Battery metals explorer Ardea Resources has entered into a binding cooperation agreement with Japan’s Sumitomo Metal Mining and Mitsubishi Corporation (Consortium) to form a 50:50 joint venture (JV) to develop the Kalgoorlie nickel project – Goongarrie Hub in Western Australia.
The JV will be known as Kalgoorlie Nickel, which is currently a wholly owned subsidiary of Ardea.
Under the agreement, the Consortium, Ardea and Kalgoorlie Nickel will fund and conduct the definitive feasibility study (DFS) for the Kalgoorlie nickel project, which is expected to commence in the first half of 2024.
The Kalgoorlie Nickel JV will manage the DFS process and the Consortium will provide all funding for the project’s DFS up to an agreed budget of about $98.5 million over about 18 months. The Consortium will also provide technical and commercial input for the DFS alongside Ardea.
“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 managing director and chief executive officer Andrew Penkethman said.
“Sumitomo Metal Mining and Mitsubishi Corporation are high-quality partners that can bring leading expertise to continue to drive the project forward… Once in production, the Kalgoorlie nickel project – Goongarrie Hub is expected to be one of the largest nickel-cobalt producers in Australia.”
At the conclusion of the DFS spend, the Consortium is set to gain a 35 per cent ownership in Kalgoorlie Nickel while retaining the right to increase its ownership to 50 per cent upon a positive final investment decision (FID).
If a positive DFS is achieved, Ardea and the Consortium will equally fund further development costs associated with the front-end engineering design and pre-commitment activities through to the FID stage.
“Sumitomo Metal Mining and Mitsubishi Corporation are pleased to formalise this cooperation agreement with Ardea in relation to the high-quality Kalgoorlie nickel project – Goongarrie Hub,” Sumitomo Metal Mining director, managing executive officer and general manager of non-ferrous metals Masaru Takebayashi said.
“We look forward to working collaboratively with the Ardea team to leverage our complementary skills and capabilities to advance this major critical minerals project in a manner which meets the high ESG (environmental, social and governance) standards expected from modern society.”
Earlier this year, Federal Resources Minister Madeleine King travelled to Japan to help strengthen Australia’s resources trading relationship.
King said the Kalgoorlie nickel project – Goongarrie Hub is a great example of the strong enduring partnership between Australia and Japan.
“This is a globally significant nickel-cobalt project that shows how Australian nickel projects can succeed economically, while also meeting the world’s best environment, social and governance standards,” King said.
“I look forward to this project going from strength to strength as both Australia and Japan work towards the global energy transition.”
The transaction is expected to be completed prior to the end of the third quarter of 2024.
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