b'CENTAURUS METALS ANNUAL REPORT 2023Environmental Agency Approval ACQUISITION OF OFF-TAKE RIGHTSof the Jaguar Powerline Route During the reporting period, Centaurus entered into an important Concurrently with the grant of the LP for the main Jaguar Project,agreement with Vale Base Metals, via its subsidiary Salobo Metais the Company has also received the grant of the combinedS.A (Vale), whereby Vale extinguished its right to 100% of the nickel Preliminary Licence (LP) and Installation Licence (LI) for theoff-take from the Jaguar Nickel Sulphide Project in exchange for an high-voltage powerline that will supply power to the Jaguar Nickelincrease in their existing royalty from the Project.Sulphide Project, following approval of the environmental study for the powerline route. The off-take rights stem from the original Jaguar Sale & Purchase In respect to the powerline route, the LP/LI approval is the finalAgreement (SPA) of 30 August 2019, when Centaurus acquired 100% environmental regulatory milestone necessary for the constructionof the Jaguar Project from Vale.of the 38km long 230kV powerline, which will provide a reliableVale agreed to extinguish the off-take rights in exchange for an low-cost, low-emission source of power to the Jaguar Project.additional royalty on the same terms as the royalty arrangements The environmental studies for the powerline were lodged in Augustincluded as part of the original Jaguar SPA, which increased Vales 2023 following the collection of a large amount of data in thetotal Net Operating Revenue royalty over Jaguar to 1.75% for nickel preceding 12-month period.sulphate and 2.00% for nickel concentrate and other products produced from the Jaguar Project.The Brazilian Ministry of Mines and Energy (MME) approved theThe increase in the Net Operating Revenue royalty of 1.20% for connection of the Jaguar Project to the national high-voltage grid innickel sulphate and 1.25% for nickel concentrate and other products October 2023 and, with this, the only approval now required beforeproduced from Jaguar is designed to compensate Vale for its commencement of construction of the powerline can begin is theprevious contractual rights under the SPA, while at the same time authorization from the energy regulatory agencies ONS/ANEEL. allowing Centaurus to explore a significantly wider array of funding A number of supplementary approval processes were alsoand off-take options for the Project.advanced and multiple water permits were granted to Centaurus,The completion of the transaction allowed Centaurus to take back including a permit to withdraw water from a local river to supply thefull control and optionality over the sale and marketing of Jaguars proposed construction camp as well as permits for the constructionstrategic, long-life, low-greenhouse gas emission nickel and with of eight bridges/culverts along the road to the project site. Further,this Centaurus has been able to commence a strategic partnering all three municipalities where there are roads to be used by theprocess in conjunction with Standard Chartered Bank, with strong Jaguar Project have now provided the necessary approvals for roadinitial interest seen in the project and its potential nickel products. upgrade work. The partnering process continued over the reporting period with the finalization of the Jaguar Feasibility Study being an important step in formalising any partnering/funding outcome for the project. 16 ANNUAL REPORT CENTAURUS METALS LIMITED CENTAURUS METALS LIMITED ANNUAL REPORT 17'