ADAVALE RESOURCES LIMITED — Interim / Quarterly Report 2020

Jan 12, 2021

13 JANUARY 2021

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ABN 91 008 719 015

December 2020 Quarterly Activities Report

New Board Delivers Solid First Full Quarter

Operational Highlights:

• Adavale granted 4 additional prospecting licences in Tanzania; another under application bringing Adavale’s portfolio to 7 licences

• Initial exploration program completed on the 4 licences surrounding the Kabanga Nickel Deposit

• World renowned nickel sulphide expert Dave Dodd of MSA appointed as

  • JORC Competent Person

• President Magufuli wins second 5 year term with new Cabinet appointed, and pledges to remove investment hurdles, inviting foreign investment in mining

Corporate Highlights:

• $1,290,000 raised via Share Purchase Plan

• $1,400,000 raised via Strategic Placement. Attaching $0.06 options

  • earmark an additional $1,050,000 when exercised.

• Adavale debt free after 100% Conversion of debt at $0.05 per share.

• New Board grow share price from $0.015 to $0.075 (previous close ), with market capitalisation growing from ~ $2.5M to ~ $21.4M

Adavale Resources (ASX: ADD) is pleased to report on a highly successful quarter for the Company as it commenced its initial exploration for high grade nickel sulphide deposits in the Kagera Nickel Belt in Tanzania, East Africa.

Adavale CEO Allan Ritchie commented: “The December quarter focused on setting solid foundations ahead of what stands to be a very exciting year for Adavale amid a greatly improved business and political climate in Tanzania. Our team in country have wasted no time managing the expedient granting of Adavale’s licences and mobilisation for boots on the ground fieldwork. Additionally, the acquired BHP data has removed a lot of heavy lifting from early exploration which is particularly valuable for a company of our size with around $2.3M in the bank.

We have now secured a world class land holding, cleaned up the balance sheet, recapitalised the business and are well positioned to execute an aggressive program of exploration in the first half 2021. I would also like to welcome Dave Dodd to the team who is eager to hit the ground running with our geological team in Tanzania in the next month.”

Adavale Resources Limited Level 7, 6 Underwood Street Sydney NSW 2000 t: +61 2 8003 6733

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Update - Kabanga Jirani Nickel Project - High Grade Nickel Sulphide Exploration in Tanzania

Adavale has been granted 6 licences, with 1 further licence recently under application, that surround or are proximal too the world class Kabanga Nickel Project with 58Mt @ 2.62% Ni. All 7 licences have collectively been named the Kabanga Jirani Nickel Project, Jirani is the Swahili word meaning ‘neighbour’ or ‘neigbourhood’.

The initial exploration program in the Kagera Region, North West Tanzania commenced in mid-November and by 30 December 2020 all samples had been delivered to SGS’s laboratory for analysis.

Numerous geochemical anomalies were identified in the field using portable XRF equipment which gives sufficiently accurate metal analysis for the purpose of this program. The XRF readings are indicating the presence of mineralisation over a significant percentage of the areas being explored and the readings continue in the pits to depth. In total 41 pits were dug to depths of up to 1m to 5m and a total of 607 soil and rock chip samples were delivered to SGS’s laboratory. Sample XRF readings in the range of 100ppm to 500ppm Ni were recorded with some readings even higher

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MAP 1: Location of Company’s 100% owned licences with only Ruiza NE under application, all in proximity to the world class Kabanga Nickel Project.

Adavale Resources Limited Level 7, 6 Underwood Street Sydney NSW 2000 t: +61 2 8003 6733

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MSA Group were appointed technical consultants for the company. The MSA team has an indepth understanding of the geology and mineralisation controls of deposits within the East African Nickel belt and a track record of discovery success.

Dave Dodd, Head of Geology and principal consultant at the MSA Group in South Africa, has been appointed as the Company’s competent person for ASX JORC reporting requirements. His in-depth understanding of nickel-sulphide deposits is nearly unparalleled and he is considered a leader in his field.

