Centaurus Metals has signed a binding offtake agreement with Glencore for the provision of nickel concentrate from its Jaguar Nickel Sulphide Project in Brazil.

This agreement stipulates that 20,000 dry tonnes per annum (dtpa) of high-grade nickel concentrate, containing 6,400 tonnes per annum (tpa) of nickel, will be supplied to Glencore.

This supply will be processed at Glencore's Sudbury smelting operations in Canada and is set to commence at the start of 2029 for a duration of five years.

The offtake constitutes around 30% of Jaguar's scheduled annual production, providing Centaurus with the flexibility to use the remaining production to support funding for the Jaguar project prior to making a final investment decision (FID).

Pricing will be based on the London Metal Exchange cash settlement nickel price, with a variable payability that adjusts according to the price movements.

The potential revenue from this agreement is estimated to exceed $450m over its initial five-year duration, assuming current nickel prices remain stable.

The deal's continuation is contingent upon certain milestones being achieved.

These include Centaurus' board reaching an FID by September 2026, completing 50% of the tailings dam construction by December 2027 and starting first concentrate production by January 2029.

If any of these conditions are not achieved, Glencore reserves the right to terminate the agreement.

Centaurus managing director Darren Gordon said: “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.

“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.

“We look forward to building a sustainable low-cost supply of low-carbon nickel in Brazil supported by Glencore’s long history in the sector and their deep knowledge of the market. Importantly, the offtake agreement will support and help de-risk the ongoing debt and equity funding processes, which we currently have under way.”

In March last year, Centaurus secured an installation licence for its 100%-owned Jaguar project, which is situated in northern Brazil’s Pará State.