $0.2013 $0.7833 $0.6756 $1.1485 $1.0496 $0.1461 $0.1667 $0.0868 $0.0952 $0.1189 $0.1461 $0.1667 Dr N Streltsova - - - - - Executives Mr R J Fitzhardinge Mr J W Westdorp Mr W E Foote 369,741 369,741 98,675 98,675 73,117 73,117 424,990 424,989 113,440 113,440 80,475 80,475 97,955 97,955 85,993 85,993 14/02/20 14/02/20 25/01/21 25/01/21 25/03/22 25/03/22 14/02/20 14/02/20 25/01/21 25/01/21 23/03/22 23/03/22 13/07/21 13/07/21 23/03/22 23/03/22 31/12/23 31/12/23 31/12/24 31/12/24 31/12/25 31/12/25 31/12/23 31/12/23 31/12/24 31/12/24 31/12/25 31/12/25 31/12/24 31/12/24 31/12/25 31/12/25 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.000 $0.1582 $0.1174 $0.7188 $0.6212 $1.1485 $1.0496 $0.1582 $0.1174 $0.7188 $0.6212 $1.1485 $1.0496 $0.6900 $0.5774 $1.1485 $1.0496 % Vest in Year 100% - - - - - - - - - - - - - 100% - - - - 100% - - - - - - - - - - - - - - - - - - Financial Year in Which Grant Vests/Vested (1) 2022 2023 2023(2) 2023(3) 2024(4) 2024(5) 2025(6) 2025(7) 2023(2) 2023(3) 2024(4) 2024(5) 2025(6) 2025(7) 2022 2023 2020 2021 2021 2022 2023 - 2023(2) 2023(3) 2024(4) 2024(5) 2025(6) 2025(7) 2023(2) 2023(3) 2024(4) 2024(5) 2025(6) 2025(7) 2024(4) 2024(5) 2025(6) 2025(7) Page 20 of 55 48 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 49 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 (1) Options are subject to the satisfaction of service conditions. Options will vest subject to achievement of the vesting conditions which will be assessed in the year following the measurement period. (2) Refer to section 16.2.3 for further details. Options will vest subject to achieving a market capitalisation, at the end of the assessment period, of greater than $200 million and which places the Company in the 300 largest companies with a primary listing of ordinary shares on the ASX by market capitalisation and to meeting a three-year service condition to 31 December 2022. (3) Options will vest subject to the achievement of the relative TSR measure detailed in the 2020 Annual Report and to meeting a three year service condition to 31 December 2022. (4) Options will vest subject to the achievement of the absolute TSR measure detailed in Section 16.2.3 and to meeting a three year service condition to 31 December 2023. (5) Options will vest subject to the achievement of the relative TSR measure detailed in Section 16.2.3 and to meeting a three year service condition to 31 December 2023. (6) Options will vest subject to the achievement of the absolute TSR measure detailed in Section 16.2.3 and to meeting a three year service condition to 31 December 2024. (7) Options will vest subject to the achievement of the relative TSR measure detailed in Section 16.2.3 and to meeting a three year service condition to 31 December 2024. 16.6.2 Options Over Equity Instruments Granted as Compensation The movement during the reporting period, by number of options over ordinary shares in Centaurus Metals Limited held, directly, indirectly and beneficially, by each KMP, including their related parties, is as follows: Held 1 January 2022 Exercised Granted 2,133,334 (933,334) - 2,820,239 (666,667) 1,374,451 (500,000) 1,433,334 (633,334) 1,666,668 (516,667) - - 446,059 155,339 - - - 146,234 160,949 171,986 Held 31 December 2022 Vested During the Period Vested and Exercisable 31 December 2022 1,200,000 2,599,631 1,029,790 800,000 1,150,001 - 1,083,066 1,237,808 367,896 - - - - - - - - - - - - - 350,001 - - - - Mr R J Fitzhardinge 1,436,832 (500,000) Mr J W Westdorp Mr W E Foote 1,076,859 195,910 - - Directors Mr D M Murcia Mr D P Gordon Mr B R Scarpelli Mr M D Hancock Mr C A Banasik Dr N Streltsova Executives 48 ANNUAL REPORT CENTAURUS METALS LIMITED Page 21 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 49 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 16.6.3 Analysis of Movements in Options The movement during the reporting period, by value, of options over ordinary shares in the Company held by each director, key management person and each of the Company executives and relevant Group executives is detailed below: Director Mr D M Murcia Mr D P Gordon Mr B R Scarpelli Mr M D Hancock Mr C A Banasik Dr N Streltsova Executives Mr R J Fitzhardinge Mr J W Westdorp Mr W E Foote Value of Options Granted $(1) Value of Options Exercised in Year $(2) Value of Options Lapsed in Year $(3) - 490,241 170,725 - - - 160,718 176,891 189,021 780,867 623,334 467,500 530,967 427,134 - 467,500 - - - - - - - - - - - (1) The value of options granted in the year is the fair value of the options calculated at grant date using either a Black Scholes option-pricing model or a Monte Carlo option pricing model. The total value of the options granted is included in the table above. This amount is allocated to remuneration over the vesting period. (2) The value of options exercised during the year is calculated as the market price of shares of the Company as at close of trading on the date the options were exercised after deducting the price paid to exercise the option. (3) The value of unvested options that lapsed during the year represents the benefit forgone and is calculated at the date the options lapsed using the Black Scholes option-pricing model assuming the performance criteria had been achieved. To the extent that the options are out of the money upon lapsing, the value is nil. 16.6.4 Performance Based Remuneration Granted and Forfeited During the Year During the year, the Board determined to pay STIs to executives in recognition of the achievement of performance targets for the year ended 31 December 2022. There were no increases in the target STI quantum during the period. A summary of STIs for the period is shown below. Executive Mr D P Gordon Mr B S Scarpelli Mr W E Foote(1) Mr J W Westdorp Mr R J Fitzhardinge Target STI Quantum (% of Base Salary) Target FY22 STI Quantum $ 50% 35% 30% 30% 30% 242,500 118,230 112,000 105,000 76,320 STI Quantum Earned $ 162,475 79,214 75,174 70,350 51,134 STI Quantum Forfeited $ 80,025 39,016 36,826 34,650 25,186 (1) 20% in 2021 due to engagement during the period. 16.6.5 Key Management Personnel Transactions (a) Loans to Key Management Personnel and Their Related Parties No loans have been made to directors or other key management personnel of Centaurus Metals Limited or the Group. (b) Key Management Personnel and Director Transactions Key Management Personnel, or their related parties, hold positions in other entities that result in them having control or significant influence over the financial or operating policies of these entities. One of these entities transacted with the Group in the reporting period. The terms and conditions of the transactions with key management personnel and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an arm’s length basis. Page 22 of 55 50 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 51 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows: Key Management Person Mr D M Murcia (1) Total and current liabilities Transaction Legal fees Transaction Value 2022 $ 21,578 2021 $ 8,156 Balance Outstanding as at 31 Dec 2022 $ 31 Dec 2021 $ 6,015 6,015 - - (1) Payable to MPH Lawyers, a firm in which Mr Murcia is a partner. 16.6.6 Shareholdings of Key Management Personnel The movement during the reporting period of ordinary shares in Centaurus Metals Limited held, directly, indirectly and beneficially, by each KMP, including their related parties, is as follows: Directors Mr D M Murcia Mr D P Gordon Mr B R Scarpelli Mr M D Hancock Mr C A Banasik D N Streltsova Executives Mr R J Fitzhardinge Mr J W Westdorp Mr W E Foote Held 1 January 2022 Received on exercise of options Other Changes (1) Held at 31 December 2022 1,338,633 6,118,879 666,667 728,920 583,334 - 6,250,724 126,800 - 933,334 666,667 500,000 633,334 516,667 - (500,000) (450,000) - (250,000) (150,000) 85,000 500,000 (600,000) - - - - 1,771,967 6,335,546 1,166,667 1,112,254 950,001 85,000 6,150,724 126,800 - (1) Represents shares sold with the exception of D N Streltsova which comprises balance on appointment. All equity transactions with Key Management Personnel other than those arising from the exercise of remuneration options have been entered into under terms and conditions no more favourable than those the Group would have adopted if dealing at arms-length. This report is signed in accordance with a resolution of the directors. D P Gordon Managing Director Perth 30 March 2023 50 ANNUAL REPORT CENTAURUS METALS LIMITED Page 23 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 51 CENTAURUS METALS ANNUAL REPORT 2022 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Centaurus Metals Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Centaurus Metals Limited for the financial year ended 31 December 2022 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Graham Hogg Partner Perth 30 March 2023 52 ANNUAL REPORT CENTAURUS METALS LIMITED KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation. CENTAURUS METALS LIMITED ANNUAL REPORT 53 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2022 Profit or Loss Other income Exploration expenditure Impairment of other receivables Employee benefits expense Share based payments expense Listing and share registry fees Professional fees Depreciation Other expenses Results from operating activities Interest income Finance expense Net finance income Loss before income tax Loss for the period Other Comprehensive Income Items that may be reclassified subsequently to profit or loss Exchange differences arising on translation of foreign operations Other comprehensive loss for the period Total comprehensive loss for the period 31 December 2022 $ 31 December 2021 $ Note 7 534,900 265,862 Note 15 Note 8 Note 9 Note 20 (36,225,206) (2,359,170) (2,497,517) (1,143,562) (153,333) (604,165) (362,832) (1,131,348) (43,942,233) 1,348,066 (33,388) 1,314,678 (13,198,599) (707,729) (1,840,182) (781,107) (121,082) (321,052) (131,342) (386,790) (17,222,021) 235,207 (7,901) 227,306 (42,627,555) (42,627,555) (16,994,715) (16,994,715) 1,149,970 (13,896) 1,149,970 (41,477,585) (13,896) (17,008,611) Earnings per Share Basic loss per share Diluted loss per share Note 12 Note 12 cents (10.14) (10.14) cents (5.04) (5.04) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying Notes. 52 ANNUAL REPORT CENTAURUS METALS LIMITED Page 25 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 53 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Consolidated Statement of Financial Position As at 31 December 2022 Current assets Cash and cash equivalents Other receivables and prepayments Inventories Total current assets Non-current assets Other receivables and prepayments Property, plant and equipment Exploration and evaluation assets Total non-current assets Total assets Current liabilities Trade and other payables Financial liability Lease liability Employee benefits – annual leave Total current liabilities Non-current liabilities Financial liability Lease liability Employee benefits – long service leave Total non-current liabilities Total liabilities Net assets Equity Share capital Reserves Accumulated losses Total equity Note 13 Note 15 Note 15 Note 16 Note 17 Note 18 Note 19 Note 20 Note 19 Note 20 31 December 2022 $ 31 December 2021 $ 34,047,722 1,329,338 58,152 35,435,212 49,209 8,903,956 13,006,304 21,959,469 57,394,681 4,589,016 1,432,088 540,419 552,779 7,114,302 183,926 488,512 279,242 951,680 8,065,982 49,328,699 8,259,389 529,725 - 8,789,114 8,156 6,004,233 12,048,261 18,060,650 26,849,764 2,893,287 5,161,448 86,576 379,516 8,520,827 1,325,267 29,334 223,690 1,578,291 10,099,118 16,750,646 236,289,294 (5,819,170) (181,141,425) 49,328,699 162,962,306 (7,697,790) (138,513,870) 16,750,646 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes. 54 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 55 Page 26 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Consolidated Statement of Financial Position As at 31 December 2022 Current assets Cash and cash equivalents Other receivables and prepayments Inventories Total current assets Non-current assets Other receivables and prepayments Property, plant and equipment Exploration and evaluation assets Total non-current assets Total assets Current liabilities Trade and other payables Financial liability Lease liability Employee benefits – annual leave Total current liabilities Non-current liabilities Financial liability Lease liability Employee benefits – long service leave Total non-current liabilities Total liabilities Net assets Equity Share capital Reserves Accumulated losses Total equity Note 13 Note 15 Note 15 Note 16 Note 17 Note 18 Note 19 Note 20 Note 19 Note 20 31 December 31 December 2022 $ 34,047,722 1,329,338 58,152 35,435,212 49,209 8,903,956 13,006,304 21,959,469 57,394,681 4,589,016 1,432,088 540,419 552,779 7,114,302 183,926 488,512 279,242 951,680 8,065,982 49,328,699 2021 $ 8,259,389 529,725 - 8,789,114 8,156 6,004,233 12,048,261 18,060,650 26,849,764 2,893,287 5,161,448 86,576 379,516 8,520,827 1,325,267 29,334 223,690 1,578,291 10,099,118 16,750,646 236,289,294 (5,819,170) (181,141,425) 49,328,699 162,962,306 (7,697,790) (138,513,870) 16,750,646 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying Notes. 