Posted on 01 May 2024
Ardea Resources and Japanese miners Sumitomo Metal Mining (SMM), Mitsubishi are forming a joint venture to develop the Kalgoorlie Nickel Project (KNP) - Goongarrie Hub located in Western Australia.
The Australian miner says the 50-50 incorporated joint venture vehicle will be Kalgoorlie Nickel, which is currently a wholly-owned subsidiary of Ardea.
This transaction represents the successful conclusion of Ardea’s strategic partner process and is a major milestone for the development of the KNP – Goongarrie Hub into a globally significant nickel-cobalt operation. However, following the announcement, Ardea’s share price dropped over 20%, Kallanish notes.
Under the joint venture, SMM, Mitsubishi, Ardea and Kalgoorlie Nickel will fund and conduct the definitive feasibility study (DFS) for the project. This budget is capped at AUD 98.5 million.
Upon agreement by the parties and subject to a positive DFS outcome, front-end engineering design and pre-commitment activities, will lead to a final investment decision on the KNP – Goongarrie Hub.
Separately to the cooperation agreement, Ardea, SMM and Kalgoorlie Nickel have agreed on funding support arrangements, enabling earlier DFS activities to occur in the second quarter of 2024. The study is set to be completed by H2 2025.
“Once in production, the KNP – Goongarrie Hub is expected to be one of the largest nickel-cobalt producers in Australia,” notes Ardea chief executive officer Andrew Penkethman.
In a separate statement on Tuesday, SMM said the Japanese consortium will leverage its expertise in nickel and cobalt extraction from low-grade nickel oxide using the high pressure acid leach (HPAL) process. Mitsubishi will contribute its “extensive” experience and track record in the Australian mining sector to assess the feasibility of the project.
The KNP – Goongarrie Hub is described as one of the world’s largest nickel deposits. It’s expected to produce around 30,000 tonnes of nickel and 2,000 t of cobalt per year over a 40-plus-year mine life.
SMM is working to secure 150,000 t/y of nickel production capacity. Both SMM and Mitsubishi expected a grant from the Japanese government to support efforts to secure critical mineral supply stability in Japan. The amount has not been disclosed.
Source:Kallanish
