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Ardea Resources has hit a major milestone in the development of its Goongarrie Hub nickel-cobalt project in Western Australia after executing a binding agreement with a giant Japanese consortium.
It now locks away a 50:50 joint venture (JV) with Sumitomo Metal Mining and Mitsubishi Corporation in a deal where the consortium has committed to funding a $98.5 million definitive feasibility study (DFS) to earn into the project. Goongarrie hub is part of Ardea’s wider Kalgoorlie Nickel Project (KNP) that operates in WA’s Goldfields region.
Ardea Resources management with Japanese consortium representatives at the Niihama Nickel Refinery in Japan.
The signing of the new shareholders’ agreement, which sets up the “GH Nickel” vehicle that will allow the Japanese consortium to acquire its slice of the project, comes just a fortnight after Australia’s Foreign Investment Review Board (FIRB) gave its approval for the union with Ardea.
Subject to positive DFS implications, the JV will bankroll the front-end engineering design (FEED) and funding activities, leading to an eventual final investment decision (FID). The Japanese consortium will then be able to claim its half-share of the Goongarrie Hub operation, rising from its initial 35 per cent slice.
‘This transaction represents a major critical minerals collaboration between Australia and Japan.’
Ardea Resources managing director and chief executive officer Andrew Penkethman
Ardea believes the formation of the JV will not only facilitate the completion of the DFS and pave the way for the FID to be made, but it will also aid in securing project development funding for the project, which it says has the potential to be a multi-decade, globally-significant nickel-cobalt operation.
The DFS into a 30,000 tonnes per annum operation out of Goongarrie Hub is already underway. The study will feature a subset of six deposits within the company’s wider KNP that features a resource of 854 million tonnes at a grade of 0.71 per cent nickel and 0.045 per cent cobalt, for 6.1 million tonnes of contained nickel and 386,000 tonnes of contained cobalt. The company says those numbers make the KNP one of the biggest nickel-cobalt resources in the developed world.
Ardea Resources managing director and chief executive officer Andrew Penkethman said: “This transaction represents a major critical minerals collaboration between Australia and Japan with the Kalgoorlie Nickel Project – Goongarrie Hub being advanced as Australia’s next large-scale, low-cost nickel-cobalt producer that meets the high ESG standards expected from modern society.”
The company recently revealed an 888-hole DFS drilling campaign for 51,745m at Goongarrie Hub, designed to lift the numbers for the measured component of its resource and firm up the project’s expected payback period.