Ardea Resources Appoints KPMG to Seek Financing Partner for Goongarrie Nickel-cobalt Project
Western Australia-based KNP is "the largest cobalt resource in the developed world", outside of the Democratic Republic of Congo (DRC), and hosts the well-endowed Goongarrie reserve, which is less than 5% of the total KNP resource, confirming the project's potential scalability, a company document noted.
KPMG's global mining M&A leader Greg Evans is leading the process, Clark said.
Based on the pre-feasibility study (PFS), announced in March, capital expenditure for Goongarrie is north of AUD 600m (USD 454m).
KPMG and Ardea are seeking a global competitive process and welcome approaches, both Clark and Evans commented. A wide type of investors, from car/electric vehicle (EV) manufacturers to strategic mining houses, could show interest, Evans said. Ardea has held talks with some potential partners already, Clark said, adding that Ardea is targeting inking an agreement, even non-binding, in 4Q18.
More than one strategic financing partner could be selected as part of the KPMG-lead process, Clark said.
KPMG expects global interest in a project of this scale, with interest particularly from Korea, China, North America and highly industrialised European nations such as Germany, which is home to major car manufacturers including Daimler [ETR:DAI], BMW [ETR:BMW] and Audi [ETR:NSU], Evans continued.
A variety of financing options are possible, anything from equity investment at the asset level to offtake arrangements, he continued.
The Goongarrie resource is defined as 215.6m tonnes at 0.06% cobalt and 0.71% nickel.
The PFS found Goongarrie is capable of generating average annual EBITDA of AUD 210m based on current pricing for sulphates, which generates a forecast project Net Present Value (NPV 8% post tax) of AUD 1.04bn and an IRR of 25%.
Ardea Resources, which listed in February 2017, has a market capitalization of AUD 98m.
Clark was appointed Managing Director of Ardea in April this year, taking over from former MD Matthew Painter.
by Christel Thunell in Sydney and Adam Orlando in Perth
About Ardea Resources Ltd:
Ardea Resources Ltd. (ASX:ARL) (OTCMKTS:ARRRF) (FRA:A91) was the best performing IPO on the ASX for 2017 and is developing the largest cobalt resource outside of the DRC, starting on the Goongarrie Nickel Cobalt Project just north of Kalgoorlie, Western Australia. Ardea will produce high-purity cobalt sulphate and nickel sulphate on site for sale directly to the battery industry. With a range of possible throughput scenarios, Ardea is seeking a strategic partner to maximise mine output to become a significant producer for the burgeoning battery industry.
Ardea's main focus is the Definitive Feasibility Study for the development of the Goongarrie Project. Drilling and variability testwork programs are underway, and cobalt sulphate and nickel sulphate marketing samples are in production in Perth. The Company aims to be producing by 2021/2022. With over 400,000 t of contained cobalt metal, and over 5.6 million tonnes of contained nickel metal, Ardea wants to realise its potential to become a major supplier to the electric vehicle and power storage sectors for decades to come.
In addition to the flagship nickel-cobalt project, Ardea also holds a series of high-quality gold and base metal assets throughout Western Australia and New South Wales. Ardea is presently exploring these projects, with much focus on the Mount Zephyr greenstone belt. This highly prospective belt hosts a suite of historic gold deposits north of Kalgoorlie (Western Australia) which have not been explored for gold in over 20 years. The Company intends to evaluate these projects and others for acceleration, spinout, or JV as appropriate.
Mr Brett Clark Managing Director & CEO
Ardea Resources Ltd.
Tel +61 8 6244 5136