Ardea forms joint venture for Kalgoorlie nickel project – Goongarrie Hub
Ardea Resources (ASX: ARL) has entered a binding cooperation agreement with Sumitomo Metal Mining and Mitsubishi Corporation (Consortium) to develop the Kalgoorlie nickel project – Goongarrie Hub in WA.
The incorporated joint venture will be Kalgoorlie Nickel (KNPL), which is currently a wholly owned subsidiary of Ardea.
The cooperation agreement sets out the terms and conditions on which Ardea, Sumitomo, Mitsubishi and KNPL will fund and undertake a definitive feasibility study (DFS).
Upon agreement by the parties and subject to a positive DFS, front-end engineering design and pre-commitment activities leading to a final investment decision on the Kalgoorlie nickel project – Goongarrie Hub.
Separate to the cooperation agreement, Ardea, Sumitomo and KNPL have agreed on funding support arrangements, enabling DFS activities to happen in Q2 2024.
Ardea managing director and chief executive Andrew Penkethman commented on the joint venture.
“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,” he said.
“Once is production, the Kalgoorlie nickel project – Goongarrie Hub is expected to be one of the largest nickel-cobalt producers in Australia.
“The project will meet the high environmental, social and governance (ESG) standards expected from modern society and be a leader in responsible resource project development.”
Under the transaction, KNPL will manage the definitive feasibility process while Sumitomo and Mitsubishi will provide funding of up to $98.5m for the DFS.
Upon the conclusion of the DFS spend, the Consortium will have a 35% ownership in KNPL with the right to increase to 50% following a positive final investment decision.
The transaction is subject to approval by the Foreign Investment Review Board and the execution of a binding shareholders agreement. Completion of the transaction is expected before the end of Q3 2024.
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