2 2 0 2 r e b m e c e D 1 3 – t r o p e R l a i c n a n i F , 0 7 9 9 4 1 1 , 6 4 6 , 0 5 7 , 6 1 ) 5 5 5 , 7 2 6 , 2 4 ( y t i u q E l a t o T $ , 2 6 5 3 4 1 1 , , 0 0 0 5 7 4 5 7 , , 0 0 7 2 5 0 1 , - ) 4 2 6 , 5 1 6 , 3 ( 8 3 6 , 5 5 0 , 4 7 9 9 6 , 8 2 3 , 9 4 ) 6 9 8 , 3 1 ( 6 1 3 , 8 1 1 , 6 2 ) 5 1 7 , 4 9 9 , 6 1 ( , 7 0 1 1 8 7 , 0 0 0 0 0 4 1 , , 9 2 6 2 6 4 5 , - - ) 5 9 7 , 2 ( 1 4 9 , 0 4 6 , 7 6 4 6 , 0 5 7 , 6 1 5 5 f o 7 2 e g a P ) 5 8 5 , 7 7 4 , 1 4 ( ) 5 5 5 , 7 2 6 , 2 4 ( 0 7 9 , 9 4 1 , 1 ) 0 7 8 , 3 1 5 , 8 3 1 ( ) 3 9 3 , 6 3 2 , 9 ( 3 0 6 , 8 3 5 , 1 6 0 3 , 2 6 9 , 2 6 1 l d e t a u m u c c A s e s s o L $ n o i t a l s n a r T e v r e s e R $ s t n e m y a P e v r e s e R $ y c n e r r u C n g i e r o F d e s a B - e r a h S l a t i p a C d e u s s I $ ) 5 5 5 , 7 2 6 , 2 4 ( - - , 0 7 9 9 4 1 1 , - - - - - - - - - - - - ) 5 2 4 , 1 4 1 , 1 8 1 ( ) 3 2 4 , 6 8 0 , 8 ( - - - - - - 2 6 5 , 3 4 1 , 1 0 5 6 , 8 2 7 ) 2 1 9 4 1 4 ( , 3 5 2 , 7 6 2 , 2 - - - - 0 0 7 , 2 5 0 , 1 0 0 0 , 5 7 4 , 5 7 ) 4 2 6 , 5 1 6 3 ( , 2 1 9 , 4 1 4 8 8 9 , 6 2 3 , 3 7 4 9 2 , 9 8 2 , 6 3 2 ) 5 1 7 , 4 9 9 , 6 1 ( - ) 5 5 1 , 9 1 5 , 1 2 1 ( ) 7 9 4 , 2 2 2 , 9 ( 4 3 9 , 4 5 9 4 3 0 , 5 0 9 , 5 5 1 ) 1 1 6 , 8 0 0 , 7 1 ( ) 5 1 7 , 4 9 9 , 6 1 ( - - - - - - - - - - - - - - - ) 6 9 8 , 3 1 ( ) 6 9 8 , 3 1 ( ) 0 7 8 , 3 1 5 , 8 3 1 ( ) 3 9 3 , 6 3 2 , 9 ( - - - - - - 7 0 1 1 8 7 , - ) 8 3 4 7 9 1 ( , 9 6 6 , 3 8 5 3 0 6 , 8 3 5 , 1 - - - - 0 0 0 , 0 0 4 1 , 9 2 6 , 2 6 4 , 5 ) 5 9 7 2 ( , 8 3 4 , 7 9 1 2 7 2 , 7 5 0 , 7 6 0 3 , 2 6 9 , 2 6 1 . s e t o N g n i y n a p m o c c a e h t h t i w n o i t c n u n o c n j i n o i t a r e p o n g e r o f i r o f e c n e r e f f i d n o i t a l s n a r t y c n e r r u c n g e r o F i d o i r e p e h t r o f s s o l e v i s n e h e r p m o c l a t o T s n o i t c a s n a r t t n e m y a p d e s a b - e r a h S 2 2 0 2 y r a u n a J 1 t a e c n a a B l d o i r e p e h t r o f s s o L 2 2 0 2 r e b m e c e D 1 3 d e d n e r a e y e h t r o F s n o i t p o f o e s i c r e x e n o r e f s n a r T s r e n w o h t i w s n o i t c a s n a r t l a t o T 2 2 0 2 r e b m e c e D 1 3 t a e c n a a B l i s e r a h s y r a n d r o f o s e u s s I d e s i c r e x e s n o i t p o e r a h S s t s o c e u s s i e r a h S 1 2 0 2 y r a u n a J 1 t a e c n a a B l d o i r e p e h t r o f s s o L n o i t a r e p o n g e r o f i r o f e c n e r e f f i d n o i t a l s n a r t y c n e r r u c n g e r o F i d o i r e p e h t r o f s s o l e v i s n e h e r p m o c l a t o T s n o i t c a s n a r t t n e m y a p d e s a b - e r a h S s n o i t p o f o e s i c r e x e n o r e f s n a r T d e s p a l s n o i t p o f o r e f s n a r T s r e n w o h t i w s n o i t c a s n a r t l a t o T 1 2 0 2 r e b m e c e D 1 3 t a e c n a a B l i s e r a h s y r a n d r o f o s e u s s I d e s i c r e x e s n o i t p o e r a h S s t s o c e u s s i e r a h S . x a t f o t e n d e s o l c s i d e r a y t i u q e n i y l t c e r i d d e s i n g o c e r s t n u o m a e h T l d a e r e b d u o h s y t i u q E n i s e g n a h C f o t n e m e t a t S d e t a d i l o s n o C e v o b a e h T y t i u q E n i s e g n a h C f o t n e m e t a t S d e t a d i l o s n o C 54 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 55 Page 26 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Consolidated Statement of Cash Flows For the year ended 31 December 2022 31 December 2022 $ 31 December 2021 $ Note Cash flows from operating activities Exploration and evaluation expenditure Payments to suppliers and employees (inclusive of GST) Other receipts Interest received Net cash used in operating activities Note 14 (37,758,214) (3,783,579) 265,862 1,303,051 (39,972,880) (12,898,881) (2,560,610) - 240,659 (15,218,832) Cash flows from investing activities Payments for property plant & equipment Payment for exploration acquisitions Buy back of project royalty Proceeds from sale of property plant & equipment Net cash used in investing activities Cash flows from financing activities Proceeds from issue of equity securities Proceeds from the exercise of options Capital raising costs Payment of lease liability Net cash from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effect of exchange rate fluctuations on cash held Cash and cash equivalents at 31 December Note 13 (3,507,396) (2,367,239) (1,000,000) 20,249 (6,854,386) 75,000,000 1,052,700 (3,329,802) (252,215) 72,470,683 25,643,417 8,259,389 144,916 34,047,722 (3,323,381) (1,485,458) (1,000,000) - (5,808,839) - 5,462,629 (2,795) (109,991) 5,349,843 (15,677,828) 24,089,281 (152,064) 8,259,389 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying Notes. 56 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 57 Page 28 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Notes to the Consolidated Financial Statements For the year ended 31 December 2022 Note 1. Reporting Entity Centaurus Metals Limited (“the Company”) is a company domiciled in Australia. The Company’s registered office is at Level 2, 1 Ord Street, West Perth WA 6005. The consolidated financial statements of the Company as at and for the year ended 31 December 2022 comprise the Company and its subsidiaries (collectively the “Group” and individually “Group entities”). The Group is a for-profit entity and is primarily involved in exploration for and evaluation of mineral resources. Note 2. Basis of Preparation Statement of Compliance The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) (including Australian Accounting Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRS’s) adopted by the International Accounting Standards Board (IASB). The consolidated financial statements were authorised for issue by the Board of Directors on 30 March 2023. Basis of Measurement The consolidated financial statements have been prepared on the historical cost basis, except for share based payments which are measured at fair value in the statement of financial position. Going Concern The financial statements for the year ended 31 December 2022 have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. During the year, the Group incurred a loss after tax of $42,627,555 with net cash inflows of $25,643,417. The Group has a working capital surplus of $28,320,910. While the Group had cash on hand of $34,047,722 as at 31 December 2022, the Group is likely to need additional working capital in order to meet the Group’s stated strategic objectives. Whilst there is no certainty that additional funding will be available to provide adequate working capital for the Group to achieve its planned objectives, the Directors believe that the Group will be able to secure funding sufficient to meet requirements to continue as a going concern based on the Company’s historical success of raising capital. The form, value and timing of any future transactions that may provide funding is yet to be determined and will depend amongst other things, on capital markets, commodity prices and the outcome of planned exploration and evaluation activities. The Directors have a reasonable expectation that further funding will be obtained to meet the Group’s objectives. In addition, the Directors have considered the minimum expenditure requirements necessary in order to maintain tenements in good standing and to meet committed expenditures for the 12 month period from the date of this report and consider the going concern basis of preparation to be appropriate. In undertaking this analysis, the Directors have considered which expenditure can be reduced if necessary. Note 3. Functional and Presentation Currency These consolidated financial statements are presented in Australian Dollars, which is the Company’s functional currency. The functional currency of the Brazilian subsidiaries is the Brazilian Real. Note 4. Use of Judgements and Estimates In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. 56 ANNUAL REPORT CENTAURUS METALS LIMITED Page 29 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 57 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Judgements Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the consolidated financial statements is included below and also in the following notes: Note 15 - Other Receivables and Prepayments; and Note 17 - Exploration and Evaluation Assets. The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely, from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves. Assumptions and Estimation Uncertainties Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the year ending 31 December 2022 is included in Note 17 – Exploration and Evaluation Assets. In addition to applying judgement to determine whether future economic benefits are likely to arise from the Group’s Exploration and Evaluation assets or whether activities have not reached a stage that permits a reasonable assessment of the existence of Reserves, the Group has to apply a number of estimates and assumptions. The Group is required to make estimates and assumptions as to future events and circumstances, in particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved. Critical to this assessment are estimates and assumptions as to Ore Reserves, the timing of expected cash flows, exchange rates, commodity prices and future capital requirements. Changes in these estimates and assumptions as new information about the recoverability of Ore Reserves becomes available, may impact the assessment of the recoverable amount of exploration and evaluation assets. If, after the expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the relevant capitalised amount is written off to profit or loss in the period when that information becomes available. Measurement of Fair Values A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the methods described below. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. (a) Trade and Other Receivables The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of interest at the reporting date. (b) Share-based Payment Transactions The fair value of employee share options is estimated using the applicable valuation methodology. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and performance conditions attached to vesting are not taken into account in determining fair value. Where the service period commences prior to grant date the fair value is provisionally calculated and subsequently revised upon grant date. Note 5. Significant Accounting Policies The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements. Basis of Consolidation (a) Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Page 30 of 55 58 ANNUAL REPORT CENTAURUS METALS LIMITED The accounting policies of subsidiaries have been changed when necessary to align them with policies adopted by the Inter-Group balances and transactions and any unrealised income and expenses arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements. Financial Report – 31 December 2022 Group. (b) Transactions Eliminated on Consolidation Foreign Currency (a) Foreign Currency Transactions rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the foreign exchange rate at the reporting date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of financial instruments, a financial liability designated as a hedge of the net investment in a foreign operation, or qualifying cash flow hedges, which are recognised in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. (b) Foreign Operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Australian dollars at exchange rates at reporting date. The income and expenses of foreign operations are translated to Australian dollars at average exchange rates for the period. Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation reserve (FCTR) within equity. as part of the profit or loss on disposal. When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income and are presented within equity in the FCTR. Comparative Revisions financial year. Financial Instruments Where necessary comparative figures have been adjusted to conform with changes in presentation in the current The Group classifies non-derivative financial assets into the following categories at fair value through profit and loss, at fair value through other comprehensive income and measured at amortised cost. The Group classifies non-derivative financial liabilities into the other financial liabilities category. (a) Non- derivative Financial Assets and Financial Liabilities – Recognition and Derecognition The Group initially recognises loans, receivables and deposits on the date when they are originated. All other financial assets and financial liabilities are recognised initially on the trade date. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Page 31 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 59 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Judgements Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the consolidated financial statements is included below and also in the following notes: Note 15 - Other Receivables and Prepayments; and Note 17 - Exploration and Evaluation Assets. The application of the Group’s accounting policy for exploration and evaluation expenditure requires judgement to determine whether future economic benefits are likely, from either future exploitation or sale, or whether activities have not reached a stage that permits a reasonable assessment of the existence of reserves. Assumptions and Estimation Uncertainties Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities in the year ending 31 December 2022 is included in Note 17 – Exploration and Evaluation Assets. In addition to applying judgement to determine whether future economic benefits are likely to arise from the Group’s Exploration and Evaluation assets or whether activities have not reached a stage that permits a reasonable assessment of the existence of Reserves, the Group has to apply a number of estimates and assumptions. The Group is required to make estimates and assumptions as to future events and circumstances, in particular, whether successful development and commercial exploitation, or alternatively sale, of the respective areas of interest will be achieved. Critical to this assessment are estimates and assumptions as to Ore Reserves, the timing of expected cash flows, exchange rates, commodity prices and future capital requirements. Changes in these estimates and assumptions as new information about the recoverability of Ore Reserves becomes available, may impact the assessment of the recoverable amount of exploration and evaluation assets. If, after the expenditure is capitalised, information becomes available suggesting that the recovery of expenditure is unlikely, the relevant capitalised amount is written off to profit or loss in the period when that information becomes available. Measurement of Fair Values A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the methods described below. