Iron Ore: Explorer. CTM.asx Speculative Buy CENTAURUS METALS LTD. Acquires export exploration target in Brazil

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1 Iron Ore: Explorer CTM.asx Speculative Buy Centaurus Metals Ltd CENTAURUS METALS LTD Acquires export exploration target in Brazil Centaurus Metals Limited ( Centaurus, CTM, Company ) has acquired an exploration target in Brazil which has export potential. It is located 140km via road to the port of Ilheus (110km as-the-crow-flies). The Company has an exploration target of 30-50Mt based on initial geological mapping of outcropping itabirite, limited surface sampling and comparisons with existing CTM projects. The Company believes it underpins CTM s strategy to initially export 1-2Mtpa of high grade hematite to international markets by mid Although the port currently does not have any dry bulk loading facilities (although note Mirabela Nickel Ltd does export smaller volumes of nickel concentrate from this port) the Company anticipates the infrastructure required to allow dry bulk loading will be relatively modest. Drilling could begin in September The Company will focus on defining a JORC resource and concurrently begin the approvals process for mining and environment. Ground magnetic work is expected to begin in the next four weeks. A drilling program is expected to begin in September. Retain Speculative Buy We have a twelve month price target of 23cps which does not directly include value for today s announcement. We will revisit our modelling assumptions over the next week. Very preliminary indications are for circa US$100m capex (including port requirements) and ~US$32-43/t operating costs including trucking to port. Consequently, today s announcement is a significant positive, despite it being early stage. We retain Speculative Buy. Fig. 1: New project located near Porto de Ilheus 17 Jun 2011 Share Price (last) $0.084 Valuation - current $ mth price target $0.23 Brief Business Description Brazilian iron ore explorer / developer Brief Investment Conclusion Iron ore developer on track for 2mt pa iron ore production from Jambreiro. Chairman & Executive Directors Didier Murcia (Chairman) Darren Gordon (M.D.) Peter Freund (Operations director) Top Shareholders Lujeta Pty Ltd 6.4% Darren Gordon (M.D.) 6.1% Company Address Level 1, 16 Ord Street West Perth WA 6005 Issued Capital - fully diluted Market Cap - fully diluted Cash (Mar 11a) Debt (Mar 11a) EV 863.6m 974.0m A$72.5m A$81.8m A$12.1m A$0.0m A$60.4m Resources - Itabirite (Mt) Reserve - Itabirite (Mt) A$ 10.0 M Jul-10 Centaurus Metals Ltd Oct-10 Feb Jun-11 Volume - RHS Source: IRESS CTM Shareprice - LHS Sector (S&P/ASX SMALL RESOURCES) - LHS Source: CTM, Hartleys Research Author: Trent Barnett Head of Research Ph: E: trent_barnett@hartleys.com.au Hartleys has completed capital raisings in the past 12 months for Centaurus Metals Limited ("Centaurus") for which it has earned fees. Hartleys has also provided corporate advice within the past 12 months to Centaurus, for which it has earned fees and continues to earn fees. Hartleys also acted as Corporate Advisor in relation to the merger of Centaurus Metals Limited (called Glengarry Resources Limited at the time of the merger) and Centaurus Resources Limited for which it earned a success fee. Analyst has a beneficial interest in shares of CTM. See back page for full disclosure. Hartleys Limited ABN (AFSL ) 141 Page St Georges 1 of 6 Terrace, Perth, Western Australia, 6000 Hartleys does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

