Adavale Resources is bulking up its South Australian uranium holdings

Adavale Resources is acquiring a 456km2 exploration licence in South Australia from Kilonova Metals
New licence is adjacent to company’s existing Mundowdna South and Lake Surprise uranium project areas
Historical exploration has identified numerous anomalous uranium target areas with drill assays up to 1m @ 263ppm U3O8

Special Report: Adavale Resources has highlighted its uranium ambitions amidst a resurgent market by expanding its South Australian holdings.

The 456km2 EL6553 exploration licence comprises two areas adjacent to and east of the company’s existing Mundowdna South and Lake Surprise project areas.

Adavale Resources (ASX:ADD) recently dug up historical airborne electromagnetic survey data over the Mundowdna South and Mundowdna licences that is expected to save costs by adding a massive 400,000 survey data points.

This data has already served to confirm that a significant paleochannel system prospective for uranium exploration is indeed present at the Mundowdna licence package.

Meanwhile, reconnaissance drilling carried out in March last year confirmed that uranium mineralisation is present at the Lake Surprise (EL5893) project within a complex braided stream environment.

While uranium prices have moderated from a peak of US$107/lb in January to about US$89.25/lb, Sprott believes the recent retreat marks a “natural and healthy pause in the current uranium bull market” and that the current long-term price of US$75/lb is a level not seen in 16 years and indicates “strong future demand for uranium”.

Adavale Resources ASX ADD — EL6553 (red outline) is spread out over two areas. Pic supplied (ADD)

Adding scale

The company has now entered into a binding heads of agreement with Kilonova Metals to acquire EL6553, which will bring the company uranium licence holdings in South Australia up to 2,058km2.

It covers the Eyre and Namba formations where sedimentary roll-front uranium deposits are known to form with notable examples being the nearby Beverley and Honeymoon uranium deposits.

Historical exploration identified numerous anomalous uranium target areas with drilling returning assays of 1m @ 263ppm eU3O8 and 0.65m @ 235ppm eU3O8.

ADD plans to focus its exploration efforts around the pathfinder uranium results previously achieved at MacDonnell Creek and George Creek prospects.

The company will also be able to consult with Kilonova owners Terry Topping and Andrew Rust – who are both experienced geologists and previously held executive and management roles with Cauldron Energy during its exploration phase in this region – to assist with developing its upcoming uranium exploration plans.

“Following the recent acquisition of a significant historical EM dataset and extensive reprocessing over our Mundowdna South EL, the company has been assessing a variety of strategic and proximal acquisitions that have demonstrated potential to host similar prospective palaeochannel systems,” executive director David Riekie said.

“We consider this acquisition represents an exciting opportunity for the company in that it has demonstrated palaeochannels containing ample evidence of elevated uranium occurrences.

“We also believe the area to be under-explored as the initial exploration of the area was abruptly halted following the Fukushima incident in Japan in 2011.

“We can now capitalise on this earlier exploration and follow up on these clearly defined targets. We see this as a huge boost to our upcoming 2024 uranium exploration programs.”

Road ahead

ADD will now complete a review of data on EL6553 provided by Kilonova and confirm target areas before starting preparation for an exploration program.

The company aims to start field exploration in April over the prospective palaeochannel system identified at the Mundowdna uranium project area.

It will also progress land access, delineate extensions to the prospective areas, carry out soil sampling/surface sampling to refine drill targets and prepare drill programs to determine its uranium mineralisation potential.

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.