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability. (a) Trade and Other Receivables market rate of interest at the reporting date. (b) Share-based Payment Transactions The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the The fair value of employee share options is estimated using the applicable valuation methodology. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and performance conditions attached to vesting are not taken into account in determining fair value. Where the service period commences prior to grant date the fair value is provisionally calculated and subsequently revised upon grant date. Note 5. Significant Accounting Policies The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements. Basis of Consolidation (a) Subsidiaries Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Page 30 of 55 58 ANNUAL REPORT CENTAURUS METALS LIMITED Financial Report – 31 December 2022 The accounting policies of subsidiaries have been changed when necessary to align them with policies adopted by the Group. (b) Transactions Eliminated on Consolidation Inter-Group balances and transactions and any unrealised income and expenses arising from intra-Group transactions, are eliminated in preparing the consolidated financial statements. Foreign Currency (a) Foreign Currency Transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency at the foreign exchange rate at the reporting date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised cost in foreign currency translated at the exchange rate at the end of the period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of financial instruments, a financial liability designated as a hedge of the net investment in a foreign operation, or qualifying cash flow hedges, which are recognised in other comprehensive income. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. (b) Foreign Operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Australian dollars at exchange rates at reporting date. The income and expenses of foreign operations are translated to Australian dollars at average exchange rates for the period. Foreign currency differences are recognised in other comprehensive income and presented in the foreign currency translation reserve (FCTR) within equity. When a foreign operation is disposed of, in part or in full, the relevant amount in the FCTR is transferred to profit or loss as part of the profit or loss on disposal. When the settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income and are presented within equity in the FCTR. Comparative Revisions Where necessary comparative figures have been adjusted to conform with changes in presentation in the current financial year. Financial Instruments The Group classifies non-derivative financial assets into the following categories at fair value through profit and loss, at fair value through other comprehensive income and measured at amortised cost. The Group classifies non-derivative financial liabilities into the other financial liabilities category. (a) Non- derivative Financial Assets and Financial Liabilities – Recognition and Derecognition The Group initially recognises loans, receivables and deposits on the date when they are originated. All other financial assets and financial liabilities are recognised initially on the trade date. The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control over the transferred asset. Any interest in such derecognised financial assets that is created or retained by the Group is recognised as a separate asset or liability. The Group derecognises a financial liability when its contractual obligations are discharged, cancelled or expire. Page 31 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 59 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Financial assets and liabilities are offset and the net amount presented in the statement of financial position when and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. The Group has the following non-derivative financial assets: receivables and cash and cash equivalents. (i) Receivables Receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, receivables are measured at amortised cost using the effective interest method, less any impairment losses. (ii) Cash and Cash Equivalents Cash and cash equivalents comprise cash balances and call deposits with original maturities of three months or less. (b) Non derivative Financial Liabilities – Measurement Non-derivative financial liabilities are initially recognised at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. (c) Share Capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares or share options are recognised as a deduction from equity, net of any tax effect. Property, Plant and Equipment (a) Recognition and Measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. Any gains or loss on disposal of an item of property, plant and equipment are recognised in profit or loss. When revalued assets are sold, the amounts included in the revaluation reserve are transferred to retained earnings. (b) Depreciation Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in profit or loss. Land is not depreciated. The estimated useful lives of property, plant and equipment are 3 to 15 years. Depreciation methods, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Exploration and Evaluation Expenditure Exploration and evaluation costs are expensed in the year they are incurred. Acquisition costs are carried forward where right of tenure of the area of interest is current and they are expected to be recouped through sale or successful development and exploitation of the area of interest, or, where exploration and evaluation activities in the area of interest have not reached a stage that permits reasonable assessment of the existence of economically recoverable reserves. Where an area of interest is abandoned, or the directors decide that it is not commercial, any accumulated acquisition costs in respect of that area are written off in the financial period in which the decision is made. Each area of interest is also reviewed at the end of each accounting period and accumulated costs written off to the extent that they will not be recoverable in the future. Amortisation is not charged on costs carried forward in respect of areas of interest in the development phase until production commences. Exploration and evaluation assets are transferred to Development Assets once technical feasibility and commercial viability of an area of interest is demonstrable. Exploration and evaluation assets are assessed for impairment and any impairment loss is recognised prior to being reclassified. Financial Report – 31 December 2022 The carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective area of interest. Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist: The term of exploration license in the specific area of interest has expired during the reporting period or will expire in the near future and is not expected to be renewed; Substantive expenditures on further exploration for and evaluation of mineral resources in the specific area are Exploration for and evaluation of mineral resources in the specific area has not led to the discovery of commercially viable quantities of mineral resources and the decision was made to discontinue such activities in Sufficient data exists to indicate that although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development not budgeted nor planned; the specified area; or or by sale. Where a potential impairment is indicated, an assessment is performed for each cash-generating unit which is no larger than the area of interest. The Group performs impairment testing in accordance with the Accounting Policy as detailed below. Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset recognised by the Group is initially measured at cost, comprised of the initial measurement of the related lease liability, any lease payments made at or before the commencement of the contract, less any lease incentives received, any initial direct costs and any restoration costs. Subsequently the asset is measured at cost less any accumulated depreciation and impairment losses and adjusted for certain re-measurements of the lease liability. Right-of-use assets are depreciated over the shorter period of either the useful life of the underlying asset or the lease term. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be determined the lessee’s incremental borrowing rate is used, being the rate the lessee would have to pay to borrow funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The lease liability is subsequently increased by the interest costs on the lease liability and decreased by lease payments made. It is re-measured where there is a change in future lease payments arising from a change in an index rate, or as appropriate, changes in the assessment of whether an extension option is reasonably certain to be exercised. The Group applies the low-value assets and the short-term lease exemptions to leases. Lease payments on short term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying amount based on their relative fair values. No deferred tax is recognised in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax under AASB 112 applies. No goodwill will arise on the acquisition of the net assets and transaction costs relating to the asset acquisition will be included in the capitalised cost Any contingent consideration arising from the acquisition will be recognised at fair value at the acquisition date. Contingent consideration classified as a liability that is a financial instrument and within the scope of AASB 9 is measured at fair value, with changes in fair value recognised in profit or loss in the statement of profit or loss and other comprehensive income in accordance with AASB 9. Asset Acquisition of the asset. Inventory Inventory comprises of diesel and is recognised and valued at the lower of cost or net realisable value (“NRV”). NRV is the estimated future selling price, less the estimated costs necessary to make the sale. Cost represents weighted average cost of the diesel on hand. 60 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 61 Page 32 of 55 Page 33 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 The carrying amount of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective area of interest. Exploration and evaluation assets are assessed for impairment if sufficient data exists to determine technical feasibility and commercial viability or facts and circumstances suggest that the carrying amount exceeds the recoverable amount. Exploration and evaluation assets are tested for impairment when any of the following facts and circumstances exist: The term of exploration license in the specific area of interest has expired during the reporting period or will expire in the near future and is not expected to be renewed; Substantive expenditures on further exploration for and evaluation of mineral resources in the specific area are not budgeted nor planned; Exploration for and evaluation of mineral resources in the specific area has not led to the discovery of commercially viable quantities of mineral resources and the decision was made to discontinue such activities in the specified area; or Sufficient data exists to indicate that although a development in the specific area is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale. Where a potential impairment is indicated, an assessment is performed for each cash-generating unit which is no larger than the area of interest. The Group performs impairment testing in accordance with the Accounting Policy as detailed below. Leases A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset recognised by the Group is initially measured at cost, comprised of the initial measurement of the related lease liability, any lease payments made at or before the commencement of the contract, less any lease incentives received, any initial direct costs and any restoration costs. Subsequently the asset is measured at cost less any accumulated depreciation and impairment losses and adjusted for certain re-measurements of the lease liability. Right-of-use assets are depreciated over the shorter period of either the useful life of the underlying asset or the lease term. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be determined the lessee’s incremental borrowing rate is used, being the rate the lessee would have to pay to borrow funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The lease liability is subsequently increased by the interest costs on the lease liability and decreased by lease payments made. It is re-measured where there is a change in future lease payments arising from a change in an index rate, or as appropriate, changes in the assessment of whether an extension option is reasonably certain to be exercised. The Group applies the low-value assets and the short-term lease exemptions to leases. Lease payments on short term leases and leases of low-value assets are recognised as an expense on a straight-line basis over the lease term. Asset Acquisition When an asset acquisition does not constitute a business combination, the assets and liabilities are assigned a carrying amount based on their relative fair values. No deferred tax is recognised in relation to the acquired assets and assumed liabilities as the initial recognition exemption for deferred tax under AASB 112 applies. No goodwill will arise on the acquisition of the net assets and transaction costs relating to the asset acquisition will be included in the capitalised cost of the asset. Any contingent consideration arising from the acquisition will be recognised at fair value at the acquisition date. Contingent consideration classified as a liability that is a financial instrument and within the scope of AASB 9 is measured at fair value, with changes in fair value recognised in profit or loss in the statement of profit or loss and other comprehensive income in accordance with AASB 9. Inventory Inventory comprises of diesel and is recognised and valued at the lower of cost or net realisable value (“NRV”). NRV is the estimated future selling price, less the estimated costs necessary to make the sale. Cost represents weighted average cost of the diesel on hand. 60 ANNUAL REPORT CENTAURUS METALS LIMITED Page 33 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 61 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Impairment (a) Non-derivative Financial Assets A loss allowance for expected credit loss (ECL) is recognised on financial assets measured at amortised cost. The loss allowances are measured at an amount equal to lifetime ECLs, except for, bank balances which are measured at 12-month ECLs, for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition. Loss allowances for trade receivables are always measured at an amount equal to lifetime ECLs. