Ethical and sustainable
nickel-cobalt
for the battery mineral
supply chain
2022
ANNUAL REPORT
Corporate Directory
Directors
Mathew Longworth, (Non-Executive Chair)
Andrew Penkethman, (Managing Director
and Chief Executive Officer)
Ian Buchhorn, (Executive Director)
Company Secretary
Sam Middlemas
Registered and Business Office
Suite 2, 45 Ord Street, West Perth
Western Australia 6005
PO Box 1433, West Perth
Western Australia 6872
Tel:
Email:
(08) 6244 5136
info@ardearesources.com.au
Website
www.ardearesources.com.au
Auditor
Dry Kirkness (Audit) Pty Ltd
(formerly Butler Settineri (Audit) Pty Ltd)
50 Colin Street
Perth WA 6005 Australia
Share Registry
Automic Group
GPO Box 5193
Sydney NSW 2001
Tel:
Tel:
Web: www.automicgroup.com.au
1300 288 664 (within Australia)
+61 2 9698 5414 (international)
Stock Exchange Listing
The Consolidated Entity’s shares are
quoted on the Australian Securities Exchange.
The Home Exchange is Perth.
Table of Contents
Chairman’s Letter ...................................1
Activities Report......................................2
Directors’ Report...................................24
Consolidated Statement of
Comprehensive Income ....................35
Consolidated Statement of
Financial Position .............................36
Consolidated Statement of
Changes in Equity ............................37
Consolidated Statement of
Cashflows ........................................38
Notes to the Financial Statements .......39
Directors’ Declaration ..........................55
Independent Auditor’s Report...............56
ASX Code: ARL - ordinary shares
Shareholder Information .......................60
Tenement Schedule..............................62
Glossary ...............................................65
Cover design represents Ardea’s Kalgoorlie Nickel Project strengths of high grade goethite material (middle left hand photo strip), and the
optionality of products to suit partner requirements - nickel and cobalt sulphate crystals produced during the 2018 bench-scale test work (top
right, bottom left photo strips) and also an example of Mixed Hydroxide Precipitate (MHP) which is the base case being studied in test work.
Photo this page: Metallurgical test work has demonstrated the effectiveness of flowsheet developments, such as Atmospheric Leaching (AL).
An AL circuit in the flow sheet will enhance CO2 mitigation and assist Ardea in the aim of reducing reliance on fossil fuel for power generation.
Ardea Resources Limited & controlled entities
Annual Report 2022
Chairman’s Letter to Shareholders 2022
Dear Shareholders,
I am pleased to present Ardea Resources Limited (Ardea or the Company) Annual Report and to reflect on what has been
an exceptional year for the Company.
The 2022 financial year has been marked by a combination of a well-supported capital raise, being awarded Major Project
Status for the Kalgoorlie Nickel Project (KNP), a nickel sulphide discovery at Emu Lake and the gold asset divestment of
Kalgoorlie Gold Mining, with free in-specie share distribution to eligible Shareholders. In addition, there has been significant
advancement in Strategic Partner discussions.
The nickel sector has seen significant volatility during the reporting period. The price of nickel started the reporting period
at US$17,500 per tonne before significantly increasing to a high of US$48,300 per tonne in March 2022. The price at the
end of the reporting period, at US$23,100 per tonne, represents an increase of 32% over the year. The outlook for nickel
remains compelling with all of these factors reinforcing supply chain security issues and the importance of sourcing long
term, reliable sources of sustainable and ethical nickel supply. In this regard, the global significance of the KNP continues
to be recognised, given the strategic scale of the resource and location in the best resources operating jurisdiction in the
World.
Feasibility Studies are continuing at the KNP to include the base case 3.5Mtpa at the Goongarrie Hub (Goongarrie) with
hydrometallurgical sample assay results confirming the 2021 resource model and metallurgical test work supporting
maximum resources utilisation and optimisation of the low-carbon flow sheet. The growth in the nickel price has once again
highlighted the strong economic potential at the KNP in addition to the project being a nationally significant asset.
A key part of our Environmental and Social Governance (ESG) plan is optimisation of the low-carbon flow sheet supporting
the Mineralised Neutraliser concept and lowering CO2 emissions. Ardea strives to balance the economic, social, and
environmental aspects of your Company with a commitment to ESG principles as an essential part of the way we operate.
We pride ourselves on the respectful relationships we have and continue to develop with our stakeholders, especially within
the diverse, modern mining community of Kalgoorlie-Boulder in Western Australia (WA), where our globally significant KNP
is located.
Exploration for nickel-copper-PGE sulphide and Critical Minerals continues on compelling targets which are complementary
to the development of the KNP. Diamond core drilling and downhole electromagnetic surveys are continuing at Emu Lake,
along with defining high-priority targets elsewhere within the highly prospective KNP tenure.
The next 12 months is looking bright for your Company as we complete further
studies on Goongarrie, progress Strategic Partner negotiations and engagement
with Government funding agencies.
In conclusion, I would like to thank our Shareholders for their tremendous support over the past year, my fellow Board
members, our Managing Director and CEO Andrew Penkethman and the team at Ardea.
Mat Longworth, Chairman
Ardea Resources Limited & controlled entities
1
Annual Report 2022
Activities Report
Environmental, Social and (Corporate) Governance
Environmental, Social and (Corporate) Governance considerations are at the forefront of the way Ardea operates. All project
designs and work practices are based on the Company minimising CO2 green-house gas emissions when in production.
The proposed flowsheet (Figure 6) has been enhanced for CO2 mitigation in the neutralisation circuit through introducing
an Atmospheric Leach (AL) circuit to assist in neutralising the acidic High Pressure Acid Leach (HPAL) discharge. The AL
circuit facilitates upgrade of the site acid plant utilisation and allows Ardea to generate its own site power requirements off-
grid, without relying on fossil fuel for power generation.
Ardea has contributed its Critical Mineral technical expertise to groups advocating for net zero carbon by 2050 and lodged
a supportive submission to the House of Representatives Standing Committee on the Environment and Energy inquiry into
the Climate Change (National Framework for Adaptation and Mitigation) Bill 2020. The KNP mineral resource is also included
in the Geological Survey of Western Australia nickel-cobalt investment flyer, as the largest nickel resource in Western
Australia (and therefore the largest in Australia), and is in the Commonwealth Government’s 2021 Australian Critical
Minerals Prospectus.
Responsible sourcing of materials, through mechanisms such as mandatory reporting of CO2 footprints for all batteries
sold is essential. Traceability is also being implemented with raw materials used in batteries that must be procured according
to OECD guidelines for sustainable sourcing. These important considerations are an essential part of the feasibility study
work Ardea is undertaking on the KNP.
Ardea enjoys strong support from the communities in which we operate, primarily the City of Kalgoorlie-Boulder and the
Shire of Menzies, and has a Native Title Agreement in place for development of the Goongarrie Hub. The benign
environmental setting being the Great Western Woodlands allows excellent post-mining rehabilitation and reafforestation.
The Goongarrie Hub mining in particular has no land-use conflict with agricultural activity, nor any of the challenges
associated with safe tailings disposal as in the tropics.
Photos clockwise from top: Ardea’s Alvin Tiong (Senior Process Engineer), Mike Miller (General Manager – Technical Services) and Andrew
Penkethman (MD & CEO) visiting the FBICRC cathode precursor production pilot plant, at Curtin University, Perth Western Australia July 2022;
Swainsona formosa (Sturt Desert Peas) Goongarrie; Ardea’s Andrew Penkethman (third from left) and Project Geologist Aidan Spilsbury (third from
right) supporting 2022 Student Meets Industry Night – AusIMM Kalgoorlie Student Chapter, April 2022; Local basketballer Noah Hinkley benefits
from the Education Trust implemented by Ardea and independently managed; Ardea sponsored Leonora Drug Action Group basketball team’s
participation in regional tournament, covering team uniform, and travelling funds; and well respected Eastern Goldfields Aboriginal Elder, Aubrey
Lynch, providing Cultural Awareness training, for the Ardea team, at the West Kalgoorlie Office.
Ardea Resources Limited & controlled entities
2
Annual Report 2022
Activities Report continued
Corporate Objectives
Ardea is a battery minerals Company focused on the development of the Kalgoorlie Nickel Project (KNP). The Company’s
projects are all located within the Eastern Goldfields world-class mineral province of Western Australia, which is the premium
operating jurisdiction in the World with certainty of title demonstrated through 130 years of sustained mineral production
and long-accepted transparent and ethical safety, environmental and operating procedures.
The Company is focussed on:
1.
2.
Sustainable and ethical development of the Goongarrie Hub, which is part of the Kalgoorlie Nickel Project, a globally
significant series of nickel-cobalt-scandium laterite deposits which host the largest nickel-cobalt resource in the
developed world and proven to be amenable to industry-standard hydrometallurgical extraction;
Nickel sulphide and Critical Mineral exploration within KNP tenements aimed at making significant discoveries.
Both disseminated nickel and massive nickel sulphide targets have been defined, with any future production fully
complementary to the nickel laterite strategy; and
3.
Corporate activity, including new tenement applications which complement Company strategy.
The KNP is comprised of a series of major undeveloped nickel-cobalt-scandium laterite deposits, which total 830Mt at
0.71% Ni and 0.046% Co (5.9Mt contained nickel metal, 380kt contained cobalt metal1). Ardea is well placed to provide
essential supplies of sustainably sourced nickel and cobalt, along with other Critical Minerals (notably scandium and the
Rare Earths neodymium, praseodymium and cerium). All KNP projects are located within 150km of the regional mining hub
of the City of Kalgoorlie-Boulder, Western Australia.
Ardea’s principal focus continues to be the development of the KNP, commencing with the Goongarrie Hub nickel laterite
deposits. However, Ardea’s strategic tenure in the heart of the Eastern Goldfields of Western Australia is also highly
prospective for nickel sulphide which is mined extensively throughout the region.
The nickel sector continues to experience a rapid rise in demand linked to Electric Vehicles (EV) and the Lithium Ion Battery
(LIB) supply chain as well as traditional uses such as stainless steel (Figure 1). Current nickel production levels are not
expected to keep pace with demand. It is expected that currently identified laterite and sulphide nickel deposits that can
ensure sustainable and ethical mineral supply will be developed in the years ahead to meet the burgeoning demand.
1
Resource breakdown, last disclosed in Ardea ASX Release 16 June 2021.
Per Goongarrie Expansion Study ASX release, 24 July 2018. All the material assumptions underpinning the forecast financial information derived from a
production target, in the initial public report referred to in rule 5.17 continue to apply and have not materially changed.
Figure 1: ALL ELEMENTS OF EV BATTERY SUPPLY CHAINS EXPAND SIGNIFICANTLY TO MEET PROJECTED DEMAND
Number of mines to produce required levels of Ni-Co
to meet projected demand in 2030 relative to 2021
+60
+41
6 000
t
k
5 000
4 000
3 000
2 000
1 000
+17
+11
350
t
k
300
250
200
150
100
50
+50
+29
6 000
t
k
5 000
4 000
3 000
2 000
1 000
3 000
t
k
2 500
2 000
1 500
1 000
500
+40
+23
4 000
3 500
h
W
G
3 000
2 500
2 000
1 500
1 000
500
+90
+52
+81
+48
)
n
o
i
l
l
i
m
(
s
V
E
f
o
r
e
b
m
u
N
50
40
30
20
10
2021 STEPS APS
2021 STEPS APS
2021 STEPS APS
2021 STEPS APS
2021 STEPS APS
2021
STEPS
APS
2030
Nickel
2030
Cobalt
2030
Cathode
2030
Anode
2030
Batteries
2030
EVs
Notes: STEPS = Stated Policies Scenario; APS = Announced Pledges Scenario. Number of additional mines/plants/factories required to meet projected demand from
the 2021 demand level is shown by the arrows. Projected demand is annual. Metal demand is total demand including EV and non-EV demand. Assumes the average
annual production capacities: nickel mine - 38 kt; cobalt mine - 7 kt; battery gigafactory - 35 GWh; and EV production plant - 0.5 million vehicles. Nickel demand does
not distinguish between Class 1 and Class 2 nickel.
ADAPTED after IEA graph. Sources: IEA analysis based on S&P Global; Bloomberg NEF; Benchmark Mineral Intelligence.
Ardea Resources Limited & controlled entities
3
Annual Report 2022
Activities Report continued
Kalgoorlie Nickel Project - Goongarrie Hub
Overview
The Goongarrie Hub is located 70km northwest of the mining centre City of Kalgoorlie-Boulder and is the premium ore feed
within the broader KNP (Figure 2). Resources from the Goongarrie South to Scotia Dam deposits are planned to be the
base load feed for two HPAL autoclaves and one AL plant located at Goongarrie South. The resources at Goongarrie are
dominantly the premium goethite style and extend continuously over 25km of strike and at Highway, 30km north, over a
strike length of 6km (Figure 2). All Goongarrie Hub mineral resources are located on granted mining leases with Native Title
Agreement in place and tenure 100%-controlled by Ardea.
The project also has ready access to high-quality infrastructure with the Goldfields Highway, rail line and power infrastructure
passing through the project area (Figure 2). There are two port options, these being Esperance and Kwinana, that are well
serviced by the KNP road and rail network.
Significantly, the KNP is located on the rail connection to the developing battery hub at the Port of Kwinana industrial area
immediately south of Perth, as well as east to Port Augusta and developing low-carbon energy hubs on the eastern Australia
seaboard.
Ardea
is actively engaged with
Commonwealth and State agencies
and statutory authorities, notably the
Department of Foreign Affairs and
Trade (DFAT), Critical Minerals Office
(CMO), Major Projects Facilitation
Agency (MPFA), Australian Trade and
Investment Commission (Austrade)
and Export Finance Australia (EFA)
who are coordinating the push for a
downstream battery industry within
Australia through “Team Australia”
and the State of Western Australia
through “Team WA”. All the LIB
feedstocks,
including nickel and
cobalt, are available in Australia and
WA at the scales required for world-
significant green energy centres of
excellence.
Figure 2:
KNP LOCATION AND
INFRASTRUCTURE PLAN
Projection GDA94 MGA94 Zone 51.
E
m
0
0
0
,
0
5
3
Glencore Murrin Murrin
nickel laterite plant
(operating)
E
m
0
0
0
,
0
0
4
AUBILS
Kalgoorlie Nickel Project
YERILLA HUB
BOYCE CREEK
6,750,000 mN
JUMP UP DAM
Location and Tenure
GHOST ROCKS
Menzies
HIGHWAY
6,700,000 mN
Kalgoorlie
Nickel Project
GOONGARRIE HUB
GOONGARRIE
0
20
40
Kilometres
LAKE REBECCA
BIG FOUR
EMU LAKE
SIBERIA
Cawse nickel laterite plant
(not operating)
Kalgoorlie
Nickel Project
KALPINI HUB
KALPINI
Silver Swan (POS)
6,650,000 mN
Bulong nickel laterite plant
(not operating)
Kalgoorlie
6,600,000 mN
BULONG
Nickel Smelter
(BHP Billiton)
Coolgardie
Kambalda
Ardea KNP Tenement
Ardea KNP
holds mineral rights
Goongarrie Resource
Town (skilled mining
workforce)
Major Road
Railway
Gas Pipeline
Ardea Resources Limited & controlled entities
4
Annual Report 2022
Activities Report continued
Photo: Aerial image
of Ardea’s
Goongarrie Hub.
showing road and
rail infrastructure
within the project
and the benign
semi-arid woodland
environment, ideal
for project
development and
rapid revegetation
post mining.
Project Funding
Following the awarding of Major Project Status (MPS) by the Prime Minister in March 2022, engagement with Commonwealth
agencies has escalated considerably, with their professionalism, contact-reach and enthusiasm of immense value to the
Australian mining sector, and in particular for Ardea. The driving force for Ardea in World Critical Minerals supply is the
KNP’s ESG-compliant chain of supply and geopolitical stability.
Ardea’s 2018 Prefeasibility Study (PFS) focussed solely on HPAL goethite feed with no beneficiation of lower grade siliceous
ore and no AL circuit. Feed rate was 1.5Mtpa for 25 years producing 12.35ktpa nickel-in-product (ASX release 28 March
2018). This production model understates the world-scale potential of the KNP hence the current feasibility programs are
required to expand to the current 3.5Mtpa plant feed model.
It is most apparent that even stronger Commonwealth support will be possible once updating of the KNP 2018 PFS is
completed. In particular, converting more of the 830Mt Mineral Resource Estimate (MRE) to Reserves is essential for
securing Export Credit Agency support for financing. Ardea continues engagement with a number of potential funding sources
both in Australia and overseas.
To expediate a more favourable KNP funding package, an industry-leading mining consultancy has been retained to produce
a representative Ore Reserve for the KNP Goongarrie Hub, using the currently defined resource of 561Mt at 0.68% Ni and
0.044% Co. The first step has commenced, being an update to the 2018 PFS financial model (by consultancy Ockham
Group based in UK). This PFS level update, as part of the ongoing feasibility programs is important, as the 3.5Mtpa project
scale has increased from the 2018, 1.5Mtpa PFS and 2.25Mtpa Expansion Study. Flow sheet enhancements such as the
inclusion of a second HPAL autoclave, the AL circuit and Mineralised Neutraliser also need to be quantified, to be able to
optimally communicate the Company value proposition.
Feasibility Programs
The KNP is owned 100% by Ardea and is undergoing feasibility for a 3.5Mtpa operation, with two HPAL autoclave trains,
each rated at 1.5Mtpa, as well as an AL circuit of at least 0.5Mtpa. The operation can be expanded if required utilising
beneficiated feed. The leach streams will initially produce Mixed Hydroxide Precipitate (MHP) as an ethical and sustainable
supply chain product for the LIB sector. The longer-term objective is to upgrade to Precursor Cathode-Active Material
(PCAM) as a Stage 2 enhancement servicing a US, European, east Asia as well an emerging Australian-domiciled Original
Equipment Manufacturers (OEM).
Ardea Resources Limited & controlled entities
5
Annual Report 2022
Activities Report continued
With the substantial KNP resource base with 5.9Mt of contained nickel, there is potential for many more trains of the
Goongarrie 1.5Mtpa HPAL module, for KNP to be an even more significant world-scale nickel-cobalt producer.
The Goongarrie Hub Material Types allow the mineralisation to be easily matched to either the HPAL or AL circuits, and
results in maximising resource utilisation. High magnesium plant feed which in previous production schedules was stockpiled
at pit ramp exits for late project HPAL processing is now designed to feed the AL circuit contemporaneously with mining.
Significantly, the additional sulphuric acid now required by adding the AL circuit leads to a larger sulphur-burning acid plant.
The acid plant reaction chemistry is highly exothermic and generates substantial heat and thus steam, which will be used
to generate electricity and for process heating for the site. This allows a material de-carbonising of the project which is
already low by industry standards (Figure 3) and will continue to be reduced as part of in-progress feasibility work.
With the AL circuit positive environmental impact on the site acid and energy balance, the operation is likely to be fully off-
grid. Ongoing feasibility work is in fact considering the operation as an energy exporter.
As well as the Ardea 2018 KNP studies, the A$34.5M (2009 money of the day) PFS completed by former KNP joint venture
partner Vale Inco in 2009 in partnership with previous KNP owner Heron Resources Limited, continues to be a valuable
information source. In particular, Vale Inco completed considerable bench-scale metallurgical work on screen beneficiation
(termed Bene Ore) which Ardea has used in framing its current metallurgical bench-scale laboratory programs. Beneficiation
has been a project risk at previous WA nickel laterite operations due to inadequate bench-scale test work and poor leach
feed grade predictive models, so the KNP is designed to be more reliant on direct feed (termed Grind Ore), particularly
during the Payback period.
