Ardea Resources (ASX:ARL) provided an update on its Kalgoorlie Nickel Project in Western Australia, focusing on progress with joint venture partners Sumitomo Metal Mining and Mitsubishi Corporation and the Definitive Feasibility Study (DFS) underway for the Goongarrie Hub.
Goongarrie Hub DFS and joint venture structure
The company said the Goongarrie Hub is being advanced through an incorporated joint venture vehicle, Kalgoorlie Nickel Proprietary Limited (KNPL). Management said the KNPL team includes about 45 personnel and that the DFS is fully funded by the Japanese consortium, with a stated budget of AUD 98.5 million.
Project scale, infrastructure, and expansion options
Ardea reiterated that it has previously outlined a more-than-40-year ore reserve and highlighted the project’s scale and potential for “brownfields, low-cost expansion” after the start of production. The company described the Goongarrie Hub as part of Australia’s largest nickel-cobalt resource base and said its location provides access to established infrastructure including road, rail, a gas pipeline, and fiber-optic cable. The company also cited support from local governments, naming the City of Kalgoorlie-Boulder and the Shire of Menzies.
On development plans discussed during the update, Ardea said the DFS is assessing six of nine mineral deposits and is not resource constrained. The base case referenced was 3.5 million tonnes per annum of throughput via two 1.75 million tonne per annum autoclaves, with space left for a potential third autoclave to allow future growth at lower capital intensity once operating.
The company also described optionality around scandium, noting scandium would go into solution along with nickel and cobalt and that space has been left for a scandium refinery depending on future demand and pricing. Management noted, however, that the scandium market is currently small at about 40 tonnes per year, although it is growing.
Processing approach and partner capabilities
Ardea said it is using high-pressure acid leach (HPAL) process technology, describing it as a method utilized since the 1950s with many components “off the shelf.” The company pointed to Sumitomo Metal Mining’s laterite operating experience, saying Sumitomo developed two nickel laterite projects in the Philippines and that both achieved over 100% of nameplate capacity in under 12 months. Ardea also characterized Mitsubishi Corporation as having global “mega-project” experience and noted the company has invested in Australia for around 70 years.
Funding support and approvals pathway
Ardea highlighted announced letters of funding support totaling $1 billion, consisting of $500 million from Export Finance Australia (EFA) and $500 million from the U.S. Export-Import Bank (EXIM). Management stressed that EFA’s support was not limited to debt and was framed as capital available in the best interest of the project’s required capital stack. The company described the support as demonstrating a pathway to project development funding even before the DFS is completed and connected it to broader themes of supply chain diversity and reducing reliance on “Chinese-dominated supply chains.”
On permitting and government engagement, Ardea said it has applied to the Western Australian state government for Lead Agency Status and expressed cautious optimism that this could be granted in coming months. Management said this would align with the project’s Major Project Status from the federal government and could help expedite assistance through approvals. The company also said it has been engaging with federal agencies on a developing pilot program referred to as the “Investor Front Door,” and that it was cautiously optimistic about being included.
Costs, market commentary, and DFS timeline
Ardea discussed operating cost metrics referenced from its 2023 pre-feasibility study (PFS). Management said the nickel-only C1 operating cost was about $10,000 per tonne, and that including cobalt by-product credits could reduce that to about $6,000 to $8,000 per tonne depending on cobalt pricing, which it said placed the project in the lower cost quartile. The company also referenced reports that when nickel prices fall below $15,000 per tonne, around 30% of producers in Indonesia lose money.
Since the PFS financial metrics were completed, Ardea said an Australian federal government production tax incentive would translate into 10% of its process operating costs being repaid. Management added that process operating costs were described as comprising about 64% of the project’s operating cost mix.
On the DFS work program, Ardea said approximately 50,000 meters of drilling have been completed, including RC infill drilling, resource definition, geotechnical and QA/QC drilling, and hydrogeological drilling intended to define sufficient groundwater sources for process operations. The company said it has maintained steady news flow during the DFS and stated the DFS is due for completion in the June quarter of this year.
In broader market remarks, Ardea said it is seeing “green shoots” in the nickel market after a difficult period, and it pointed to changes in Indonesia including shortening certain mining permits and reducing annual ore quotas, alongside operational challenges of wet tropical environments and tailings disposal. Ardea said it expects to differentiate itself through operating standards in Western Australia and argued that expected nickel market surplus has been “overplayed” and is reducing, while higher-value ore in Indonesia has already been mined and processed, with declining ore grades and rising operating costs.
Ardea also noted it controls about 3,200 square kilometers of tenure within the broader Kalgoorlie Nickel Project and said, beyond laterite nickel resources, its tenements are prospective for precious metals such as gold and other critical minerals, which management described as future optionality.
In closing comments, Ardea reiterated the scale and longevity of the asset, the DFS funding by its partners, stakeholder engagement, and design innovations aimed at reducing emissions and footprint, including citing an acid plant as the major source of power and evaluating in-pit tailings disposal to minimize surface impacts.
About Ardea Resources (ASX:ARL)
Ardea Resources Limited engages in the evaluation, exploration, and development of mineral properties in Australia. The company explores for nickel, cobalt, scandium, gold, PGEs, and copper deposits. It holds 100% interest in Kalgoorlie Nickel Project (KNP) located in the Kalgoorlie, Western Australia that comprises nickel, cobalt, and scandium laterite mineral resources, as well as and nickel sulphide and critical projects; the Kalpini Project is located in the City of Kalgoorlie-Boulder that covers approximately 121 square kilometers; and the Bardoc Tectonic Zone Gold Project, which has nickel sulphide prospects.
