Promising Nickel-Cobalt Project Positions Ardea Resources for Growth

Ardea Resources' flagship Goongarrie Nickel-Cobalt Project in Western Australia has the potential to be a globally significant, multi-generational asset that could supply key materials for the electric vehicle and energy storage industries. With strong project fundamentals, an experienced leadership team, and a recently signed MOU with a Japanese consortium, Ardea Resources may offer an attractive investment opportunity.

Strategic Metals to Power the Future

The electric vehicle and battery storage revolutions are driving massive growth in demand for nickel and cobalt. Forecasts suggest nickel demand could triple from 2020 to 2040 as high-nickel cathode chemistries enable higher-performance batteries. Cobalt demand is also surging. Ardea's Goongarrie Hub is ideally positioned to supply these strategic metals, with reserves of 4M tonnes of nickel and 250K tonnes of cobalt - among the largest nickel-cobalt deposits globally. Located just 70km from Kalgoorlie, the project enjoys close proximity to infrastructure in a low-risk Australian jurisdiction.

Flagship Asset Advances Towards Development

In June 2022, Ardea Resources released a Pre-Feasibility Study outlining plans for a long-life, large-scale open-pit mining and processing operation at Goongarrie. The PFS detailed a production profile averaging 30K tonnes per annum of nickel and 2K tpa of cobalt over a 40+ year mine life. The project benefits from orebodies extending laterally over 15km of strike, with some zones over 100m thick. The deposit geology and mineralization help enable low-cost mining and processing, with free-digging ore and low energy consumption. Ardea's patented neutralizer provides a further cost advantage, enabling on-site acid neutralization. The mining and concentrator footprint has a low environmental impact, with tailings storage in mined pits.

Attractive Economics Positioned for Enhancement

The Goongarrie Hub PFS demonstrates robust economics, with an NPV of $4.9B AUD and a 23% IRR over a 40+ year project life. The scale of production yields average annual EBITDA of over $800M AUD. Opportunities exist to optimize the project further. Scandium credits, longer autoclave residence times, and remote operations could each improve returns. The initial development focuses on just a fraction of the overall resource, providing a pipeline for long-term growth.

Strategic Partner Secured for Development

In July 2022, Ardea signed an MOU with a Japanese consortium including trading houses Mitsubishi and Mitsui and nickel producer Sumitomo Metal Mining. With Sumitomo's expertise in HPAL technology and Mitsubishi/Mitsui's financing capacity, Ardea Resources is well-positioned to advance Goongarrie to production. The consortium plans to fully fund a Definitive Feasibility Study, likely earning a significant project interest. Ardea Resources retains 100% of its other nickel-cobalt and gold projects, providing additional upside.

Experienced Leadership to Guide Development

Ardea Resource's managing director Andrew Penkethman has over 25 years of experience in mining, providing continuity to steer Goongarrie's development. Ardea Resources maintains a tight capital structure, with directors and management holding significant equity stakes aligned with shareholders.

Ardea Resources could potentially be a good investment

Strong Nickel/Cobalt Fundamentals

• Demand for nickel and cobalt is projected to surge over the coming decades due to electric vehicle and battery growth. Ardea Resourcess deposits position it well to benefit from this macro trend.

World-Class Asset with Long Mine Life

• The Goongarrie Hub has over 4M tonnes of nickel and 250K tonnes of cobalt, with a 40+ year initial mine life. The scale and longevity provide cash flow visibility.

Robust Economics

• The PFS demonstrates attractive financial metrics including a $4.9B NPV, 23% IRR, and +$800M average annual EBITDA over the life of mine.

Upside Potential

• Opportunities exist to optimize the project further, enhancing already strong economics. The initial development only utilizes a fraction of the total mineralization.

Strategic Partners Onboard

• The MOU with the Japanese consortium brings technical expertise in HPAL along with potential project financing. This derisks development.

Location/Infrastructure

• Western Australia is a top global mining jurisdiction. Existing infrastructure nearby provides cost benefits.

Experienced Leadership

• Ardea's MD has over 25 years experience in the mining sector to guide the project forward. The board and management hold significant equity.

However, risks remain around execution, permitting, costs, metal prices and other factors. As with any mining investment, thorough due diligence is warranted. But on balance, Ardea presents a compelling nickel/cobalt investment case. The project's scale, grade, strategic location and robust economics position it strongly to create value for shareholders amid surging battery metal demand. As Goongarrie advances towards production, Ardea Resources could emerge as a globally relevant nickel-cobalt producer. With demand surging for electric vehicle metals, Ardea Resources offers leverage to this high-growth theme alongside robust project fundamentals and strategic partnerships. For investors seeking battery metal exposure, Ardea Resources may warrant consideration.

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