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information. The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due. The Group considers a financial asset to be in default when the financial asset is more than 90 days past due. Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. 12- month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk. (i) Measurement of ECLs ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls. ECLs are discounted at the effective interest rate of the financial asset. (ii) Credit-impaired financial assets At each reporting date, the Group assesses whether financial assets carried at amortised costs are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Presentation of allowance for ECL in the statement of financial position Loss allowances for financial assets measured at amortised costs are deducted from the gross carrying amount of the assets. (iii) Write-off The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. (b) Non-financial Assets The carrying amounts of the Group’s non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets. The group of assets is referred to as the Cash Generating Unit or CGU. The Group’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired, then the recoverable amount is determined for the CGU to which the corporate asset belongs. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis. Financial Report – 31 December 2022 In respect of assets, other than goodwill, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Employee Benefits (a) Defined Contribution Plans services are rendered by employees. (b) Other Long-term Employee Benefits A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. (c) Short-term Benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (d) Share-based Payment Transactions The fair value of share-based payment awards granted to employees is recognised as an expense at grant date with a corresponding increase in equity, over the period that employees become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group. When the Company grants options over its shares to employees of subsidiaries, the fair value at grant date is recognised as an increase in the investments in subsidiaries, with a corresponding increase in equity over the vesting period of the grant. Provisions as a finance cost. Revenue A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised Revenue is recognised when the goods are delivered and have been accepted by customers at their premises. For contracts that permit the customer to return an item, revenue is recognised to the extent that it is highly probably that a significant reversal in the amount of cumulative revenue recognised will not occur. Therefore, the amount of revenue recognised is adjusted for expected returns, which are estimated based on the historical data. In these circumstances, a refund liability and a right to recover returned goods asset are recognised. Finance Income and Finance Costs Finance income comprises interest income on funds invested, dividend income, gains on the disposal of debt securities measured at fair value through other comprehensive income, changes in the fair value of financial assets at fair value through profit and loss, and gains on hedging instruments that are recognised in profit or loss. Interest income is 62 ANNUAL REPORT CENTAURUS METALS LIMITED Page 34 of 55 Page 35 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 63 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 In respect of assets, other than goodwill, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Employee Benefits (a) Defined Contribution Plans A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees. (b) Other Long-term Employee Benefits The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods plus related on-costs; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. (c) Short-term Benefits Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably. (d) Share-based Payment Transactions The fair value of share-based payment awards granted to employees is recognised as an expense at grant date with a corresponding increase in equity, over the period that employees become entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes. Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group. When the Company grants options over its shares to employees of subsidiaries, the fair value at grant date is recognised as an increase in the investments in subsidiaries, with a corresponding increase in equity over the vesting period of the grant. Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost. Revenue Revenue is recognised when the goods are delivered and have been accepted by customers at their premises. For contracts that permit the customer to return an item, revenue is recognised to the extent that it is highly probably that a significant reversal in the amount of cumulative revenue recognised will not occur. Therefore, the amount of revenue recognised is adjusted for expected returns, which are estimated based on the historical data. In these circumstances, a refund liability and a right to recover returned goods asset are recognised. Finance Income and Finance Costs Finance income comprises interest income on funds invested, dividend income, gains on the disposal of debt securities measured at fair value through other comprehensive income, changes in the fair value of financial assets at fair value through profit and loss, and gains on hedging instruments that are recognised in profit or loss. Interest income is 62 ANNUAL REPORT CENTAURUS METALS LIMITED Page 35 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 63 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex- dividend date. Finance costs comprise interest expense on borrowings, losses on the disposal of debt securities measured at fair value through other comprehensive income, changes in the fair value of financial assets at fair value through profit or loss and losses on hedging instruments that are recognised in profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Foreign currency gains and losses are reported on a net basis. Income Tax Income tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Goods and Services Tax and Equivalent Indirect Taxes Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST) and equivalent indirect taxes, except where the amount of tax incurred is not recoverable from the taxation authority. In these circumstances, the tax is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of tax included. The net amount of tax recoverable from, or payable to, the taxation authority is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The tax components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the tax authority are classified as operating cash flows. Earnings per Share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise listed options and share options granted to employees. Segment Reporting An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segment operating results are regularly reviewed by the Group’s Managing Director to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Segment results that are reported to the Managing Director include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise minimal, not material corporate assets (primarily the Group’s headquarters), head office expenses, and income tax assets and liabilities. Segment capital Page 36 of 55 64 ANNUAL REPORT CENTAURUS METALS LIMITED Financial Report – 31 December 2022 other than goodwill. Government Grants expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets Government grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the periods in which the expenses are recognise, unless the conditions for receiving the grant are met after the related expenses have been recognised. In this case, the grant is recognised when it becomes receivable. The Group has adopted the amendment to standards, including any consequential amendments to other standards, with Changes in Accounting Policies a date of initial application of 1 January 2022. New Standards and Interpretations Not Yet Adopted Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2022 reporting periods and have not been early adopted by the Group These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseesable future transactions. There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting period and on foreseeable future transactions. Note 6. Operating Segments The Group operates in the mineral exploration industry. For management purposes the Group is organised into one main operating segment which involves the exploration of minerals. All of the Group’s activities are interrelated and financial information is reported to the Managing Director (Chief Operating Decision Maker) as a single segment. Accordingly, all significant operating decisions are based upon an analysis on the Group as one segment. The financial results and financial position from this segment are largely equivalent to the financial statements of the Group as a whole. Geographical Segment Information Brazil Australia Total Note 7. Other Income R&D tax refund Other Gain on sale of property plant & equipment Note 8. Employee Benefits Expense Salaries, fees and other benefits Superannuation Recognised in exploration expenditure expense Total Note 9. Share-based Payments 2022 Non-current Assets $ 21,651,685 307,784 21,959,469 2021 Non-current Assets $ 17,968,727 91,923 18,060,650 31 December 31 December 2022 $ 517,875 10,769 6,256 534,900 2021 $ 265,862 - - 265,862 31 December 31 December 2022 $ 6,760,576 293,323 (4,556,382) 2,497,517 2021 $ 3,910,049 170,709 (2,240,576) 1,840,182 From time to time the Group may make share-based payments in connection with its activities. These payments may comprise the issue of options under various terms and conditions. Options granted carry no dividend or voting rights. When exercisable, each option is converted into one ordinary share of the Company with full dividend and voting rights. Page 37 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 65 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Financial Report – 31 December 2022 recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group’s right to receive payment is established, which in the case of quoted securities is the ex- expenditure is the total cost incurred during the period to acquire property, plant and equipment, and intangible assets other than goodwill. Government Grants Government grants that compensate the Group for expenses incurred are recognised in profit or loss as other income on a systematic basis in the periods in which the expenses are recognise, unless the conditions for receiving the grant are met after the related expenses have been recognised. In this case, the grant is recognised when it becomes receivable. Changes in Accounting Policies The Group has adopted the amendment to standards, including any consequential amendments to other standards, with a date of initial application of 1 January 2022. New Standards and Interpretations Not Yet Adopted Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2022 reporting periods and have not been early adopted by the Group These standards are not expected to have a material impact on the entity in the current or future reporting periods and on foreseesable future transactions. There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting period and on foreseeable future transactions. Note 6. Operating Segments The Group operates in the mineral exploration industry. For management purposes the Group is organised into one main operating segment which involves the exploration of minerals. All of the Group’s activities are interrelated and financial information is reported to the Managing Director (Chief Operating Decision Maker) as a single segment. Accordingly, all significant operating decisions are based upon an analysis on the Group as one segment. The financial results and financial position from this segment are largely equivalent to the financial statements of the Group as a whole. Geographical Segment Information Brazil Australia Total Note 7. Other Income R&D tax refund Gain on sale of property plant & equipment Other Note 8. Employee Benefits Expense Salaries, fees and other benefits Superannuation Recognised in exploration expenditure expense Total Note 9. Share-based Payments 2022 Non-current Assets $ 21,651,685 307,784 21,959,469 31 December 2022 $ 517,875 10,769 6,256 534,900 2021 Non-current Assets $ 17,968,727 91,923 18,060,650 31 December 2021 $ 265,862 - - 265,862 31 December 2022 $ 31 December 2021 $ 6,760,576 293,323 (4,556,382) 2,497,517 3,910,049 170,709 (2,240,576) 1,840,182 From time to time the Group may make share-based payments in connection with its activities. These payments may comprise the issue of options under various terms and conditions. Options granted carry no dividend or voting rights. When exercisable, each option is converted into one ordinary share of the Company with full dividend and voting rights. Page 37 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 65 dividend date. method. Income Tax income. Finance costs comprise interest expense on borrowings, losses on the disposal of debt securities measured at fair value through other comprehensive income, changes in the fair value of financial assets at fair value through profit or loss and losses on hedging instruments that are recognised in profit or loss. