Ardea Resources Provides Nickel Sector Lifeline

THE BOURSE WHISPERER: Ardea Resources (ASX: ARL) is keeping the Australian nickel sector alive with the announcement of a Joint Venture to develop the Goongarrie Hub within the company’s Kalgoorlie Nickel Project (KNP) in Western Australia.

The Kalgoorlie Nickel Project hosts one of the largest nickel-cobalt resources in the developed world hosting 854 million tonnes at 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.

Ardea claims this places the company in prime position to provide essential supplies of ESG-compliant nickel and cobalt, along with other critical minerals such as scandium.

The Goongarrie Hub is located just outside the Western Australian mining heart of Kalgoorlie-Boulder and is armed with resources of 584 million tonnes at 0.69 per cent nickel and 0.043 per cent cobalt for 4 million tonnes of contained nickel and 250,000 tonnes of contained cobalt.

Ardea Resources has entered into a binding Cooperation Agreement with a consortium of Japanese companies: Sumitomo Metal Mining Co., Ltd (SMM) and Mitsubishi Corporation (MC).

SMM is a pre-eminent Japanese nickel-cobalt laterite development and production company, operating the Coral Bay and Taganito HPAL nickel operations in the Philippines and the Niihama Nickel Refinery and Harima Refinery in Japan.

MC is one of Japan’s largest and premier general trading and investment companies with decades of experience in investing in the Australian resources sector.

Together with the consortium, Ardea will form a 50:50 incorporated JV to develop the KNP – Goongarrie Hub under the moniker of Kalgoorlie Nickel Pty Ltd (KNPL), which is currently a wholly owned subsidiary of Ardea.

Ardea views the transaction as a successful conclusion of the company’s Strategic Partner process labelling it a major milestone for the development of the KNP – Goongarrie Hub into a globally important nickel-cobalt operation.

“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,” Ardea Resources managing director and CEO Andrew Penkethman said when announcing the deal.

“Sumitomo Metal Mining and Mitsubishi Corporation are high quality partners that can bring leading expertise to continue to drive the project forward.

“Sumitomo Metal Mining is a leader in developing and operating nickel laterite projects and is fully integrated within both the stainless steel and lithium-ion battery sectors.

“Mitsubishi Corporation has decades of resources sector experience within Australia and has been a significant investor and contributor to the Australian economy.


“Ardea acknowledges Japan as a well-respected partner of Australia and looks forward to being part of the growing relationship between the two nations, as they progress their commitment to the global energy transition.

“This is especially relevant with nickel and cobalt classified as Critical Minerals by both nations.”

Under the terms of the transaction, KNPL will manage the DFS process, for which the consortium will stump up 100 per cent of the funding up to a budget of approximately $98.5 million via staged equity contributions over approximately 18 months.

Ardea and the consortium will provide technical and commercial input into the DFS.

At the conclusion of the DFS spend, the consortium will have subscribed to a 35 per cent ownership in KNPL and retain the right to increase its ownership in KNPL to 50 per cent upon a positive FID decision by the consortium.

“Once in production, the Kalgoorlie Nickel Project – Goongarrie Hub is expected to be one of the largest nickel-cobalt producers in Australia,” Penkethman continued.

“The project will meet the high ESG standards expected from modern society and be a leader in responsible resource project development, as demonstrated by Ardea’s 2023 Pre-Feasibility Study.”