Adavale raises $1.65 million to advance ongoing massive nickel sulphide drilling program in Tanzania

Adavale Resources is undertaking a capital raise to further fund its promising Kabanga Jirani project, where massive nickel sulphides have been intersected in the first two holes.

Junior explorer Adavale Resources (ASX:ADD) has received binding commitments to raise $1.65 million through a placement to new and existing sophisticated and professional investors.

The placement will comprise the issue of ~86.8 million new fully paid ordinary shares at an issue price of 1.9 cents/share and a 1:1 attaching listed option (ADDOA) exercisable at 3 cents/share expiring December 31, 2025.

The new fully paid ordinary shares are due to be settled on or about 28 July, 2023. A further 86.8 million attaching options will be issued following shareholder approval.

Following the placement, ADD will conduct an entitlement offer to raise up to $2 million.

The entitlement offer will be on the same terms as the placement offering existing shareholders on a pro-rata basis one new share for every five ordinary fully paid shares held on Friday, 28 July 2023.

ADD said directors and management intend to subscribe for their rights in the entitlement offer totalling ~$118k. The entitlement offer is underwritten for $600k.

Funds will be used to progress and accelerate the nickel exploration at ADD’s Kabanga Jirani Nickel Project in Tanzania, including Downhole EM (DHEM), RC & diamond drilling, general working capital and costs associated with the capital raise.

Nickel sulphide hits at Kabanga Jirani

ADD this week announced significant nickel sulphide discoveries in the first two holes at the Luhuma Central prospect within the Kabanga Jirani project in Tanzania.

The diamond hole DDLUHC001 intersected 4.15m of massive nickel sulphide, while DDLUHC002 encountered 4.9m of blebby and heavily disseminated nickel sulphides with occasional semi-massive veinlets.

Preliminary assay results from the Tanzanian project revealed a 4.13m zone grading 0.99% nickel, starting from a down-hole depth of 223.35m, within a broader interval of 12.15m at 0.46% nickel, commencing from 221.35m.

Additionally, hole DDLUHC001 showed 2m at 0.57% nickel from 249m, and DDLUHC002 exhibited 4m at 0.52% nickel from 200.55m.

Drilling of the third hole, DDLUHC003 is now underway, while ADD has prepared the earlier holes and several holes at HEM 2, which bear similarities to Luhuma Central, for downhole electromagnetic (DHEM) surveying.

DHEM teams and equipment are currently being mobilised to Luhuma Central to initiate the survey for these three holes, aiming to gain further insights into the potential of the project.

Diamond drilling on Prospecting Licence PL 23980/2033 (Luhuma Central) is being carried out as part of a broader 5,000m combined diamond drilling and reverse circulation drill program to test a series of targets generated by ADD about the Luhuma Trend.

The Luhuma Trend is a narrow 15km belt within Kabanga North East that is characterised by strongly elevated gravity and electromagnetic anomalism.

Confident of a nickel discovery

ADD executive director David Riekie said the explorer was grateful for the support of existing and new shareholders in the placement.

“We have made significant progress in our understanding of the geology and controls on mineralisation at Kabanga Jirani this year, particularly in light of our recent massive sulphide intersections at Luhuma Central,” he said.

“We firmly believe that the vectors to mineralisation are pointing us in the right direction for a discovery.

“We currently have two drill rigs on site and with this level of exploration activity there should be plenty of newsflow over the coming months to look forward to.”

This article was developed in collaboration with Adavale Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.