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Highlights

  • Cobalt development focus in light of surging demand from tech industry
  • With over 700Mt of defined cobalt and nickel mineralisation, Ardea is focusing on the high-grade Cobalt Zone: 108.3Mt at 0.10 % cobalt and 0.79 % nickel
  • 28 March 2018 - Outstanding results for Goongarrie Nickel Cobalt Project released
  • Feb 2018 - RC drilling at Goongarrie Nickel-Cobalt Project to improve confidence and upgrade resources delivers better than expected results
    • Infill RC drilling confirms continuity of mineralisation in optimised pit footprint areas:
      • Ensures reliability of modelling and mine scheduling
      • Providing samples for variability test work and marketing studies
    • Better than expected intercepts are from outside the areas planned for early stage mining, including:
      • AGSR0005 32 m at 0.09 % cobalt and 1.06 % nickel from 16 m
        including 14 m at 0.15 % cobalt and 1.46 % nickel from 22 m
      • AGSR0009 56 m at 0.07 % cobalt and 1.09 % nickel from 12 m
        including 16 m at 0.11 % cobalt and 1.20 % nickel from 30 m
      • AGSR0015 32 m at 0.08 % cobalt and 0.87 % nickel from 32 m
        including 24 m at 0.10 % cobalt and 0.99 % nickel from 36 m
    • Many of these intercepts are from the Elsie South deposit, adjacent to the proposed plant site
    • Diamond drilling has commenced:
      • Will provide QAQC confidence in RC drilling results
      • Primary source for metallurgical variability test work samples
      • Source for production of marketing samples

Goongarrie Nickel-Cobalt Project

With over 700Mt of defined cobalt and nickel mineralisation at KNP, Ardea has high-grade Cobalt Zone. From the PFS currently nearing completion (Dec 2017 quarterly), greater confidence of development of mining at Goongarrie South and Big Four has emerged. The new hub from these two mines within the KNP Cobalt Zone will be known as the Goongarrie Nickel-Cobalt Project.

An update Mineral Resources for the KNP Cobalt Zone was announced 14 March 2018. An updated KNP Cobalt Zone resource has increased markedly to 108.3 Mt at 0.10 % cobalt and 0.79 % nickel and includes over 108,000 tonnes of contained cobalt metal and over 856,000 tonnes of nickel metal.

Increased tonnages are from Goongarrie area:

This new KNP Cobalt Zone resource is comprised as follows:

Table 1 – KNP Cobalt Zone – Resource Statement (March 2018) from RMRC and HGMC consulting groups
Camp Deposit Resource category Cutoff (%) Size (Mt) Co (%) Ni (%) Contained Co (t) Contained Ni (t) Remodel status
Goongarrie Goongarrie South Total ≥0.08% Co or ≥0.5% Ni 53.1 0.10 0.82 52,000 436,600 ARL, March 2018
Big Four Total ≥0.08% Co or ≥0.5% Ni 25.0 0.10 0.77 24,000 192,100 ARL, March 2018
Scotia Total ≥0.08% Co or ≥0.5% Ni 5.0 0.11 0.87 5,600 43,600 ARL, March 2018
Goongarrie subtotal 83.1 0.10 0.81 81,600 672,300
Siberia Black Range Total ≥0.5% Ni 19.2 0.09 0.68 17,800 130,600 ARL, August 2017
Yerilla Aubils Total ≥0.08% Co 6.0 0.15 0.90 9,000 54,000 Heron, 2009
KNP Cobalt Zone TOTAL 108.3 0.10 0.79 108,400 856,900

All figures are rounded to appropriate significant figures reflect the degree of certainty.

See the 14 March 2018 announcement for full details and breakdown and parameters.

For the latest information from the PFS including flowsheet selection, by products such as scandium and DFS drilling underway see December 2017 Quarterly report and 14 March 2018 announcement "Resource Update at KNP Cobalt Zone delivers over 100 million tonnes".

Ardea Delivers Outstanding Pre-Feasibility Study for the Goongarrie Nickel Cobalt Project with Significant Expansion Potential

Details in 28 March 2018 announcement

KNP Background

KNP, Australia’s largest cobalt resource

Containing 386,400 tonnes of contained cobalt metal, the KNP is Australia’s largest cobalt deposit. By this measure, it is more than three times larger than Australia’s second largest cobalt deposit. The newly-reported cobalt resource from the high-grade KNP Cobalt Zone is a subset of the larger KNP resource (28 June 2017 announcement) and this subset is by itself Australia’s fourth largest cobalt resource, containing 85,410 tonnes of cobalt metal. The KNP Cobalt Zone also has one of the highest cobalt grades in Australia.

