(Reuters) - Ardea Resources said on Monday it signed a binding deal with Japan's Sumitomo Metal Mining and Mitsubishi Corp to develop the Kalgoorlie nickel project, sending the Australian nickel miner's shares more than 11% higher.
Under the agreement, the companies will form a joint venture and fund and conduct a definitive feasibility study to arrive at a final investment decision for the Kalgoorlie Nickel Project (KNP) - Goongarrie Hub, Ardea Resources said in a statement.
The consortium of Sumitomo Metal Mining and Mitsubishi will fund A$98.5 million ($64.42 million) for the costs of the study, thereby earning a 50% stake in the joint venture. Ardea will own the remaining stake in the venture.
"Once in production, the Kalgoorlie Nickel Project - Goongarrie Hub is expected to be one of the largest nickel-cobalt producers in Australia," Ardea CEO Andrew Penkethman said.
Ardea shares were trading 9.4% higher at A$0.93 as of 0010 GMT, after rising up to 11% in early trade.
($1 = 1.5291 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru; Editing by Subhranshu Sahu)
