Announcement PDF ASX ANNOUNCEMENT/MEDIA RELEASE 12 October 2023 High MgO Zone Provides Vector to Prospective Nickel Sulphide Geology at Luhuma • Two most recent diamond drillholes at Luhuma Central show significant increase in MgO (ultramafic indicator) • Increased MgO provides a key vector for more primitive, hence favourable ultramafic geology, which is a feature of large nickel sulphide deposits • These positive outcomes have important implications for the future direction of exploration and potential at Luhuma Central • Reverse circulation (RC) drilling to map this area for higher tenor nickel sulphide mineralisation to commence shortly • Ground electromagnetic (EM) survey results correlate strongly with Luhuma Central massive sulphide mineralisation at depth Adavale Resources Limited (ASX: ADD) (“or the Company”) is pleased to advise that the two most recently completed diamond holes at Luhuma Central (DDLUHC004 and DDLUHC005) intersected more primitive MgO bearing lithologies. These lithologies are significantly higher in MgO than encountered in previous drilling at Luhuma Central. Within mafic ultramafic lithologies associated with magmatic nickel sulphide systems, increasing MgO content is recognised as a vector to locations of high nickel sulphide accumulation that form world class ‘giant’ nickel sulphide deposits. Strong conductive responses generated by the orientation ground Electromagnetic (EM) survey underway at Luhuma Central correlate strongly with down-hole Electromagnetic (DHEM) plates modelled around recent massive sulphide intersections drilled by Adavale. Ground EM will enable Adavale to trace the continuity of nickel mineralisation using a lower density of drillholes. Adavale’s Executive Director, David Riekie commented: “Finding the high MgO ultramafic ‘feeder zone’ to a magmatic nickel sulphide rich intrusive system in the East African Nickel Belt has been one of our preliminary goals. We are very pleased to have identified vectors at Luhuma Central that point us towards these prospective zones. This is an excellent outcome from this round of drilling so far. In addition, the strong correlation between the orientation ground EM survey data and modelled DHEM plates at Luhuma Central means we can now confidently extend the ground survey to trace prospective massive nickel sulphide mineralisation, both north and south and test potential strike extensions.” ASX: ADD DIRECTORS & OFFICERS GRANT PIERCE CHAIRMAN DAVID RIEKIE EXECUTIVE DIRECTOR JOHN HICKS DIRECTOR ALLAN RITCHIE CHIEF EXECUTIVE OFFICER LEONARD MATH CFO & COMPANY SECRETARY ABOUT ADAVALE Adavale Resources is an ASX-listed exploration company targeting projects in the 'battery materials‘ space. The company is currently focused on both its 100% owned Kabanga Jirani Nickel Project and 2 Farm-in ‘Luhuma’ licences adjacent and along strike from the world’s largest undeveloped high grade NiS resource of 58Mt @ 2.62% Ni. Adavale is also progressing exploration on its 100% owned uranium tenements in South Australia Outcomes From Luhuma Central Diamond Drilling Program Adavale recently completed drillhole DDLUHC005 at Luhuma Central, which provided two valuable pieces of geological information. The first was a much broader zone of disseminated sulphides was encountered than in previous drillholes completed to the north. The second was the broad zone of gabbronorite intersected by DDLUHC005, which can be correlated with a similar but thinner and less MgO rich gabbronorite intersected by DDLUHC004 located approximately 100 metres to the north. The gabbronorite zones encountered in DDLUHC004 and DDLUHC005 both have higher MgO content (ranging from 10% up to 17% MgO respectively) than the broad norite (typically about 7% MgO) and gabbro (typically about 4% MgO) zones intersected in drillholes DDLUHC001, 2 and 3 located further to the north. The massive sulphide intersected in DDLUHC004 returned 1.34% Ni, which is a slightly higher tenor (percentage Ni in 100% sulphides) than the approximately 1% Ni reported for the massive sulphides intersected in earlier drillholes located further to the north (ASX Release 21September 2023 “Luhuma Central Assay Results”). The nickel tenor of the broad zone of 3-7% disseminated sulphides intersected in DDLUHC005 appears to be broadly in keeping with the massive sulphides intersected in DDLUHC004 to the north. A thin massive sulphide zone intersected in DDLUHC005 at 423.4m returned 0.3m at 1.26% Ni in keeping with DDLUHC004 and indicating that the tenor may be increasing towards the south in conjunction with an interpreted increasing MgO content in this direction. Table 1 shows the assay values for massive sulphides intercepted in DDLUHC004 and DDLUHC005. Table 1 Selected assay results for DDLUHC005, DDLUHC004 from ALS laboratory Drillhole ID Nature of Mineralisation From (m) To (m) Thickness (m) Ni % Cu % Co % DDLUHC004 Massive Sulphide 256.42 257.54 1.12 1.34 0.14 0.14 DDLUHC004 Massive Sulphide 319.46 319.66 0.20 2.14 0.09 0.30 DDLUHC004 Massive Sulphide 322.88 323.2 0.32 1.80 0.06 0.13 DDLUHC005 Massive Sulphide 423.4 423.7 0.30 1.26 0.07 0.16 This has important implications for the future direction and potential of ongoing exploration at Luhuma Central. The potential increase in nickel tenor towards the south described