Diamond Drilling at Goongarrie South reported 4 July 2017 (announcement) was undertaken for the purpose to sample mineralisation that is representative of future mining activities. These samples will be used for the metallurgical test work that is a major part of the Pre-Feasibility Study (PFS) for the KNP Cobalt Zone. This test work will define the mechanisms for recovering cobalt and nickel from the various deposits that constitute the Cobalt Zone.

The drilling also returned as expected exceptional results to confirm high-grade cobalt and nickel mineralisation, and highlight potentially significant occurrences of scandium.

Forthcoming metallurgical studies will move the KNP towards a PFS focusing on feedstocks for the lithium ion battery industry (Lithium Nickel Manganese Cobalt Oxide - LiNiMnCoO₂ or NMC).

Other drilling in the March/June 2017 quarters was at Black Range (announcement) and Kalpini (announcement).

Highlights at Goongarrie South
Highlights at Black Range
Scotia Dam cobalt-nickel deposit

The Scotia Dam resource is a small, high-grade cobalt-nickel deposit at the southern end of the Goongarrie camp of deposits. Cobalt mineralisation at Scotia Dam is continuous over around 1,200 metres of strike using a 0.05 % cobalt grade shell.

The remodelled Total Resource for Big Four is 2.5 Mt at 0.17% cobalt and 0.82% nickel (announcement dated 28 August 2017).

Kalpini Project

Historically, cobalt and nickel mineralisation at Kalpini has been identified over an approximate 30 km strike length. Thick intercepts of mineralisation are evident at numerous localities and these have contributed to the historic Inferred Mineral Resource at Kalpini of 75.0 Mt at 0.044% cobalt and 0.73% nickel. (see the Ardea Resources Prospectus p.86 for further details).

In the June 2017 quarter, Ardea completed a drill program aimed to infill and characterise some of the lesser drilled areas between the defined deposits at Kalpini. Ardea’s recent drilling was purposefully targeted at gaps in the distribution of historic drilling (Figure 2). Results (Figure 3, Figure 4) show that higher cobalt and nickel values are consistent with historic results. Intercepts at a 0.5% nickel cut-off grade include the following:

Distributions of scandium, which has not been previously explored for at Kalpini, differ locally to the nickel and cobalt distributions (Figure 3, Figure 4). The discovery of thick scandium intercepts at Kalpini is significant because they could become a potentially meaningful by-product credit. Scandium intercepts include:

Assessment of the Kalpini system of deposits is ongoing.

Semi-precious gemstones within the KNP – Chrysoprase (“Australian Jade”)

The Kalgoorlie Nickel Project is characterised by widespread occurrences of the semi-precious gemstone chrysoprase. Chrysoprase is a rare, highly valued, nickel-bearing variety of chalcedony. Colour varies from apple green to deep green, and the highest quality material is translucent. Chrysoprase is commonly known by gemologists as “Australian jade” and is often used in jewellery as a substitute for jade due to its harder wearing characteristics. Chrysoprase is highly valued in east Asia notably China.

The occurrence of chrysoprase in shallow strongly weathered horizons throughout the KNP is directly analogous to the occurrence of opal in the opal fields of Coober Pedy (SA) and Lightning Ridge (NSW). As in the opal fields, chrysoprase has developed in veins within cracks and crevices in the clay-rich host rocks. In the KNP, the highest quality, deepest green chrysoprase shows a direct spatial relationship to the cobalt- and nickel-rich parts of the orebodies. Ardea has defined five advanced stage chrysoprase pit opportunities within the KNP.

In October 2017, Ardea announced a $5 million chrysoprase deal with Australia Jade Mining Limited, a binding Terms Sheet with Sydney-based company Australian Jade Mining Limited (ACN 616 121 361, “AJML”) on the sale and transfer of mining tenements, exploration tenements, and semi-precious gemstone rights in the Yerilla, Jump Up Dam, Aubils and Canegrass areas of Western Australia, northeast and north of Kalgoorlie. Ardea will retain rights to all minerals other than semi-precious gemstones within the tenement group, which includes all laterite-associated materials such as cobalt, nickel, and scandium, as well as non-laterite minerals such as gold. (announcement dated 3 October 2017)