Ardea Resources tweaks giant WA nickel study as scandium findings loom
Ardea Resources (ASX: ARL) has joined forces with Japanese industrial heavyweights Sumitomo Metal Mining and Mitsubishi Corporation to put its giant Goongarrie nickel-cobalt project near Kalgoorlie through another engineering workout, chasing lower development costs and improved operating efficiencies before committing to the next major development stage.
The partners have agreed to introduce a new pre-front-end engineering and design phase, known as Pre-FEED, after independent technical reviews identified opportunities to sharpen the economics of one of Australia's biggest undeveloped nickel-cobalt deposits.
The additional work is expected to take about nine months, allowing Ardea and its Japanese partners an opportunity to further refine the project's economics and build a stronger foundation for its next development phase.
The partners are now working to finalise the scope, timing, and funding arrangements before Christmas, paving the way for the next round of engineering and optimisation work.
The optimisations come on the back of a technical review of draft DFS chapters by independent experts, which highlighted potential improvements in mining, hydrogeology, metallurgy and non-processing infrastructure.
The decision to refine the project's economics comes against a challenging nickel market backdrop which weakened through August and September 2026. Despite the current headwind, supply-side risks continue to provide some price support and the project's strategic importance has been recognised by both the Australian and United States governments through combined initiatives aimed at securing non-Chinese critical minerals supply chains.
The Japanese consortium has fully funded the DFS so far under an agreed budget of $98.5 million. As of September 30, about A$91.4 million of that budget has been expended. Ardea says the remaining $7.1 million available in cash within the joint venture company, Kalgoorlie Nickel Pty Ltd., will fund current activities while optimisation studies are progressed.
The DFS work undertaken to date has given the project partners a detailed understanding of the Goongarrie Hub and has identified clear opportunities to enhance the project, including the capital and operating cost profile as well as to further evaluate the scandium and gold opportunity. Ardea Resources Managing Director and CEO Andrew Penkethman
The KNP is one of the largest nickel-cobalt resources in the developed world, with a global mineral resource of 854 million tonnes grading 0.71 per cent nickel and 0.045 per cent cobalt, containing a massive 6.1 million tonnes of nickel and 386,000 tonnes of cobalt.
The Goongarrie Hub, the focus of the DFS, hosts a JORC-compliant ore reserve of 194.1 million tonnes at 0.70 per cent nickel and 0.05 per cent cobalt, underpinning a potential multi-decade operation of more than 40 years. In addition to its headline nickel-cobalt resource, Ardea is pushing ahead with a self-funded scoping study on recovering scandium, a high-value critical mineral.
However, nickel is not the only metal attracting attention.
Ardea is also wrapping up a separate scandium scoping study, slated for November, examining whether the critical mineral could be economically recovered as a by-product of nickel-cobalt production, potentially adding another revenue stream.
In another development, the partners have agreed to investigate the gold potential within Goongarrie's development footprint, including the existing Big Four gold deposit.
The project sits within the prolific Bardoc Tectonic Zone, a major geological structure hosting several million-ounce gold deposits.
Ardea will lead a gold scoping study involving resource definition drilling, testing extensions of known mineralisation and hunting for potential repeats hidden beneath transported cover.
The work will also examine whether gold mineralisation could influence the positioning of planned mine infrastructure.
Under Western Australian government policy, economically viable gold deposits cannot simply be buried beneath mining infrastructure, making the investigation an important part of the development puzzle.
Despite the revised nickel-cobalt DFS timetable, Goongarrie retains significant strategic backing, including conditional funding support equivalent to $1 billion from Export Finance Australia and the US Export-Import Bank.
The project also enjoys Australian Major Project Status and features in critical minerals cooperation arrangements involving Australia, Japan and the United States.
Ardea and its heavyweight Japanese partners appear to be taking a measured and prudent approach to the project development, using the current market lull to kick the tyres on the DFS and squeeze every last drop of value out of what is already a monster project.
Armed with a healthy $20.9 million cash balance as at the end of September, no debt and the prospect of adding scandium and gold to its already substantial nickel-cobalt inventory, Ardea appears to be steadily strengthening the foundations of its long-term ambitions to unlock one of Australia's biggest undeveloped nickel resources.
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