Centaurus Metals (ASX: CTM) has executed a binding offtake agreement with global commodities group Glencore for nickel concentrate from its Jaguar project in Brazil.
The agreement covers the supply of 20,000 dry metric tonnes per annum of high-grade nickel concentrate to Glencore’s Sudbury smelting operations in Canada once production begins at the project.
The contract represents approximately one-third of Jaguar’s forecast annual production capacity of 65,000 tonnes per annum of nickel concentrate and marks a key milestone toward the project’s commercial development.
The offtake agreement will run for an initial five-year period from the commencement of production, which is scheduled to begin in 2029.
At current nickel prices, the estimated value of the offtake agreement over the life of the initial five-year contract exceeds US$450 million.
Long-Term Supply Agreement
Under the terms of the agreement, Centaurus will supply concentrate grading approximately 32% nickel, equating to around 6,400 tonnes per annum of contained nickel.
Pricing will be referenced to the London Metal Exchange cash settlement nickel price, with a variable nickel payability structure that adjusts in line with market prices.
The agreement is subject to several development milestones being achieved ahead of first production.
These include Centaurus’ board making a final investment decision by 30 September 2026, completion of 50% of the tailings dam construction by 31 December 2027, and first concentrate production by 15 January 2029.
Should any of these milestones not be met, Glencore retains the right to terminate the agreement.
Jaguar Project Validated
“The signing of our first binding offtake agreement for nickel concentrate production with Glencore is a significant achievement for Centaurus and the Jaguar nickel project,” managing director Darren Gordon said.
“Glencore is one of the biggest names in natural resources globally and one of the longest-standing integrated participants in the nickel sector—signing them up as a long-term offtake partner is a major coup that validates the quality of the Jaguar project and supports our commercial development strategy.”
Mr Gordon said the agreement would support the company’s ongoing debt and equity funding processes and help advance development of a low-cost nickel supply operation in Brazil.
Additional payability terms have also been established for any copper and cobalt by-products contained in the nickel concentrate.
