The company announced the acquisition of the Jaguar nickel project in Brazil's Carajas Province from Vale in early August 2019.

The market's recognition of the deal has been a slow-burner.

The stock actually fell 22% on the day the deal was announced, hitting 10c, the lowest level during the second half of 2019.

However, it was announced during the Diggers & Dealers conference and may have gotten lost in the flood of other news to come out at the time.

Consideration for the Jaguar acquisition was US$250,000 cash up front and the transfer of Centaurus' Salobo West project to Vale.

The company will also have to pay Vale $1.75 million within three years, or on the start of a bankable feasibility study, and $5 million on first commercial production.

Vale will be entitled to a net operating revenue royalty of 0.75% on all concentrate production and Centaurus will take on Vale's obligation to Brazil's National Bank for Economic and Social Development for a 1.8% net operating revenue royalty.

Centaurus and Vale have also agreed to a future offtake agreement allowing Vale to purchase 100% of production on standard arm's length prevailing market prices.

Vale may also consider a pre-purchase agreement to support Centaurus' project funding efforts.

Centaurus has been in Brazil since 2007, mainly as an iron ore explorer/developer, and had made a conscious decision to leverage off its years of experience and contacts and remain in the country.

Managing director Darren Gordon said Vale had been looking to divest some of its smaller assets to other players.

Avanco Resources (now OZ Minerals) had done a similar deal over Vale's Pantera copper project about 18 months earlier.

"The timing was quite good in that they were ready to deal on things," Gordon told MNN.

Vale recognised Centaurus' experience in Brazil, which is what Gordon believes gave the company an advantage in its dealings.

"All the things we did in iron ore showed that we could get a mine up," he said.

Plus there was the advantage of holding ground adjacent to Vale's Salobo mine that allowed the major to consolidate its holdings.

"It's a very light front-ended deal," Gordon said.

"It's a really good model to be able to do deals in Brazil."

Jaguar was a bit of a sleeper in that there was little public information on it and it hadn't been drilled in a decade.

Vale had been seeking a large bulk mining operation and pattern drilled the project.

While it got some high-grade results, the project's size didn't meet the expectations of a global major.

"For them, 30m at 3% nickel doesn't change whether it's a mine or not," Gordon said.

"Whereas, we can build a mine around that."

Jaguar had a historical foreign resource estimate of 315 million tonnes of contained nickel at 0.78% nickel when acquired by Centaurus.

Centaurus' work focused on a smaller, higher grade project.

The company's drilling extended known high-grade zones and also resulted in a new discovery, Onca Rosa, with hits including 9.3m at 3.13% nickel.

Centaurus last month reported a maiden indicated and inferred resource of 48Mt at 1.08% nickel for 517,500 tonnes of contained nickel, including a high-grade component of 20.6Mt at 1.56% nickel for 321,400t of nickel.

"It's a resource that stands comfortably against other ASX nickel sulphide resources," Gordon said.

The resource estimate also beat analysts' expectations.

Euroz Securities had estimated a maiden resource of 10-15Mt resource at 1.5-2% nickel, while Sprott had a mid-point of 12.5Mt at 1.75%.

Sprott has since initiated coverage on Centaurus with a buy rating and A95c price target, noting the company had about twice the metal of Panoramic Resources, about three times Mincor Resources' inventory, and about half Western Areas, but traded at less than a quarter of its peers.

"We think this valuation gap will now close with the maiden JORC," Sprott said.

Centaurus shares rose as high as 54c last week.

Gordon believes the company's market capitalisation would be at least double its current $125 million if the resource was in Australia.

Still, he noted the market was starting to come around and the company could re-rate further with exploration success and economic studies.

Centaurus has only drilled to an average depth of about 250m, and has numerous untested regional targets.

Centaurus is planning to ramp up drilling again and drill a few deeper holes.

A scoping study is expected to be delivered in the next 3-4 months.

"We need to tie a bow around it to show that it works," Gordon said.

A prefeasibility study is targeted for completion by the December quarter.

Preliminary metallurgical test work has indicated over 80% recoveries to produce a quality 16% nickel concentrate.

Jaguar is only 15km from the Onca Puma ferronickel plant, where there is a high-voltage power station.

A mining lease application has been lodged and Centaurus is targeting the lodgement of an environmental study in the June quarter of 2021.

Centaurus Metals' Jaguar acquisition is a nominee for Deal and/or Merger of the Year in the 2020 MNN Awards.