Vale Inco test work also returned favourable nickel-cobalt recoveries from Atmospheric Leach test work but did not progress
the concept. With the Global Financial Crisis of 2008, Vale Inco closed multiple nickel operations world-wide and withdrew
from the KNP joint venture. Fortuitously, Ardea has been able to retain the KNP and continue adding value to the asset, at
a time of high nickel demand.
Ardea Resources Limited & controlled entities
6
Annual Report 2022
Goongarrie, Kalgoorlie Nickel Project
Activities Report continued
Figure 3:
GOONGARRIE HUB
PROCESS FLOW
Sulphur
RO
Sulphuric
Acid Plant
Power
Plant
Borefields
Water Treatment Desalinated Water
PROCESS and UTILITIES
Goethite Ore
1. LEACHING
Acid
Sag Mill
Beneficiated Goethite
Pressure Acid Leach (PAL)
Saprolite Ore
Acid
SN Residue
SN Underflow
Sag Mill
Beneficiated Saprolite
Atmospheric Leach (AL)
Residue Leach (RL)
Neutraliser
Floc
2. RESIDUES HANDLING
Lime
Tailings
Storage
Tailings
Neutralisation
Air
Primary
Neutralisation
CCDs
3. IMPURITY REMOVAL
Wash Water
MgO
Lime
Neutraliser
Air
Secondary Neutralisation (SN)
To RL
Mixed Hydroxide
Product (MHP)
Scavenger
Precipitation (SP)
Manganese
Removal (MR)
Ardea Resources Limited & controlled entities
Ni & Co
PRODUCTS
7
Annual Report 2022
Activities Report continued
Resource Modelling
During the year, drill assay results were received from Goongarrie South, Goongarrie Hill and Highway metallurgical test
work drill core, which have confirmed the geological model and estimates for high-grade laterite nickel-cobalt-scandium
mineralisation (ASX releases 16 May and 26 May 2022).
The KNP continues to be evaluated for high-grade, >1% nickel plant feed options. This work also covers by-product
metallurgical studies, including scandium and Rare Earth Elements (REE), and that all mineral resource estimation uses
uniform methodologies. A review of the full KNP high-grade nickel MRE is continuing, with Siberia North in the western
Goongarrie Hub currently being assessed for an updated MRE.
The combined Mineral Resources at the Goongarrie and Highway deposits for a starter processing plant development at
the KNP Goongarrie Hub are reported below (Table 1), with an initial focus on the high-grade resource based on a 0.8% Ni
cut-off grade.
The full Goongarrie Hub now has a single Material Types algorithm based solely on XRD-generated mineralogy. This
modelling is the basis for pit optimisations, metallurgical flow sheet and engineering designs.
Most importantly, Material Types are now segregated in the comminution circuit as Grind or Bene, and in leaching as HPAL
feed, AL feed and Neutraliser. The system has been developed by Ardea’s in-house Principal Resource Geologist, and is
illustrative of the elite nickel laterite expertise the Company has developed since its 2017 ASX listing.
Drill core for the in-progress metallurgical test work has been selected on the basis of the modelled Material Types. The
Vale Inco 2005-2009 and Ardea 2017-2018 piloting very much focussed on Grind HPAL plant feed, so the current feasibility
programs are skewed towards AL feed.
In terms of beneficiation, the KNP model used to select the test material was based on an assumed grade of scats (siliceous
material rejected in screening) of 0.35% Ni. The financial model at that time used a nickel price of US$19,500 per tonne.
At the current nickel price exceeding US$20,000 per tonne, grades as low as 0.35% Ni sitting in fully sampled stockpiles,
have significant value exceeding variable processing costs which has the potential to move plant feed away from Bene in
favour of Grind. Additionally, HPAL with 94% nickel recovery is favoured over AL with lower recoveries. To accommodate
such considerations, the KNP 2018 PFS financial model has been upgraded.
Table 1 - Highway and Goongarrie (ASX release 15 February and June 16, 2021) nickel and cobalt Mineral Resource Estimates
using a 0.8% Ni cut-off grade
Deposit
Goongarrie Hub
(GH, GS, BF & SD)
Highway
Combined
Deposits
Resource
Category
Measured
Indicated
Inferred
Subtotal
Indicated
Inferred
Subtotal
Measured
Indicated
Inferred
Grand Total
Quantity
(Mt)
Nickel
(%)
Cobalt
(%)
Contained
nickel (kt)
Contained
cobalt (kt)
11.0
41.5
7.1
59.6
15.1
3.7
18.8
11.0
56.5
10.8
78.3
1.13
0.97
0.95
1.00
1.01
0.98
1.00
1.13
0.98
0.95
1.00
0.106
0.070
0.051
0.074
0.053
0.053
0.053
0.106
0.066
0.051
0.069
125
404
67
595
152
36
188
125
556
103
784
11.6
29.0
3.6
44.3
8.0
2.0
10.0
11.6
37.1
5.6
54.3
Ardea Resources Limited & controlled entities
8
Annual Report 2022
Activities Report continued
Ardea’s updated 2021 Goongarrie and Highway resource estimates were incorporated with historic KNP resource estimates
compiled by various parties between 2004 and 2009 and signed off to meet JORC-2012 guidelines by Heron Resources in
2013 (refer Table 2 below). The KNP Goongarrie Hub MRE, based on a 0.5% Ni cut-off grade, is 561Mt with 3.8Mt of
contained nickel and 248kt of contained cobalt and will be able to supply premium goethite plant feed to an HPAL process
plant located at Goongarrie for multiple decades.
Table 2 – Updated KNP nickel and cobalt Mineral Resource Estimates based on a 0.5% Ni cut-off grade
Size
Size
(Mt)
(Mt)
Ni
Ni
(%)
(%)
Co
Co
(%)
(%)
Contained Metal Estimation Details
Contained Metal Estimation Details
Source
Ni (kt) Co (kt) Method
Source
Ni (kt) Co (kt) Method
Camp
Camp
Prospect
Prospect
Goongarrie
Goongarrie South
Highway
Ghost Rocks
Goongarrie Hill
Big Four
Scotia
Resource
Resource
Category
Category
Measured
Indicated
Inferred
Indicated
Inferred
Inferred
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Goongarrie Subtotal Measured
Indicated
Inferred
Combined
Siberia
Siberia South
Siberia North
Black Range
Siberia Subtotal
KNP Goongarrie
Hub
TOTAL
Bulong
Taurus
Bulong East
Bulong East
Bulong Subtotal
Hampton
Kalpini
Hampton Subtotal
KNP Kalpini Hub TOTAL
Yerilla
Jump Up Dam
Boyce Creek
Aubils
KNP Yerilla Hub TOTAL
KNP TOTAL
GRAND TOTAL
Inferred
Indicated
Inferred
Indicated
Inferred
Indicated
Inferred
Combined
Measured
Indicated
Inferred
Combined
Inferred
Indicated
Inferred
Indicated
Inferred
Combined
Inferred
Inferred
Indicated
Inferred
Combined
Measured
Indicated
Inferred
Indicated
Inferred
Measured
Indicated
Inferred
Combined
Measured
Indicated
Inferred
Combined
Legend:
LUC – Local Uniform Conditioning; OK – Ordinary Kriging.
18
82
10
71
21
47
40
29
49
14
12
5
18
253
127
398
81
10
53
9
10
19
144
163
18
272
270
561
14
16
24
16
38
54
75
75
16
114
130
4
42
18
27
49
4
68
68
140
22
357
452
830
0.94
0.71
0.64
0.69
0.67
0.66
0.65
0.60
0.71
0.68
0.71
0.72
0.94
0.69
0.65
0.69
0.65
0.64
0.66
0.67
0.69
0.65
0.66
0.66
0.94
0.69
0.65
0.68
0.84
1.06
0.79
1.06
0.81
0.88
0.73
0.73
1.06
0.76
0.79
0.94
0.78
0.63
0.77
0.70
0.94
0.78
0.68
0.73
0.94
0.72
0.68
0.71
0.085
0.049
0.033
0.038
0.040
0.042
0.037
0.025
0.047
0.043
0.065
0.043
0.085
0.044
0.037
0.044
0.033
0.051
0.043
0.090
0.100
0.070
0.041
0.045
0.085
0.046
0.039
0.044
0.051
0.055
0.053
0.055
0.052
0.053
0.044
0.044
0.055
0.047
0.048
0.048
0.043
0.034
0.058
0.066
0.048
0.049
0.057
0.053
0.079
0.047
0.044
0.046
171
584
61
487
141
312
259
176
346
96
82
37
171
1,758
823
2,753
523
64
352
62
68
126
943
1,070
171
1,885
1,767
3,822
119
169
190
169
309
477
550
550
169
859
1,028
36
324
116
206
346
36
531
462
1,028
207
2,584
3,088
5,879
15
40
3
27
8
20
15
7
23
6
7
2
15
112
47
175
27
5
23
8
10
13
59
73
15
126
107
248
7
9
13
9
20
29
33
33
9
53
62
2
18
6
16
33
2
33
39
74
17
168
199
384
Year
Year
2021
2021
2021
2021
2021
Ardea
Ardea
Ardea
Ardea
Ardea
Snowden 2004
2021
2021
Ardea
Ardea
Ardea
Ardea
Ardea
Ardea
2021
2021
2021
2021
LUC
LUC
LUC
LUC
LUC
OK
LUC
LUC
LUC
LUC
LUC
LUC
OK
OK
OK
OK
OK
Snowden 2004
Snowden 2009
Snowden 2009
2017
2017
HGMC
HGMC
OK
OK
OK
Snowden 2007
Snowden 2004
Snowden 2004
OK
Snowden 2004
OK
OK
OK
OK
OK
Snowden 2008
Snowden 2008
Snowden 2008
Snowden 2009
2008
Heron
Ardea Resources Limited & controlled entities
9
Annual Report 2022
Activities Report continued
Processing Research and Development
- Scandium and Rare Earth Elements
FY2022 Research & Development (R&D) has been primarily based upon metallurgical experiments aimed at optimising
the downstream product and hence revenue streams from the KNP and its sub-set Goongarrie Hub.
Key experiments relate to sustainability enhancements for the KNP HPAL and AL flowsheets, notably predicated upon the
use of in-pit derived neutralisers. The priority focus is the diamond drill core metallurgical test work underway at ALS Balcatta
metallurgical laboratory, which in addition to the nickel-cobalt HPAL and AL work is also considering the Critical Minerals
essential for the new age technologies used in limiting carbon emissions, such as the EV, Static Storage Battery (SSB) and
electric motor/wind-turbine sectors.
In terms of potential product revenue streams, opportunities involving the Critical Minerals cobalt, scandium and magnesium,
the Platinum Group Elements (PGE) – Ru, Rh, Os and the REE neodymium, praseodymium and cerium. However, project
development has always been focussed on nickel-cobalt, which continues to be the case, with Ardea’s flow sheet in no way
dependent upon any by-product credits.
The securing of feed for the AL circuit is critical, since this was the mechanism to increase acid demand. Designing the
Mineralised Neutraliser and AL programs has been the key program in FY2022 R&D and is continuing into FY2023.
Highly sought Critical Minerals within the KNP lateritic enrichment regolith profile identified in R&D include:
•
•
•
•
•
Nickel-Cobalt-Manganese (NCM) content in LIB including PCAM;
EV electric motor REE permanent NdFeB magnet metals, most notably Nd-Pr. The KNP also has common Ce and
potential for Dy and La;
Scandium for scandium-aluminium lightweight, high-strength fabrication in general and EV chassis in particular;
Vanadium for community-scale and larger SSBs;
Critical Minerals targets at potentially extractable grades identified during KNP R&D include:
•
•
Ba, Cr, Ga, In, Mg, Mo, Te, Ti, Sn, W, Y, Zr; and
PGEs - Ru, Rh, Os (due to excessive assay cost, using Pt-Pd as a pathfinder in drill pulp re-assay).
Ardea Resources Limited & controlled entities
10
Annual Report 2022
Activities Report continued
to be
All of these Critical Minerals can be assessed because
the HPAL process requires complete dissolution of
goethite-hosted nickel-cobalt mineralisation, thereby
rendering all contained metals into solution and thus
amenable to recovery. This does not require each of
these metals
in stand-alone economic
concentrations in their own right. Recovery of these
metals relies on nickel and cobalt hydrometallurgical
recovery, potentially providing significant credits and
upside
In-progress
the project economics.
metallurgical R&D will help determine the viability of
recovering co-product Critical Minerals from the HPAL
Pregnant Liquor Solution (PLS).
to
research and development
Critical Minerals
is
predicated on the 60 element Ardea multi-element
assay suite used in all sampling programs. The main
R&D focus for the Company continues to be searching
the KNP technical data base to select archived Ardea
drill sample pulps for re-assay for Critical Minerals
(notably REE co-products, and PGE which is also used
for identifying fertile nickel sulphide multi-element
ratios). This R&D is a joint CSIRO-Ardea program.
CSIRO
Ardea continues to work with industry leading research partners, such as Australia’s national science agency, CSIRO. The
nickel sulphide study is supported and co-funded by the Australian Government’s Entrepreneurs' Programme, Innovation
Connections service and is continuing, with several samples from Emu Lake, Goongarrie and Highway being assessed to
confirm key nickel sulphide indicators.
Recent results have also highlighted the prospectivity of the Walter Williams Formation (WWF) for hosting magmatic nickel
sulphide. Fortuitously, Ardea is the largest holder of the WWF in the Eastern Goldfields, as this is the dominant host unit
that has weathered to form the Goongarrie Hub nickel laterite deposits. Whilst the Company focus remains on completing
the Goongarrie Hub feasibility, this nickel sulphide prospectivity provides additional optionality.
Future Battery Industries Cooperative Research Centre
The Future Battery Industries Cooperative Research Centre (FBICRC) based at Curtin University, Perth, is an independent
centre where industry, government and researchers can come together to create the tools, technologies and skills to grow
the role of battery storage in Australia’s electricity grids, and make Australia a larger downstream player in global battery
value chains.
Ardea continues to sponsor and work with the FBICRC team on the following work streams:
1.
2.
3.
4.
5.
Cathode Precursor Project.
Innovative Nickel-Cobalt Extraction.
Electrochemical testing of Australian battery materials in standard cell formats.
Provenance and Trusted Supply Chains.
Certification and Environmental life Cycle Assessment.
Ardea Resources Limited & controlled entities
11
Annual Report 2022
Activities Report continued
Each one of these work streams is aimed at ensuring high quality product specifications and ESG compliance for the LIB
sector and sustainable and ethical supply from the best-regarded operating jurisdiction in the World, WA.
The consortium of FBICRC participants includes some of the largest nickel and chemicals producers in the World who are
working with companies such as Ardea to produce from locally sourced materials the batteries used in electric vehicles.
Ardea has assembled suitable bulk drill sample material from current Goongarrie Hub drilling plus product from the 2018
PFS Goongarrie pilot run as test material for the FBICRC pilot plant. The Cathode Precursor Production Pilot Plant was
officially launched on 11 July 2022, with Ardea representatives Alvin Tiong, Andrew Penkethman and Mike Miller attending
on behalf of the Company.
Bench-scale Metallurgy
Bench-scale metallurgical test work is continuing at the ALS metallurgical laboratory in Perth. As well as conventional HPAL,
the metallurgical test work program is investigating Atmospheric Leaching of high-magnesium plant feed as well as the
Mineralised Neutraliser, which would be performed in parallel to HPAL leaching of the dominant iron-rich goethitic feed.
From a process perspective, Atmospheric Leaching will be beneficial for stabilising the overall circuit, especially with regards
to sulphuric acid plant production and its role in maintaining the off-grid, carbon free, site energy balance. Other ALS R&D
includes:
•
•
•
•
Leach feed cut size increased to nominal minus 212 microns (was 75 microns), to allow additional leach feed tonnes
albeit at slightly lower leach feed grade (facilitated by high nickel prices).
Gravity separation of ore preparation oversize for potential recovery of target heavy mineral by-products.
Atmospheric pressure leaching of high nickel grade serpentine saprolite mineralisation.
Acid neutralisation using magnesite recovered in-pit from immediately below the nickel-cobalt ore.
Downstream test work is planned to define the design criteria and integrate the new features into the overall flowsheet. The
test work will generate MHP product for review by prospective customers and for evaluation of MHP refining options.
R&D results continue to be received with recent neutralisation results from a composite sample over the Highway resource
returning favourable nickel upgrade in the fine fraction to complement the sought-after acid neutralisation capacity of the
coarse fraction.
Photos: page 10 left: Metallurgical test work has demonstrated the effectiveness of flowsheet developments, such as Atmospheric Leaching; page
10 right: High feed slurry density helps Ardea obtain high production from a two-train HPAL circuit; page 11 Hydrogeology studies - Siberia North
Water Drilling, March 2022; photo page 12: HPAL - Leach tests were conducted to demonstrate leach efficiency as a function of time and acid
dosage.
Ardea Resources Limited & controlled entities
12
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Activities Report continued
The Goongarrie South, Goongarrie Hill and Highway metallurgical hole selection was primarily based on obtaining
representative in situ material for testing the Atmospheric Leach hydrometallurgical flowsheet. However, given the premium
goethite material type that dominates at Goongarrie, limited AL feed is expected. However, at Highway and to a lesser extent
Goongarrie Hill, some high-magnesium nontronite-serpentine clay mineralisation was sought for testing on the basis of its
role in sulphuric acid demand and hence power generation for the KNP low-carbon flowsheet.
Initial metallurgical results are indicating lower carbon content than originally modelled and assuming this trend continues,
the carbon emissions from the Goongarrie Hub will continue to drop, as studies are progressed. The updated values are
approximately 10kg CO2/kg Ni, before cobalt credits, whereas original modelling indicated values of approximately 15kg
CO2/kg Ni .
Metallurgical Bulk Samples
Where parties doing technical due diligence on the KNP have required bulk samples for their independent test work, this
has been facilitated through Ardea’s extensive drill sample laboratory coarse residue archive (several tonnes of material
archived at the Ardea West Kalgoorlie yard and at the Malaga storage unit). These are key R&D assets, with results used
to help validate existing data.
Hydrogeology
R&D using the multi-element database is a key means to quantify KNP process water resources. Historical drill logging
failed to address water potential, which the R&D now addresses.
At Goongarrie, all nickel-cobalt-scandium resources are located on granted mining leases. As such, Ardea has first rights
to any ground water underlying these areas. Past work by Ardea has defined multiple potential water sources with water for
project development to be sourced from dedicated bores and conventional open pit dewatering ahead of mining.
Following the R&D, additional water sourcing activities were completed at Siberia North, assessing fractured rock aquifers,
with 18 RC holes air lifted for 1,284m. Several zones of below marine salinity water (~40,000 TDS), were identified as a
conventional Reverse Osmosis plant feed. The R&D program proved to be most valuable.
Both typical Eastern Goldfields saline water and potable water will be required for project development.
Ardea’s US-based nano-filtration R&D test work has demonstrated the potential for this technology to be used for softening
the HPAL water feed and for recycling barren process water to reduce both the project’s water consumption and its water
evaporation pond footprint.
Infrastructure and Logistics
As part of its ongoing permitting engagement, Ardea has accelerated
communications with a number of key stakeholders, including:
1.
2.
3.
The City of Kalgoorlie-Boulder – to provide both organisations with an
update on key project development considerations, such as infrastructure
and worker accommodation. Regular communication continues.
The Shire of Menzies – update on key project development
considerations. Regular communication continues.
Southern Ports, Esperance – update on the transport of goods and
services between Esperance and Goongarrie.
4. Goldfields Industrial Water Group – to study means of working co-
operatively with local Community and industry for efficient collection, use
and recycling of water resources in the Kalgoorlie region.
