Battery and Critical Minerals to the World Kalgoorlie Nickel Project, Western Australia
KNP Goongarrie Hub Ore Reserve & Feasibility Study Defines +40 Year Operation with Strong Financial Metrics
On 5 July 2023, Ardea Resources released their Pre-Feasibility Study (PFS) completed on its 100%-owned Kalgoorlie Nickel Project (KNP) Goongarrie Hub, located 70km northwest of the mining capital of Australia, the City of Kalgoorlie-Boulder. The KNP was awarded Major Project Status by the Federal Government in March 2022.¹
The PFS presents a high-quality evaluation of the Project and defines a compelling investment case to advance the Goongarrie Hub through to Definitive Feasibility Study (DFS). The PFS has also identified clear project enhancement opportunities which will be quantified during the DFS. The PFS should be regarded as being comprised of conservative assumptions and outcomes.
PFS Highlights include:
- Ore Reserve – 194.1Mt at 0.70% Ni and 0.05% Co for 1.36Mt of contained nickel and 99,000t of contained cobalt.²
- Mining optimisation studies have projected production of approximately 30,000t of nickel and 2,000t of cobalt per year for more than 40 years. Year 1 to 5 (post ramp up) production >34ktpa nickel and >3ktpa cobalt²
- Conventional low-cost open pit mining methods result in mining costs comprising less than 12% of total operating cost with a very low strip ratio at an average of 1.5 for the first 35 years of mine life²
- The project generates³:
- Pre-tax NPV₇ of A$7,625M and IRR of 30%
- Post-tax NPV₇ of A$4,980M and IRR of 23%
- Average Annual EBITA of A$800M
- Project pay back within 3.1 years
- Direct cash cost after Co by products of US$3,763/t Ni in MHP during the first five years of operation, and US$5,763/t Ni in MHP over life of mine³
- Total capital cost of A$3,117m, including process plant and infrastructure cost of A$2,264M and sulphuric acid, steam and power plant cost of $574M³
- Life Cycle Assessment (LCA) is expected to be 11.9 kg CO₂ eq. per kg nickel in MHP based on Ardea’s Scope 1, 2 and upstream Scope 3 emissions.⁴
- In-pit tailings disposal minimises environmental footprint and enables mine site rehabilitation, concurrent with steady-state mine operation
For detailed summary of the outcomes of the PFS, see ASX announcement dated 5 July 2023.
- ASX Release 21 March 2022.
- See KNP Goongarrie Hub PFS presentation page 21 for detailed Ore Reserve table.
- See KNP Goongarrie Hub PFS presentation page 43-48 for detailed notes on the financial metrics.
- See KNP Goongarrie Hub PFS presentation page 41 for detailed notes on the LCA.
Ardea Kalgoorlie Nickel Project MOU with Sumitomo Metal Mining and Mitsubishi Corporation
- Ardea continues to make substantial progress on the Kalgoorlie Nickel Project - Goongarrie Hub Definitive Feasibility Study (DFS) scope with a consortium (Consortium) consisting of Sumitomo Metal Mining (SMM) and Mitsubishi Corporation (MC)*.
- Ardea collaboration with well-regarded and experienced Japanese Consortium (JC) comprised of Sumitomo Metal Mining Co., Ltd and Mitsubishi Corporation has resulted in completion of 2023 PFS due diligence, agreement on the DFS Scope of Work, with the DFS tender review and budget nearing completion.
- Ardea and the JC are working towards executing Final Agreements to facilitate the completion of the KNP Goongarrie Hub DFS, make a Final Investment Decision and jointly secure project development funding for this strategic nickel-cobalt project. Ardea and the Consortium have agreed to extend the period for negotiating the Cooperation Agreement to April 2024.
- For details, see ASX announcement dated 5 July 2023, ASX announcement dated 29 September 2023, ASX announcement dated 21 December 2023, December 2023 Quarterly Report, ASX announcement dated 29 February 2024, ASX announcement dated 27 March 2024.
* Mitsui & Co., Ltd (Mitsui) has elected to withdraw from the Consortium 21 December 2023.