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest Foreign currency gains and losses are reported on a net basis. Income tax expense comprises current and deferred tax. Current and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date and any adjustment to tax payable in respect of previous years. Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Goods and Services Tax and Equivalent Indirect Taxes Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST) and equivalent indirect taxes, except where the amount of tax incurred is not recoverable from the taxation authority. In these circumstances, the tax is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of tax included. The net amount of tax recoverable from, or payable to, the taxation authority is included as a current asset or liability in the balance sheet. Cash flows are included in the statement of cash flows on a gross basis. The tax components of cash flows arising from investing and financing activities which are recoverable from, or payable to, the tax authority are classified as operating cash flows. Earnings per Share Segment Reporting The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise listed options and share options granted to employees. An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segment operating results are regularly reviewed by the Group’s Managing Director to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available. Segment results that are reported to the Managing Director include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise minimal, not material corporate assets (primarily the Group’s headquarters), head office expenses, and income tax assets and liabilities. Segment capital Page 36 of 55 64 ANNUAL REPORT CENTAURUS METALS LIMITED Financial Report – 31 December 2022 The following table sets out the vesting outcome base on the Company’s Absolute TSR performance Assessment Table Threshold TSR Level over Amount of ZEPOs which will vest Assessment Period and become exercisable Less than 30% B/t 30% and 40% B/t 40% and 50% 50% or greater Zero 50% 75% 100% Inputs for Measurement of Grant Date Fair Values The fair value at grant date of the share-based payments is charged to the income statement over the period which the benefits of the employee services are expected to be derived. The fair values of awards granted were estimated using a either a Monte Carlo simulation or a Black-Scholes option pricing technique taking into account the following inputs: Grant Date Expiry Date 23/03/22 31/12/25 Exercise Price $0.000 Life of option Share price at Expected Vesting share price condition grant date volatility 3.78 years $1.30 100% Relative Risk-free interest rate 2.173% Fair Value at grant date $1.1485 23/03/22 31/12/25 $0.000 3.78 years $1.30 100% Absolute 2.173% $1.0496 TSR TSR Total expense recognised as share-based payment – share options 31 December 31 December 2022 $ 1,143,562 2021 $ 781,107 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 During the reporting period 1,225,220 options were issued to employees and directors (2021: 1,395,452). Options issued to employees were issued under the Employee Share Incentive Plan approved by shareholders at the Annual General Meeting on 27 May 2022. Options issued to executive directors were approved by shareholders under ASX Listing Rule 10.11. Reconciliation of Outstanding Share Options The number and weighted average exercise prices of share options issued are as follows: Outstanding at start of period Exercised during the period Lapsed during the period Issued during the period Outstanding at balance date Exercisable at balance date Weighted Average Exercise Price 2022 $0.1822 $0.2807 - $0.0000 $0.1212 $0.1800 Number of Options 2022 12,247,857 (3,750,002) - 1,225,220 9,723,075 350,001 Weighted Average Exercise Price 2021 $0.2172 $0.0021 - $0.0000 $0.1822 $0.2721 Number of Options 2021 12,085,733 (1,233,335) - 1,395,452 12,247,857 4,100,003 The options outstanding at 31 December 2022 have exercise prices ranging from $0.000 to $0.405 (2021: $0.000 to $0.405) and the weighted average remaining contractual life is 1.40 years (2021: 1.61 years). There were 3,750,002 options exercised during the year (2021: 1,233,335). There were 1,225,220 options issued during the year (2021: 1,395,452). Details of the options issued during the year are as follows: Grant Date Number of Options Vesting Period(1) Option Term Expenses Arising from Share Based Payment Transactions Directors 23/03/22 23/03/22 Total Employees 23/03/22 23/03/22 300,700 300,698 601,398 311,912 311,910 623,822 36 months(2) 36 months(3) 48 months 48 months 36 months(2) 36 months(3) 48 months 48 months (1) From 1 January 2022 subject to continued employment. (2) Options will vest in the future subject to performance and services based vesting conditions being met. The Company’s share price performance is measured via relative Total Shareholder Return (TSR). The Company’s TSR is measured against a peer group of companies. Vesting will occur subject to meeting a three-year service condition to 31 December 2024 and the performance condition tested against the relative TSR measure for the period 1 January 2022 to 31 December 2024. (3) Vesting will occur subject to meeting a three-year service condition to 31 December 2024 and the performance condition tested against the absolute TSR measure for the period 1 January 2022 to 31 December 2024. The following table sets out the vesting outcome based on the Company’s relative TSR performance. TSR percentile compared to peer group Percentage Options that vest <50th percentile 0% Between 50th and 75th percentile Pro-rata between 50% and 100% >75th percentile 100% No options will vest unless the percentile ranking of the Company’s TSR for the relevant performance year, as compared to the TSRs for the Peer Group companies, is at or above the 50th percentile. 66 ANNUAL REPORT CENTAURUS METALS LIMITED Page 38 of 55 Page 39 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 67 Financial Report – 31 December 2022 The following table sets out the vesting outcome base on the Company’s Absolute TSR performance Assessment Table Threshold TSR Level over Assessment Period Amount of ZEPOs which will vest and become exercisable Less than 30% B/t 30% and 40% B/t 40% and 50% 50% or greater Zero 50% 75% 100% Inputs for Measurement of Grant Date Fair Values The fair value at grant date of the share-based payments is charged to the income statement over the period which the benefits of the employee services are expected to be derived. The fair values of awards granted were estimated using a either a Monte Carlo simulation or a Black-Scholes option pricing technique taking into account the following inputs: Grant Date 23/03/22 Expiry Date 31/12/25 Exercise Price $0.000 Life of option 3.78 years Share price at grant date $1.30 Expected share price volatility 100% 23/03/22 31/12/25 $0.000 3.78 years $1.30 100% Vesting condition Relative TSR Absolute TSR Risk-free interest rate 2.173% Fair Value at grant date $1.1485 2.173% $1.0496 Grant Date Number of Options Vesting Period(1) Option Term Expenses Arising from Share Based Payment Transactions Total expense recognised as share-based payment – share options 31 December 2022 $ 1,143,562 31 December 2021 $ 781,107 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 During the reporting period 1,225,220 options were issued to employees and directors (2021: 1,395,452). Options issued to employees were issued under the Employee Share Incentive Plan approved by shareholders at the Annual General Meeting on 27 May 2022. Options issued to executive directors were approved by shareholders under ASX Listing Rule 10.11. Reconciliation of Outstanding Share Options The number and weighted average exercise prices of share options issued are as follows: Outstanding at start of period Exercised during the period Lapsed during the period Issued during the period Outstanding at balance date Exercisable at balance date Weighted Average Exercise Price 2022 $0.1822 $0.2807 - $0.0000 $0.1212 $0.1800 Number of Options 2022 12,247,857 (3,750,002) 1,225,220 9,723,075 350,001 Weighted Average Exercise Price 2021 $0.2172 $0.0021 $0.0000 $0.1822 $0.2721 - - Number of Options 2021 12,085,733 (1,233,335) - 1,395,452 12,247,857 4,100,003 The options outstanding at 31 December 2022 have exercise prices ranging from $0.000 to $0.405 (2021: $0.000 to $0.405) and the weighted average remaining contractual life is 1.40 years (2021: 1.61 years). There were 3,750,002 options exercised during the year (2021: 1,233,335). There were 1,225,220 options issued during the year (2021: 1,395,452). Details of the options issued during the year are as follows: Directors 23/03/22 23/03/22 Total Employees 23/03/22 23/03/22 300,700 300,698 601,398 311,912 311,910 623,822 36 months(2) 36 months(3) 48 months 48 months 36 months(2) 36 months(3) 48 months 48 months (1) From 1 January 2022 subject to continued employment. (2) Options will vest in the future subject to performance and services based vesting conditions being met. The Company’s share price performance is measured via relative Total Shareholder Return (TSR). The Company’s TSR is measured against a peer group of companies. Vesting will occur subject to meeting a three-year service condition to 31 December 2024 and the performance condition tested against the relative TSR measure for the period 1 January 2022 to 31 December 2024. (3) Vesting will occur subject to meeting a three-year service condition to 31 December 2024 and the performance condition tested against the absolute TSR measure for the period 1 January 2022 to 31 December 2024. The following table sets out the vesting outcome based on the Company’s relative TSR performance. TSR percentile compared to peer group Percentage Options that vest <50th percentile >75th percentile 0% 100% Between 50th and 75th percentile Pro-rata between 50% and 100% No options will vest unless the percentile ranking of the Company’s TSR for the relevant performance year, as compared to the TSRs for the Peer Group companies, is at or above the 50th percentile. 66 ANNUAL REPORT CENTAURUS METALS LIMITED Page 38 of 55 Page 39 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 67 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 10. Income Tax Numerical Reconciliation of Income Tax Expense to Prima Facie Tax Payable Loss from continuing operations before income tax expense Tax at the Australian tax rate of 27.5% (2021: 27.5%) Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Overseas project generation and review costs Share-based payments Non assessable grant income Sundry items Effect of tax rates in foreign jurisdictions Under provision from prior year Deferred tax assets not recognised 31 December 2022 $ (42,627,555) (11,722,578) 31 December 2021 $ (16,994,715) (4,673,547) 1,997,922 314,479 (142,416) (222,930) (9,775,523) (27,327) (326,378) 10,129,228 822,525 214,805 (73,113) 9,918 (3,699,412) (8,886) (761,674) 4,469,972 Income tax benefit, being deferred tax - - Tax Losses Tax losses Potential tax benefit (between 27.5-34%) 31 December 2022 $ 66,189,799 19,677,571 31 December 2021 $ 61,188,366 18,096,045 The tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of remaining tax losses because it is not probable that future taxable profit will be available against which the Group can utilise the benefit. Deferred Tax Assets The following deferred tax balances have not been recognised: Deferred Tax Assets Exploration expenditure Accrued expenses/provisions Transaction costs relating to issue of capital Tax losses carried forward (net of tax losses utilised) 31 December 2022 $ 31 December 2021 $ 21,247,510 8,992,211 246,235 19,677,571 50,163,527 9,931,563 10,916,869 80,887 18,096,045 39,025,364 The tax benefits of the above deferred tax assets will only be obtained if: The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to be utilized; The Company continues to comply with the conditions for the deductibility imposed by law; and No changes in income tax legislation adversely affect the Company in utilising the benefits. Note 11. Dividends There were no dividends paid or declared during the period (2021: nil). Financial Report – 31 December 2022 Note 12. Earnings/(Loss) per Share Basic Loss per Share The calculation of basic and diluted earnings per share at 31 December 2022 was based on the loss attributable to ordinary shareholders of $42,627,555 (2021: $16,994,715) and a weighted average number of ordinary shares outstanding of 420,198,738 (2021: 337,081,397), calculated as follows: Loss Attributable to Ordinary Shareholders Loss attributable to the shareholders Weighted Average Number of Ordinary Shares Issued ordinary shares at beginning of the period Effect of shares issued Weighted average number of ordinary shares at the end of the period Loss per share (cents) Diluted loss per share (cents) Diluted Earnings per Share Cash at bank and on hand Deposits - short term Potential ordinary shares were not considered to be dilutive as the Group made a loss for the year ended 31 December 2022 and the exercise of potential shares would not increase that loss. Note 13. Cash and Cash Equivalents The deposits are bearing floating and fixed interest rates between 3.15% & 3.81% in Australia and 12.39% & 12.92% in Brazil (2021: between 0.06% Australia and 4.79% Brazil). Note 14. Reconciliation of Cash Flows from Operating Activities Non-cash employee benefits expense– share based payments (Profit)/Loss on sale of plant and equipment Operating loss before changes in working capital and provisions (40,957,625) (15,991,213) Loss for the period