above, together with the similar more primitive (increasing MgO content) nature of their associated host rocks in this direction indicates that the open untested southern end is the most prospective part of the intrusion. The significance of these trends pointing to this part of the intrusion is that further work in this area may identify the high MgO rich ultramafic chonolith (‘magma tube’) that formed the Luhuma intrusion and from where the magma spread laterally north and south ‘fractionating’ to form the lower MgO rich peripheral lithologies to the main conduit. If present, this high MgO ultramafic chonolith is where nickel sulphide mineralisation of both higher grade and tenor is likely to have accumulated. The geology is depicted in Figure 1 and shows the inclined Luhuma Central drill holes completed to date with the dominant rock types projected to surface. Three main lithologies have been intersected to date, namely gabbronorite, norite and gabbro with the gabbronorite having the highest MgO content and therefore potentially being the most primitive. ASX Announcement 2 The gabbronorite has only been intersected in the southernmost two drillholes (DDLUCH004 and DDLUHC005). Also shown on Figure 1 is the location of eight planned vertical RC drillholes (approximately 1,200m), to be drilled shortly. The four southern RC holes will be drilled initially to determine if the intrusion continues to become more primitive and MgO rich in this direction followed by the four holes to the north to see if any unrecognised prospective lithological changes are also occurring in this direction. Figure 1 Shows the location of Luhuma Central drillholes DDLUHC004 and DDLUHC005 completed to date with the dominant lithologies projected to surface. Three main lithologies have been intersected to date, namely gabbronorite (higher MgO), norite and gabbro. The gabbronorite having the highest MgO content and therefore potentially being the most primitive and most prospective for initial testing with RC drilling. Luhuma Central Ground EM Orientation Survey Adavale has relied heavily on downhole DHEM survey modelling to guide the targeting of subsequent drillholes since the intersection of massive sulphides in Luhuma Central drillhole DDLUHC001. To improve logistics and reduce the expense of maintaining a DHEM crew at hand, a ground EM orientation survey has been implemented to determine if this technique could delineate possible extensions to the Luhuma Central mineralisation beyond where diamond drilling has currently been completed (Figure 2). ASX Announcement 3 The orientation ground EM survey has now been completed over the currently drilled area and has been successful. The strong conductive responses identified by the orientation ground EM survey correlate strongly with the DHEM plates modelled from the recent massive sulphide intersections reported by Adavale at Luhuma Central. This provides the Company with the confidence and validation to use the ground EM technique at Luhuma Central and regionally to explore for massive sulphide mineralisation within mafic-ultramafic bodies to depths of about 300m below surface. Adavale is now extending the ground EM survey to the north and south at Luhuma Central and will be report the results in the coming weeks. Figure 2 Location of ground EM survey areas relative to the DHEM survey completed on the DD holes 001 to 005 inclusive. ASX Announcement 4 Next Steps RC drilling is continuing at HEM 4 to determine if a series of coincident EM, geochemical and gravity anomalies identified there are associated with favourable host rocks at depth below the cover sequence. The results of this program are expected in early November. Included in the upcoming news flow will be the following: • • • Ground EM results Results from RC drilling at HEM 4 and Results from RC drilling at Luhuma Central This announcement is authorised for release by the Board of Adavale Resources Limited. Further information: For broker and media enquiries: David Riekie Executive Director E: investor@adavaleresources.com Andrew Rowell White Noise Communications E: andrew@whitenoisecomms.com P: +61 400 466 226 References ASX Announcement 21 September 2023 “ Luhuma Central Asay results”. 1 Competent Persons Statement The information in this release that relates to “exploration results” for the Project is based on information compiled or reviewed by Mr David Dodd of MSA, South Africa. Mr Dodd is a consultant for Adavale Resources Limited and is a member of the SACNASP. Mr Dodd has sufficient experience that is relevant to the style of mineralisation and type of deposits under consideration as well as to the activity that is being undertaken to qualify as a Competent Person under the ASX Listing Rules. Mr Dodd consents to this release in the form and context in which it appears. Cautionary Statements Visual estimates of mineral abundance should never be considered a proxy or substitute for laboratory analyses where concentrations or grades are the factor of principal economic interest. Visual estimates also potentially provide no information regarding impurities or deleterious physical properties relevant to valuations. The Company regularly uses a portable hand-held XRF analyser to screen drill core for mineralisation before cutting