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In This List

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Ardea pegs up to A$1.40B value in Goongarrie nickel-cobalt project study

Ardea Resources Ltd. said March 28 that a pre-feasibility study for the Goongarrie nickel-cobalt project in Western Australia confirmed the economic viability of the open pit operation under two different autoclave throughput scenarios.

Under an autoclave throughput of 1.0 million tonnes per annum, the study estimated a posttax net present value, discounted at 8%, of A$1.04 billion, an internal rate of return of 25% and a payback period of 5.3 years.

Initial CapEx is approximately A$598.6 million, including A$76.5 million for contingency. C1 cash cost is pegged at US$5.59 per pound before cobalt credits and 42 U.S. cents per pound after cobalt credits.

Average production over the 25-year mine life is expected at 41,500 tonnes per annum of nickel sulfate and 5,500 tonnes per annum of cobalt sulfate at all-in sustaining costs of US$1.00 per pound after cobalt credits.

On the other hand, a 1.5-million-tonnes-per-annum autoclave throughput scenario estimated a higher posttax NPV, discounted at 8%, of A$1.40 billion, an IRR of 25% and a payback period 5.6 years. Mine life is also pegged at 25 years.

Under this case, initial CapEx is pegged at A$745.8 million, with a contingency provision of A$95.9 million. C1 cash cost is approximately US$5.32 per pound before cobalt credits and 45 U.S. cents per pound after cobalt credits.

Average production over the life of mine is expected at 55,300 tonnes per annum of nickel sulfate and 6,900 tonnes per annum of cobalt sulfate at all-in sustaining costs of 99 U.S. cents per pound after cobalt credits.

The study was based on a total resource of 215.6 million tonnes containing 130,700 tonnes of cobalt and 1.5 million tonnes of nickel grading 0.06% cobalt and 0.71% nickel in the combined measured, indicated and inferred categories.

Following the outlining of the Goongarrie project's potential upside, the miner has started initial programs towards a definitive feasibility study, with a development decision towards late 2019.