Adjustments for: Depreciation Change in other receivables Change in trade creditors and provisions Net cash used in operating activities 31 December 31 December 2022 $ 2021 $ (42,627,555) (16,994,715) 2022 Number 358,291,616 61,907,122 420,198,738 2021 Number 325,857,160 11,224,237 337,081,397 (10.14) (10.14) (5.04) (5.04) 31 December 31 December 2022 $ 760,413 33,287,309 34,047,722 2021 $ 9,154 8,250,235 8,259,389 31 December 31 December 2022 $ 2021 $ (42,627,555) (16,994,715) 537,137 1,143,562 (10,769) 222,395 781,107 - (1,050,692) 2,035,437 (39,972,880) (321,775) 1,094,156 (15,218,832) 68 ANNUAL REPORT CENTAURUS METALS LIMITED Page 40 of 55 Page 41 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 69 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 10. Income Tax Numerical Reconciliation of Income Tax Expense to Prima Facie Tax Payable Loss from continuing operations before income tax expense Tax at the Australian tax rate of 27.5% (2021: 27.5%) Tax effect of amounts which are not deductible/(taxable) in calculating taxable income: Overseas project generation and review costs Share-based payments Non assessable grant income Sundry items Effect of tax rates in foreign jurisdictions Under provision from prior year Deferred tax assets not recognised Tax Losses Tax losses Potential tax benefit (between 27.5-34%) Income tax benefit, being deferred tax - - The tax losses do not expire under current tax legislation. Deferred tax assets have not been recognised in respect of remaining tax losses because it is not probable that future taxable profit will be available against which the Group can utilise the benefit. Deferred Tax Assets The following deferred tax balances have not been recognised: Deferred Tax Assets Exploration expenditure Accrued expenses/provisions Transaction costs relating to issue of capital Tax losses carried forward (net of tax losses utilised) The tax benefits of the above deferred tax assets will only be obtained if: The Company derives future assessable income of a nature and of an amount sufficient to enable the benefit to The Company continues to comply with the conditions for the deductibility imposed by law; and No changes in income tax legislation adversely affect the Company in utilising the benefits. be utilized; Note 11. Dividends There were no dividends paid or declared during the period (2021: nil). 31 December 31 December 2022 $ (42,627,555) (11,722,578) 2021 $ (16,994,715) (4,673,547) 1,997,922 314,479 (142,416) (222,930) (9,775,523) (27,327) (326,378) 10,129,228 822,525 214,805 (73,113) 9,918 (3,699,412) (8,886) (761,674) 4,469,972 31 December 31 December 2022 $ 66,189,799 19,677,571 2021 $ 61,188,366 18,096,045 31 December 31 December 2022 $ 2021 $ 21,247,510 8,992,211 246,235 19,677,571 50,163,527 9,931,563 10,916,869 80,887 18,096,045 39,025,364 Financial Report – 31 December 2022 Note 12. Earnings/(Loss) per Share Basic Loss per Share The calculation of basic and diluted earnings per share at 31 December 2022 was based on the loss attributable to ordinary shareholders of $42,627,555 (2021: $16,994,715) and a weighted average number of ordinary shares outstanding of 420,198,738 (2021: 337,081,397), calculated as follows: Loss Attributable to Ordinary Shareholders Loss attributable to the shareholders Weighted Average Number of Ordinary Shares Issued ordinary shares at beginning of the period Effect of shares issued Weighted average number of ordinary shares at the end of the period Loss per share (cents) Diluted loss per share (cents) Diluted Earnings per Share 31 December 2022 $ 31 December 2021 $ (42,627,555) (16,994,715) 2022 Number 358,291,616 61,907,122 420,198,738 2021 Number 325,857,160 11,224,237 337,081,397 (10.14) (10.14) (5.04) (5.04) Potential ordinary shares were not considered to be dilutive as the Group made a loss for the year ended 31 December 2022 and the exercise of potential shares would not increase that loss. Note 13. Cash and Cash Equivalents Cash at bank and on hand Deposits - short term 31 December 2022 $ 31 December 2021 $ 760,413 33,287,309 34,047,722 9,154 8,250,235 8,259,389 The deposits are bearing floating and fixed interest rates between 3.15% & 3.81% in Australia and 12.39% & 12.92% in Brazil (2021: between 0.06% Australia and 4.79% Brazil). Note 14. Reconciliation of Cash Flows from Operating Activities Loss for the period Adjustments for: Depreciation Non-cash employee benefits expense– share based payments (Profit)/Loss on sale of plant and equipment Operating loss before changes in working capital and provisions Change in other receivables Change in trade creditors and provisions Net cash used in operating activities 31 December 2022 $ 31 December 2021 $ (42,627,555) (16,994,715) 537,137 222,395 1,143,562 (10,769) (40,957,625) (1,050,692) 2,035,437 (39,972,880) 781,107 - (15,991,213) (321,775) 1,094,156 (15,218,832) 68 ANNUAL REPORT CENTAURUS METALS LIMITED Page 40 of 55 Page 41 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 69 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 15. Other Receivables and Prepayments Current R&D tax refund Other Receivables Security deposits Prepayments Non – Current Other Receivables Provision for impairment Security deposits 31 December 2022 $ 31 December 2021 $ 517,875 228,463 76,293 506,707 1,329,338 3,570,292 (3,563,969) 42,886 49,209 265,862 67,446 33,648 162,769 529,725 1,008,755 (1,000,599) - 8,156 Non-current Other Receivables include Brazilian federal VAT (PIS-Cofins) levied on the Group’s purchases. Recoverability of PIS-Cofins assets is dependent upon the Group generating a federal company tax liability, which may be offset against the Group’s PIS-Cofins assets if the Group elects to do so. The current practice of the Group is to impair PIS-Cofins assets given the pre-development status of the Jaguar Project. During the period the entity wrote off $3,876 which was previously provided for due to credits expiring (2021: $3,388). An impairment expense of $2,359,170 was recognized on indirect taxes receivable in 2022 (2021: $707,729). Information about the Group’s exposure to credit and market risk and impairment losses for other receivables is included in Note 25. Note 16. Property, Plant and Equipment At Cost Accumulated depreciation Movements in Carrying Amounts 31 December 2022 $ 9,958,972 (1,055,016) 8,903,956 31 December 2021 $ 6,526,942 (522,709) 6,004,233 Movements in the carrying amounts for each class of property, plant and equipment between beginning and end of the current financial year. Plant and Equipment Carrying amount at beginning Additions Disposals Depreciation Effect of movements in exchange rates Carrying amount at end Land and Buildings Carrying amount at beginning Additions Depreciation Effect of movements in exchange rates Carrying amount at end 31 December 2022 $ 31 December 2021 $ 880,659 873,156 (13,284) (193,126) 51,935 1,599,340 5,010,056 565,807 (5,510) 723,556 6,293,909 457,064 549,727 (4,105) (116,079) (5,948) 880,659 175,901 4,885,835 (1,915) (49,765) 5,010,056 Page 42 of 55 Financial Report – 31 December 2022 Right-of-use assets (see also Note 20) Carrying amount at beginning Additions Depreciation Effect of movements in exchange rates Carrying amount at end Total Opening net book value Additions Effect of movements in exchange rate Additions to Land in 2021 include the allocation of the fair value of 3 properties at the Jaguar Project which Centaurus has secured possession of. Note 17. Exploration and Evaluation Assets The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful development and commercial exploitation or, alternatively, sale of the respective project areas. Note 18. Trade and Other Payables Current Trade and other creditors Accrued expenses Note 19. Financial Liability Current Land possession Non-Current Land possession Consideration due to Vale for Jaguar acquisition Up-front consideration due to Terrativa for Salobo West Royalty buy back 113,518 1,219,588 (327,768) 5,369 1,010,707 8,903,956 152,029 68,218 (104,400) (2,329) 113,518 6,004,233 31 December 31 December 2022 $ 12,048,261 66,466 891,577 13,006,304 2021 $ 8,764,153 3,402,083 (117,975) 12,048,261 31 December 31 December 2022 $ 2021 $ 3,286,165 1,302,851 4,589,016 1,270,026 1,623,261 2,893,287 31 December 31 December 2022 $ 2021 $ - - 1,432,088 1,432,088 2,400,840 933,534 1,827,074 5,161,448 183,926 183,926 1,325,267 1,325,267 Page 43 of 55 70 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 71 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Right-of-use assets (see also Note 20) Carrying amount at beginning Additions Depreciation Effect of movements in exchange rates Carrying amount at end Total 113,518 1,219,588 (327,768) 5,369 1,010,707 8,903,956 152,029 68,218 (104,400) (2,329) 113,518 6,004,233 Additions to Land in 2021 include the allocation of the fair value of 3 properties at the Jaguar Project which Centaurus has secured possession of. Note 17. Exploration and Evaluation Assets Opening net book value Additions Effect of movements in exchange rate 31 December 2022 $ 12,048,261 66,466 891,577 13,006,304 31 December 2021 $ 8,764,153 3,402,083 (117,975) 12,048,261 The ultimate recoupment of exploration and evaluation expenditure carried forward is dependent on successful development and commercial exploitation or, alternatively, sale of the respective project areas. Note 18. Trade and Other Payables Current Trade and other creditors Accrued expenses Note 19. Financial Liability Current Consideration due to Vale for Jaguar acquisition Up-front consideration due to Terrativa for Salobo West Royalty buy back Land possession Non-Current Land possession 31 December 2022 $ 31 December 2021 $ 3,286,165 1,302,851 4,589,016 1,270,026 1,623,261 2,893,287 31 December 2022 $ 31 December 2021 $ - - 1,432,088 1,432,088 2,400,840 933,534 1,827,074 5,161,448 183,926 183,926 1,325,267 1,325,267 Page 43 of 55 70 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 71 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 20. Leases The Group leases motor vehicles, offices and warehouse facilities. The leases are typically for a period of 1 to 5 years. During the year the Group exercised its option to extend the Corporate head office lease for a further 2 years. In addition a project office lease was entered into for a 21 month period. In Brazil a new office lease was entered into in Belo Horizonte for a period of 2.5 years. New leases were entered into for motor vehicles, office and warehouse space for the Jaguar project. A right of use asset and lease liability have been recognised as a result of these leases. The Group has applied the exemptions available under AASB 16 for short term leases and leases of low value. Financial Report – 31 December 2022 Options Listed Options 30,995). Information relating to options, including details of options issued, exercised or lapsed during the financial year and outstanding at the end of the financial year are set out in Note 9. No listed options were exercised during the year (2021: 28,909,045). No listed options expired during the year (2021: Current Non-Current Lease payments are payable as follows Less than one year Between one to three years Amounts Recognised in Profit or Loss Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short term leases of low value assets Note 21. Capital and Reserves On issue at beginning of period Issue of ordinary shares for placement at $1.1600 per share Issue of ordinary shares as a part of placement fee at $1.1600 per share Issue of ordinary shares on exercise of unlisted options at $0.2250 per share Issue of ordinary shares on exercise of unlisted options at $0.3780 per share Issue of ordinary shares on exercise of unlisted options at $0.1800 per share Issue of ordinary shares for Salobo West royalty buy back at $0.6108 per share Issue of ordinary shares on exercise of unlisted options at $0.21 per share Issue of ordinary shares on exercise of listed options at $0.18 per share On issue at the end of the period – Fully paid Ordinary Shares 31 December 2022 $ 540,419 488,512 1,028,931 31 December 2022 $ 540,419 488,512 1,028,931 31 December 2021 $ 86,576 29,334 115,910 31 December 2021 $ 86,576 29,334 115,910 31 December 2022 $ 31 December 2021 $ 33,388 243,837 7,901 7,901 297,124 41,106 2022 Number of Shares 358,291,616 64,655,172 409,483 2,233,335 1,400,000 116,667 - - - 427,106,273 2021 Number of Shares 325,857,160 - - - - - 2,292,076 1,233,335 28,909,045 358,291,616 Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. Every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Weighted average exercise price 2022 Number of Listed Options Weighted average exercise price - - - - - - - - $0.18 $0.18 $0.18 - 2021 Number of Listed Options 28,940,040 (28,909,045) (30,995) - On issue at beginning of period Options exercised - CTMOC Options expired - CTMOC On issue at the end of the period Share-based Payments Reserve Translation Reserve subsidiary. Guarantees Note 22. Contingent Liabilities Jaguar Project Acquisition the Jaguar Project Acquisition. The share-based payments reserve is used to recognise the fair value of options issued but not exercised. The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the Group’s net investment in a foreign The Company has given guarantees in respect of bank security bonds amounting to $119,159 (2021: $33,648), secured by cash deposits lodged as security with the bank. The terms of the Jaguar Sale and Purchase Agreement with Vale give rise to the following contingent liabilities related to US$5.0 million on first commercial production from the project payable to Vale; a royalty of 0.55% on Net Operating Revenue for nickel sulphate or 0.75% on Net Operating Revenue generated from any future concentrate production from the project payable to Vale; and a royalty of 1.8% on Net Operating Revenue generated from any future concentrate production from the project No material losses are anticipated in respect of any of the above contingent liabilities. There are no other contingent payable to BNDES. liabilities that require disclosure. Note 23. Capital Commitments The Group has no capital commitments as at the year ended 31 December 2022 (2021: $nil). 