and sampling. This allows for some understanding of the distribution of mineralisation prior to sampling to better ensure that the sampled core is representative of the type and style of mineralisation. Numerous readings are obtained and recorded for future reference. The hand-held XRF provides confirmation that mineralisation is present however it is not an accurate determination of the elemental concentration within the sample analysed. Limitations include; very small analysis window, possible inhomogeneous distribution of mineralisation, analytical penetration depth and possible effects from irregular rock surface. The pXRF readings are subject to confirmation by chemical analysis from an independent laboratory. ASX Announcement 5 Forward looking statements This document contains forward-looking statements concerning Adavale. Forward-looking statements are not statements of historical fact and actual events and results may differ materially from those described in the forward-looking statements as a result of a variety of risks, uncertainties and other factors. Forward-looking statements are inherently subject to business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause the Company’s actual results to differ materially from those expressed or implied in any forward-looking information provided by the Company, or on behalf of the Company. Such factors include, among other things, risks relating to additional funding requirements, metal prices, exploration, development and operating risks, competition, production risks, regulatory restrictions, including environmental regulation and liability and potential title disputes. Forward looking statements in this document are based on Adavale’s beliefs, opinions and estimates of Adavale as of the dates the forward-looking statements are made, and no obligation is assumed to update forward looking statements if these beliefs, opinions and estimates should change or to reflect other future developments. Although management believes that the assumptions made by the Company and the expectations represented by such information are reasonable, there can be no assurance that the forward-looking information will prove to be accurate. Forward-looking information involves known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any anticipated future results, performance or achievements expressed or implied by such forward-looking information. Such factors include, among others, the actual market price of nickel, the actual results of future exploration, changes in project parameters as plans continue to be evaluated, as well as those factors disclosed in the Company's publicly filed documents. Readers should not place undue reliance on forward-looking information. The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws. No representation, warranty or undertaking, express or implied, is given or made by the Company that the occurrence of the events expressed or implied in any forward- looking statements in this document will actually occur. ABOUT ADAVALE Adavale Resources Limited (ASX:ADD) is a nickel sulphide exploration company that holds 100% of the Kabanga Jirani Nickel Project, a portfolio of 12 highly prospective granted licences covering ~1,216km2 along the Karagwe-Ankolean belt in Tanzania. The six southernmost licences are proximal to the world-class Kabanga Nickel Deposit (58Mt @ 2.62% Ni). Adavale has farmed-in to two more highly prospective licences contiguous to our seven southernmost licences, adding a further 99km2 to the portfolio 1,315sq km). Adavale’s licences were selected based on their strong geochemical and geophysical signatures from the previous exploration undertaken by BHP. Adavale also holds exploration licences for their sedimentary uranium potential within the northern part of the highly prospective Lake Frome Embayment in South Australia. ASX Announcement 6 Appendix 1 Adavale Resources Limited – Reverse Circulation and Diamond Drilling Program - Kabanga Jirani Nickel Project JORC Code Edition 2012: Table 1 Section 1: Sampling Techniques and Data (Criteria in this section apply to all succeeding sections.) Criteria JORC Code Explanation Commentary Sampling techniques • RC drilling is conducted primarily to identify the presence of mafic/ultramafic intrusions or to pre-collar ahead of converting to diamond drilling. RC chips that are identified as mafic or ultramafic are initially analysed with a pXRF, but representative samples are also submitted to ALS (South Africa) for analyses by ICP MS. • • Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling. Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used. Aspects of the determination of mineralisation that are Material to the Public Report. In cases where ‘industry standard’ work has been done this would be relatively simple (eg ‘reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay’). