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Japanese consortium dives deeper into Ardea Resources DFS

Ardea Resources’ Goongarrie Hub railway siding. Credit: File

Ardea Resources has agreed to give a major Japanese consortium more time for due diligence on the company’s definitive feasibility study (DFS) at its Kalgoorlie nickel play (KNP) as part of a memorandum of understanding (MOU).

The consortium, comprised of Sumitomo Metal Mining, Mitsubishi Corporation and Mitsui & Co., now has until the end of the year to formalise the scope of the DFS with Ardea on the company’s Goongarrie Hub project. Management describes Sumitomo as a pre-eminent Japanese nickel-cobalt laterite development and production company, and Mitsubishi and Mitsui as Japan’s two biggest trading houses.

Ardea says it will continue negotiations with the consortium with a view to securing a binding agreement to form a partnership to direct and facilitate the completion of the DFS, make a final investment decision (FID) and jointly secure funding to develop its globally-significant nickel-cobalt resource. The resource sits at 194.1 million tonnes at 0.70 per cent nickel and 0.05% cobalt for 1.36 million tonnes of contained nickel and 99,000 tonnes of contained cobalt.

The Ardea Team and the Consortium continue to make sound progress on scoping the Definitive Feasibility Study and agreeing to terms for Final Agreements with technical and commercial meetings taking place in the City of Kalgoorlie- Boulder, Shire of Menzies, Perth and Tokyo. Definitive Feasibility Study tender documents, once agreed upon between Ardea and the Consortium, will be sent to specialist service providers for quotes. I’m excited for the future of Ardea to play a meaningful role in the global energy transition and see the development advantages derived from working with quality partners and our location within the best resources operating jurisdiction in the world. Ardea Resources managing director and chief executive officer Andrew Penkethman

The extension agreement is intended to provide adequate time for the required input from all companies and to incorporate aspects of the Goongarrie Hub tenement consolidation, which was completed after execution of the original MOU with the consortium. Ardea says it will also continue to advance other time-critical workstreams, such as season-dependent environmental surveys.

Following completion of the DFS, and as agreed under the MOU, the consortium will ultimately earn a significant interest in the joint venture (JV) to develop and operate the KNP Goongarrie Hub and will have certain offtake rights. The terms of a proposed JV are being negotiated and are anticipated to result in the KNP being in a strong position to progress towards FID and to secure project development funding, with a focus on competitive financing from Australian and foreign lenders including Export Credit Agencies.

The agreed follow-on from the extension of time under the MOU is that exclusivity arrangements between Ardea and the consortium are to be completed by the end of next year’s first quarter.

Under the exclusivity arrangements, Ardea may continue discussions with other interested parties which have already started due diligence studies under the Strategic Partner process, up until the time the consortium completes its due diligence.

Management says the consortium has the high technical and commercial standards that should help unlock the full potential of its KNP Goongarrie Hub.

Sumitomo is a long-established Japanese company with 16th century roots in copper mining and processing. It is an integrated producer covering areas from mineral resources development, smelting and refining to the production of battery and functional materials. It owns several quality resource interests in copper and gold, while its strength in nickel lies in high-pressure acid leach (HPAL) technology to recover metals such as nickel and cobalt from nickel oxide ores.

Mitsubishi is a global integrated enterprise that develops and operates businesses together with its offices and subsidiaries worldwide, in addition to its global network of about 1700 group companies and businesses spanning multiple industries in energy, natural gas, industrial materials, chemicals, mineral resources, industrial infrastructure, automotive and mobility, food, consumer industries, power solutions and urban development.

Mitsui & Co. is a global trading and investment company with a diversified business portfolio that spans some 63 countries in Asia, Europe, North, Central and South America, The Middle East, Africa and Oceania. It has about 5400 employees, deploys talent around the globe and has built a strong and diverse core business portfolio covering the mineral and metal resources, energy, machinery and infrastructure, and chemicals industries.

All that make them more-than-decent dance partners.

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