Australia’s Foreign Investment Review Board (FIRB) has given its approval for a powerful Japanese consortium consisting of Sumitomo Metal Mining and Mitsubishi Corporation to join forces with Ardea Resources for the development of the Goongarrie Hub operation within the latter’s giant Kalgoorlie Nickel Project (KNP) in Western Australia’s Goldfields region.
It comes after a 50:50 joint-venture (JV) agreement was signed by Ardea and the consortium in April this year.
Ardea confirmed this morning that it had been advised by the consortium that the FIRB has expressed “no objection” to the Japanese firms funding into the massive project, which management has described as the biggest nickel-cobalt resource in the developed world and a major critical minerals collaboration between Australia and Japan.
As announced in April, the consortium has committed to tipping in a whopping $98.5 million to fund a definitive feasibility study (DFS) for the Goongarrie Hub project that sits about 70km north-west of the famous gold mining town of Kalgoorlie. A further positive reveal was securing merger control clearance from Korea’s Fair Trade Commission, a condition that the consortium insisted be included on its must-have list in order to satisfy the JV agreement.
Ardea Resources managing director and chief executive officer Andrew Penkethman said: “Ardea is pleased to see the conditions precedent are continuing to be satisfied to enable the joint venture with Sumitomo Metal Mining Co., Ltd and Mitsubishi Corporation to proceed. The support from the Australian Foreign Investment Review Board is a strong endorsement from the Australian Government for this major Critical Minerals collaboration between Australia and Japan.”
The company says the FIRB approval and consent from the Korea Fair Trade Commission satisfies two of four important conditions precedent to the co-operation agreement that are required to propel the JV forward.
Ardea and the consortium are vigorously working towards satisfying the remaining two conditions, initially through the incorporation of the consortium’s JV special-purpose-vehicle (SPV) business entity being undertaken in Australia. The consortium SPV is then required to agree to the co-operation agreement and the execution of a shareholder’s agreement.
Both necessary conditions are anticipated to be satisfied by end of this year’s third quarter.
Ardea notes work is continuing for the Goongarrie Hub JV using a $12 million funding line supplied by Sumitomo, with infill resource definition drilling at the proposed Big Four nickel-cobalt deposit and bench-scale metallurgical work. Funds are also being used to progress processing plant engineering studies, in addition to bore-field design work following the completion of hydrogeological exploration drilling and with further environmental approvals required.
An interesting backdrop to the compelling mining hook-up is how an unsolicited email from Sumitomo to Ardea expressing initial interest in the project, in conjunction with an introduction between the latter and Mitsubishi originated from the Federal Government-owned Export Finance Australia, has resulted in the three parties linking arms to develop the world-class operation to help meet the market’s need for quality-grade critical minerals.
The KNP contains a significant number of nickel-cobalt and critical mineral deposits and features a total resource of 854 million tonnes at 0.71 per cent nickel and 0.045 per cent cobalt for 6.1 million tonnes of contained nickel and 386,000 tonnes of cobalt. The Goongarrie Hub, within the KNP, hosts a mineral resource of 584 million tonnes at 0.69 per cent nickel and 0.043 cobalt for 4 million tonnes of contained nickel and 250,000 tonnes of cobalt.
Ardea also has its fingers in various advanced-stage exploration targets such as Kalpini, a nickel sulphide prospect, along with several lithium, scandium and rare earths targets across its highly-prospective Eastern Goldfields nickel-gold province.
But the FIRB approval is an important step in meeting the JV requirements for its flagship operation and provides invaluable support for a project that could bring a tremendous boost to the Kalgoorlie region.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Craig Nolan