5.
Rail infrastructure and logistical suppliers in the Kalgoorlie region.
Ardea Resources Limited & controlled entities
13
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Activities Report continued
Environment and Rehabilitation
All project development within the KNP is aimed at ensuring systematic and rapid rehabilitation, concurrent with operations.
The KNP is located within the Great Western Woodlands, the largest and healthiest temperate to semi-arid (Mediterranean
climate) woodland on Earth. The woodlands cover almost 16,000,000 hectares from the Nullarbor Plain in the east to the
Wheatbelt in the west; from Esperance in the south through to the inland mulga country north of Kalgoorlie including the
KNP as a comparative very small component of the woodlands.
Comprehensive KNP flora and fauna surveys by Vale Inco in 2009 and Ardea in 2017 have confirmed environmental
sustainability within the “temperate dry laterite” ecosystem.
Mine rehabilitation methodology is facilitated through four decades of WA open pit gold mine operations, and the KNP
footprint is minimised through the use of mining voids for tailings and mullock disposal. Mining voids will be progressively
rehabilitated during the course of operations and returned to their pre mining state, by dressing the back filled open pit voids
with topsoil (Figure 5).
In terms of ESG compliance for hydrometallurgical metal processing, the KNP’s benign and manageable environmental
footprint contrasts strongly with “wet tropical laterite” projects. The tropical laterites require submarine tailings disposal or
valley tailings storage with consequent substantial environmental risk. Tailings disposal in these environments tends to be
further complicated by high rainfall and the fact that most tropical laterite deposits are located in seismically active regions.
Additionally, wet tropical laterite production areas commonly involve non-restorable rain forest habitat destruction, which is
unacceptable to OECD battery metal end-users.
It is doubtful whether wet tropical laterite hydrometallurgical battery metal sources can comply with the ESG standards
required by the EV sector, particularly where submarine tailings disposal is used. Similarly, with in excess of 3,000mm of
annual rainfall, it is an immense challenge for long-term tailings stabilisation.
The KNP semi-arid climate is likely just as important as its nickel grade for the project’s robust development potential.
Figure 4:
MINIMISING CARBON EMISSIONS IS AN ESSENTIAL PART OF ARDEA’S DEVELOPMENT PLAN FOR THE KALGOORLIE NICKEL
PROJECT, WITH INDUSTRY LEADING LOW CARBON EMISSIONS COMPARED TO PEERS
Nickel industry CO2e curve (Scope 1 and 2 only) for 2021
Ardea’s provisional CO2 emission calculations sit at less than half the weighted industry average
and less than a quarter of Indonesia Matte production
)
q
e
i
N
t
/
e
2
O
C
t
(
s
n
o
i
s
s
i
m
E
100
75
50
25
0
*
t
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e
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o
r
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l
e
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i
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e
i
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o
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e
m
a
f
a
r
r
e
T
t
s
e
W
l
e
k
c
N
i
Weighted Average
KNP 10-15 kg/kg
CO2 emission*
y
a
B
a
d
e
W
o
k
a
o
r
o
S
-
l
e
a
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a
h
s
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n
s
T
i
0
20
after source Wood Mackenzie
40
60
Production (cumulative centile)
80
100
• These figures are provisional, based on the most recent mass balances but
subject to changes in mine plan and other metrics for comparison
Ardea Resources Limited & controlled entities
14
Annual Report 2022
Activities Report continued
Figure 5:
PLANNED GOONGARRIE HUB IN-PIT TAILS DISPOSAL AND REHABILITATION STRATEGY
Goongarrie, Kalgoorlie Nickel Project
Return to natural land surface and vegetation
of the Great Western Woodlands
Ardea Resources Limited & controlled entities
15
Annual Report 2022
Activities Report continued
WA Nickel Sulphide and Critical Minerals projects
Ardea’s extensive and strategic land holding in the Eastern Goldfields of WA comprises 169 tenements, covering over
4,271km2 and in addition to the globally significant nickel-cobalt-scandium KNP resource, is highly prospective for nickel
sulphide, platinum group element (PGE) and Critical Minerals (Figure 6).
Ardea Nickel Sulphide Strategy
The Company priority continues to be the development of the KNP, commencing with the Goongarrie Hub nickel laterite
deposits. However, Ardea’s strategic tenure in the heart of the Eastern Goldfields of Western Australia is also highly
prospective for nickel sulphide which is mined extensively throughout the region. Ardea’s nickel sulphide strategy
complements the development of the KNP. The KNP nickel sulphide targets are a valuable asset in a region of multiple
nickel sulphide concentrators, with most constrained by insufficient sulphide feed availability.
Ardea’s KNP tenure covers extensive zones of ultramafic stratigraphy which hosts the KNP nickel laterite resources (Figure
6). This same tenure is highly prospective for both Kambalda style komatiite lava flow and Nova-Julimar style intrusive
related magmatic nickel sulphide mineralisation. It is important to note that any nickel sulphide discovery has the potential
to be processed as supplementary feed to laterite mineralisation through the autoclaves planned for Goongarrie.
Although sulphides would only be processed in limited quantities compared to the lateritic throughput, they have the added
benefit of helping control autoclave oxidising potential, assisting exothermic reaction kinetics (reduce autoclave steam
heating requirement), and typically improving overall nickel recoveries.
An additional bonus is that metal concentrations considered deleterious to conventional nickel sulphide flotation concentrator
processing (and that have historically curtailed development of several Eastern Goldfields deposits) do not affect the HPAL
process, opening the possibility of mineral extraction from nickel sulphide deposits that may otherwise be overlooked.
Figure 6:
ARDEA TENEMENT PLAN
highlighting the location of the
Kalpini Project, Emu Lake Nickel
Sulphide Camp and nickel mines
and deposits in the region
Projection MGA 94 Zone 51
Cathedrals
Ni Sul
occurrences
6,800,000mN
300,000mE
PERRINVALE
Leonora
400,000mE
MURRIN MURRIN
Laverton
Mt Windarra
50km
GDA94 MGA94 Zone 51
6,700,000mN
GOONGARRIE
SIBERIA NTH
BLACK RANGE
GHOST ROCKS
Menzies
HIGHWAY
Kalgoorlie
Nickel Project
GOONGARRIE HUB
AUBILS
Kalgoorlie
Nickel Project
YERILLA HUB
BOYCE CREEK
JUMP-UP DAM
LAKE REBECCA
EMU LAKE
CAWSE
Silver Swan
Kalgoorlie
Nickel Project
KALPINI HUB
LEGEND
Ardea 100%
Ardea hold Minerals Rights
inc Ni Lat
6,600,000mN
Main roads
Railway line
Gas pipline
Mine - Ni Lat
Mine - Ni Sul
Ni Occurrence
Kalgoorlie
BULONG
BULONG
Coolgardie
Ardea Resources Limited & controlled entities
16
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Activities Report continued
Emu Lake Nickel Sulphide Prospect
Ardea’s Kalpini Project is located 70km north-east of the City of Kalgoorlie-Boulder and covers 121km2 on contiguous
granted Mining Lease tenure 100%-owned by Ardea (Figure 6 and 8).
Regionally there are two distinct Kalpini ultramafic units each with 20-25km strike within Ardea tenure (Figure 8):
•
•
The Kalpini Eastern Komatiite Belt hosts Ardea’s Wellington East and Acra North nickel laterite deposits containing
75Mt at 0.73% nickel and 0.04% cobalt, for 549.7kt nickel and 32.6kt cobalt (Ardea ASX release 16 June 2021).
Aeromagnetic data indicates a uniform sheet of ultramafics (lacking discrete volcanic centres). The ultramafics are
typical of the Walter Williams Formation style, consisting of a thick 200-600m sheet with olivine orthocumulate upper
and lower contacts with middle olivine meso to adcumulate which favourably weathers to nickel laterite (Dunitic Sheet
Flows-Layered Lava Lakes, “DSF-LLS”, Figure 7). The Eastern Komatiite sits on the Kurnalpi Dome granitoid
basement and is presumably an older lava flow sequence.
The Kalpini Western Komatiite Belt hosts the Emu Lake Nickel Sulphide Camp. There are three documented and
well-defined fertile nickel sulphide surfaces at Emu Lake (Dunitic Channelised Sheet Flows, “DCSF”, Figure 7). The
volcanics are characterised by a bi-modal co-magmatic suite, with each cycle having a footwall dacite volcanic overlain
by ultramafic volcanic flows (Figure 7). Aeromagnetics indicate multiple discrete ultramafic centres. The ultramafic
component of the flows is typically 10-40m thick, with dacite being the lower flow component and komatiite the upper
flow component. Massive nickel sulphide typically occurs in the upper dacite and grades stratigraphically up into
disseminated nickel sulphide in the basal komatiite. The volcanic morphology is typical of a komatiite thermal erosion
setting (as per Silver Swan) in a channelised flow. The Western Komatiite Belt overlies a thick felsic volcanic sequence
(Black Flag Group equivalent) and is presumably a younger flow sequence than the Eastern Komatiite Belt.
Figure 7:
KOMATIITE FACIES outlined from Gole & Barnes, 2020
Ardea Resources Limited & controlled entities
17
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Activities Report continued
Figure 8:
AEROMAGNETICS FOR THE KALPINI PROJECT
showing strongly magnetic Komatiite Belts with historic shallow drill coverage focussed predominantly
on nickel laterite mineralisation on the Eastern Komatiite Belt
Projection MGA 94 Zone 51
E2801224
E2801224
M2700395
M2700395
M2700395
Binti Gossan
ELD015
2.00m @ 6.08% Ni
Binti South
AELD0003
2.72m @ 5.42% Ni
Western Komatiite Belt
> 20km of prospective strike, no deep
core drilling or modern DHEM
outside of Binti targets
M2700506
M2700506
M2700506
E2700594
E2700594
E2700594
>
2
0
k
m
S
t
r
i
k
e
l
e
n
g
t
h
Kalpini Project
Emu Lake
Nickel Sulphide Camp
Eastern Komatiite Belt
6,650,000mN
Host to Kalpini nickel laterite resource -
under explored nickel sulphide potential
M2800205
M2800205
M2800205
6,640,000mN
M2800199
M2800199
M2800199
LEGEND
Ardea 100%
Ardea hold
Ni Lat Minerals Rights
Drill collars
6,630,000mN
E
m
0
0
0
0
0
4
,
5km
UTM Projection MGA Zone 51
E
m
0
0
0
0
1
4
,
Ardea Resources Limited & controlled entities
18
Annual Report 2022
Activities Report continued
AELD0003 - Ni Sulphide zone
Historic nickel sulphide drill exploration within the Kalpini Western Komatiite Belt has focussed on the Eastern Ultramafic
(EU) and Central Ultramafic (CU), with key historic drill-hole being ELD015 with 2m at 6.08% Ni (ASX release 7 February
2022). Drill testing of the Western Ultramafic (WU) was restricted to minimal “scissor” sections with easterly drill direction.
These holes invariably intersected the WU in the depleted saprolite weathered zone. The majority of historic holes had
westerly drill directions and at Binti Gossan only intersected the EU and CU horizons, with the prime WU simply not drilled
at the depths prospective for nickel sulphide mineralisation.
The EU and CU nickel sulphide surfaces show remarkable continuity and are open north and south and down-dip. Their
uniform geometry suggests a sheet-flow environment for these komatiite flows. The discrete flow channels that must be
present to have fed the sheet flows are yet to be intersected in Emu Lake drilling. The uniform position, grade and thickness
of historic drill intercepts confirms the nickel sulphide fertility of the sheet-flow system.
Ardea commenced exploration of the WU in 2021 with drill-hole AELD0001, testing an off-hole DHEM anomaly from an
historic survey of ELD046. This led to the discovery of the AELD0003 nickel sulphides with 2.72m at 5.42% Ni (ASX release
14 January 2022). The Binti South 3D model (ASX release 7 February 2022, figure 3) records the EU and CU with
contiguous strike orientation south from Binti Gossan, though the intervening ground is undrilled at depth.
Significantly, Binti South includes as the red shape (ASX release 7 February 2022, figure 3) the WU with basal nickel
sulphide mineralisation as confirmed by AELD0002 and 0003. The WU is now the main exploration focus of Ardea, at both
Binti South and Binti Gossan, with additional exploration upside on the CU and EU ultramafic flows with all three target
zones able to be tested by each drillhole (Figure 9).
In “Silver Swan style” nickel sulphide systems (as Emu Lake clearly is), the exploration methodology is to define a fertile
nickel sulphide surface within komatiite flows and then identify the flow channel facies of the system, being the optimum
setting in which massive sulphides are likely to deposit. Once identified, the fertile surface is tested with systematic drilling
with Down-hole Electro-Magnetic (DHEM) surveys used to locate the target conductor plates. The Ardea results for
AELD0003 at Binti South and historic drill hole, ELD015, at Binti Gossan confirm an exceptionally fertile system, entirely
comparable to that documented for Silver Swan.
Late in the financial year, Ardea completed five follow-up diamond core drill holes for 1,711m and completed associated
DHEM surveys on all holes drilled from the current drilling program at the Binti South and Binti Gossan Prospects.
Drill hole assays are awaited and the data interpretation process is continuing.
Ardea Resources Limited & controlled entities
19
Annual Report 2022
Activities Report continued
Figure 9:
3D MODELLING ON ULTRAMAFIC HORIZONS AT EMU LAKE SULPHIDE CAMP, KALPINI PROJECT
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Activities Report continued
COMPLIANCE STATEMENT (JORC 2012)
A competent person’s statement for the purposes of Listing Rule 5.22 has previously been announced by the Company for:
KNP Cobalt Zone Study on 7 August 2017, PFS 28 March 2018 and Expansion Study 24 July 2018.
GNCP High Grade Resource - 60 million tonne at 1.0% Nickel Sustainable Long-life Battery Metal Resource Confirmed, 15 February 2021.
Highway Nickel Deposit - Mineral Resource Estimate, 16 June 2021.
Annual Report 2021 – 24 September 2021.
Goongarrie Hub Feasibility Study Update, 15 November 2021.
Emu Lake Nickel Sulphide Discovery confirmed with 2.72m at 5.42% Ni, 14 January 2022.
Goongarrie Hub Feasibility Study Update, 25 January 2022.
Emu Lake Nickel Sulphide Camp Follow-Up Program, 7 February 2022.
Confirmation of High-Grade Nickel-Cobalt from Highway Metallurgical Drilling, 11 February 2022.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10. Emu Lake Nickel Sulphide Follow-up Drilling Commenced, 7 March 2022.
11. Goongarrie Hub Water Extraction Licences Granted, 11 March 2022.
12. High-grade Nickel-Cobalt Confirmed at Kalpini with Scandium and Rare Earth Elements, 14 March 2022.
13. Kalgoorlie Nickel Project Awarded Major Project Status, 18 March 2022.
14. Kalgoorlie Nickel Project Recognition on All Tiers of Australian Government, 21 March 2022.
15. Confirmation of High-Grade Nickel-Cobalt from Goongarrie South Metallurgical Drilling, 16 May 2022.
16. Confirmation of High-Grade Nickel-Cobalt from Goongarrie Hill Metallurgical Drilling, 26 May 2022.
17. Kalgoorlie Nickel Project Feasibility Study Update, 14 June 2022.
18. Kalgoorlie Nickel Project Strategy Update, 9 September 2022
The Company confirms that it is not aware of any new information or data that materially affects information included in previous announcements, and all material
assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. All projects are subject to new work programs,
notably drilling, metallurgy and JORC Code 2012 resource estimation as applicable.
The information in this report that relates to Resource Estimates for the KNP is based on information originally compiled by previous and current full-time employees of
Heron Resources Limited and current full-time employees of Ardea Resources Limited. The Exploration Results, Resource Estimates and data collection processes
have been reviewed, verified and re-interpreted by Mr Ian Buchhorn who is a Member of the Australasian Institute of Mining and Metallurgy and currently a director of
Ardea Resources Limited. Mr Buchhorn has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the
exploration activities undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’. Mr Buchhorn consents to the inclusion in this report of the matters based on his information in the form and context that it appears. Mr
Buchhorn owns Ardea shares.
The exploration and industry benchmarking summaries are based on information reviewed or compiled by Mr Andrew Penkethman, who is a Fellow of the Australasian
Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Penkethman is a full-time employee of Ardea Resources Limited and
has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as
a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Penkethman
has reviewed this press release and consents to the inclusion in this report of the information in the form and context in which it appears. Mr Penkethman owns Ardea
shares.
Ardea Resources Limited & controlled entities
21
Annual Report 2022
Activities Report continued
ASX CHAPTER 5 COMPLIANCE AND PFS CAUTIONARY STATEMENT
The Company has concluded that it has a reasonable basis for providing the forward-looking statements and forecast financial information included in this announcement.
The detailed reasons for that conclusion are outlined throughout this announcement and all material assumptions, including the JORC modifying factors, upon which
the forecast financial information is based are disclosed in this announcement. This announcement has been prepared in accordance with the JORC Code (2012) and
the ASX Listing Rules.
The actual results could differ materially from a conclusion, forecast or projection in the forward-looking information. Certain material factors were applied in drawing a
conclusion or making a forecast or projection as reflected in the forward-looking information.
The Goongarrie Nickel Cobalt Project is at the PFS phase and although reasonable care has been taken to ensure that the facts are accurate and/or that the opinions
expressed are fair and reasonable, no reliance can be placed for any purpose whatsoever on the information contained in this document or on its completeness. Actual
results and developments of projects and the scandium market development may differ materially from those expressed or implied by these forward-looking statements
depending on a variety of factors.
A key conclusion of the PFS and Expansion Study, which are based on forward looking statements, is that the Goongarrie Nickel Cobalt Project is considered to have
positive economic potential.
The Mineral Resource used for the PFS was classified under JORC 2012 Guidelines and announced by the Company on 14 March 2018. The cut-off grades adapted
for the PFS and reported in Table 3.1 are the basis of the production target assumed for the PFS.
The Company believes it has a reasonable basis to expect to be able to fund and further develop the Goongarrie Nickel Cobalt Project. However, there is no certainty
that the Company can raise funding when required.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This news release contains forward-looking statements and forward-looking information within the meaning of applicable Australian securities laws, which are based on
expectations, estimates and projections as of the date of this news release.
This forward-looking information includes, or may be based upon, without limitation, estimates, forecasts and statements as to management’s expectations with respect
to, among other things, the timing and amount of funding required to execute the Company’s programs, development and business plans, capital and exploration
expenditures, the effect on the Company of any changes to existing legislation or policy, government regulation of mining operations, the length of time required to
obtain permits, certifications and approvals, the success of exploration, development and mining activities, the geology of the Company’s properties, environmental
risks, the availability of labour, the focus of the Company in the future, demand and market outlook for precious metals and the prices thereof, progress in development
of mineral properties, the Company’s ability to raise funding privately or on a public market in the future, the Company’s future growth, results of operations, performance,
and business prospects and opportunities. Wherever possible, words such as “anticipate”, “believe”, “expect”, “intend”, “may” and similar expressions have been used
to identify such forward-looking information. Forward-looking information is based on the opinions and estimates of management at the date the information is given,
and on information available to management at such time. Forward-looking information involves significant risks, uncertainties, assumptions, and other factors that
could cause actual results, performance or achievements to differ materially from the results discussed or implied in the forward-looking information. These factors,
including, but not limited to, fluctuations in currency markets, fluctuations in commodity prices, the ability of the Company to access sufficient capital on favourable
terms or at all, changes in national and local government legislation, taxation, controls, regulations, political or economic developments in Australia or other countries
in which the Company does business or may carry on business in the future, operational or technical difficulties in connection with exploration or development activities,
employee relations, the speculative nature of mineral exploration and development, obtaining necessary licenses and permits, diminishing quantities and grades of
mineral reserves, contests over title to properties, especially title to undeveloped properties, the inherent risks involved in the exploration and development of mineral
properties, the uncertainties involved in interpreting drill results and other geological data, environmental hazards, industrial accidents, unusual or unexpected formations,
pressures, cave-ins and flooding, limitations of insurance coverage and the possibility of project cost overruns or unanticipated costs and expenses, and should be
considered carefully. Many of these uncertainties and contingencies can affect the Company’s actual results and could cause actual results to differ materially from
those expressed or implied in any forward-looking statements made by, or on behalf of, the Company. Prospective investors should not place undue reliance on any
forward-looking information.