Corporate

The Company raised $1,290,000 from the SPP culminating in the issue of only 43,000,000 new shares. Soon after, the Company concluded the conversion of the $1,000,000 Convertible Note and all accrued interest in full for a further 25,746,504 shares rendering Adavale Debt free.

Following the SPP Adavale raised $1,400,000 at $0.04 (excluding fees) from institutional and sophisticated investors by way of a placement which included the issue of 17,500,000 options expiring 22 Dec 2022 with a $0.06 exercise price and a right to Adavale, at their discretion, to cause the exercise at $0.06 should the 10-day VWAP reach $0.12. The exercise of these options would bring a further $1,050,000 in to Adavale, and like all capital raised by the new board of Adavale the lion’s share will be applied to exploration.

Ironside Capital, Foster Stockbroking and Taylor Collison acted as Joint Lead Managers to this raise which attracted multiple world class institutions to the register including Ausbil Global Resources.

Capital Structure and Cash Position

Capital Structure and Cash Position	Capital Structure and Cash Position
The Company’s summarised capital structure as of 31 December 2020 is as follows:
Issued fully paid ordinary shares:	285,532,677
Options @ $0.06 Exp. 11 Dec 2022	2,000,000
Options @ $0.06 Exp. 31 Dec 2022	15,500,000
Cash at bank:	$2.293 million

Directors and Officers as well as some contractors have agreed to receive their fees in shares. The disciplined approach to reducing corporate costs means the majority of the Company’s balance sheet is therefore available for share price accreting exploration activities.

During the quarter no payments in cash were paid to related parties for their services, however as noted in the Appendix 5B, shares in-lieu of fees were issued to directors from their appointment up to 30 November 2020 and to former directors for prior services rendered.

Tanzanian Presidential Elections

His Excellency John Pombe Magufuli was re-elected as President of Tanzania for a second 5- year term in October 2020. As cited in numerous press articles the President spoke publicly that his second 5-year term will be focused on attracting foreign investment in mining - (http://www.xinhuanet.com/english/2020 11/13/c_139514401.htm ). He appointed his new Cabinet and Minister Doto Biteko has retained his position of Minister of Minerals providing stability for the sector. Professor Shukrani Manya (previously Executive Secretary of the Mining Commission) was appointed Deputy Minister of Minerals.

Adavale Resources Limited Level 7, 6 Underwood Street Sydney NSW 2000 t: +61 2 8003 6733

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Schedule of Tenements

Mining Tenements Held by Adavale Resources Limited as at 31 December 2020.

Pursuant to ASX Listing Rule 5.3.3 the Company reports as follows in relation to mining tenements held at the end of each quarter and acquired or disposed of during the quarter and their location.

Ministry ID	Area(km2)	Project Location
PL 11406/2020	298.02 km2	Kabanga Nth East, Tanzania
PL 11405/2020	113.84 km2	Kabanga North,Tanzania
PL 16307/2020	64.08 km2	Burigi,Tanzania
PL 16469/2020	194 km2	Burigi North, Tanzania
PL 16522/2020	181.74 km2	Kabanga East, Tanzania
PL 16521/2020	273.27 km2	Kabanga West,Tanzania
EL 5892	92 km2	Lake Arthur East, Sth Aust.
EL 5893	167 km2	Lake Arthur,Sth Aust.
EL 5644	137 km2	Canegrass Swamp, Sth Aust.

This announcement has been authorised for release by the Board of Adavale Resources Limited.

To contact the Company about this announcement please email Julian Rockett, julian@adavaleresources.com. For further information on the Company and our projects please visit www.adavaleresources.com

About Adavale

Adavale Resources Limited (ASX:ADD) is a nickel sulphide exploration company with a portfolio of highly prospective prospecting licences in the Kagera Region of the United Republic of Tanzania. All Adavales’ tenements are surrounding and proximal to the world class Kabanga Nickel Deposit (58Mt @ 2.62% Ni) and were selected based on their strong geochemical and geophysical signatures from previous exploration undertaken by BHP Billiton.

Adavale Resources Limited Level 7, 6 Underwood Street Sydney NSW 2000 t: +61 2 8003 6733

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