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Ardea Resources (ASX:ARL) Appoints KPMG to Seek Financing Partner for Goongarrie Nickel-cobalt Project
Ardea Resources Ltd (ASX:ARL) (OTCMKTS:ARRRF) (FRA:A91), an emerging Australian cobalt and nickel producer, has appointed KPMG to help seek a strategic financing partner for its Goongarrie nickel-cobalt resource, which is part of the large Kalgoorlie Nickel Project (KNP), newly appointed Managing Director Brett Clark told Mergermarket.

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

Mr Brett Clark
Managing Director & CEO
Ardea Resources Limited
Tel +61 8 6244 5136

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