Although the forward-looking information contained in this news release is based upon what management believes, or believed at the time, to be reasonable assumptions,
the Company cannot assure prospective purchasers that actual results will be consistent with such forward-looking information, as there may be other factors that cause
results not to be as anticipated, estimated or intended, and neither the Company nor any other person assumes responsibility for the accuracy and completeness of any
such forward-looking information. The Company does not undertake, and assumes no obligation, to update or revise any such forward-looking statements or forward-
looking information contained herein to reflect new events or circumstances, except as may be required by law.
No stock exchange, regulation services provider, securities commission or other regulatory authority has approved or disapproved the information contained
in this news release.
Ardea Resources Limited & controlled entities
22
Annual Report 2022
ABN 30 614 289 342
Financial Statements
for the year ended
30 June 2022
Directors’ Report
The Directors present their report on Ardea Resources Limited and the entities it controlled at the end of and during the
year ended 30 June 2022 (“financial period”).
DIRECTORS & SENIOR MANAGEMENT
The names and details of the Directors and Senior Management of Ardea Resources Limited during the financial period
and until the date of this report are:
Mathew Longworth – BSc (Hons) MAusIMM
Non-Executive Chair
Appointed 31 July 2020
Matthew Longworth is a geologist with over 35 years experience across exploration, project evaluation/development,
operations and corporate management. He previously held roles as Exploration Manager, COO and CEO/Managing
Director with Australian listed companies, and Mining Consultant with Xtract Mining consultants. In his senior corporate
roles, Mathew led multidisciplinary project evaluation and development teams. Mr Longworth is a member of the
Australasian Institute of Mining and Metallurgy.
Mr Longworth has excellent experience of the key Ardea exploration and development projects, being the Kalgoorlie Nickel
Project (KNP) nickel-cobalt and Bardoc Tectonic Zone gold. Mr Longworth joined Heron Resources in 2003 as Exploration
Manager rising to Managing Director in 2007 to 2011. Mr Longworth applied his intimate knowledge of the BTZ and broader
Eastern Goldfields geology to the KNP to collaborate with Vale Inco in their 2005 to 2009 KNP feasibility study.
He is currently Chairman of the unlisted Company Greenfields Exploration Limited, Non-Executive Director at Asra Minerals
Ltd, Chair of Northam Resources Limited, and was formerly non-executive Chairman of ASX listed Metalicity Limited (from
1 July 2019 to 18 May 2021) . Mr Longworth has no other public company directorships.
Andrew Penkethman – BSc, FAusIMM, MAIG
Managing Director and Chief Executive Officer
Appointed Managing Director 5 February 2020 following his appointment as Chief Executive Officer on 1 April
2019
Andrew Penkethman is a resources sector executive and geologist with over 25 years experience in the resources industry.
His technical skills include project evaluation, exploration, discovery, resource development, feasibility study management,
permitting, stake holder engagement and mine development across open pit and underground operations within Australia
and overseas. Commodities experience includes battery minerals, base metals, gold and energy commodities over a
range of geological settings.
Mr Penkethman’s technical expertise is complimented by over 15 years in executive roles with a strong corporate focus
including strategic partner processes, joint venture management, financial modelling, and project acquisition and
divestment. Mr Penkethman has ASX, AIM and TSX equity markets experience. He holds a Bachelor of Science degree
from the University of Wollongong, is a Fellow of the Australasian Institute of Mining and Metallurgy and a Member of the
Australian Institute of Geoscientists.
During the year prior to the end of this financial period, Mr Penkethman is a non-executive Director of Kalgoorlie Gold
Mining Limited (16 November 2021 to present).
Ian Buchhorn – BSc (Hons), Dipl. Geosci (Min. Econ), MAusIMM
Executive Director
Appointed 17 August 2016
Ian Buchhorn is a Mineral Economist and Geologist with over 40 years experience. He was the founding Managing Director
of Heron Resources Limited for a period of 11 years until early 2007 and returned to that role briefly prior to his resignation
as an Executive Director in June 2017. Mr Buchhorn previously worked with a number of international mining co mpanies
and has worked on nickel, bauxite and industrial mineral mining and exploration, gold and base metal project generation
and corporate evaluations. For the last 30 years Mr Buchhorn has acquired and developed mining projects throughout the
Eastern Goldfields of Western Australian and has operated as a Registered Mine Manager.
During the three years prior to the end of this financial period, Mr Buchhorn is a Director of Godolphin Resources Limited (19
June 2019 to present).
Ardea Resources Limited & controlled entities
24
Annual Report 2022
Directors’ Report continued
COMPANY SECRETARY
Robert (Sam) Middlemas – B.Com., PGradDipBus. CA
Mr Middlemas was appointed Company Secretary and Chief Financial Officer on 20 October 2016. He is a chartered
accountant with more than 25 years experience in various financial, board and company secretarial roles with a
number of listed public companies operating in the resources sector. He is the principal of a corporate advisory company
which provides financial and secretarial services specialising in capital raisings and initial public offerings. Previously M r
Middlemas worked for an international accountancy firm. His fields of expertise include corporate secretarial practice,
financial and management reporting in the mining industry, treasury and cash flow management and corporate
governance. Mr Middlemas ceased the role of Chief Financial Officer on the 8 June 2022 and continues as the company’s
Company Secretary.
CHIEF FINANCIAL OFFICER
Rebecca Moylan – B.Bus (Acc&FIN)., FFINSIA, GAICD, CPA
Ms Moylan was appointed Chief Financial Officer on 8 June 2022. She is certified practicing accountant with more than
20 years’ experience in financial and corporate management, accounting, project financing and contract negotiation.
During her career in the mining industry. This has included positions as Chief Financial Officer and Company Secretary
of several ASX-listed companies.
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial period consisted of mineral exploration and evaluation
(Feasibility Studies) in Western Australia.
There have been no significant changes in these activities during the financial period.
DIVIDENDS
No dividend has been paid and no dividend is recommended for the current financial period.
REVIEW OF OPERATIONS AND ACTIVITIES
The Consolidated Entity recorded an operating loss after income tax for the Financial Period ended 30 June 2022 of
$5,328,190 (2021 - $2,298,543).
Ardea is a battery minerals Company focused on the development of the Kalgoorlie Nickel Project ( KNP). The KNP is
comprised of a series of major undeveloped nickel-cobalt-scandium laterite deposits, which total 830Mt at 0.71% Ni and
0.046% Co (5.9Mt contained nickel metal, 384kt contained cobalt metal – ASX release 16 June 2021). All KNP projects
are located within 150km of the regional mining hub of the City of Kalgoorlie-Boulder, Western Australia.
Western Australia
Kalgoorlie Nickel Project (KNP) and Goongarrie Hub
The key objective for Ardea is developing a nickel-cobalt mining operation at the Goongarrie Hub within the KNP which
produces sustainable and ethical minerals for the rapidly growing Lithium Ion Battery ( LIB) supply chain.
The Goongarrie Hub is located 70km northwest of the mining city of Kalgoorlie-Boulder and is Ardea’s most advanced
project, within the broader KNP. Resources from the Goongarrie and Highway deposits are planned to be the base load
feed for a High-Pressure Acid Leach (HPAL) plant with supporting Atmospheric Leach (AL) circuit, located at Goongarrie
South. The resources at Goongarrie South are dominantly the premium goethite style and extend continuously over
25km of strike. At Goongarrie Hill, 6km north of the planned Goongarrie plant site and extending over a strike length of 5km,
and at Highway, 30km north, extending over a strike length of 6km, the dominant ore types are magnesium-rich serpentine
styles, being suited to AL processing. All Goongarrie Hub resources are located on granted mining leases with Native
Title Agreement in place and tenure 100%-controlled by Ardea. The KNP resource category breakdown is as follows:
Resource Estimate for the KNP based on a 0.5 % nickel cut-off. Note that all values have been rounded appropriate to their
deemed accuracy.
Resource Category
Measured
Indicated
Inferred
KNP Total Resources
Quantity
(Mt)
22
357
452
830
Nickel
(%)
0.94
0.72
0.68
0.71
Cobalt
(%)
0.079
0.047
0.044
0.046
Contained
nickel (kt)
207
Contained
cobalt (kt)
17
2,584
3,088
5,879
168
199
384
Ardea Resources Limited & controlled entities
25
Annual Report 2022
Directors’ Report continued
Drilling
During the 2022 financial year, 69 drill holes were completed for 10,482.5m on KNP tenements.
22 RC holes for 2,181m were drilled on a combination of hydrogeology targets at Siberia and exploration targets at
Bulong and Emu Lake. 47 diamond core holes for 8,301.5m were drilled on a combination of nickel laterite and site
infrastructure targets at Highway, Goon South and Goon Hill, and nickel sulphide targets at Emu Lake.
Ardea’s standard multi-element geochemical samples were taken from all drilling completed to maximise knowledge
gained from this drilling, so that the Company can consider all mineral potential, with a priority on nickel and other Critical
Minerals occurring within the KNP.
Metallurgy
A review of the metallurgical flowsheet was conducted, which, in conjunction with an updated appreciation of the resource
potential, prompted the following changes:
Inclusion of Atmospheric Leaching and Mineralised Neutraliser
(cid:2)
(cid:2) Production of MHP as an intermediate as a precursor to LIB end-use materials
(cid:2)
(cid:2)
(cid:2) Enhancement of the process and bore water circuits
(cid:2) Risk management of the tailings storage facility.
Increased emphasis on sourcing of utilities-grade water
Integration of acid plant by-product energy into the site energy balance
Desktop studies indicated the viability of these initiatives, combined with feedback from potential off -takers and other
stakeholders.
The metallurgical process model was revised to accommodate these changes, and its outputs used for updated process
data (e.g. Mass balance, block flow diagrams, design criteria, equipment lists, major equipment sizing). A gap analysis of
this work was conducted by Wood Engineering, which ratified the work to date and the general direction of the work.
Metallurgical testwork was conducted at ALS laboratory to refine the process data for the atmospheric leaching and
neutraliser changes. A final report is pending.
The impact of these changes are to be collated and summarised in an amalgamated Feasibility Study report in the near
future.
Approvals
Referral to EPA is linked to completion of the Goongarrie Hub DFS.
Definitive Feasibility Study, Goongarrie Hub
•
•
•
The completion of the Definitive Feasibility Study is linked to in progress metallurgical test work and the Strategic Partner process.
An interim PFS is in progress to summarise Ardea’s 3.5Mtpa base case and to define a current Ore Reserve. Pre-Feasibility Study,
lodged 28 March 2018, based on a production rate up to 1.5Mtpa;
Case
1.0Mtpa
1.5Mtpa
Pre-tax NPV8
A$1.43 billion
A$1.93 billion
Post-tax NPV8
A$1.04 billion
A$1.40 billion
IRR
25 %
25 %
Payback
5.3 years
5.6 years
Expansion Study, lodged 24 July 2018, based on a production rate up to 2.25Mtpa;
Case
2.25Mtpa
Pre-tax NPV8
A$3.1 billion
Post-tax NPV8
A$2.3 billion
IRR
27 %
Payback
5.1 years
As part of the completion of the in progress PFS an updated Ore Reserve will be defined based on the Mineral
Resource Estimate updates completed on the Goongarrie and Highway deposits during 2021, that include a
high grade core of 78 million tonnes at 1.0% nickel and 0.069% cobalt (784kt contained nickel metal, 54kt
contained cobalt metal – ASX release 16 June 2021). This material is planned to be the dominant plant feed to
maximise nickel and cobalt production.
Mineral Resource Estimate for the Goongarrie Hub deposits, Highway and Goongarrie (ASX release 15 February and June 16,
2021) using a 0.8% Ni cut-off grade. Note that all values have been rounded appropriate to their deemed accuracy.
Resource Category
Measured
Indicated
Inferred
KNP Total Resources
Quantity
(Mt)
11.0
56.5
10.8
78.3
Nickel
(%)
1.13
0.98
0.95
1.00
Cobalt
(%)
0.106
0.066
0.051
0.069
Contained
nickel (kt)
125
556
103
784
Contained
cobalt (kt)
11.6
37.1
5.6
54.3
Ardea Resources Limited & controlled entities
26
Annual Report 2022
Directors’ Report continued
CORPORATE AND FINANCIAL POSITION
As at 30 June 2022 the Consolidated Entity had cash reserves of $22 million (2021 - $5.7 million).
RISK MANAGEMENT
The Board is responsible for the oversight of the Consolidated Entity’s risk management and control framework.
Responsibility for control and risk management is delegated to the appropriate level of management with the Managing
Director (or equivalent) having ultimate responsibility to the Board for the risk management and control framework.
Areas of significant business risk to the Consolidated Entity are highlighted in the Business Plan presented to the Board by
the Managing Director (or equivalent) each year.
Arrangements put in place by the Board to monitor risk management include monthly reporting to the Board in respect of
operations and the financial position of the Consolidated Entity.
EARNINGS/LOSS PER SHARE
Basic loss per share
Diluted loss per share
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
2022
Cents
(3.59)
(3.59)
2021
Cents
(1.84)
(1.84)
In the opinion of the Directors the following significant changes in the state of affairs of the Consolidated Entity that occ urred
during the financial period under review:
• During the year there were 10,363,637 new shares at 55 cents per share as a Placement to Sophisticated
Investors to raise funds of $5,700,000;
•
•
The Company also completed capital raise issuing 30,907,553 new shares at 70 cents per share to professional
an sophisticated investors to raise $21,635,287
The Kalgoorlie Gold Mining Limited spin out completed and was the final rationalization of Ardea’s asset
portfolio.
• Subsequent to the end of the financial year, the Company issued 120,000 performance rights.
OPTIONS/PERFORMANCE RIGHTS OVER UNISSUED CAPITAL
Unlisted Options
There were 4,000,000 Options issued during the year or on issue at 30 June 2022 (2021 – Nil).
Performance Rights
As at 30 June 2022 there were 4,422,000 Performance Rights on issue. During the year the Company issued 1,531,000
Performance Rights to Directors and Employees under the Ardea Performance Rights Plan that was approved at the 2020
AGM. 549,000 Performance Rights lapsed without achieving the hurdle or following employees leaving the Company.
Subsequent to the end of the financial year a further 120,000 Performance Rights have been issued.
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27
Annual Report 2022
Directors’ Report continued
CORPORATE STRUCTURE
Ardea Resources Limited (ACN 614 289 342) is a Company limited by shares that was incorporated on 1 7 August 2016
and is domiciled in Australia.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen since the end of the financial period any item, transaction or event of a material and unusual nature
likely, in the opinion of the Directors of the Consolidated Entity to affect substantially the operations of the Consolidated
Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent financial years except
for the following:
On the 13th July 2022, 120,000 performance rights were issued to employees of the Company under the Ardea Performance
Rights Plan that was approved at the 2020 AGM.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS
Likely developments in the operations of the Consolidated Entity are included elsewhere in this Annual Report.
Disclosure of any further information has not been included in this report because, in the reasonable opinion of the Directors,
to do so would be likely to prejudice the business activities of the Consolidated Entity.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Consolidated Entity holds various exploration licences to regulate its exploration activities in Australia. These licences
include conditions and regulations with respect to the rehabilitation of areas disturbed during the course of its exploration
activities. So far as the Directors are aware there has been no known breach of the Consolidated Entity’s licence co nditions
and all exploration activities comply with relevant environmental regulations.
INFORMATION ON DIRECTORS
As at the date of this report the Directors’ interests in shares and unlisted performance rights of the Consolidated Entity
are as follows:
Director
Title
Mathew Longworth
Andrew Penkethman
Ian Buchhorn
Non-Executive Chair
Appointed on 21 July 2020
Managing Director
Appointed 5 February 2020
Non-Executive Director
Appointed on 17 August 2016
Directors’ Interests in
Ordinary Shares
Directors’ Interests in
Performance Rights
21,428
552,401
700,000
1,300,000
12,980,585
900,000
DIRECTORS’ MEETINGS
The number of meetings of the Consolidated Entity’s Directors held in the period each Director held office during the
financial period and the numbers of meetings attended by each Director were:
Director
Board of Directors’ Meetings
Mathew Longworth
Andrew Penkethman
Ian Buchhorn
Meetings Attended
11
11
11
Meetings held while a director
11
11
11
In addition to the above there were 2 Audit Committee Meetings and 1 Remuneration Committee Meeting held with the
full board in attendance at each Meeting.
Ardea Resources Limited & controlled entities
28
Annual Report 2022
Directors’ Report continued
REMUNERATION REPORT
the ASX Corporate Governance Council’s Corporate Governance Principles and
Recommendation 8.1 of
Recommendations (4th edition) states that the Board should establish a Remuneration Committee. The Board has formed
the view that given the number of Directors on the Board, this function could be performed just as effec tively with full Board
participation. Accordingly, it was resolved that there would be no separate Board sub-committee for remuneration purposes
and Remuneration Committee meetings would be made up of the full board.
This report details the amount and nature of remuneration of each Director of the Consolidated Entity and executive officers
of the Consolidated Entity during the period.
Overview of Remuneration Policy
The Board of Directors is responsible for determining and reviewing compensation arrangements for the Directors and the
executive team. The broad remuneration policy is to ensure that remuneration properly reflects the relevant person’s duties
and responsibilities, and that the remuneration is competitive in attracting, retaining and m otivating people of the highest
quality. The Board believes that the best way to achieve this objective is to provide the Managing Director and the executive
team with a remuneration package consisting of a fixed and variable component that together reflec ts the person’s
responsibilities, duties and personal performance. An equity based remuneration arrangement for the Board and the
executive team was put in place following the 2017 AGM approval and updated at the 2020 AGM. The remuneration policy
is to provide a fixed remuneration component and short term incentive payments with a specific equity related component,
with performance conditions. The Board believes that this remuneration policy is appropriate given the stage of development
of the Consolidated Entity and the activities which it undertakes and is appropriate in aligning Director and executive
objectives with shareholder and business objectives.
The remuneration policy in regard to setting the terms and conditions for the Managing Director has been developed by the
Board taking into account market conditions and comparable salary levels for companies of a similar size and operating in
similar sectors.
Directors receive a superannuation guarantee contribution required by the government, which is currently 10.5% per annum
(10% up to 30 June 2022) and do not receive any other retirement benefit. Some individuals, however, have chosen to
sacrifice part or all of their salary to increase payments towards superannuation.
All remuneration paid to Directors is valued at cost to the Consolidated Entity and expensed. Options and Performance
Rights are valued using either the Black-Scholes methodology or the Binomial model. In accordance with current accounting
policy the value of these options is expensed over the relevant vesting period.
Non-Executive Directors
The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment
and responsibilities. The Board determines payments to the Non-Executive Directors and reviews their remuneration
annually, based on market practice, duties and accountability. Independent external advice is sought when required.
The maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders
at a General Meeting and was approved at a maximum of $500,000 at the 2017 AGM. Actual remuneration paid to the
Consolidated Entity’s Non-Executive Directors is disclosed below. Remuneration fees for Non- Executive Directors are not
linked to the performance of the Consolidated Entity. However, to align Directors’ interests with shareholder interests, the
Directors are encouraged to hold shares in the Consolidated Entity and it is intended all will receive options or performance
rights.
