Kalgoorlie Nickel Project’s 40-Year Mine Life Supported by $98.5M Fully Funded DFS
Ardea Resources Limited has made significant progress on its Kalgoorlie Nickel Project (KNP) Goongarrie Hub, supported by a fully funded $98.5 million Definitive Feasibility Study (DFS) led by a Japanese consortium. The project is positioned as a long-life, low-cost nickel-cobalt operation critical to the global battery supply chain.
- KNP Goongarrie Hub DFS fully funded by Sumitomo Metal Mining and Mitsubishi Corporation consortium
- Project boasts a 40+ year mine life with strong financial metrics including a post-tax NPV of A$4.98 billion
- Large-scale nickel-cobalt resource with over 6 million tonnes of contained nickel
- Innovative ESG initiatives including Mineralised Neutraliser technology and low carbon footprint
- Strategic importance amid rising global nickel demand driven by electric vehicle growth
Strategic Partnership and Funding
Ardea Resources Limited has reaffirmed its commitment to advancing the Kalgoorlie Nickel Project (KNP) Goongarrie Hub through a Definitive Feasibility Study (DFS) fully funded by a consortium of Japanese partners, Sumitomo Metal Mining (SMM) and Mitsubishi Corporation (MC). The consortium is investing up to A$98.5 million to earn an initial 35% interest in the project, with the potential to increase to 50% upon a positive Final Investment Decision (FID).
This partnership not only provides robust financial backing but also aligns with Japan’s Critical Minerals Supply Security Plan, underscoring the project's global strategic significance.
Project Scale and Resource Strength
The KNP Goongarrie Hub is Australia’s largest nickel-cobalt resource, with a Mineral Resource Estimate exceeding 6 million tonnes of contained nickel and 386,000 tonnes of cobalt. The project’s ore reserve supports a multi-decade operation, with a Pre-Feasibility Study (PFS) outlining a mine life of over 40 years producing approximately 30,000 tonnes of nickel and 2,000 tonnes of cobalt annually.
Recent infill drilling and metallurgical testing are enhancing resource confidence and are expected to increase throughput from 3.5Mtpa to 4Mtpa, potentially boosting production volumes and improving project economics.
Financial Outlook and Operational Efficiency
The PFS projects compelling financial metrics, including a post-tax Net Present Value (NPV7) of A$4.98 billion and an Internal Rate of Return (IRR) of 23%, with an average annual EBITDA of A$800 million. The project’s low operating costs, estimated between US$6,000 and US$10,000 per tonne of nickel, position it competitively against global peers, supported by premium ore characteristics such as soft, free-digging goethite and a low strip ratio.
Innovations such as the Mineralised Neutraliser, which replaces imported lime and reduces emissions, alongside in-pit tailings storage and steam recycling for power generation, contribute to operational efficiency and sustainability.
ESG Commitment and Workforce Development
Ardea is advancing its Environmental, Social, and Governance (ESG) credentials with a Digbee ESG™ 'A' score, reflecting continuous improvement and innovation. The project emphasizes responsible mining practices, including reduced carbon emissions and meaningful engagement with First Nations communities through education grants and employment pathways.
The construction phase is expected to create around 3,000 jobs, with over 800 operational roles sustained over the mine life, supporting regional economic development in Western Australia’s Goldfields region.
Market Context and Strategic Importance
The timing of the KNP Goongarrie Hub’s production aligns with forecasted nickel market deficits from 2028 onwards, driven by surging demand for electric vehicles and energy storage. The project’s location in a stable jurisdiction with excellent infrastructure further enhances its attractiveness as a secure, long-term supplier of critical battery minerals.
Ardea’s ongoing DFS workstreams, including resource modelling, process plant design, and environmental approvals, are progressing well, with completion expected in the second half of 2025. The collaboration with the Japanese consortium is also focusing on optimising debt financing to support project development.
Bottom Line?
As Ardea nears DFS completion, the Kalgoorlie Nickel Project stands poised to become a cornerstone of Australia’s critical minerals supply, but market dynamics and financing strategies will be key to unlocking its full potential.
Questions in the middle?
- How will nickel and cobalt price volatility impact the final investment decision and project financing?
- What are the potential risks or delays in securing environmental and native title approvals during the DFS phase?
- How might Ardea and its partners leverage emerging technologies or market shifts to enhance project value beyond current DFS assumptions?