72 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 73 Page 44 of 55 Page 45 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 20. Leases The Group leases motor vehicles, offices and warehouse facilities. The leases are typically for a period of 1 to 5 years. During the year the Group exercised its option to extend the Corporate head office lease for a further 2 years. In addition a project office lease was entered into for a 21 month period. In Brazil a new office lease was entered into in Belo Horizonte for a period of 2.5 years. New leases were entered into for motor vehicles, office and warehouse space for the Jaguar project. A right of use asset and lease liability have been recognised as a result of these leases. The Group has applied the exemptions available under AASB 16 for short term leases and leases of low value. 31 December 31 December Current Non-Current Lease payments are payable as follows Less than one year Between one to three years Amounts Recognised in Profit or Loss Interest on lease liabilities Expenses relating to short-term leases Expenses relating to leases of low-value assets, excluding short term leases of low value assets Note 21. Capital and Reserves On issue at beginning of period Issue of ordinary shares for placement at $1.1600 per share Issue of ordinary shares as a part of placement fee at $1.1600 per share Issue of ordinary shares on exercise of unlisted options at $0.2250 per share Issue of ordinary shares on exercise of unlisted options at $0.3780 per share Issue of ordinary shares on exercise of unlisted options at $0.1800 per share Issue of ordinary shares for Salobo West royalty buy back at $0.6108 per share Issue of ordinary shares on exercise of unlisted options at $0.21 per share Issue of ordinary shares on exercise of listed options at $0.18 per share 31 December 31 December 2022 $ 540,419 488,512 1,028,931 2022 $ 540,419 488,512 1,028,931 2022 $ 33,388 243,837 7,901 2021 $ 86,576 29,334 115,910 2021 $ 86,576 29,334 115,910 2021 $ 7,901 297,124 41,106 31 December 31 December 2022 Number of 2021 Number of Shares 325,857,160 Shares 358,291,616 64,655,172 409,483 2,233,335 1,400,000 116,667 - - - - - - - - 2,292,076 1,233,335 28,909,045 Ordinary Shares Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. Every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Financial Report – 31 December 2022 Options Information relating to options, including details of options issued, exercised or lapsed during the financial year and outstanding at the end of the financial year are set out in Note 9. Listed Options No listed options were exercised during the year (2021: 28,909,045). No listed options expired during the year (2021: 30,995). Weighted average exercise price 2022 Number of Listed Options Weighted average exercise price - - - - - - - - $0.18 $0.18 $0.18 - 2021 Number of Listed Options 28,940,040 (28,909,045) (30,995) - On issue at beginning of period Options exercised - CTMOC Options expired - CTMOC On issue at the end of the period Share-based Payments Reserve The share-based payments reserve is used to recognise the fair value of options issued but not exercised. Translation Reserve The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations, as well as from the translation of liabilities that hedge the Group’s net investment in a foreign subsidiary. Note 22. Contingent Liabilities Guarantees The Company has given guarantees in respect of bank security bonds amounting to $119,159 (2021: $33,648), secured by cash deposits lodged as security with the bank. Jaguar Project Acquisition The terms of the Jaguar Sale and Purchase Agreement with Vale give rise to the following contingent liabilities related to the Jaguar Project Acquisition. US$5.0 million on first commercial production from the project payable to Vale; a royalty of 0.55% on Net Operating Revenue for nickel sulphate or 0.75% on Net Operating Revenue generated from any future concentrate production from the project payable to Vale; and a royalty of 1.8% on Net Operating Revenue generated from any future concentrate production from the project payable to BNDES. No material losses are anticipated in respect of any of the above contingent liabilities. There are no other contingent liabilities that require disclosure. Note 23. Capital Commitments On issue at the end of the period – Fully paid 427,106,273 358,291,616 The Group has no capital commitments as at the year ended 31 December 2022 (2021: $nil). 72 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 73 Page 44 of 55 Page 45 of 55 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 24. Related Parties Key Management Personnel KMP compensation is comprised of the following: Short term employee-benefits (Salaries and STI Plan) Long term employee benefits Post–employment benefits Share-based payments expense 31 December 2022 $ 2,494,279 43,089 106,150 1,065,182 3,708,700 31 December 2021 $ 2,029,615 30,025 86,545 763,249 2,909,434 Individual Directors and Executives Compensation Disclosures Information regarding individual directors’ and executives’ compensation and equity instruments disclosures as required by Corporations Regulation 2M.3.03 is provided in the Remuneration Report section of the Directors’ Report. Key Management Personnel and Director Transactions A member of KMP, or their related parties, held positions in other entities that resulted in them having control or significant influence over the financial or operating policies of these entities. This entity transacted with the Group in the reporting period. The terms and conditions of the transactions with key management personnel and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an arm’s length basis. The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows: Key Management Person Mr D M Murcia (1) Total and current liabilities Transaction Legal fees (1) Payable to MPH Lawyers, a firm in which Mr Murcia is a partner. Transactions with Related Parties Transaction Value 2022 $ 21,578 2021 $ 8,156 Balance Outstanding as at 31 Dec 2022 $ 31 Dec 2021 $ 6,015 6,015 - - Transactions between the parent company and its subsidiaries which are related parties of that company are eliminated on consolidation and are not disclosed in this note. Note 25. Financial Instruments – Fair Values and Risk Management Financial Risk Management The Group has exposure to the following risks arising from the use of financial instruments: Credit Risk Liquidity Risk Market Risk Currency Risk. This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and their management of capital. Further quantitative disclosures are included throughout these consolidated financial statements. Financial Report – 31 December 2022 (a) Risk Management Framework framework. The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their role and obligations and are able to identify and manage business risks. (b) Credit Risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s other receivables and investment securities. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty. However, management also considers the default risk of the industry and country in which counterparties operate, as these factors may have an influence on credit risk. The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was: 31 December 31 December 2022 $ 34,047,722 871,840 34,919,562 2021 $ 8,259,389 375,113 8,634,502 Cash and cash equivalents (1) Other receivables Standard and Poor’s rating. (1) Cash and cash equivalents are held with bank and financial institution counterparties, which are rated BB- to AA based on Other receivables also include refundable deposits and tax credits which include Brazilian federal VAT (PIS-Cofins). The recoverability of PIS-Cofins assets is dependent upon the Group generating a federal company tax liability, which may be offset against the Groups PIS-Cofins assets. As at 31 December 2022, the PIS-Cofins tax asset has been fully impaired as taxable profits in the ordinary course of business are not considered probable though one-off taxable profits may be generated on specific transactions. The Group’s maximum exposure to credit risk for other receivables at the reporting date by geographic region was: Carrying Amount 31 December 31 December 2022 $ 594,428 277,412 871,840 2021 $ 299,700 75,413 375,113 Australia Brazil Liquidity Risk These balances are net of provision for impairment (refer to Note 15). Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with the financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. As at 31 December 2022, the Group has current trade and other payables of $4,589,016 (31 December 2021: $2,893,287), Current Financial Liabilities of $1,432,088 (31 December 2021: $5,161,448), current lease liabilities of $540,419 (31 December 2021: $86,576), non current lease liabilities of $488,512 (31 December 2021: $29,334) and Non-Current Financial Liabilities of $183,926 (31 December 2021: $1,325,267). The Group believes it will have sufficient cash resources to meet its financial liabilities when due. The following table shows the contractual maturities of financial liabilities, excluding the impact of netting agreements. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. 74 ANNUAL REPORT CENTAURUS METALS LIMITED Page 46 of 55 Page 47 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 75 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 24. Related Parties Key Management Personnel KMP compensation is comprised of the following: Short term employee-benefits (Salaries and STI Plan) Long term employee benefits Post–employment benefits Share-based payments expense 31 December 31 December 2022 $ 2,494,279 43,089 106,150 1,065,182 3,708,700 2021 $ 2,029,615 30,025 86,545 763,249 2,909,434 Individual Directors and Executives Compensation Disclosures Information regarding individual directors’ and executives’ compensation and equity instruments disclosures as required by Corporations Regulation 2M.3.03 is provided in the Remuneration Report section of the Directors’ Report. Key Management Personnel and Director Transactions A member of KMP, or their related parties, held positions in other entities that resulted in them having control or significant influence over the financial or operating policies of these entities. This entity transacted with the Group in the reporting period. The terms and conditions of the transactions with key management personnel and their related parties were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to non-key management personnel related entities on an arm’s length basis. The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows: Key Management Person Mr D M Murcia (1) Total and current liabilities Transaction Legal fees (1) Payable to MPH Lawyers, a firm in which Mr Murcia is a partner. Transactions with Related Parties Transaction Value 2022 $ 2021 $ 21,578 8,156 Balance Outstanding as at 31 Dec 2022 31 Dec 2021 $ 6,015 6,015 $ - - The Group has exposure to the following risks arising from the use of financial instruments: Financial Risk Management Credit Risk Liquidity Risk Market Risk Currency Risk. This note presents information about the Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and their management of capital. Further quantitative disclosures are included throughout these consolidated financial statements. Financial Report – 31 December 2022 (a) Risk Management Framework The Board of Directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their role and obligations and are able to identify and manage business risks. (b) Credit Risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s other receivables and investment securities. The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each counterparty. However, management also considers the default risk of the industry and country in which counterparties operate, as these factors may have an influence on credit risk. The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was: Cash and cash equivalents (1) Other receivables 31 December 2022 $ 34,047,722 871,840 34,919,562 31 December 2021 $ 8,259,389 375,113 8,634,502 (1) Cash and cash equivalents are held with bank and financial institution counterparties, which are rated BB- to AA based on Standard and Poor’s rating. Other receivables also include refundable deposits and tax credits which include Brazilian federal VAT (PIS-Cofins). The recoverability of PIS-Cofins assets is dependent upon the Group generating a federal company tax liability, which may be offset against the Groups PIS-Cofins assets. As at 31 December 2022, the PIS-Cofins tax asset has been fully impaired as taxable profits in the ordinary course of business are not considered probable though one-off taxable profits may be generated on specific transactions. The Group’s maximum exposure to credit risk for other receivables at the reporting date by geographic region was: Transactions between the parent company and its subsidiaries which are related parties of that company are eliminated on consolidation and are not disclosed in this note. Note 25. Financial Instruments – Fair Values and Risk Management Australia Brazil Carrying Amount 31 December 2022 $ 31 December 2021 $ 594,428 277,412 871,840 299,700 75,413 375,113 These balances are net of provision for impairment (refer to Note 15). Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with the financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. As at 31 December 2022, the Group has current trade and other payables of $4,589,016 (31 December 2021: $2,893,287), Current Financial Liabilities of $1,432,088 (31 December 2021: $5,161,448), current lease liabilities of $540,419 (31 December 2021: $86,576), non current lease liabilities of $488,512 (31 December 2021: $29,334) and Non-Current Financial Liabilities of $183,926 (31 December 2021: $1,325,267). The Group believes it will have sufficient cash resources to meet its financial liabilities when due. The following table shows the contractual maturities of financial liabilities, excluding the impact of netting agreements. It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly different amounts. 