Senior Executives and Management
The Consolidated Entity aims to reward executives with a level of remuneration commensurate with their position and
responsibilities within the Consolidated Entity so as to:
•
•
•
Reward executives for Consolidated Entity and individual performance against targets set by reference
to appropriate benchmarks;
Reward executives in line with the strategic goals and performance of the Consolidated Entity; and
Ensure that total remuneration is competitive by market standards.
Structure
Remuneration consists of the following key elements:
•
•
•
Fixed remuneration;
Issuance of unlisted options/performance rights; and
Short term incentive payments.
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29
Annual Report 2022
Directors’ Report continued
Fixed Remuneration
Fixed remuneration consists of base remuneration (which is calculated on a total cost basis including any employee benefits
eg. motor vehicles) as well as employer contributions to superannuation funds.
The level of fixed remuneration is set so as to provide a base level of remuneration which is both appropriate to the positio n
and is competitive in the market.
Remuneration packages for the staff who report directly to the Managing Director (or equivalent ) are based on the
recommendation of the Managing Director (or equivalent), subject to the approval of the Board in the annual budget setting
process.
Service Agreements
Mr Andrew Penkethman was appointed as Chief Executive Officer on 1 April 2019 and Man aging Director on 5 February
2020 and is employed under an executive services agreement on a salary of $290,000 plus statutory superannuation
and short and long term incentives (increased to $374,500 in July 2022). He was awarded 1,200,000 Performance Rights
in 3 equal tranches by the board on 7 July 2019 under the Employee Share Option Scheme that was approved at the 2017
AGM, 500,000 Performance Rights following approval at the 2020 AGM, and a further 400,000 Performance Rights
following approval at the 2021 AGM. The agreement is subject to a mutual 3 month notice period. He also receives short
term incentive bonus of up to $100,000 based on a number of operating KPI’s. In 2021, he also received a special bonus
relating to a successful share raising. During the current period, the board has awarded Mr Penkethman a long term
incentive cash bonus of $400,000 upon the signing of a Strategic Partner to fund the KNP Feasibility study and a $200,000
cash payment following the Announcement of a JORC Compliant Nickel Sulfide Resource of >1Mt at 2% Ni equivalent.
Mr Ian Buchhorn was appointed as an Executive Director - Technical on 8 September 2017 and is employed under an
executive services agreement on a salary of $330,000 plus statutory superannuat ion and short and long term incentives
(subsequently reduced to 80%), then increased to $341,095 on 1 July 2022. He was awarded 900,000 Performance Rights
in 3 equal tranches that were approved by shareholders at the 2017 AGM, 400,000 Performance Rights approved at the
2019 AGM, 400,000 Performance Rights approved at the 2020 AGM, and a further 300,000 Performance Rights approved
at the 2021 AGM. The agreement is subject to a mutual 3 month notice period.
Details of the nature and amount of each element of the remuneration of each Director and Executive Officer of Ardea
Resources Limited paid/accrued during the financial period are as follows:
Primary
Post Employment
Equity
Compensation
Base
Salary/Fees
$
Bonus
$
Superannuation
Contributions
$
Performance
Rights
$
Total
$
2021/2022
M Longworth – Non-Executive Chair (i)
A Penkethman – Managing Director
I Buchhorn – Executive Director
Executives and Key Management
Personnel
S Middlemas - Company Secretary (iv)
R Moylan – Chief Financial Officer (v)
2020/2021
Directors
M Longworth – Non-Executive Chair (i)
A Penkethman – Managing Director
I Buchhorn – Executive Director
K Law – Non-Executive Chair (ii)
W Bramwell – Non-Executive (iii)
Executives
S Middlemas - Company Secretary (iv)
90,562
350,000
318,780
95,665
13,583
70,625
297,250
270,600
33,333
20,000
87,000
-
130,000
40,000
-
35,000
31,878
52,984
104,153
92,870
143,546
619,153
483,528
-
-
-
1,358
11,955
-
107,620
14,941
-
45,000
-
-
-
28,238
25,707
-
-
16,495
70,596
72,082
-
-
87,120
441,084
368,389
33,333
20,000
9,065
96,065
Mr Longworth was appointed Non-Executive Chair on 31 July 2020.
(i)
(ii) Ms Law was appointed Non-Executive Chair on 7 November 2016, and moved into an executive role in July 2018 until February 2019, and resigned
from the board on 31 July 2020. All fees were paid to her Consulting Company Fitzroy Consulting Services.
(iii) Mr Bramwell was appointed as a Non-Executive Director on 29 January 2018 and resigned from the board on 3 July 2020. Fees were paid to his
Consulting Company Sabre Investments from February 2020.
(iv) Mr Middlemas was appointed Company Secretary on 20 October 2016. All fees for providing Company Secretarial services were paid to Sparkling
Investments Pty Limited.
(v) Ms Moylan was appointed Chief Financial Officer on 8 June 2022.
Other than the Directors, executive officers and key management personnel disclosed above there were no other executive
officers who received emoluments during the financial period ended 30 June 2022.
Ardea Resources Limited & controlled entities
30
Annual Report 2022
Directors’ Report continued
The Managing Directors cash bonus was paid in March 2022 and represented 80% of the available bonus of $100,000
based on the number of KPIs achieved (the remainder of the bonus lapsed). The KPIs have been updated for 2022/23
in line with operating and market conditions that have been set by the full Board. He also received a $50,000 special bonus
relating to a successful share raising during the reporting period.
Performance Rights issued during the current financial period
During the current financial year the Company issued a further 1,531,000 Performance Rights to Directors and
Employees under the Ardea Performance Rights Plan that was approved at the 2020 AGM. The Performance Rights
convert into fully paid ordinary shares for $Nil consideration upon the attainment of the following performance hurdles:
Class ‘J’ Performance Rights: upon the Company’s Shares reaching a 30 day VWAP which is equal to or greater than
$0.65 per Share; and continuous service of the Performance Rights holder in their capacity as a Director or Executive of
the Company, or in a role as otherwise agreed by the Board of the Company, from the date of issue of the Performance
Rights to 31 May 2023, prior to 30 June 2023.
Class ‘K’ Performance Rights: upon the Company’s Shares reaching a 30 day VWAP which is equal to or greater than
$0.67 per Share; and continuous service of the Performance Rights holder in their capacity as a Director or Executive of
the Company, or in a role as otherwise agreed by the Board of the Company, from the date of issu e of the Performance
Rights to 30 November 2023, prior to 31 December 2023.
During the financial year 200,000 Performance rights lapsed without the hurdle being achieved and a further 349,000
Performance rights lapsed following employees leaving the Company.
Subsequent to year end, there have been a further issue of 120,000 Performance rights that were issued to employees of
the Company.
The Performance Rights issued during the financial year were valued using a hybrid employee share option pricing
model that simulates the Company’s share price at the expiry date.
The variables used to value the Performance Rights are as follows:
Item
Class J
Class K
Underlying Security
Exercise Price
Share Price Barrier
$0.51
Nil
$0.65
$0.50
Nil
$0.67
Grant Date
28 July 21
29 Nov 21
Expiration Date
30 June 23
31 Dec 23
Life of Rights (years)
2
Volatility
Risk free rate
100%
1.50%
2
100%
1.50%
The likelihood of achieving each of the Performance hurdles was then considered leading to a value for the Class J
Performance Rights of 23.93 cents (total $103,138), the value of the Class K Performance Rights of 22.85 cents (total
$251,350). These values will be expensed over the life of the Performance rights and will be reassessed at each audit
period to ensure the underlying assumptions remain, with adjustments to be made with any changing conditions.
Other Transactions with Directors
The Company rents office and storage facilities in Kalgoorlie from an entity associated with Executive Director Ian Buchhorn
on normal arms length commercial terms. Total rent paid for the financial year was $92,471.50, (2021 - $75,480).
The Company p r e v i o u s l y used Indigenous Professional Services Pty Ltd (an entity associated with Non-Executive
Chair Katina Law) to provide HR consulting work on normal arms length commercial terms. Total paid during the financial
year was $nil (2021 - $2,240).
Ardea Resources Limited & controlled entities
31
Annual Report 2022
Directors’ Report continued
Director and KMP Movement in Shares and Performance Rights
The aggregate numbers of shares and performance rights of the Company held directly, indirectly or beneficially by Directors
and Executive Officers of the Consolidated Entity or their personally-related entities are as follows:
2022
Mr M Longworth
Mr A Penkethman
Mr I Buchhorn
Mr S Middlemas
Ms R Moylan
2021
Mr M Longworth
Mr A Penkethman
Mr I Buchhorn
Ms K Law
Mr W Bramwell
Mr S Middlemas
Opening
-
123,829
12,830,585
573,701
-
-
60,000
12,511,440
1,008,046
10,000
538,046
Purchases Received on performance
rights achieving hurdles
Disposals
Closing
Ordinary Shares
21,428
-
150,000
-
-
63,829
319,145
-
35,655
428,572
-
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,008,046
10,000
-
21,428
552,401
12,980,585
633,701
-
-
123,829
12,830,585
-
-
573,701
Performance Rights(1)
2022
Mr M Longworth
Mr A Penkethman
Mr I Buchhorn
Mr S Middlemas
Ms R Moylan
2021
Mr M Longworth
Mr A Penkethman
Mr I Buchhorn
Ms K Law
Mr W Bramwell
Mr S Middlemas
Opening
Issued
Expired/
Lapsed
Converted
to shares
Closing
400,000
1,300,000
800,000
180,000
-
-
1,200,000
700,000
700,000
425,000
210,000
300,000
400,000
300,000
60,000
-
400,000
500,000
400,000
-
-
120,000
-
-
(200,000)
-
-
-
(400,000)
(300,000)
(700,000)
(425,000)
(150,000)
(400,000)
(60,000)
700,000
1,300,000
900,000
180,000
-
-
-
-
-
-
-
400,000
1,300,000
800,000
-
-
180,000
(1) Directors and Staff were issued Performance Rights subject to a number of performance hurdles.
INDEMNIFYING OFFICERS AND AUDITOR
During the year the Company paid an insurance premium to insure certain officers of the Consolidated Entity. The officers
of the Consolidated Entity covered by the insurance policy include the Directors named in this report.
The Directors and Officers Liability insurance provides cover against all costs and expenses that may be incurred in
defending civil or criminal proceedings that fall within the scope of the indemnity and that may be brought against t he officers
in their capacity as officers of the Consolidated Entity. The insurance policy does not contain details of the premium paid
in respect of individual officers of the Consolidated Entity. Disclosure of the nature of the liability cover and the amount
of the premium is subject to a confidentiality clause under the insurance policy.
The Consolidated Entity has not provided any insurance for an auditor of the Consolidated Entity.
AUDITORS’ INDEPENDENCE DECLARATION
Section 370C of the Corporations Act 2001 requires the Consolidated Entity’s auditors Dry Kirkness (Audit) Pty Ltd
(formerly Butler Settineri (Audit) Pty Ltd), to provide the Directors of the Consolidated Entity with an Independence
Declaration in relation to the audit of the financial report. This Independence Declaration is attached and forms part of this
Directors’ Report.
NON-AUDIT SERVICES
The external auditors have not undertaken any non-audit work during the financial year.
PROCEEDINGS ON BEHALF OF THE CONSOLIDATED ENTITY
No person has applied for leave of Court to bring proceedings on behalf of the Consolidated Entity or intervene in any
proceedings to which the Consolidated Entity is a party for the purpose of taking responsibility on behalf of the Consolidated
Entity for all or any part of those proceedings. The Consolidated Entity was not party to any such proceedings during the
year.
Ardea Resources Limited & controlled entities
32
Annual Report 2022
Directors’ Report continued
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of the
Consolidated Entity support and have adhered to the principles of corporate governance. The Consolidated Entity’s
corporate governance practices have been disclosed in Appendix 4G in accordance with ASX listing rule 4.7.3 at the same
time as the annual report is lodged with the ASX. Further information about the Company’s corporate governance practices
is set out on the Company’s web site at www.ardearesources.com.au/corporate-governance. In accordance with the
recommendations of the ASX, information published on the web site includes codes of conduct and other policies
and procedures relating to the Board and its responsibilities.
DATED at Perth this 27th day of September 2022
Signed in accordance with a resolution of the Directors
Mathew Longworth
Non-Executive Chair
Compliance Statement (JORC 2012)
A competent person’s statement for the purposes of Listing Rule 5.22 has previously been announced by the Company for:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
KNP Cobalt Zone Study on 7 August 2017, PFS 28 March 2018 and Expansion Study 24 July 2018.
GNCP High Grade Resource - 60 million tonne at 1.0% Nickel Sustainable Long-life Battery Metal Resource Confirmed, 15
February 2021.
Highway Nickel Deposit - Mineral Resource Estimate, 16 June 2021.
Annual Report 2021 – 24 September 2021.
Goongarrie Hub Feasibility Study Update, 15 November 2021.
Emu Lake Nickel Sulphide Discovery confirmed with 2.72m at 5.42% Ni, 14 January 2022.
Goongarrie Hub Feasibility Study Update, 25 January 2022.
Emu Lake Nickel Sulphide Camp Follow-Up Program, 7 February 2022.
Confirmation of High-Grade Nickel-Cobalt from Highway Metallurgical Drilling, 11 February 2022.
Emu Lake Nickel Sulphide Follow-up Drilling Commenced, 7 March 2022.
Goongarrie Hub Water Extraction Licences Granted, 11 March 2022.
High-grade Nickel-Cobalt Confirmed at Kalpini with Scandium and Rare Earth Elements, 14 March 2022.
Kalgoorlie Nickel Project Awarded Major Project Status, 18 March 2022.
Kalgoorlie Nickel Project Recognition on All Tiers of Australian Government, 21 March 2022.
Confirmation of High-Grade Nickel-Cobalt from Goongarrie South Metallurgical Drilling, 16 May 2022.
Confirmation of High-Grade Nickel-Cobalt from Goongarrie Hill Metallurgical Drilling, 26 May 2022.
Kalgoorlie Nickel Project Feasibility Study Update, 14 June 2022.
Quarterly Activities Report - June 2022, 19 July 2022.
Kalgoorlie Nickel Project Strategy Update, 9 September 2022.
The Company confirms that it is not aware of any new information or data that materially affects information included in previous announcements, and all
material assumptions and technical parameters underpinning the estimates continue to apply and have not materially changed. All projects are subject to
new work programs, notably drilling, metallurgy and JORC Code 2012 resource estimation as applicable.
The information in this report that relates to Exploration Results and Resource Estimates for the Goongarrie Nickel Cobalt Project is based on information
originally compiled by previous and current full-time employees of Heron Resources Limited and current full-time employees of Ardea Resources Limited.
The Exploration Results, Resource Estimates and data collection processes have been reviewed, verified, and re-interpreted by Mr Ian Buchhorn who is a
Member of the Australasian Institute of Mining and Metallurgy and currently a director of Ardea Resources Limited. Mr Buchhorn has sufficient experience
that is relevant to the style of mineralisation and type of deposit under consideration and to the exploration activities undertaken to qualify as a Competent
Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Buchhorn
consents to the inclusion in this report of the matters based on his information in the form and context that it appears. Mr Buchhorn owns shares in Ardea.
The exploration and industry benchmarking summaries are based on information reviewed by Andrew Penkethman, who is a Fellow of the Australasian
Institute of Mining and Metallurgy and a Member of the Australian Institute of Geoscientists. Mr Penkethman is a full-time employee of Ardea Resources
Limited and has sufficient experience, which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is
undertaking to qualify as a Competent Person as defined in the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources
and Ore Reserves’. Mr Penkethman has reviewed this press release and consents to the inclusion in this report of the information in the form and context
in which it appears. Mr Penkethman owns shares in Ardea.
Ardea Resources Limited & controlled entities
33
Annual Report 2022
Auditor’s Independence Declaration
Ardea Resources Limited & controlled entities
34
Annual Report 2022
Financial Statements
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2022
Other income
Employee expenses
Insurance expenses
Secretarial fees
Corporate expenses
Strategic partnership expenses
Computer support services
Depreciation
Amortisation – right-of-use assets
Share based payments
Write-off of Exploration Expenditure
Impairment of investments
Revaluation of Investments
NOTES
2022
2021
2
3
15
9
9
$
50,314
$
188,219
3,180,790
2,332,968
71,826
103,195
254,214
447,996
107,897
54,947
85,818
374,333
223,287
2,204,390
1,066,403
51,650
79,590
278,289
-
86,104
92,089
106,017
243,640
423,675
-
985,920
Employee costs recharged to capitalised exploration
(3,107,195)
(2,461,488)
Other expenses
Loss before income tax
Income tax
Net loss attributable to members of the Consolidated
Entity’s
Other Comprehensive Loss net of tax
Total Comprehensive Loss
Basic earnings/(loss) per share
(cents per share)
Diluted earnings/(loss) per share
(cents per share)
5
14
19
19
310,603
(5,328,190)
-
268,308
(2,298,543)
-
(5,328,190)
(2,298,543)
-
-
(5,328,190)
(2,298,543)
(3.59) cents
(1.84) cents
(3.59) cents
(1.84) cents
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the Consolidated
Entity’s accompanying notes.
Ardea Resources Limited & controlled entities
35
Annual Report 2022
Financial Statements continued
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
NOTES
2022
$
2021
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Other receivables
Other assets
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Plant and equipment and motor vehicles
Investments
Right-of-use Assets
Capitalised mineral exploration expenditure
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Right-of-use Liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Right-of-use Liabilities
Provisions
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share Based Payment Reserve
Accumulated losses
TOTAL EQUITY
6
7
8
9
6A
10
11
6A
12
6A
12
22,018,398
1,991,656
54,835
24,064,889
-
956,777
276,973
5,689,762
1,025,238
19,027
6,734,027
35,153
1,326,055
51,787
25,299,933
27,954,447
26,533,683
50,598,572
29,367,442
36,101,469
786,594
150,611
471,859
1,409,064
129,677
47,425
177,102
437,341
51,787
322,942
812,070
-
-
-
1,586,166
812,070
49,012,406
35,289,399
13(a)
15
14
60,005,783
4,547,152
41,328,919
4,172,819
(15,540,529)
(10,212,339)
49,012,406
35,289,399
The above Consolidated Statement of Financial Position should be read in conjunction with the Consolidated Entity’s
accompanying notes.
Ardea Resources Limited & controlled entities
36
Annual Report 2022
Financial Statements continued
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Notes
Contributed
Equity
$
Share Based
Payment
Reserve
$
Losses
Total
$
$
BALANCE AT 30 JUNE 2020
Total Comprehensive Income
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Shares issued during the year
Return of Capital – Godolphin Resources
Limited
Performance Rights issued to staff
BALANCE AT 30 JUNE 2021
36,685,870
-
3,930,401
-
(7,913,796)
(2,298,543)
32,702,475
(2,298,543)
13(b)
13(b)
4,873,969
(230,920)
-
-
-
242,418
-
-
-
4,873,969
(230,920)
242,418
41,328,919
4,172,819
(10,212,339)
35,289,399
BALANCE AT 30 JUNE 2021
Total Comprehensive Income
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS
Shares issued during the year
Less share issue costs
Return of Capital – Kalgoorlie Gold Mining
Limited
Performance Rights issued to staff
BALANCE AT 30 JUNE 2022
41,328,919
4,172,819
(10,212,339)
35,289,399
-
13(b)
13(b)
13(b)
27,335,287
(1,658,423)
(7,000,000)
-
-
-
-
-
374,333
(5,328,190)
(5,328,190)
-
-
-
-
27,335,287
(1,658,423)
(7,000,000)
374,333
60,005,783
4,547,152
(15,540,529)
49,012,406
The above Consolidated statement of changes in equity should be read in conjunction with the Consolidated Entity’s
accompanying notes.