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information. For RC analyses sampling is not representative of the broader geological horizons and simply represents values derived from select points. The pXRF has been calibrated using the AMIS standards AMIS0315, AMIS0317, AMIS0319, AMIS0329, AMIS384 and AMIS0367. Standards used to verify quality of results measured include AMIS0317 and AMIS0315. If mineralisation is intercepted with RC drilling than RC material will be captured for every metre drilled. The material is put through a riffler and one third is taken for further analyses where it is sieved to remove the chips which are stored in a chip tray. Both the fines and the chips are logged and analysed using the pXRF to record Ni values. MgO values are also noted for each lithological interval. Any mineralised fines will be submitted for analyses using aqua regia digest. All sampling equipment must be cleaned between samples to prevent contamination. SG is calculated at site using a pycnometer and measurements are taken systematically down the drillhole. This is used to reconcile intercepted lithologies against the modelled gravity anomalies to verify that the causative source has been intercepted. For diamond drilling sampling takes place as follows: Core is aligned and a cutting line is drawn to prevent sampling bias. Samples are marked off in pre-defined intervals of 1 m or smaller if required to honour lithological contacts. The core is split along the china marker reference line. The sampling depth and sample ID are then transferred onto the half core remaining so that the core can be revisited and act as a reference. The remaining sampled half of the core is then submitted to an accredited laboratory (ALS South Africa) along with QAQC samples which will form 15% of all samples submitted and will include certified blanks and Ni standards. ASX Announcement 7 Criteria JORC Code Explanation Commentary Drilling techniques • Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, facesampling bit or other type, whether core is oriented and if so, by what method, etc). Combination of RC and diamond drilling using NQ sized core. Current depth limit of RC drilling is 150m and for diamond drilling is 600m. Drill sample recovery • Method of recording and assessing core and chip sample recoveries and results assessed. For RC Drilling Logging • Measures taken to maximise sample recovery and ensure representative nature of the samples. • Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material. • • Sub-sampling techniques and sample preparation ASX Announcement Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. • The total length and percentage of the relevant intersections logged. • If core, whether cut or sawn and whether quarter, half or all core taken. • If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. • For all sample types, the nature, quality and appropriateness of the sample preparation technique. • Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples. Bulk sample retrieved from the cyclone, sample is put through the riffler and 2 to 3 kg sample retrieved for analyses (if required). Chips from this sample are extracted by washing some of the sample material – these chips are placed in a chip tray in order to keep a record of lithologies for each metre drilled. The riffler is cleaned with compressed air between sample collection to prevent contamination. For Diamond Drilling RQD measurements are taken of core to record recovery. Nature of mineralisation is not nuggety and prone to strong variations in grade that correlate to core loss or loss of fines. Sample length may be compromised when drilling through massive sulphides where core loss is often prevalent. The following is recorded for each interval in the lithology log: Borehole ID, From and to depths, lithology code, weathering, colour, grain size, rock texture and contact type and angle The following is recorded for each mineralized interval in the mineralisation log: borehole ID, from and to depths, mineralisation type, mineralisation style and mineralisation abundance (usually as a sulphide percentage) Chips from RC drilling are stored in a chip tray with a representative sample captured for every metre. Drill core has been cut in half with half core remaining in the core tray and the other half submitted to the laboratory. Where the lithology is uniform samples are taken at 1 m intervals otherwise sample lengths are dictated by geological contacts. RC material has been captured for every metre drilled. For details of sampling technique see “Sampling techniques” section. 8 Criteria Quality of assay data and laboratory tests Verification of sampling and assaying Location of data points ASX Announcement JORC Code Explanation • Measures taken to ensure that the sampling is representative of the in-situ material collected, including for instance results for field duplicate/second-half sampling. • Whether sample sizes are appropriate to the grain size of the material being sampled. • The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. • For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. • Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established. • The verification of significant intersections by either independent or alternative company personnel. • The use of twinned holes. • Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. • Discuss any adjustment to assay data. • Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation. • Specification of the grid system used. • Quality and adequacy of topographic control. Commentary Core samples will be analysed by SGS Tanzania and/or ALS laboratory in South Africa. An aqua regia