Ardea Resources Ltd.: 2.25Mtpa Goongarrie Nickel Cobalt Project Expansion Study
Perth - Ardea Resources Ltd. (ASX:ARL) (OTCMKTS:ARRRF) ("Ardea" or "the Company") is pleased to announce the results from its recently completed 2.25Mtpa Expansion Study at the Company's flagship Goongarrie Nickel Cobalt Project ("Goongarrie", "GNCP"). Goongarrie is a large mineral resource and this study evaluates the option of a higher throughput base case than that in the Pre-Feasibility Study ("PFS"). The Expansion Study showed significant improvements in the value of the project, the rate of return and the payback period compared to the 1.0Mtpa and 1.5Mtpa PFS results (see ASX announcement 28 March 2018).Expansion Study Highlights- 2.25Mtpa over an initial 25-year mine life
- Annual production of over 10,000 tonnes of cobalt sulphate (2,100 tonnes contained cobalt) and over 81,000 tonnes of nickel sulphate (18,000 tonnes contained nickel)
- Enhanced NPV from previous PFS estimates
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Case Pre-tax NPV8 Unleveraged Post-tax Payback
Post-tax NPV8 IRR
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2.25Mtpa A$3.1 billion A$2.3 billion 27 % 5.1 years
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Previous PFS results
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1.0Mtpa A$1.43 billion A$1.04 billion 25 % 5.3 years
1.5Mtpa A$1.93 billion A$1.40 billion 25 % 5.6 years
- Cobalt recovery of approximately 95 % and nickel recovery of approximately 93 % (life of mine)
- Initial capital cost of approximately A$1,165 million inclusive of 20% contingency
- Competitive LOM C1 cash cost of approximately US$4.63 / lb nickel metal (before cobalt credits)
- LOM C1 cash cost of approximately US($0.34) / lb nickel metal (after cobalt credits)
Key Points
- 2.25Mtpa base case is easily capable of further expansion using modular processing trains to reflect the true scale of the project
- The on-site neutraliser source also contains nickel and cobalt mineralisation, which could further reduce operating costs and provide up to an additional 10% production of nickel and cobalt sulphates (not included in the Expansion Study revenue stream)
- Further upgrade options include scandium production, High Purity Alumina production and in-pit neutraliser optimisation
- Definitive Feasibility Study (DFS) programs underway including a 7.5 tonne pilot run
- Goongarrie already attracting strong interest from potential strategic and offtake partners
Overview
The purpose of the 2.25Mtpa Goongarrie Expansion Study was to investigate the optimal throughput that could be achieved using one autoclave processing train. The positive results reflect the favourable metallurgical characteristics of the Goongarrie orebody which enables extremely short residence time in the autoclave, with no significant loss in metal recovery.
These outstanding metallurgical characteristics and rheology have resulted in an extremely robust unleveraged pre-tax NPV of approximately A$3.1 billion, with a pre-tax IRR of approximately 31% and a rapid payback period of 5.1 years for a 2.25Mtpa operation.
The 2.25Mtpa start-up option can easily be expanded by adding modular processing trains to take advantage of the full scale of Goongarrie's world-class resource base.
Commenting on the Expansion Study results, Ardea Executive Chair Katina Law said "We are pleased with the results of this Expansion Study as it highlights the upside potential of Goongarrie and its competitive economies of scale. The primary goal of the Company is to determine a cost-effective start-up scenario and also provide an upside case more suited to a financier or partner seeking a long life, lower cost, sustainable production base in a stable jurisdiction. The results have shown the benefits of scale, demonstrating Goongarrie as a unique battery metals project that can become a significant global producer over a long life."
Notes:
1 - GNCP is part of the Kalgoorlie Nickel Project KNP, the developed world's largest cobalt resource
2 - The 28 March 2018 PFS announcement provide a 1.0Mtpa base case and a 1.5Mtpa option
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About Ardea Resources Ltd:
Ardea Resources Ltd. (ASX:ARL) (OTCMKTS:ARRRF) (FRA:A91) is an Australian resources company with an extensive Western Australia and New South Wales "battery metal" portfolio of nickel, cobalt and zinc, with associated scandium, High Purity Alumina and gold. Ardea owns 100% of the Kalgoorlie Nickel Project (KNP), a globally significant series of nickel-cobalt-scandium laterite deposits which host the largest cobalt resource in the developed world. Ardea is focused on the development of the Goongarrie Nickel Cobalt Project (GNCP) within the KNP, 80km north of Kalgoorlie WA. In March 2018 Ardea released a PFS on the GNCP and has commenced Definitive Feasibility Study programs. In June 2018 Ardea retained KPMG Australia Corporate Finance to assist in securing a Strategic Partner to jointly develop the GNCP.
The current piloting is the culmination at semi-commercial scale of two years of intense bench-scale Research and Development with Simulus using Ardea drill samples. The piloting is testing multiple new metallurgical concepts involving the uniquely endowed Goongarrie mineralisation.
Contact:
Ardea Resources Ltd.:
Katina Law Executive Chair, Ardea Resources
Tel: +61-8-6244-5136
Media or Investor Inquiries:
Michael Weir, Citadel Magnus
Tel: +61-8-6160-4900