Cobalt and nickel explorer Ardea Resources Limited (ASX: ARL) has announced a significant increase in resources to support the pre-feasibility study (PFS) at its Goongarrie nickel cobalt project in Western Australia.
The company today reported an updated resource for the KNP cobalt zone of 108.3 million tonnes grading at 0.10% cobalt and 0.79% nickel, including more than 108,000t of contained cobalt metal and over 856,000t of contained nickel metal.
This resource represents the initial cobalt and nickel mining inventory that Ardea intends to develop from the Goongarrie area within its wholly-owned KNP project.
It incorporates the Goongarrie South, Big Four and Scotia Dam deposits, as well as the Black Range deposit at Siberia, and the Aubils deposit at the Yerilla camp within the KNP project.
Previously, the resource estimate stood at 64.4Mt grading at 0.13% cobalt and 0.77% nickel, including 81,000t of contained cobalt metal and 495,200t of contained nickel metal.
Ardea said the upgrade was not due to additional drilling but rather a revised focus of mining at Goongarrie during the development of the PFS.
“Previous resource estimates at Goongarrie were reported by Ardea in June 2017 using a 0.08% cobalt cut-off only, ensuring capture of much high-grade nickel mineralisation,” the company reported.
“However, as the PFS has progressed, metals prices improved dramatically. This positively impacted modelling of mining schedules, and it became clear that blocks containing high-grade nickel mineralisation with moderate cobalt grades (of less than 0.08%) are a volumetrically and fiscally important component of the deposits.”
Goongarrie PFS nearing completion
Ardea’s prime future development is the Goongarrie nickel cobalt project, located within the company’s larger KNP project in Western Australia’s Goldfields region.
According to Ardea, the Goongarrie PFS is nearing completion, with mining schedules defining a series of open pits stretching from the north of the Goongarrie South deposit to the central parts of the Big Four area in the south.
In its December quarterly report released at the end of January, the company said the future plant site had been selected, a site layout had been defined and pit optimisations had been run at a 1Mt per annum throughput.
According to the company, the mine scheduling is on a revenue basis, meaning it is largely irrelevant whether it is cobalt or nickel that is providing the maximum return.
“It does not matter if, for example, a mine block contains subgrade cobalt if the nickel grade is sufficiently high – the block will be mined,” Ardea stated.
“It is the in-ground value of that block that is the key in scheduling.”
Ardea shares were up 1.9% by afternoon trade on Wednesday.