digest will be used to avoid the inclusion of silicate Ni. CRM’s, blanks and standards have been inserted to verify laboratory accuracy, precision or bias. QAQC samples will form 15% of all samples submitted. In some instances a four acid digest will also be used and some samples may be analysed by SGS in Tanzania. Chips from RC drilling are stored in a chip tray with a representative sample captured for every metre to enable check sampling to be undertaken. All logging and pXRF readings have been undertaken by a senior exploration personnel. Primary data was collected in the core shed using a set of standard logging templates and entered into a tablet with tailor made dropdown menus. The data is forwarded to their independent data management consultant (MSA) for validation and loading into the company’s drilling database The drillhole collars were surveyed with a handheld GPS unit with an accuracy of 5m which is considered sufficiently accurate for the purpose of the drillhole. All co- ordinates are expressed in Arc1960. 9 Criteria JORC Code Explanation Commentary Data spacing and distribution • Data spacing for reporting of Exploration Results. • Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied. No regular drill hole spacing has been set with individual holes design to intersect specific targets. Diamond drillholes were designed to test coincident gravity, Geochemical and HEM/DHEM and AMT anomalies. • Whether sample compositing has been applied. • Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which this is known, considering the deposit type. • If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material. Sample security • The measures taken to ensure sample security. Samples are kept in the core shed and then delivered in person by the geologist to the courier company from where they are dispatched to the laboratory. Audits or reviews • The results of any audits or reviews of sampling techniques and data. Internal audits/reviews of procedures are ongoing, however no external reviews have been undertaken. Orientation of data in relation to geological structure ASX Announcement Drillholes are designed to intercept conductors orthogonally if possible or alternatively to drill through the EM anomalies. 10 Section 2: Reporting of Exploration Results Criteria JORC Code Explanation Commentary Mineral tenement and land tenure status • Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings. The Kabanga Jirani Nickel Project located in Tanzania covering 1,215.97km2 comprises of ten granted licences, all are 100% owned by Adavale Resources as follows: • The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area. PL 11406 298 km2 Kabanga North East PL 11886 23 km2 Kabanga South East PL 11405 114 km2 Kabanga North PL 11538 64 km2 Burigi PL 11537 194 km2 Burigi North PL 11591 182 km2 Kabanga East PL11590 273 km2 Kabanga West PL11592 19.4 km2 Ruiza North East PL 12175 44.83 km2 Southeast Wedge PL 23980/2023 3.74 km2 Luhuma Central In addition there are two licences with farm-in agreements (65% ownership interest) PL11692 26 km2, Luhuma North PL11693 73 km2, Luhuma South Exploration done by other parties • Acknowledgment and appraisal of exploration by other parties. Not applicable, not referred to. Geology • Deposit type, geological setting and style of mineralisation. The exploration target is a magmatic Ni-Cu-PGE sulphide with the same genesis to the Kabanga N-Cu-PGE sulphide deposit that the licences are adjacent to. Drill hole Information • A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: DDLUHC 001 • easting and northing of the drill hole collar Elevation 1508 Easting 261206 Northing 9711222 Azimuth: 120 ASX Announcement 11 Criteria JORC Code Explanation • elevation or RL (Reduced Level – elevation above sea level in metres) of the drill hole collar • dip and azimuth of the hole • down hole length and interception depth • hole length. • If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case. Commentary Dip: 60° EOH: 300.9m DDLUHC 002 Easting 261267 Northing 9711177 Elevation 1513 Azimuth: 120 Dip: 60° EOH: 451.3m DDLUHC 003 Easting 261182 Northing 9711297 Elevation 1515 Azimuth: 115 Dip: 60° Planned EOH: 361.3m DDLUHC 004 Easting 261149 Northing 9711143 Elevation 1512 Azimuth: 120 Dip: 65° EOH: 386m DDLUHC 005 Easting 261084.4 Northing 9711109.9 Elevation 1512 Azimuth: 130 Dip: 60° EOH: 501.1m Data aggregation methods • • ASX Announcement In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated. Where aggregate intercepts incorporate short lengths of high-grade results and longer lengths of low-grade results, the procedure used for such aggregation should be stated and some typical Assay results from drilling are weighted according to sample length. 12 Criteria JORC Code Explanation • • Commentary examples of such aggregations should be shown in detail. The assumptions used for any reporting of metal equivalent values should be clearly stated. These relationships are particularly important in the reporting of Exploration Results. If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (e.g. ‘down hole length, true width not known’). Not applicable – insufficient data available at this point to describe relationship between mineralisation widths and intercept length. • Appropriate maps and section