74 ANNUAL REPORT CENTAURUS METALS LIMITED Page 46 of 55 Page 47 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 75 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Financial liabilities 31 December 2022 Trade and other payables Financial liabilities Lease liabilities 31 December 2021 Trade and other payables Financial liabilities Lease liabilities Market Risk Carrying amount Contractual cash flows 6 mths or less 6-12 mths 1-2 years 2-5 years 4,589,016 1,616,014 1,028,932 7,233,962 4,589,016 1,672,354 1,137,312 7,398,682 4,589,016 705,040 320,367 5,614,423 - 769,903 288,621 1,058,524 - 197,411 274,440 471,851 - - 253,884 253,884 2,893,287 6,486,715 115,910 9,495,912 2,893,287 6,710,158 97,163 9,700,608 2,893,287 4,088,863 65,582 7,047,732 - 500,000 31,581 531,581 - 2,121,295 - 2,121,295 - - - - Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns. Currency Risk The Group is exposed to currency risk on purchases that are denominated in currency other than the respective functional currencies of the Group entities, primarily the Australian dollar (AUD) and Brazilian Real (BRL). The currencies in which these transactions are primarily denominated are AUD and BRL. The Group’s investments in its Brazilian subsidiaries are denominated in AUD and are not hedged as those currency positions are considered to be long term in nature. Interest Rate Risk Profile At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was: Fixed rate instruments Financial assets Variable rate instruments Financial assets 31 December 2022 $ 31 December 2021 $ 20,000,000 13,287,309 33,287,309 - 8,251,513 8,251,513 Fair Value Sensitivity Analysis for Fixed Rate Instruments The Group does not account for any fixed rate financial assets at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss or equity. Financial Report – 31 December 2022 Cash Flow Sensitivity Analysis for Variable Rate Instruments A change of 300 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis for 2021 was 100 basis points. Profit or Loss Equity Increase Decrease Increase Decrease 157,200 157,200 (157,200) (157,200) 23,207 23,207 (23,207) (23,207) - - - - - - - - The objectives for managing capital are to safeguard the Group’s ability to continue as a going concern and to provide funding for the Group’s planned exploration activities. Centaurus Metals Limited is an exploration company and is dependent on its ability to raise capital from the issue of new shares and its ability to realise value from its exploration and evaluation assets. The Board is responsible for capital management. This involves the use of cash flow forecasts to determine future capital management requirements. There were no changes in the Group’s approach to capital management during the period. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. 31 December 2022 Variable rate instruments Cash flow sensitivity (net) 31 December 2021 Variable rate instruments Cash flow sensitivity (net) Capital Management Note 26. Group Entities Parent Entity Centaurus Metals Limited Subsidiaries Centaurus Resources Pty Ltd San Greal Resources Pty Ltd Itapitanga Holdings Pty Ltd Centaurus Brasil Mineração Ltda Centaurus Pesquisa Mineral Ltda Centaurus Gerenciamento Ltda Centaurus Niquel Ltda Itapitanga Mineração Ltda Note 27. Subsequent Events Country of Incorporation Ownership interest 2022 2021 Australia Australia Australia Brazil Brazil Brazil Brazil Brazil 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Other than outlined above, there has not arisen, in the interval between the end of the financial year and the date of this report an item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years. 76 ANNUAL REPORT CENTAURUS METALS LIMITED Page 48 of 55 Page 49 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 77 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Carrying amount Contractual 6 mths or cash flows less 6-12 mths 1-2 years 2-5 years 4,589,016 1,616,014 1,028,932 7,233,962 4,589,016 1,672,354 1,137,312 7,398,682 4,589,016 705,040 320,367 769,903 288,621 5,614,423 1,058,524 197,411 274,440 471,851 253,884 253,884 - - - - - - - - - - - 2,893,287 6,486,715 115,910 2,893,287 6,710,158 97,163 2,893,287 4,088,863 65,582 9,495,912 9,700,608 7,047,732 500,000 31,581 531,581 2,121,295 2,121,295 Financial liabilities 31 December 2022 Trade and other payables Financial liabilities Lease liabilities 31 December 2021 Trade and other payables Financial liabilities Lease liabilities Market Risk Currency Risk Fixed rate instruments Financial assets Variable rate instruments Financial assets Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising returns. The Group is exposed to currency risk on purchases that are denominated in currency other than the respective functional currencies of the Group entities, primarily the Australian dollar (AUD) and Brazilian Real (BRL). The currencies in which these transactions are primarily denominated are AUD and BRL. The Group’s investments in its Brazilian subsidiaries are denominated in AUD and are not hedged as those currency positions are considered to be long term in nature. Interest Rate Risk Profile At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was: 31 December 31 December 2022 $ 20,000,000 13,287,309 33,287,309 2021 $ - 8,251,513 8,251,513 Fair Value Sensitivity Analysis for Fixed Rate Instruments The Group does not account for any fixed rate financial assets at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss or equity. Financial Report – 31 December 2022 Cash Flow Sensitivity Analysis for Variable Rate Instruments A change of 300 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis for 2021 was 100 basis points. 31 December 2022 Variable rate instruments Cash flow sensitivity (net) 31 December 2021 Variable rate instruments Cash flow sensitivity (net) Capital Management Profit or Loss Equity Increase Decrease Increase Decrease 157,200 157,200 (157,200) (157,200) 23,207 23,207 (23,207) (23,207) - - - - - - - - The objectives for managing capital are to safeguard the Group’s ability to continue as a going concern and to provide funding for the Group’s planned exploration activities. Centaurus Metals Limited is an exploration company and is dependent on its ability to raise capital from the issue of new shares and its ability to realise value from its exploration and evaluation assets. The Board is responsible for capital management. This involves the use of cash flow forecasts to determine future capital management requirements. There were no changes in the Group’s approach to capital management during the period. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. Note 26. Group Entities Parent Entity Centaurus Metals Limited Subsidiaries Centaurus Resources Pty Ltd San Greal Resources Pty Ltd Itapitanga Holdings Pty Ltd Centaurus Brasil Mineração Ltda Centaurus Pesquisa Mineral Ltda Centaurus Gerenciamento Ltda Centaurus Niquel Ltda Itapitanga Mineração Ltda Note 27. Subsequent Events Country of Incorporation Ownership interest 2022 2021 Australia Australia Australia Brazil Brazil Brazil Brazil Brazil 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% Other than outlined above, there has not arisen, in the interval between the end of the financial year and the date of this report an item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years. 76 ANNUAL REPORT CENTAURUS METALS LIMITED Page 48 of 55 Page 49 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 77 Financial Report – 31 December 2022 Directors’ Declaration 1. In the opinion of the directors of Centaurus Metals Limited (the “Company”): (a) The consolidated financial statements and notes, and the Remuneration Report in the Directors’ Report are in accordance with the Corporations Act 2001, including: (i) Giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its performance, for the financial year ended on that date; and (ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and 2. 3. The directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Managing Director and the Chief Financial Officer for the financial year ended 31 December 2022. The financial report also complies with International Financial Reporting Standards as disclosed in Note 2. Signed in accordance with a resolution of the directors. __________________ D P Gordon Managing Director Perth 30 March 2023 CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 28. Remuneration of Auditors Audit Services Auditors of the Company Audit and review of financial reports Services other than statutory audit Taxation compliance services Other consulting services 31 December 2022 $ 31 December 2021 $ 60,000 58,861 7,576 10,590 18,166 6,968 - 6,986 Note 29. Parent Entity Disclosures As at, and throughout, the financial year ended 31 December 2022 the parent entity of the Group was Centaurus Metals Limited. Results of the Parent Entity Loss for the period (1) Total comprehensive loss for the period 31 December 2022 $ 31 December 2021 $ (41,438,269) (41,438,269) (16,844,975) (16,844,975) (1) During the year ended 31 December 2022 the parent entity provided for an impairment of $31,000,000 (2021: $11,000,000) (relating to loans to subsidiaries based on an assessment of recoverability). Financial Position of the Parent Entity at Year End Current assets Non-current assets (1) Total assets Current liabilities Non-current liabilities Total liabilities Net assets Share capital Reserves Accumulated losses Total equity 31 December 2022 $ 31 December 2021 $ 26,297,277 26,280,746 52,578,023 3,157,749 80,413 3,238,162 49,339,861 5,866,948 13,581,590 19,448,538 2,502,355 223,691 2,726,046 16,722,492 236,289,294 2,267,253 (189,216,686) 49,339,861 162,962,306 1,538,603 (147,778,417) 16,722,492 (1) Included within non-current assets are investments in and loans to subsidiaries net of provision for impairment. Ultimate recoupment is dependent on successful development and commercial exploitation or, alternatively, sale of the respective project areas. 78 ANNUAL REPORT CENTAURUS METALS LIMITED Page 50 of 55 Page 51 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 79 Financial Report – 31 December 2022 Directors’ Declaration 1. In the opinion of the directors of Centaurus Metals Limited (the “Company”): (a) The consolidated financial statements and notes, and the Remuneration Report in the Directors’ Report are in accordance with the Corporations Act 2001, including: (i) (ii) Giving a true and fair view of the Group’s financial position as at 31 December 2022 and of its performance, for the financial year ended on that date; and Complying with Australian Accounting Standards Interpretations) and the Corporations Regulations 2001; (including the Australian Accounting (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and The directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Managing Director and the Chief Financial Officer for the financial year ended 31 December 2022. The financial report also complies with International Financial Reporting Standards as disclosed in Note 2. 2. 3. Signed in accordance with a resolution of the directors. (1) During the year ended 31 December 2022 the parent entity provided for an impairment of $31,000,000 (2021: $11,000,000) (relating to loans to subsidiaries based on an assessment of recoverability). Financial Position of the Parent Entity at Year End __________________ D P Gordon Managing Director Perth 30 March 2023 As at, and throughout, the financial year ended 31 December 2022 the parent entity of the Group was Centaurus Metals CENTAURUS METALS ANNUAL REPORT 2022 Financial Report – 31 December 2022 Note 28. Remuneration of Auditors Audit Services Auditors of the Company Audit and review of financial reports Services other than statutory audit Taxation compliance services Other consulting services Note 29. Parent Entity Disclosures Limited. Results of the Parent Entity Loss for the period (1) Total comprehensive loss for the period Current assets Non-current assets (1) Total assets Current liabilities Non-current liabilities Total liabilities Net assets Share capital Reserves Accumulated losses Total equity project areas. 31 December 31 December 2022 $ 2021 $ 60,000 58,861 7,576 10,590 18,166 6,968 - 6,986 31 December 31 December 2022 $ 2021 $ (41,438,269) (41,438,269) (16,844,975) (16,844,975) 31 December 31 December 2022 $ 2021 $ 26,297,277 26,280,746 52,578,023 3,157,749 80,413 3,238,162 49,339,861 5,866,948 13,581,590 19,448,538 2,502,355 223,691 2,726,046 16,722,492 236,289,294 2,267,253 162,962,306 1,538,603 (189,216,686) (147,778,417) 49,339,861 16,722,492 (1) Included within non-current assets are investments in and loans to subsidiaries net of provision for impairment. Ultimate recoupment is dependent on successful development and commercial exploitation or, alternatively, sale of the respective 78 ANNUAL REPORT CENTAURUS METALS LIMITED Page 50 of 55 Page 51 of 55 CENTAURUS METALS LIMITED ANNUAL REPORT 79 CENTAURUS METALS ANNUAL REPORT 2022 80 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 81 CENTAURUS METALS ANNUAL REPORT 2022 80 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 81 CENTAURUS METALS ANNUAL REPORT 2022 82 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 83 CENTAURUS METALS ANNUAL REPORT 2022 82 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 83 ANNUAL REPORT 2022 AUSTRALIA Level 2, 1 Ord Street West Perth, WA 6005 PO Box 975, West Perth, WA 6872 T: +61 8 6424 8420 BRAZIL Edifício Century Tower Rua Maria Luiza Santiago, 200 Santa Lúcia, 17ª Andar - Sala 1703 Belo Horizonte - MG - CEP: 30360-740 BRAZIL T: +55 31 3194 7750 ACN 009 468 099 www.centaurus.com.au
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