Ardea Resources Limited & controlled entities
37
Annual Report 2022
Financial Statements continued
CONSOLIDATED STATEMENT OF CASHFLOWS
For the year ended 30 June 2022
Cash flows from operating activities
Interest received
Other Income
Payments to suppliers and employees (inclusive of goods
and services tax)
NOTES
2022
$
2021
$
17,280
22,242
62,089
146,851
(2,102,665)
(763,614)
Net cash used in operating activities
20(a)
(2,065,114)
(554,674)
Cash flows from investing activities
Payments for exploration and evaluation
Research and development refund received
Proceeds (Payments) for investments
Proceeds (Payments) for plant and equipment (net)
Net cash used in investing activities
Cash flows from financing activities
Proceeds from the issue of shares
Costs of shares issued
Net cash provided by financing activities
Net increase (decrease) in cash held
Cash at the beginning of the financial period
Cash at the end of the financial period
(8,255,065)
(9,578,518)
893,260
98,485
(19,794)
1,040,381
139,594
(6,129)
(7,283,114)
(8,404,672)
27,335,287
(1,658,423)
4,874,002
(230,953)
25,676,864
4,643,049
16,328,636
5,689,762
(4,316,297)
10,006,059
22,018,398
5,689,762
The above Consolidated Statement of Cash Flows should be read in conjunction with the Consolidated Entity’s
accompanying notes.
Ardea Resources Limited & controlled entities
38
Annual Report 2022
Notes to the Financial Statements
For the year ended 30 June 2022
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The principal accounting policies adopted in preparing the financial report of the Company, Ardea Resources
Limited and its controlled entities (“Ardea” or “Consolidated Entity”), are stated to assist in a general understanding
of the financial report. These policies have been consistently applied as presented, unless otherwise indicated.
Ardea Resources Limited is a Company limited by shares incorporated and domiciled in Australia whose shares
are publicly traded on the official list of the Australian Securities Exchange. The financial statements are presented
in Australian dollars which is the Consolidated Entity’s functional currency.
(a)
Basis of Preparation
This general purpose financial report has been prepared in accordance with Australian Accounting
Standards (including Australian Interpretations) adopted by the Australian Accounting Standards Board
and the Corporations Act 2001.
Ardea Resources Limited is a for-profit entity for the purpose of preparing the financial statements.
The financial report has been prepared on the basis of historical costs and does not take into account
changing money values or, except where stated, current valuations of non-current assets.
The financial report was authorised for issue by the Directors.
(b)
Use of Estimates and Judgements
The preparation of financial statements requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and reported amounts of assets and
liabilities, income and expenses. Actual results may differ from these estimates. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods affected. The only
significant estimate in the financial report is the R&D incentive rebate accrued which is based on
management’s estimate of the eligible expenditure incurred in the year.
(c)
Basis of Consolidation
Controlled Entities
The consolidated financial statements comprise the financial statements of Ardea Resources Limited and
its subsidiaries as at 30 June 2022.
The financial statements of the subsidiaries are prepared for the same reporting period as the parent
company, using consistent accounting policies.
In preparing the consolidated financial statements, all intercompany balances and transactions, income
and expenses and profit and losses resulting from intra-group transactions have been eliminated in
full. The subsidiaries are fully consolidated from the date on which control is transferred to the
consolidated entity and ceases to be consolidated from the date on which control is transferred out of the
consolidated entity.
The acquisition of the subsidiaries have been accounted for using the purchase method of accounting.
The purchase method of accounting involves allocating the cost of the business combination to the fair
value of the assets acquired and the liabilities and contingent liabilities assumed at the date of acquisition.
Accordingly, the consolidated financial statements include the results of the subsidiaries for the period
from their acquisition.
Ardea Resources Limited & controlled entities
39
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable
income based on the income tax rate adjusted by changes in deferred tax assets and liabilities attributable
to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the
financial statements, and to unused tax losses.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to
apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted.
The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary
differences to measure the deferred tax asset or liability. An exception is made for certain temporary
differences arising from the initial recognition of an asset or a liability. No deferred asset or liability is
recognised in relation to those temporary differences if they arose in a transaction, other than a business
combination, that at the time of the transaction did not affect either accounting profit or taxable profit or
loss.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if
it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
Current and future tax balances attributable to amounts recognised directly in equity are also recognised
directly in equity.
(e)
Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the
Consolidated Entity and the revenue can be reliably measured. The following specific recognition criteria
must also be met before revenue is recognised:
Interest income
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on
the financial asset.
(f)
Cash and Cash Equivalents
Cash and short-term deposits in the balance sheet comprise cash at bank and in hand and short term
deposits with an original maturity of three months or less.
For the purposes of the Consolidated Statement of Cash Flows, cash and cash equivalents consist o f
cash and cash equivalents as defined above, which are readily convertible to cash on hand and which
are used in the cash management function on a day-to-day basis.
(g)
Employee Entitlements
Liabilities for wages and salaries, annual leave and other current employee entitlements expected to
be settled within 12 months of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date and are measured at the amounts expected to be paid when
the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is
taken and measured at the rates paid or payable.
Other long-term employee benefits The Consolidated Entity’s net obligation in respect of long-term employee
benefits is the amount of future benefit that employees have earned in return for their service in the current
and prior periods plus on-costs; that benefit is discounted to determine its present value. The discount rate is
the yield at the reporting date on AA credit-rated (Corporate bond rate) bonds that have maturity dates
approximating the terms of the consolidated entity’s obligations.
Contributions to employee superannuation plans are charged as an expense as the contributions are
paid or become payable.
Ardea Resources Limited & controlled entities
40
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h)
Property, Plant and equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any
accumulated depreciation and impairment losses.
Property, plant and equipment and Motor Vehicles
Property, Plant and equipment, and Motor Vehicles are stated at cost less accumulated depreciation and
any impairment in value.
The carrying values of property, plant and equipment and Motor Vehicles are reviewed for impairment
when events or changes in circumstances indicate the carrying value may not be recoverable.
For an asset that does not generate largely independent cash flows, the recoverable amount is
determined for the cash-generating unit to which the asset belongs.
If any such indication exists where the carrying values exceed the estimated recoverable amount, the
assets or cash generating units are written down to their recoverable amount.
Depreciation
Depreciable non-current assets are depreciated over their expected economic life using either the straight
line or the diminishing value method. Profits and losses on disposal of non-current assets are taken into
account in determining the operating loss for the year. The depreciation rate used for each class of assets
is as follows:
•
Plant & equipment and Motor Vehicles
20 - 33%
(i)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of goods and services tax (“GST”),
except where the amount of GST incurred is not recoverable from the Australian Taxation Office (“ATO”).
In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part
of an item of the expense.
Receivables and payables are stated with the amount of GST included. GST incurred is claimed from
the ATO when a valid tax invoice is provided. The net amount of GST recoverable from, or payable to,
the ATO is included as a current asset or liability in the balance sheet.
Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash
flows arising from investing and financing activities which are recoverable from, or payable to, the ATO
are classified as operating cash flows.
(j)
Payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to
the end of the financial period and which are unpaid. The amounts are unsecured and are usually
paid within 30 days of recognition.
(k)
Contributed Equity
Issued capital is recognised as the fair value of the consideration received by the Company.
Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a
reduction of the share proceeds received.
Ardea Resources Limited & controlled entities
41
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(l)
Exploration and Evaluation Expenditure
Mineral exploration and evaluation expenditure incurred is accumulated in respect of each identifiable
area of interest and is subject to impairment testing. These costs are carried forward only if they relate
to an area of interest for which rights of tenure are current and in respect of which:
•
•
such costs are expected to be recouped through the successful development and exploitation of the
area of interest, or alternatively by its sale; or
exploration and/or evaluation activities in the area have not reached a stage which permits a
reasonable assessment of the existence or otherwise of economically recoverable reserves and
active or significant operations in, or in relation to, the area of interest are continuing.
In the event that an area of interest is abandoned or if the Directors consider the expenditure to be of
reduced value, accumulated costs carried forward are written off in the year in which that assessment is
made. A regular review is undertaken of each area of interest to determine the appropriateness of
continuing to carry forward costs in relation to that area of interest.
Where a mineral resource has been identified and where it is expected that future expenditures will be
recovered by future exploitation or sale, the impairment of the exploration and evaluation is written back
and transferred to development costs. Once production commences, the accumulated costs for the
relevant area of interest are amortised over the life of the area according to the rate of depletion of the
economically recoverable reserves.
Costs of site restoration and rehabilitation are recognised when the Consolidated Entity has a present
obligation, the future sacrifice of economic benefits is probable and the amount of the prov ision can be
reliably estimated.
The amount recognised as a provision is the best estimate of the consideration required to settle the
present obligation at the reporting date, taking into account the risks and uncertainties surrounding the
obligation. Where a provision is measured using the cash flows estimated to settle the present obligation,
its carrying amount is the present value of those cash flows.
Exploration and evaluation assets are assessed for impairment if:
•
•
(i) sufficient data exists to determine technical feasibility and commercial viability, and
(ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
For the purpose of impairment testing, exploration and evaluation assets are allocated to cash-
generating units to which the exploration activity relates. The cash generating unit shall not be larger
than the area of interest.
Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of
interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first
tested for impairment and then re-classified from intangible assets to mining property and development
assets within property, plant and equipment.
(m)
Earnings per Share
Basic earnings per share (“EPS”) are calculated based upon the net loss divided by the weighted average
number of shares. Diluted EPS are calculated as the net loss divided by the weighted average number
of shares and dilutive potential shares.
(n)
Financial risk management
The Board of Directors has overall responsibility for the establishment and oversight of the risk
management framework, to identify and analyse the risks faced by the Consolidated Entity. These risks
include credit risk, liquidity risk and market risk from the use of financial instruments. The Consolidated
Entity has only limited use of financial instruments through its cash holdings being invested in short term
interest bearing securities. The primary goal of this strategy is to maximise returns while minimising risk
through the use of accredited Banks with a minimum credit rating of A1 from Standard & Poors. The
Consolidated Entity has no debt, and working capital is maintained at its highest level possible and
regularly reviewed by the full board.
Ardea Resources Limited & controlled entities
42
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(o)
Leases
The Group as lessee
At inception of a contract, the Group assesses if the contract contains a lease or is a lease. If there is a
lease present, a right-of-use asset and a corresponding lease liability are recognised by the Group where
the Group is a lessee. However, all contracts that are classified as short-term leases (i.e. a lease
with a remaining lease term of 12 months or less) and leases of low-value assets are recognised as an
operating expenses on a straight-line basis over the term of the lease.
Initially the lease liability is measured at the present value of the lease payments still to be paid at the
commencement date. The lease payments are discounted at the interest rate implicit in the lease. If
this rate cannot be readily determined, the Group uses the incremental borrowing rate. All lease payments
are included in the measurement of the lease liability.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, any lease
payments made at or before the commencement date and any initial direct costs. The subsequent
measurement of the right-of-use assets is at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the lease term or useful life of the underlying asset,
whichever is the shortest.
(p)
Share-based payment transactions
The Company provides benefits to employees (including Directors and consultants) of the Consolidated
Entity in the form of share-based payment transactions, whereby employees render services in exchange
for shares or rights over shares (“Equity–settled transactions”).
There is currently a plan in place to provide these benefits being an Employee Share Option Plan
(“ESOP”) which provides benefits to Directors, consultants and senior executives.
The cost of these equity-settled transactions is measured by reference to fair value at the date at
which they are granted. The fair value is determined by an external valuer using either the Black - Scholes
or Binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of Ardea Resources Limited (“market conditions”).
The cost of equity settled securities is recognised, together with a corresponding increase in equity, over
the period in which the performance conditions are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (“vesting date”).
Where the Consolidated Entity acquires some form of interest in an exploration tenement or an
exploration area of interest and the consideration comprises share-based payment transactions, the fair
value of the equity instruments granted is measured at grant date. The cost of equity securities is
recognised within capitalised mineral exploration and evaluation expenditure, together with a
corresponding increase in equity.
Ardea Resources Limited & controlled entities
43
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
1.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(q)
Financial instruments
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the
contractual provisions of the financial instrument, and are measured initially at fair value adjusted by
transactions costs, except for those carried at fair value through profit or loss, which are measured
initially at fair value. Subsequent measurement of financial assets and financial liabilities are described
below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and all substantial risks and rewards are transferred. A financial
liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and subsequent measurement of financial assets
Financial assets at fair value through profit and loss are limited to holdings of listed securities and are
valued based on the quoted share price at the relevant reporting date with the as sociated changes in
fair value through profit and loss.
Other financial assets are measured at amortised cost.
Classification and measurement of financial liabilities
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction
costs unless the Company designated a financial liability at fair value through profit or loss.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in
profit or loss are included within finance costs or finance income.
(r)
New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for
30 June 2022 reporting periods, and have not been adopted by the Consolidated Entity. The
Consolidated Entity’s assessment of the impact of these new standards and interpretations is that
they will have no material impact and will only effect disclosure provisions in future full year accoun ts.
Ardea Resources Limited & controlled entities
44
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
2.
OTHER INCOME
Interest
Other Income
3.
EXPENSES
2022
$
2021
$
28,072
41,368
22,242
50,314
146,851
188,219
Contributions to employees superannuation
plans
228,608
188,781
Depreciation - Plant and equipment
54,947
92,089
Provision for employee entitlements
256,844
101,248
4.
AUDITORS’ REMUNERATION
Audit – Dry Kirkness (Audit) Pty Limited (formerly Butler Settineri (Audit) Pty Limited)
Audit and review of the financial statements
25,153
28,494
5.
INCOME TAX
No income tax is payable by the Consolidated Entity as it has carry forward losses for income tax purposes
for the year, so current tax, deferred tax and tax expense is $Nil.
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Loss from continuing operations
(5,328,190)
(2,298,544)
Tax at the tax rate of 25% (2021 - 26%)
(1,332,048)
(597,622)
Tax effect of amounts which are deductible in
calculating taxable income:
Non-deductible expenses/gains
Other allowable expenditure/income
Deferred tax asset not brought to account
Income tax expense
(b) Tax losses
1,883,727
(172,416)
63,476
(91,284)
379,263 625,430
-
-
Unused tax losses for which no deferred tax
asset has been recognised
18,880,575
19,057,370
Potential tax benefit at 25% (2021 - 26%)
4,720,144
4,954,916
(c) Unbooked Deferred Tax Assets and
Liabilities
Unbooked deferred tax assets comprise:
Provisions/Accruals/Other
545,284
348,942
Tax losses available for offset against future
taxable income
Unbooked deferred tax liabilities comprise:
Capitalised mineral exploration and evaluation
expenditure
(d) Franking credits balance
18,880,575
19,057,370
19,425,859
19,406,312
28,800,070
32,039,829
The Consolidated Entity has no franking credits available as at 30 June 2022.
Ardea Resources Limited & controlled entities
45
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
6.
OTHER RECEIVABLES
Current
GST recoverable
R&D Receivable
Interest Receivable and Other
6A.
RIGHT-OF-USE ASSETS & LIABILITIES
Current
Right-of-use Assets
Right-of-use Liabilities
Non-Current
Right-of-use Assets
Right-of-use Liabilities
A) Right-of-use maturity analysis
Maturity analysis
Within one year
Later than one year and not later than three years
Less unearned interest
Total Lease Liability
Current
Non-Current
Total Right-of-use liability
B) Amounts recognized in profit and loss
Depreciation expense on right-of-use assets
Interest expense on right-of-use liabilities
2022
$
69,650
1,800,000
122,006
1,991,656
-
150,611
276,973
129,677
159,970
134,829
(14,510)
280,289
150,611
129,677
280,289
85,818
7,495
2021
$
22,486
900,000
102,752
1,025,238
-
51,787
51,788
-
51,787
-
-
51,787
51,787
-
51,788
106,017
-
The Company leases its corporate office at Suite 2, 45 Ord St West Perth. The lease expires on 19 April
2025. The Company has a lease at Unit 6, 17 Townsend Street, Malaga. The lease expires on 9 Sept 2026.
The leases are recognized in accordance with AASB 16: Leases, which the Company adopted on 1 July
2019. Refer note 1 (o) for further details.
7.
OTHER ASSETS
Current
Prepayments
54,835
19,027
Ardea Resources Limited & controlled entities
46
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
8.
PROPERTY, PLANT AND EQUIPMENT
Plant and office equipment
At cost
Accumulated depreciation
Motor Vehicles
At cost
Accumulated depreciation
Property and buildings
At cost
Accumulated depreciation
Reconciliation
2022
$
2021
$
294,277
274,483
(294,277)
(274,483)
-
-
209,068
(209,068)
-
-
-
-
209,068
(173,915)
35,153
-
-
35,153
Reconciliation of the carrying amounts for each class of plant and equipment and Properties and
Buildings are set out below:
Plant and office equipment
Carrying amount at beginning of the period
Additions
Depreciation
Carrying amount at the end of the year
Motor Vehicles
Carrying amount at beginning of the year
Disposals
Depreciation
Carrying amount at the end of the year
-
19,794
33,693
6,129
(19,794)
(39,822)
-
-
35,153
87,420
-
-
(35,153)
(52,267)
-
35,153
Ardea Resources Limited & controlled entities
47
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
9.
INVESTMENT
Investment in Godolphin –
Shares 1
Particulars
Opening balance
Add: Shares purchases
Less: Shares sold
Less: Fair Value adjustment
Closing balance
Investment in Metalicity –
Shares 1
Particulars
Opening balance
Add: Shares purchases
Less: Shares sold
Less: Fair Value adjustment
Closing balance
Investment in KalGold –
Shares 1
Particulars
Opening balance
No. of shares
554,551
-
554,551
No. of shares
23,843,825
-
(22,000,000)
-
1,843,825
No. of shares
-
2022
$
83,182
(34,936)
48,246
2022
$
238,483
-
(98,485)
(104,467)
35,531
2022
$
-
Add: Shares purchases
9,000,000
1,800,000
Less: Shares sold
Less: Fair Value adjustment
-
-
Closing balance
9,000,000
Investment in KalGold –
Options 2
Particulars
Opening balance
No. of
shares
-
-
(927,000)
873,000
2022
$
Add: Options issued in CY
15,000,000
1,200,000
Less: Options terminated
Less: Impairment
Closing balance
-
-
15,000,000
-
(1,200,000)
-
2021
$
105,365
(22,183)
83,182
2021
$
1,252,222
-
(60,000)
(953,783)
238,438
2021
$
-
-
-
-
-
2021
$
-
-
-
-
-
Ardea Resources Limited & controlled entities
48
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
Investment in Godolphin –
Options 3
Particulars
Opening balance
Add: Options issued in CY
Less: Options terminated
Less: Impairment
Closing balance
No. of
shares
2022
$
2021
$
15,000,000
1,004,390
1,004,390
-
-
-
-
-
(1,004,390)
-
-
-
15,000,000
-
1,004,390
1. Shares in Listed Entities are valued at the closing share price on ASX at 30 June 2022.
2. Ardea received 15,000,000 unlisted options as part of the consideration for the spin out of the
Kalgoorlie gold assets from the Ardea group to Kalgoorlie Gold Mining Limited. The value of these
options at the grant date was 0.08 per the Black Scholes valuation model. Unlisted Options subject
to escrow until November 2023 - exercisable at 25 cents any time prior to 16 November 2024. The
options are "out of the money" at the 30 June 2022 reporting date and hence have not been
revalued from their cost but impaired as it is unlikely, based on market conditions, that the value will
be realized.
