Ardea Resources has entered into a binding cooperation agreement with Sumitomo Metal Mining and Mitsubishi (together known as the consortium) to establish a 50:50 joint venture (JV) for the development of the Kalgoorlie Nickel Project (KNP)–Goongarrie Hub in Western Australia.
This incorporated JV vehicle will be named Kalgoorlie Nickel Pty Ltd (KNPL), a completely owned subsidiary of Ardea.
The agreement outlines the collaboration between the consortium, Ardea and KNPL to fund and conduct the definitive feasibility study (DFS).
Upon agreement by the entities, and subject to a positive DFS result, front-end engineering design (FEED) and pre-commitment activities (PCA) will be undertaken, leading to a final investment decision (FID) on the KNP–Goongarrie Hub.
Under the terms, KNPL will manage the DFS process, with the consortium offering 100% of the funding for the DFS up to a budget of around A$98.5m ($63.98m) through staged equity contributions over approximately 18 months.
Technical and commercial input into the DFS will be provided by Ardea and the consortium.
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Upon completion of the DFS spend, the consortium will hold a 35% stake in KNPL, with an option to increase this to 50% following a positive FID.
The specifics of the FEED and PCA will be determined during the DFS.
Ardea MD and CEO Andrew Penkethman said: “The Ardea team have been focused on aligning the company with the best possible strategic partners to assist in realising the full potential of the Kalgoorlie nickel project – Goongarrie Hub.
“Sumitomo Metal Mining and Mitsubishi Corporation are high-quality partners that can bring leading expertise to continue to drive the project forward.”
The DFS is slated to begin in the first half of 2024 and be completed by the second half of 2025.
The transaction is expected to be finalised before the end of Q3 2024.
The KNP, once operational, is poised to become one of Australia’s largest sources of nickel and cobalt.
The Kalgoorlie project boasts a significant resource of 854 million tonnes (mt) at 0.71% nickel and 0.045% cobalt for 6.1mt of contained nickel and 386,000t of contained cobalt.
The Goongarrie hub, located 70km north-west of Kalgoorlie-Boulder city, holds resources of 584mt at 0.69% nickel and 0.043% cobalt for 4mt of contained nickel and 250,000t of contained cobalt.
