CNGR Invests $40M in Jaguar Nickel Mine: Project Economics Explained for Engineers

Centaurus Metals (ASX: CTM) is closer to making a final investment decision on its $380 million Jaguar project in Brazil after Glencore (LON: GLEN) and China’s CNGR pledged $40 million and agreed to purchase all of the mine’s forecast nickel concentrate production for its first five years of operation.

Centaurus said Wednesday that two companies have each committed to invest $20 million in the project and will each buy at least 20,000 dry metric tonnes of nickel concentrate annually under separate five-year agreements beginning in the first half of 2029. The concentrate contains 30% nickel, and its combined net sales value is estimated at $900 million at current metal prices.

Centaurus Managing Director Darren Gordon said in a statement that securing contracts for 100% of Jaguar’s forecast output for the first five years, alongside $40 million in new strategic equity, had substantially strengthened the project’s commercial and funding foundations.

As Brazil seeks to become a larger supplier of battery metals to global markets, the agreements improve Jaguar’s prospects. They also show that major commodity traders and Chinese battery materials manufacturers are prepared to secure long-term nickel supplies despite developers’ significant financing needs and volatile metal prices.

Equity Commitments Advance Jaguar Funding

• Together, the new purchase commitments and an existing Glencore contract announced in March cover approximately 22,500 tonnes of contained nickel annually during Jaguar’s initial five years of production.
• Centaurus said the new equity commitments will help complete the funding package needed to approve construction at Jaguar in the state of Pará; the process of securing senior debt financing is already well advanced.
• Glencore and CNGR will each provide $12.5 million in the first of two tranches.
• Each company’s additional $7.5 million payment is conditional on shareholder approval and a final investment decision; CNGR’s participation also requires Chinese outbound investment approval.
• The conditions for the second tranche must be met by Jan. 31, 2027.
• Both investors will receive shares priced at A$0.425 apiece, a 5% premium to Centaurus’ 20-day volume-weighted average share price before the agreements were signed.

If Centaurus does not ship its first nickel concentrate by the end of 2029, buyers may terminate their agreements, creating a firm commercial deadline as the developer seeks financing and prepares to begin construction. Under the contracts, prices are linked to the London Metal Exchange cash settlement price for nickel, while the share of the metal’s value paid to Centaurus varies with market conditions. The contracts also provide for payments for copper and cobalt byproducts.

Brazil’s Nickel Investment Boom Accelerates

Vale (NYSE: VALE), one of the world’s largest mining companies, expects copper and nickel to account for about 40% of its earnings before interest, taxes, depreciation, and amortization in the coming years, underscoring the growing role of base metals in its portfolio. This outlook reflects expectations of stronger long-term demand driven by electrification, as well as potential supply constraints following production cuts in Indonesia, the world’s leading nickel producer. However, the sector faces price volatility and competition from lower-cost Indonesian operations.esian operations.

MMG Singapore Resources has been less successful. The subsidiary of Chinese state-owned MMG is seeking to resolve European Commission objections to its proposed $500-million acquisition of Anglo American’s (LON: AAL) nickel assets in Brazil.