3. The Company received 15,000,000 unlisted options as part of the consideration for the spin out of
the NSW assets from the Ardea group to Godolphin Resources Limited. The value of these options
at the grant date was 0.07055 per the Black Scholes valuation model. Unlisted Options subject to
escrow until January 2022 - exercisable at 25 cents any time prior to January 2023. The options are
"out of the money" at the 30 June 2022 reporting date and hence have not been revalued from their
cost but impaired as it is unlikely, based on market conditions, that the value will be realized.
2022
$
2021
$
Non-Current
Unlisted Options in Listed Company
Unlisted Options in Listed Company
-
-
1,004,390
-
Investment in Listed Entities
956,777
321,665
956,777
1,326,055
Particulars in relation to the controlled entities
Ardea Resources Limited is the parent entity.
Name of Controlled entity
Atriplex Pty Ltd ACN 113 719 207
Yerilla Nickel Pty Ltd ACN 123 249 810 1
Class of
Shares
Ordinary
Ordinary
Ardea Exploration Pty Ltd ACN 137 889 279
Ordinary
Kalgoorlie Nickel Pty Ltd ACN 137 889 199
Ordinary
Kalgoorlie Gold Mining Pty Ltd ACN 645 666 1641 Ordinary
Wellington Nickel Pty Ltd ACN 659 195 294
Ordinary
Equity Holding
2022
2021
100%
-
100%
100%
-
100%
100%
100%
100%
100%
100%
-
1.The Company’s interest in Yerilla Nickel Pty Ltd and Kalgoorlie Gold Mining Pty Ltd was transferred to
Kalgoorlie Gold Mining Limited immediately prior to the IPO being completed. This transaction led to the
following movements in Area’s accounts:
Exploration
Issued Capital (Capital Return)
Investment in listed Company
Unlisted options in listed Company
Exploration write-offs
Net Gain/(loss) on loss of control of subsidiary
Ardea Resources Limited & controlled entities
$
(10,060,502)
7,000,000
1,800,000
1,200,000
60,502
-
49
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
10. CAPITALISED MINERAL EXPLORATION EXPENDITURE
2022
$
2021
$
Non-Current - in the exploration phase
Cost brought forward
27,954,447
20,496,211
Add: Expenditure incurred during the year (at
cost)
9,429,275
9,512,317
Less Kalgoorlie Gold Spinout tenements
(10,060,502)
-
R&D Refund received/receivable
(1,800,000)
(1,630,406)
Exploration expenditure written off
(223,287)
(423,675)
25,299,933
27,954,447
The recoupment of costs carried forward is dependent on the successful development and/or commercial
exploitation or alternatively sale of the respective areas of interest.
During the year the Company completed the spinout of the Gold rights on tenements into a new IPO listing on
ASX called Kalgoorlie Gold Mining Limited. The capitalised mineral exploration expenditure relating to these
gold rights was $10,060,502.
11. TRADE AND OTHER PAYABLES
Current (Unsecured)
Trade creditors
681,343
Other creditors and accruals 105,250
786,593
411,341
26,000
437,341
Included within trade and other creditors and accruals is an amount of $245,075 (2020 - $321,301) relating to
exploration expenditure.
12. PROVISIONS
Current
Employee entitlements
Non-Current
471,859
322,942
Employee entitlements
47,425
-
13. CONTRIBUTED EQUITY
(a)
Ordinary Shares
169,737,772 (2021 - 127,670,582) fully paid
ordinary shares
60,005,783
41,328,919
(b)
Share Movements during the Year
Beginning of the financial period
127,670,582
41,328,919
117,300,435
36,685,870
2022
2021
Number of shares
$
Number of shares
$
New shares issues during the period
Placement and SPP at 47c/share
Placement and SPP at 55c/share
Placement and SPP at 70c/share
Conversion of performance rights
Kalgoorlie Gold Return of Capital
Less costs of issue
-
-
10,370,147
4,873,969
10,363,637
5,700,000
30,907,553
21,635,287
796,000
-
-
-
(7,000,000)
(1,658,423)
-
-
-
-
-
-
-
-
-
169,737,772
60,005,783
127,670,582
41,328,919
Ardea Resources Limited & controlled entities
50
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
13.
CONTRIBUTED EQUITY (Continued)
(c) Unlisted Options
There were 4,000,000 options on issue during the year ended 30 June 2022 (2021 – Nil)
(d)
Share Based Payments
During the current financial year there were a number of Share Based payments made to Directors and Employees
with 1,531,000 Performance Rights, (2021 – 2,610,000) issued during the period and there were 549,000
Performance Rights (2021 – 2,850,000) that lapsed/expired. There were 796,000 shares issued during the period
from the conversion of Performance Rights (2021 – Nil). Subsequent to year end there have been a further
120,000 Performance Rights issued on 13 July 2022.
(e)
Terms and Conditions of Contributed Equity
Ordinary Shares
The Company is a public Company limited by shares. The Company was incorporated in Perth, Western Australia.
The Company’s shares are limited whereby the liability of its members is limited to the amount (if any) unpaid
on the shares respectively held by them.
Ordinary shares have the right to receive dividends as declared and, in the event of the winding up of the Company,
to participate in the proceeds from the sale of all surplus assets in proportion to the number of shares held.
Ordinary shares which have no par value, entitle their holder to one vote, either in person or by proxy, at a meeting
of the Company.
The Company’s objectives when managing capital are to safeguard their ability to continue as a going concern, so
that they may continue to provide returns for shareholders and benefits for other stakeholders.
(f)
Capital Risk Management
Due to the nature of the Consolidated Entity’s activities, being mineral development and exploration, the
Consolidated Entity does not have ready access to credit facilities, with the primary source of funding being
equity raisings. Therefore, the focus of the Consolidated Entity’s capital risk management is the current working
capital position against the requirements to meet exploration programmes and corporate overheads. The
Consolidated Entity’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating
requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the
Consolidated Entity at 30 June 2022 are as follows:
Cash and cash equivalents
Trade and other receivables
Other assets
Trade and other payables
Provisions
Working capital position
14.
ACCUMULATED LOSSES
2022
$
2021
$
22,018,398
5,689,762
1,991,656
1,025,238
54,835
19,027
(786,593)
(437,341)
(519,284)
(322,942)
22,759,012
5,973,743
Accumulated losses at the beginning of the period
10,212,339
7,913,796
Net loss attributable to members
5,328,190
2,298,543
Accumulated losses at the end of the year
15,540,528
10,212,339
Ardea Resources Limited & controlled entities
51
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
15.
RESERVES
Share Based Payment Reserve
Balance at the beginning of the period
Add: Amounts expensed in current period
Balance at the end of the period
2022
$
2021
$
4,172,819
374,333
4,547,152
3,930,401
242,418
4,172,819
Share Option reserve
The share option reserve comprises any equity settled share based payment transactions.
16.
RELATED PARTIES
Full remuneration and other transaction details for Directors and Executives are included in the Directors report
where the information has been audited as indicated.
17.
EXPENDITURE COMMITMENTS
(a) Exploration
The Consolidated Entity has certain obligations to perform minimum exploration work on mineral leases held.
These obligations may vary over time, depending on the Consolidated Entity’s exploration programmes and
priorities. As at balance date, total exploration expenditure commitments on tenements held by the Consolidated
Entity have not been provided for in the financial statements and those which cover the following twelve month
period amount to $3,045,770 (2021 - $3,992,500). These obligations are also subject to variations by farm-
out arrangements or sale of the relevant tenements.
(b) Capital Commitments
The Consolidated Entity had no capital commitments at 30 June 2022.
18.
SEGMENT INFORMATION
The Consolidated Entity operates predominantly in one segment involved in the mineral exploration and
development industry in Australia.
19.
EARNINGS/ (LOSS) PER SHARE
The following reflects the loss and share Data used in
the calculations of basic and diluted earnings/ (loss) per share:
Earnings/ (loss) used in calculating basic
and diluted earnings/ (loss) per share
Weighted average number of ordinary shares used in
calculating basic earnings/ (loss) per share:
Effect of dilutive securities
Share options*
Adjusted weighted average number of ordinary shares
used in calculating diluted earnings/ (loss) per share
2022
$
2021
$
(5,328,190)
(2,298,543)
Number of Shares
148,541,584
125,103,443
_-
-
148,541,584
125,103,443
Basic and Diluted loss per share (cents per share)
3.59 cents
1.84 cents
*Non-dilutive securities
As at balance date, 4,422,000 performance rights which represent potential ordinary shares were not dilutive as
they would decrease the loss per share.
Ardea Resources Limited & controlled entities
52
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
20.
NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of the loss from ordinary activities
after income tax to the net cash flows
used in operating activities
2022
$
2021
$
Loss from ordinary activities after income tax
(5,328,190)
(2,298,543)
Non-cash items:
Depreciation
Exploration Writedowns
Revaluation of Investments
Loss /(Profit) on sale of Investments
Accrued Interest
Share based payments
Change in operating assets and liabilities:
Decrease (Increase) in prepayments
Decrease (Increase) in receivables
Increase in trade creditors and accruals
Increase in employee entitlements
54,947
223,287
3,270,793
-
(12,763)
374,333
(42,299)
(900,000)
100,665
194,114
92,089
423,675
985,920
(79,593)
20,721
242,418
(43)
(83,915)
41,350
101,247
Net cash outflows used in operating activities
(2,065,114)
(554,674)
(b) Non Cash Financing and Investing Activities
Full details of the Non Cash impact of the Performance Rights has been disclosed in the Remuneration Report.
21.
FINANCIAL INSTRUMENTS
The Consolidated Entity’s activities expose it to a variety of financial risks and market risks. The Consolidated
Entity’s overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the Consolidated Entity.
(a)
Interest Rate Risk
The Consolidated Entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will
fluctuate as a result of changes in market, interest rates and the effective weighted average interest rates on those
financial assets, is not significant. Cash and cash equivalents are the only assets effected and the average interest
rate received is 0.24% (2021: 0.27%).
(b) Credit Risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date, is
the carrying amount, net of any provisions for doubtful debts, as disclosed in the balance sheet and in the notes
to the financial statements.
The Consolidated Entity does not have any material credit risk exposure to any single debtor or group of debtors,
under financial instruments entered into by it, and hence no credit loss allowance is required.
(c) Commodity Price Risk and Liquidity Risk
At the present state of the Consolidated Entity’s operations it has minimal commodity price risk and limited liquidity
risk due to the level of payables and cash reserves held. The Consolidated Entity’s objective is to maintain a
balance between continuity of exploration funding and flexibility through the use of available cash reserves.
(d) Net Fair Values
For assets and other liabilities, the net fair value approximates their carrying value. No financial assets and
financial liabilities are readily traded on organised markets in standardised form. The Consolidated Entity has
no financial assets where the carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the
statement of financial position and in the notes to the financial statements.
Ardea Resources Limited & controlled entities
53
Annual Report 2022
22.
EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS
Employee Entitlements
The aggregate employee entitlement liability is disclosed in Note 12.
Superannuation Commitments
The Consolidated Entity contributes to individual employee accumulation superannuation plans at the statutory
rate of the employees’ wages and salaries, in accordance with statutory requirements, to provide benefits to
employees on retirement, death or disability.
Accordingly no actuarial assessments of the plans are required.
23.
CONTINGENT LIABILITIES
There were no material contingent liabilities not provided for in the financial statements of the Consolidated
Entity as at 30 June 2022 other than:
Native Title and Aboriginal Heritage
Native title claims have been made with respect to areas which include tenements in which the Consolidated Entity
has an interest. The Consolidated Entity is unable to determine the prospects for success or otherwise of the
claims and, in any event, whether or not and to what extent the claims may significantly affect the Consolidated
Entity or its projects. Agreement is being negotiated with various native title claimants in relation to Aboriginal
Heritage issues regarding certain areas in which the Consolidated Entity has an interest.
24.
EVENTS SUBSEQUENT TO BALANCE DATE
There has not arisen since the end of the financial period any item, transaction or event of a material and unusual
nature likely, in the opinion of the Directors of the Consolidated Entity to affect substantially the operations of the
Consolidated Entity, the results of those operations or the state of affairs of the Consolidated Entity in subsequent
financial years except for the following:
On the 13th July 2022, 120,000 performance rights were issued to employees of the Company under the Ardea
Performance Rights Plan that was approved at the 2020 AGM.
25.
PARENT COMPANY
(a) Financial Position
Assets
Total current assets
Total non-current assets
Total Assets
Liabilities
Total current liabilities
Total non-current liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
2022
$
24,064,889
26,533,683
50,598,572
1,409,064
177,102
1,586,166
49,012,406
60,005,783
4,547,152
(15,540,528)
49,012,406
2021
$
6,734,027
29,367,442
36,101,469
812,070
-
812,070
35,289,399
41,328,919
4,172,819
(10,212,339)
35,289,399
Total comprehensive loss for the year
5,328,190
2,298,543
Ardea Resources Limited has not entered into any deed of cross guarantee with its wholly-owned subsidiaries,
had no contingent liabilities at 30 June 2022 and no capital commitments at 30 June 2022.
Ardea Resources Limited & controlled entities
54
Annual Report 2022
NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2022 continued
DIRECTORS’ DECLARATION
In the opinion of the Directors of Ardea Resources Limited (“the Consolidated Entity”):
(a)
the financial statements and notes, set out on pages 36 to 54, are in accordance with the Corporations Act 2001,
including:
(i)
(ii)
complying with Accounting Standards in Australia and the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
giving a true and fair view of the financial position of the Consolidated Entity as at 30 June 2022 and of its
performance, as represented by the results of its operations, for the financial year to 30 June 2022.
(b)
there are reasonable grounds to believe that Ardea Resources Limited will be able to pay its debts as and when they
become due and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from the Managing
Director and the Company Secretary for the year to 30 June 2022.
This declaration is made in accordance with a resolution of the Directors.
Signed at Perth this 27th day of September 2022.
Mathew Longworth
Chairman
Ardea Resources Limited & controlled entities
55
Annual Report 2022
Independent Auditor’s Report
Ardea Resources Limited & controlled entities
56
Annual Report 2022
Independent Auditor’s Report continued
Ardea Resources Limited & controlled entities
57
Annual Report 2022
Independent Auditor’s Report continued
Ardea Resources Limited & controlled entities
58
Annual Report 2022
Independent Auditor’s Report continued
Ardea Resources Limited & controlled entities
59
Annual Report 2022
Shareholder Information
The following additional information was applicable at 9 September 2022.
1. Distribution of Fully Paid Ordinary Shareholders is as follows:
Size of Holding Number of Holders Shares Held
1 - 1,000 710 401,379 0.24%
1,001 - 5,000 1,513 4,067,853 2.40%
5,001 - 10,000 548 4,289,103 2.53%
10,001 - 100,000 932 28,451,635 16.76%
100,001 - 165 132,527,802 78.08%
3,868 169,737,772 100.00%
%
a) There were 319 shareholders who held less than a marketable parcel.
b) The twenty largest shareholders hold 55.33% of the issued fully paid capital of the Company.
2. Substantial Shareholders of Fully Paid Ordinary Shareholders are as follows:
Holder Number of Shares %
Ian Buchhorn and Associates 12,980,585 7.65%
B O’Shannassy and Associates 9,414,377 5.55%
3. Voting Rights
In accordance with the Company's constitution, voting rights are on the basis of a show of hands, one vote for every
registered holder and on a poll, one vote for each share held by registered holders.
4. Top 20 Shareholders of Fully Paid Ordinary Shares
Number of Shares %
CITICORP NOMINEES PTY LIMITED 19,735,805 11.63%
BNP PARIBAS NOMINEES PTY LTD 14,435,111 8.50%
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 10,385,685 6.12%
HAZURN PTY LTD 7,298,849 4.30%
JOSCO PTY LTD 5,383,809 3.17%
SHENTON WORLD FUND LTD 4,857,143 2.86%
BNP PARIBAS NOMS PTY LTD 3,794,980 2.24%
KURANA PTY LTD 3,261,393 1.92%
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM 3,040,862 1.79%
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 3,001,976 1.77%
MR OLIVIER DUPUY &MS JULIE DUPUY 2,655,385 1.56%
B & J O'SHANNASSY MANAGEMENT PTY LTD
2,165,572 1.28%
MR IWAN JONES &MS JOYCE CHRISTINE JONES
2,100,000 1.24%
MR MICHAEL ANDREW HARRIS 1,795,000 1.06%
MRS PAMELA JEAN BUCHHORN 1,672,073 0.99%
JOSCO PTY LTD 1,666,664 0.98%
CIRCUMFERENCE CAPITAL CT PTY LTD
1,428,572 0.84%
MAYFAIR VENTURES PTE LTD 1,428,572 0.84%
MS BO XU 1,350,000 0.80%
MARTIN BUCKLEY 1,292,539 0.76%
TOTAL
92,861,818 54.71%
Ardea Resources Limited & controlled entities
60
Annual Report 2022
Shareholder Information continued
5. Unlisted Options
4,000,000 Unquoted Options currently on issue convertible at A$0.75 each prior to 08/12/2023, exercisable upon the
Company signing a binding agreement with an Equity Partner for the Kalgoorlie Nickel Project with a minimum $10m
equity investment.
6. Share Buy-Backs
There is no current on-market buy-back scheme.
7. Stock Exchanges
The Securities of the Company are not quoted on any other stock exchanges.