2 Hartleys Limited Centaurus Metals Ltd 17 June 2011 SUMMARY MODEL Centaurus Metals Limited Share Price 17 June 2011 CTM A$0.084 Speculative Buy Financials are Hartleys preliminary estimates given there is yet to be a scoping study Key Market Information Directors Company Information Share Price A$0.084 Didier Murcia (Chairman) Level 1, 16 Ord Street Market Capitalisation (ordinary shares) A$72.5m Darren Gordon (M.D.) West Perth WA Week High-Low $ $0.068 Peter Freund (Operations director) Tel: Issued Capital 863.6m Geoff Clifford (Non-exec) Fax: Issued Capital (fully diluted for all options) 974.0m Keith Mckay (Non-exec) Web: Options 110.4m Richard Hill (Non-exec) Issued Capital (fully diluted for new equity) m Hedging - Substantial Shareholders m shares % Yearly Turnover/Volume A$50.8m / 490.2m 1 Lujeta Pty Ltd % Risked Valuation (A$) A$ Darren Gordon (M.D.) % 3 Financial Performance Unit 30 Jun Jun Jun Jun 14 4 FX Assumptions 30 Jun Jun Jun Jun 15 Iron Ore (65% Fe) mt BRL/AUD BRL/USD Net Revenue BRLm USD/AUD Total Costs BRLm (1.1) (1.1) (24.1) (68.4) 8 EBITDA BRLm (1.1) (1.1) Depreciation/Amort BRLm - - (2.6) (11.7) 10 Reserves & Resources Mt % Fe Attrib. EBIT BRLm (1.1) (1.1) Net Interest BRLm Itambe Pre-Tax Profit BRLm Reserves 0.00 Tax Expense BRLm - - (20.3) (53.7) Resources % 100% NPAT BRLm Passabem Abnormal Items BRLm Reserves 0.00 Reported Profit BRLm Resources % 100% Jambreiro Financial Position Unit 30 Jun Jun Jun Jun 14 Reserves 0.00 Resources % 100% Cash BRLm Total % Other Current Assets BRLm Total Current Assets BRLm Production Summary Unit 30 Jun Jun Jun Jun 15 Property, Plant & Equip. BRLm Tonnes Ore Mined mt Exploration BRLm Cash Cost BRL/t Investments/other BRLm Beneficiated Ore mt Tot Non-Curr. Assets BRLm Grade % Fe 65% 65% 65% Total Assets BRLm Cash Cost BRL/t Cash Cost USD/t Short Term Borrowings BRLm Price Assumptions Unit 30 Jun Jun Jun Jun 15 Other BRLm Brazilian Domestic Selling Total Curr. Liabilities BRLm Iron Ore - Lump BRL/t Long Term Borrowings BRLm Iron Ore - Hematitinha BRL/t Other BRLm Iron Ore - Sinter BRL/t Total Non-Curr. Liabil. BRLm Iron Ore - Fines BRL/t Total Liabilities BRLm Hedging Unit 30 Jun Jun Jun Jun 15 Net Assets BRLm none Cashflow* Unit 30 Jun Jun Jun Jun 14 Sensitivity Analysis Risked Valuation (A$/s) Operating Cashflow BRLm (1.2) (1.1) Base Case Income Tax Paid BRLm (20.3) Iron ore price +10% 0.26 Interest & Other BRLm Iron ore price -10% 0.19 Operating Activities BRLm Operating Costs +10% 0.21 Operating Costs -10% 0.24 Property, Plant & Equip. BRLm (5.5) (30.9) (76.5) (8.0) Exploration and Devel. BRLm (0.8) (0.8) (0.8) (0.8) Other BRLm Investment Activities BRLm (6.3) (31.7) (77.3) (8.8) Preliminary Valuation Est. BRLm Est. Est. Change in Debt BRLm (NAV) - BRL Risked BRL/share $A/share Equity & Options BRLm Jambreiro 14%) New funding required BRLm Other (inc explor. & Passabem) Dividends Paid BRLm Forwards Financing Activities BRLm Corporate Overheads (0.01) (0.01) Net Cash (Debt) Net Cashflow BRLm (4.6) Tax Losses Options & Other Equity Ratio Analysis Unit 30 Jun Jun Jun Jun 14 Total (BRL) Cashflow Per Share BRL BRL/AUD spot Cashflow Multiple x 486.7x 47.1x 3.2x 1.4x Earnings Per Share BRL TOTAL A$ Price to Earnings Ratio x 507.5x 47.8x 4.3x 1.7x 12 mth price target (A$) 0.23 Dividends Per Share BRL Dividend Yield x 0.0% 0.0% 0.0% 0.0% Net Debt / Equity % -38% -59% -44% -70% Net Debt / ND + Equity % -62% -142% -79% -234% Interest Cover x na na Return on Equity % 1% 3% 22% 40% # assumes 0% chance that Jambreiro is funded with debt, 10% chance funded 50/50, 55% chance funded all 35% chance funded with all equity at higher prices. Analyst: Trent Barnett Phone: Last Updated: 17/06/2011 Sources: IRESS, Company Information, Hartleys Research Page 2 of 6

3 Hartleys Limited Centaurus Metals Ltd 17 June 2011 Fig. 1: Porto de Ilheus Source: br/porto_aratu.php&ei=6an6tejpeimiuqps4- SCAw&sa=X&oi=translate&ct=result&resnum=3&ved=0CDIQ7gEwAg&prev=/search%3Fq%3Dhttp:// ortalcodeba/pt-br/home.php%26hl%3den%26rls%3dcom.microsoft:en-au:ie-searchbox%26prmd%3divns RISKS The key near term risk is the outcome of the pre-feasibility study for Jambreiro expected to begin shortly. Additionally, there is exploration risk at the new export project. Other risks are domestic iron ore prices, the usual risks associated with green field developments (eg environmental, commissioning etc), resource conversion. Funding is potentially a lower risk than for Australian junior iron developers given we understand the Company should be eligible for debt funding from the Brazilian development bank. Page 3 of 6