Ardea Resources Limited & controlled entities
61
Annual Report 2022
Tenement Schedule
Ardea Resources Limited Tenement Schedule (WA) as at 30 June 2022
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
Goongarrie Hub
E24/196
Goongarrie 100 Live
M24/731
Goongarrie 100 Live 3
E24/209
Goongarrie 100 Live
M24/732
Goongarrie 100 Live 3
E24/211
Goongarrie 100 Pending
M24/744
Goongarrie 100 Live
E29/934
Goongarrie 100 Live
M24/778
Goongarrie 100 Live 3
E29/1028 Goongarrie 100 Live
M29/167
Goongarrie 100 Live
E29/1038 Goongarrie 100 Live
M29/202
Goongarrie 100 Live
E29/1039 Goongarrie 100 Pending
M29/272
Goongarrie 100 Live
E29/1045 Goongarrie 100 Live
M29/278
Goongarrie 100 Live
E29/1048 Goongarrie 100 Live
M29/423
Goongarrie 100 Live
E30/500
Goongarrie 100 Live
M29/424
Goongarrie 100 Live
E30/501
Goongarrie 100 Live
M29/426
Goongarrie 100 Live
E30/502
Goongarrie 100 Live
P24/5260 Goongarrie 100 Live
G29/25
Goongarrie 100 Pending
P24/5328 Goongarrie 100 Live
L24/239
Goongarrie 100 Live
P24/5329 Goongarrie 100 Live
L29/134
Goongarrie 100 Live
P24/5265 Goongarrie-Carr Boyd 100 Live
L29/135
Goongarrie 100 Live
P24/5169 Goongarrie-Windanya 100 Live
L30/67
L30/68
Goongarrie 100 Live
P24/5480 Goongarrie-Windanya 100 Live
Goongarrie 100 Live
M24/919
Goongarrie-Scotia 100 Ni rights Live 6
L16/141
Goongarrie 100 Live
M24/959
Goongarrie-Scotia 100 Ni rights Live 6
L30/85
Goongarrie 100 Pending
M24/541
Goongarrie 100 Live
P29/2646 Highway North 100 Live
P29/2650 Highway North 100 Live
P29/2647 Highway North 100 Live
P29/2651 Highway North 100 Live
P29/2648 Highway North 100 Live
E29/1125 Goongarrie East 100 Live 16
P29/2649 Highway North 100 Live
E29/1082 Goongarrie 100 Live
P24/5528 Goongarrie 100 Pending
E29/1089 Goongarrie 100 Live
P29/2559 Highway North 100 Live
P29/2561 Highway North 100 Live
P29/2560 Highway North 100 Live
P29/2562 Highway North 100 Live
P29/2501 Highway - Moriarty 100 Live
E29/941
Ghost Rocks 100 Live
P29/2511 Ghost Rocks 100 Live
E29/981
Ghost Rocks 100 Live
P29/2512 Ghost Rocks 100 Live
M29/214
Highway 100 Live
P29/2513 Ghost Rocks 100 Live
P29/2538 Ghost Rocks 100 Live
P29/2514 Ghost Rocks 100 Live
P29/2539 Ghost Rocks 100 Live
P29/2515 Ghost Rocks 100 Live
Ardea Resources Limited & controlled entities
62
Annual Report 2022
Tenement Schedule continued
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
Goongarrie Hub Expansion Siberia
E24/203
Siberia 100 non Au-Ag rights Live 4
P29/2484
Siberia 100 Live
E29/889
Siberia 100 non Au-Ag rights Live 4
P29/2485
Siberia 100 Live
M24/634
Siberia 100 non Au-Ag rights Live 1,4
P24/5416
Siberia 100 Live
M24/660
Siberia 100 non Au-Ag rights Live 4
P24/5417
Siberia 100 Live
M24/663
Siberia 100 non Au-Ag rights Live 4
P24/5418
Siberia 100 Live
M24/664
Siberia 100 non Au-Ag rights Live 4
M24/665
Siberia 90 non Au-Ag rights Live 2,4
M24/683
Siberia 100 non Au-Ag rights Live 4
M24/686
Siberia 100 non Au-Ag rights Live 4
M24/772
Siberia 100 non Au-Ag rights Live 4
M24/797
Siberia 100 non Au-Ag rights Live 4
M24/915
Siberia 100 non Au-Ag rights Live 4
M24/916
Siberia 100 non Au-Ag rights Live 4
P24/5235
Siberia 100 Live
P24/5236
Siberia 100 Live
Kalpini Hub
E27/524
E27/606
E27/607
E28/1224
E28/2978
M27/395
M27/506
M27/512
M28/199
M28/201
M28/205
E27/278
E27/438
E27/520
E27/579
E28/1746
E28/2483
E25/578
M25/59
M25/134
M25/145
M25/151
M25/161
M25/171
M25/187
M25/209
E27/646
E28/3139
P25/2295
P25/2296
P25/2297
P25/2304
P25/2305
Kalpini 100 non Au rights Live 9
Kalpini 100 non Au rights Live 14
Kalpini 100 non Au rights Live 14
Kalpini 100 Live
Kalpini 100 non Au rights Live 14
Kalpini 100 Live
Kalpini 100 Live
Kalpini 100 Pending
Kalpini 100 Live
Kalpini 100 Live
Kalpini 100 Live
Kalpini-Acra 100 Ni Lat Ore Live 5
Kalpini-Acra 100 Ni Lat Ore Live 5
Kalpini-Acra 100 Ni Lat Ore Live 5
Kalpini-Acra 100 Ni Lat Ore Live 5
Kalpini-Acra 100 Ni Lat Ore Live 5
Kalpini-Acra 100 Ni Lat Ore Live 5
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini 100 non Au rights Pending 14
Kalpini 100 Pending
Kalpini 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Goongarrie Hub Expansion Black Range
M24/757
Black Range 100 non Au-Ag rights Live 4
M24/973
Black Range 100 non Au-Ag rights Pending 4
P24/4395
Black Range 100 non Au-Ag rights Live 4
P24/4396
Black Range 100 non Au-Ag rights Live 4
P24/4400
Black Range 100 non Au-Ag rights Live 4
P24/4401
Black Range 100 non Au-Ag rights Live 4
P24/4402
Black Range 100 non Au-Ag rights Live 4
P24/4403
Black Range 100 non Au-Ag rights Live 4
P25/2454
P25/2455
P25/2456
P25/2457
P25/2458
P25/2459
P25/2460
P25/2461
P25/2482
P25/2483
P25/2484
P25/2559
P25/2560
P25/2561
P25/2609
P25/2613
P25/2614
P25/2615
P25/2650
P25/2305
M31/488
P31/2038
P31/2039
P31/2040
E27/643
E27/647
P25/2306
M25/19
P25/2307
P25/2308
P25/2408
P25/2409
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Lake Rebecca 100 non Au rights Pending 14
Kalpini-Lake Rebecca 100 non Au rights Live 14
Kalpini-Lake Rebecca 100 non Au rights Live 14
Kalpini-Lake Rebecca 100 non Au rights Live 14
Kalpini 100 non Au rights Pending 14
Kalpini 100 non Au rights Pending 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Kalpini-Bulong 100 non Au rights Live 13, 14
Ardea Resources Limited & controlled entities
63
Annual Report 2022
Tenement Schedule continued
Tenement
Location Ardea Interest Status Note Tenement
(%)
Location Ardea Interest Status Note
(%)
WA Regional
E39/2188
Yundamindra 100 Live 15
Yerilla Hub
E39/1954
Yerilla-Aubils 100 non Au rights Live 14
M15/1101 WA Regional Pre-emp Ni-Co Lat Live 7
M39/1147 Yerilla-Aubils 100 non Au rights Pending 14
M15/1263 WA Regional Pre-emp Ni-Co Lat Live 7
E31/1092
Yerilla-Boyce Creek 100 non Au rights Live 14
M15/1264 WA Regional Pre-emp Ni-Co Lat Live 7
E31/1169
Yerilla-Boyce Creek 100 non Au rights Live 14
M15/1323 WA Regional Pre-emp Ni-Co Lat Live 7
E31/1208
Yerilla-Boyce Creek 100 non Au rights Live 14
M15/1338 WA Regional Pre-emp Ni-Co Lat Live 7
E31/1213
Yerilla-Boyce Creek 100 non Au rights Live 14
M27/510 WA Regional 100 Ni Lat Ore Live 8
M31/483
Yerilla-Boyce Creek 100 non Au rights Live 14
M27/272
Kanowna East Non-Au Rights Live 10
M31/493
Yerilla-Boyce Creek 100 non Au rights Pending 14
E31/1261
Pinjin 100 Pending
M31/475
Yerilla-Jump Up Dam 100 non Au rights Live 14
E28/3134
Pinjin 100 Pending
M31/477
Yerilla-Jump Up Dam 100 non Au rights Live 14
M31/479
Yerilla-Jump Up Dam 100 non Au rights Live 14
Kookynie Gold-Nickel
Kookynie 0 Live 11
E40/350
E40/357
Kookynie 0 Live 11
Perrinvale Nickel-Gold
Perrinvale 100 non Au rights Live 14
E29/1006
E29/1078
Perrinvale 100 non Au rights Live 14
Mt Zephyr Gold-Nickel
E37/1271 Mt Zephyr 100 Live 12
E37/1272 Darlot East 100 Live 12
E37/1273 Darlot East 100 Live 12
E37/1274 Mt Zephyr 100 Live 12
E39/1706 Mt Zephyr 100 Live 12
E39/1854 Mt Zephyr 100 Live 12
Bedonia Nickel-PGE-Gold
E39/1985 Mt Zephyr 100 Live 12
E63/1828
Bedonia 100 Live
E63/1856
Bedonia 100 Live
E63/1857
Bedonia 100 Live
E63/1928
Bedonia 100 Live
Notes:
1
Britannia Gold Ltd retains precious metal rights.
2.
3.
Impress Ventures Ltd has a 10% equity free-carried interest to a decision to mine.
Norton Gold Fields Limited retains certain Au claw-back rights and royalty receivable.
4. Ora Banda Mining Ltd holds Au-Ag rights while Ardea retains all non Au-Ag rights.
5.
6.
7.
8.
9.
Acra JV – Northern Star Resources Ltd earn-in with Essential Metals Limited. Former holds gold rights while latter retains nickel sulphide rights. Ardea
retains rights to Ni laterite ore.
Black Mountain Gold Limited all rights with exception of Ardea retaining Ni rights.
Ramelius Resources Limited assignee (Maximus Resources Ltd) all rights, Ardea pre-emptive right to Ni-Co laterite.
Paddington Gold Pty Ltd all mineral rights (except nickel sulphide) while Ardea retains rights to nickel laterite ore.
By Sale Agreement between Northern Star (Carosue Dam) Pty Ltd and Kalnorth Gold Mines Ltd, Northern Star (Carosue Dam) Pty Ltd now owns Au
rights while Ardea retains non-Au rights.
10. Northern Star (Kanowna) Limited holds Au rights. Ardea retains non-Au rights.
11. The Option to purchase the tenements was transferred to Metalicity Limited on 21 November 2020. Ardea retains non Au rights.
12. The Mt Zephyr/Darlot East tenements were farmed out to Red 5 Limited on 18 November 2020 whereby Red 5 Limited may earn 80% equity interest.
Ardea is free carried to Decision to Mine.
13. Purchase of tenements by Binding Terms Sheet and Alluvial Rights Agreements dated 4 June 2021 between the Seller Steven Lionel Kean and Ardea
Resources Limited.
14. By way of the Demerger Implementation Deed executed between Ardea Resources Limited, Kalgoorlie Gold Mining Limited, Yerilla Nickel Pty Ltd,
Kalgoorlie Nickel Pty Ltd and Ardea Exploration Pty Ltd dated 9 September 2021, certain tenements are to be transferred to newly listed Kalgoorlie Gold
Mining Limited. For certain other tenements, Ardea Resources Limited or its subsidiaries will continue to hold and retain non-gold rights while Kalgoorlie
Gold Mining Limited retain gold rights only.
Ardea Resources Limited & controlled entities
64
Annual Report 2022
Glossary
ASIC means Australian Securities and Investments Commission
ASX means ASX Limited (ABN 98 008 624 691) or the Australian Securities Exchange, as appropriate
Australian Registry means Security Transfer Registrars Pty Ltd of 770 Canning Highway, Applecross WA
Ardea or ARL or Company means Ardea Resources Limited (ABN: 30 614 289 342) ARL : ASX is the Ardea code on ASX
Ag means Silver
AL means Atmospheric Leach (being a hydrometallurgical process done at atmospheric pressure, in contrast to high pressure leach HPAL)
Au means Gold
Anomaly means a value higher or lower than expected, which outlines a zone of potential exploration interest but not necessarily of commercial
significance
Archaean means a period of geological time spanning 3.8 to 2.5 billion years before present
Austrade - Australian Trade and Investment Commission
BTZ means Bardoc Tectonic Zone
Co means Cobalt
CMO means Australian Federal Government - Critical Minerals Office
Critical Minerals means metals and non-metals that are considered vital for the economic well-being of the world's major and emerging economies,
yet whose supply may be at risk due to geological scarcity, geopolitical issues, trade policy or other factors. The minerals ranked by Geoscience
Australia: Rare-earth elements (REE), gallium (Ga), indium (In), tungsten (W), platinum-group elements (PGE) including platinum (Pt) and palladium
(Pd), cobalt (Co), niobium (Nb), magnesium (Mg), molybdenum (Mo), antimony (Sb), lithium (Li), vanadium (V), nickel (Ni), tantalum (Ta), tellurium
(Te), chromium (Cr) and manganese (Mn).
Cu means Copper
DFAT means Australian Federal Government - Department of Foreign Affairs and Trade
DHEM means downhole electromagnetics
DWER means WA Department of Water and Environmental Regulation
EFA means Export Finance Australia
EM means electromagnetics
EV means Electric Vehicle
ESG means Environmental Social and Governance principles
Feasibility study means a study with three progressively more detailed stages:
Scoping Study means a first pass estimate of engineering requirements and costs of a mining operation, processing plant and plant infrastructure.
Included in the cost estimates will be infrastructure, tailings disposal, power supply, and owner's costs. The plant design may change as a result
of test work analysis, optimisation studies and engineering improvements performed during execution of the follow-up Pre-feasibility Study.
Operating and capital cost estimates are to an order of magnitude accuracy of ± 30%.
Pre-feasibility Study (PFS) means an engineering and cost study of a mining operation, processing plant and plant infrastructure. Included in
the cost estimates will be infrastructure, tailings disposal, power supply, and owner's costs. The plant design may change as a result of test
work analysis, optimisation studies and engineering improvements performed during execution of the Pre-feasibility Study. Operating and capital
cost estimates are to an accuracy of ± 25%.
Definitive Feasibility Study (DFS) means a feasibility study undertaken to a high degree of accuracy which may be used as a basis for raising
finance for the construction of a project. Typically operating and capital cost estimates are to an accuracy of +/- 15-20%. A DFS is the standard
of report required by primary debt funders to demonstrate the technical and commercial viability of a project.
FBICRC means Future Batteries Industry Co-operative Research Centre of which Ardea is a member
GAS means the Gap Analysis Study by Ardea appointed global consulting engineering firm, Wood
GWL means groundwater extraction licences
HPAL means High-Pressure Acid Leach
Ardea Resources Limited & controlled entities
65
Annual Report 2022
Glossary continued
KNP means Kalgoorlie Nickel Project, a nickel cobalt laterite project located through an arc 30 to 150km north-north west to east of Kalgoorlie.
It is comprised of the:
Goongarrie Hub – Goongarrie South, Goongarrie Hill, Highway, Ghost Rocks, Big Four, Scotia, Black Range and Siberia deposits
Kalpini Hub – Kalpini and Bulong deposits
Yerilla Hub – Jump Up Dam, Boyce Creek, Aubils and Lake Rebecca deposits
LIB means Lithium Ion Battery
m means metre and km means kilometres
Mt means Million tonnes
Mineralisation means in economic geology, the introduction of valuable elements into a rock body
Mineralised Neutraliser means a specific plant feed unique to the Goongarrie Hub for which the fine component is AL feed and coarse component is
a neutraliser
MHP means Mixed Hydroxide Precipitate
MPFA means Australian Federal Government - Major Projects Facilitation Agency
MPS means Major Project Status - KNP was award MPS in March 2022 by the Prime Minister of Australia
Ni means Nickel
Nickel Laterite means Nickel occurring as an oxidised hydrated iron oxide, ferruginous clay, smectite clay, chlorite and serpentine assemblage overlying
weathered ultramafic rock
Nickel Sulphide means nickel and copper occurring as an un-oxidised sulphide assemblage associated with fresh ultramafic rock
NCM means Nickel-Cobalt-Manganese
OEM mean Original Equipment Manufacturers
OECD means Organisation for Economic Cooperation and Development
PCAM Precursor Cathode-active Material
PGE means Platinum Group Metals - Ruthenium (Ru), Rhodium (Rh), Palladium (Pd), Osmium (Os), Iridium (Ir), and Platinum (Pt)
PLS means Pregnant Liquor Solution
Project means a grouping of prospects within a specific geographic location, often with a common geological setting
Prospect means a target upon which exploration programs are planned or have commenced
Province means a grouping of projects within a geological district defined by a major mineralised crustal structure
R&D means Research and Development
RAB means Rotary Air Blast drilling technique in which a sample is returned to surface outside the rod string by compressed air. Sample quality is
poor.
RC means Reverse Circulation drilling method employing a rotating or hammering action on a drill bit which returns a sample to the surface inside the
rod string by compressed air. Sample quality is very good, particularly if the drill hole is dry.
REE means Rare Earth Elements, notably Neodymium (Nd), Praseodymium (Pr) and Cerium (Ce).
RM means Rare Metals
Reserves or Ore Reserves or Mineral Reserves as defined by JORC Code.
Proven or Proved Ore Reserve means the economically mineable part of a Measured Mineral Resource. It includes diluting materials and
allowances for losses which may occur when the material is mined. Appropriate assessments, which may include Feasibility Studies, have been
carried out, and include consideration of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental,
social and governmental factors. These assessments demonstrate at the time of reporting that extraction could reasonably be justified. The term
"economic" implies that extraction of the Ore Reserve has been established or analytically demonstrated to be viable and justifiable under
reasonable investment assumptions.
Probable Ore Reserve is the economically mineable part of an Indicated Mineral Resource.
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Glossary continued
Resource or Mineral Resource (MRE) means a Mineral Resource Estimate as defined by JORC Code and is a concentration or occurrence of material
of intrinsic economic interest in or on the earth’s crust in such form, quality and quantity that there are reasonable prospects for eventual economic
extraction. Mineral Resources are further sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.
Measured Resource means a ‘Measured Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities,
shape and physical characteristics are estimated with confidence sufficient to allow the application of Modifying Factors to support detailed mine
planning and final evaluation of the economic viability of the deposit. Geological evidence is derived from detailed and reliable exploration, sampling
and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes, and is sufficient to
confirm geological and grade (or quality) continuity between points of observation where data and samples are gathered. A Measured Mineral
Resource has a higher level of confidence than that applying to either an Indicated Mineral Resource or an Inferred Mineral Resource. It may be
converted to a Proved Ore Reserve or under certain circumstances to a Probable Ore Reserve.
Indicated Resource means an ‘Indicated Mineral Resource’ is that part of a Mineral Resource for which quantity, grade (or quality), densities,
shape and physical characteristics are estimated with sufficient confidence to allow the application of Modifying Factors in sufficient detail to
support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and
reliable exploration, sampling and testing gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and
drill holes, and is sufficient to assume geological and grade (or quality) continuity between points of observation where data and samples are
gathered. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be
converted to a Probable Ore Reserve.
Inferred Resource means an ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade (or quality) are estimated
on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade (or quality)
continuity. It is based on exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral
Resource and must not be converted to an Ore Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be
upgraded to Indicated Mineral Resources with continue exploration.
JORC (2012 edition) means the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves and is a professional
code of practice that sets minimum standards for Public Reporting of minerals Exploration Results, Mineral Resources and Ore Reserves. The
JORC Code provides a mandatory system for the classification of minerals Exploration Results, Mineral Resources and Ore Reserves according
to the levels of confidence in geological knowledge and technical and economic considerations in Public Reports.
Sc means Scandium
SSB means Static Storage Battery
TZ means Tectonic Zone
V means Vanadium
WA means Western Australia
WWF means Walter Williams Formation, prospective for hosting magmatic nickel sulphide and the dominant host unit that has weathered to form the
Goongarrie Hub nickel laterite deposits
WU, CU, EU means ultramafic units Western Ultramafic, Central Ultramafic and Eastern Ultramafic and as defined, at the Emu Lake nickel sulphide
prospect. The basal WU is the prime nickel sulphide target.
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Opposite: Photo caption top to bottom, left to right: Mike Miller (General Manager - Technical Services) with Murry Clark (Ardea Kalgoorlie Team) at
Goongarrie; Ardea’s Diggers and Dealers 2022 booth - Luke Mateljan and Ross Lynch of Ngaliku WPH JV. Ross is the son of local elder Aubrey
Lynch. l-r: Luke Mateljan, Mat Longworth (Ardea Chair), Ross Lynch, Mike Miller (Ardea General Manager – Technical), Andrew Penkethman (Ardea
MD & CEO); Darren Howe (Geology Superintendent) conducting a Site Visit Goongarrie; Goongarrie Hill open pit face showing silica plates in a
goethite matrix. The mineralisation elsewhere at Goongarrie is dominated by goethite as the laterite has been in a topographical low, is partly
covered by Lake Goongarrie sediments and features the northwest trending Bardoc Tectonic Zone structures that run through the Walter Williams
Formation (WWF). These features have resulted in preferential weathering of the WWF and movements in the water table which have leached out
the silica, leaving the premium goethite mineralisation that will be direct feed to the process plant; Goongarrie Hill; View over Goongarrie; Darren
Howe (Geology Superintendent) conducting a Site Visit Goongarrie with Mat Longworth (Ardea Chair).
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