4 HARTLEYS RESEARCH COVERAGE LIST Hartleys Research Coverage Hartleys Hartleys Name Ticker Last M. CAP Status Research Name Ticker Last M. CAP Status Research Resources Gold Price* (A$m) Recommendation Price* (A$m) Recommendation Oil & Gas Page 4 of 6 Conventional Oil & Gas 1. Intrepid Mines Limited IAU Explorer Speculative Buy 1. Woodside Petroleum Ltd WPL ,897 Major Buy 2. Beadell Resources Limited BDR Developer Accumulate 2. Nexus Energy Ltd NXS Developer / Explorer Speculative Buy 3. Gold One International Limited GDO Producer No Rating 3. Tap Oil Ltd TAP Producer / Explorer Buy 4. Integra Mining Limited IGR Producer Speculative Buy 4. FAR Ltd FAR Explorer / Producer Speculative Buy 5. Silver Lake Resources Limited SLR Producer Buy 5. Carnarvon Petroleum Ltd CVN Producer / Explorer Accumulate 6. Catalpa Resources Limited CAH Producer Buy 6. Otto Energy Ltd OEL Explorer / Producer Buy 7. Focus Minerals Ltd FML Producer Buy 7. Cooper Energy Ltd COE Producer / Explorer Buy 8. Tanami Gold NL TAM Producer Accumulate 8. Amadeus Energy Ltd AMU Producer / Explorer Neutral 9. Northern Star Resources Ltd NST Producer Buy 9. Hawkley Oil and Gas Ltd HOG Producer / Explorer Buy 10. PMI Gold Corporation Limited PVM Developer Speculative Buy 10. WHL Energy Ltd WHN Explorer / Producer Speculative Buy 11. YTC Resources Limited YTC Developer Speculative Buy 11. Sun Resources NL SUR Explorer / Producer Neutral 12. Papillon Resources Limited PIR Explorer Speculative Buy 13. Cortona Resources Limited CRC Developer Speculative Buy 12. Aurora Oil and Gas Ltd AUT ,319 Producer / Developer Reduce 14. Ausquest Limited AQD Explorer Speculative Buy 13. Samson Oil & Gas Ltd SSN Developer / Producer Buy 15. Emmerson Resources Limited ERM Explorer Speculative Buy 14. Oilex Ltd OEX Explorer / Producer Speculative Buy 16. Canyon Resources Limited CAY Explorer Speculative Buy 15. European Gas Ltd EPG Producer / Explorer Speculative Buy 17. Geopacific Resources NL GPR Explorer Speculative Buy 16. Strike Energy Ltd STX Explorer / Producer Buy 18. Southern Gold Limited SAU Explorer Speculative Buy 17. Entek Energy Ltd ETE Producer / Explorer Speculative Buy Iron Ore Sub-Total 36, Atlas Iron Limited AGO ,983 Producer Buy Industrials 20. Centaurus Metals Ltd CTM Explorer Speculative Buy Resource Services - Capital Intensive Coal 1. Ausdrill Limited ASL Contract Drilling Buy 21. Riversdale Mining Limited RIV ,109 Developer No Rating 2. NRW Holdings Ltd NWH Contract mining Accumulate Base Metals 3. Mermaid Marine Ltd MRM Oil & Gas Services Accumulate 22. Independence Group NL IGO ,126 Gold, Ni, Zn, Cu Buy 4. Fleetw ood Corporation FWD Accomodation Neutral 23. Aviva Corporation Limited AVA Producer/Explorer Speculative Buy 5. Matrix Composites & MCE Oil & Gas Services Buy Other metals 6. Engineering Imdex Ltd Limited IMD Drilling Supplies Buy 24. Kasbah Resources Limited KAS Tin Developer Buy 7. Macmahon Holdings Limited MAH Contract mining Neutral 25. Shaw River Resources Limited SRR Manganese: Speculative Buy 8. MACA Ltd MLD Contract mining Buy 26. Hazelw ood Resources Ltd HAZ Tungsten Explorer/Developer Speculative Buy 9. Pacific Energy Ltd PEA Remote Pow er Buy Uranium 10. Swick Mining Services Ltd SWK Contract Drilling Speculative Buy 27. Peninsula Energy Ltd PEN Developer Buy Resource Services - Labour Intensive 28. Impact Minerals Limited IPT Explorer Speculative Buy 11. Monadelphous Group Limited MND ,615 Construction Buy Source: IRESS, Hartleys Research. * 17 Jun 2011 Non Conventional Oil & Gas Sub-Total 10, Decmil Group Limited DCG Construction Buy 13. Lycopodium Limited LYL Engineer. & Constr. Accumulate 14. RCR Tomlinson Ltd RCR Engineer. & Constr. Buy 15. LogiCamms Limited LCM Engineer. & Constr. Speculative Buy 16. VDM Group Limited VMG Engineer. & Constr. Speculative Buy Other Industrial Companies 17. Seven West Media Limited SWM ,191 Media Accumulate 18. Austal Limited ASB Civil and Military Buy 19. iinet Limited IIN Telecommunications Vessels Buy 20. Cash Converters Internat. CCV Unsecured Finance Buy 21. Limited Amcom Telecommunications AMM Telecommunications Buy 22. Limited RedHill Education Ltd RDH 'For profit' education Neutral Sub-Total 12, GRAND TOTAL 59,183

5 HARTLEYS CORPORATE DIRECTORY Research Trent Barnett Head of Research Mike Millikan Resources Analyst David Wall Energy Analyst Peter Gray Analyst Janine Bell Research Assistant Corporate Finance Grey Egerton- Head of Corporate Finance Warburton Richard Simpson Director - Corporate Finance Paul Fryer Director - Corporate Finance Dale Bryan Director - Corporate Finance Ben Wale Senior Manager - Corporate Finance Ben Crossing Senior Manager Corporate Finance Stephen Kite Senior Manager Corporate Finance Scott Weir Corporate Finance Exec Registered Office Level 6, 141 St Georges Tce Perth WA 6000 Australia Postal Address GPO Box 2777 Perth WA 6001 Australia Contact Details Telephone: Facsimile: Website: info@hartleys.com.au Note: personal addresses of company employees are structured in the following manner: firstname_lastname@hartleys.com.au Hartleys Recommendation Categories Buy Accumulate Neutral Reduce / Take profits Sell Share price appreciation anticipated. Share price appreciation anticipated but the risk/reward is not as attractive as a Buy. Alternatively, for the share price to rise it may be contingent on the outcome of an uncertain or distant event. Analyst will often indicate a price level at which it may become a Buy. Take no action. Upside & downside risk/reward is evenly balanced. There is unlikely to be further gains over the investment time horizon but there is a possibility of some price weakness over that period. Significant price depreciation anticipated. Institutional Sales Carrick Ryan Justin Stewart Simon van den Berg Steven Boyce Nick Wheeler Wealth Management Nicola Bond Bradley Booth Adrian Brant Nathan Bray Sven Burrell Simon Casey Tony Chien Travis Clark David Cross Nicholas Draper John Featherby Ben Fleay John Georgiades John Goodlad Andrew Gribble David Hainsworth Neil Inglis Murray Jacob Gavin Lehmann Shane Lehmann Steven Loxley Andrew Macnaughtan Christian Marriott Scott Metcalf David Michael Damir Mikulic Nicole Morcombe Jamie Moullin Chris Munro Michael Munro Ian Parker Ian Plowman Margaret Radici Charlie Ransom (CEO) Elliott Rowton Conlie Salvemini David Smyth Greg Soudure Sonya Soudure Dirk Vanderstruyf Alex Wallis Marlene White Samuel Williams No Rating Speculative Buy No recommendation. Share price could be volatile. While it is anticipated that, on a risk/reward basis, an investment is attractive, there is at least one identifiable risk that has a meaningful possibility of occurring, which, if it did occur, could lead to significant share price reduction. Consequently, the investment is considered high risk. Page 5 of 6

6 Disclaimer/Disclosure The author of this publication, Hartleys Limited ABN ( Hartleys ), its Directors and their Associates from time to time may hold shares in the security/securities mentioned in this Research document and therefore may benefit from any increase in the price of those securities. Hartleys and its Advisers may earn brokerage, fees, commissions, other benefits or advantages as a result of a transaction arising from any advice mentioned in publications to clients. Hartleys has completed capital raisings in the past 12 months for Centaurus Metals Limited ("Centaurus") for which it has earned fees. Hartleys has also provided corporate advice within the past 12 months to Centaurus, for which it has earned fees and continues to earn fees. Hartleys also acted as Corporate Advisor in relation to the merger of Centaurus Metals Limited (called Glengarry Resources Limited at the time of the merger) and Centaurus Resources Limited for which it earned a success fee. Any financial product advice contained in this document is unsolicited general information only. Do not act on this advice without first consulting your investment adviser to determine whether the advice is appropriate for your investment objectives, financial situation and particular needs. Hartleys believes that any information or advice (including any financial product advice) contained in this document is accurate when issued. Hartleys however, does not warrant its accuracy or reliability. Hartleys, its officers, agents and employees exclude all liability whatsoever, in negligence or otherwise, for any loss or damage relating to this document to the full extent permitted by law. Page 6 of 6