After submitting several applications, Adavale Resources (ASX: ADD) is hoping to get its hands on tenements adjoining the world renowned Kabanga nickel sulphide project in Tanzania that were previously owned by BHP (ASX: BHP).
The tenement applications are part of Adavale’s recently announced new strategic direction to lock-in assets that feed the surging lithium-ion battery sector.
Adavale has applied for tenements covering 411 square kilometres along the Karagwe-Ankolean system, which also hosts Kabanga which is considered one of the largest undeveloped nickel sulphide deposits globally.
The tenement Adavale has bid for include Kabanga North and Kabanga North East.
“We have identified some tenements with huge potential adjoining one of the largest undeveloped high-grade nickel sulphide resources,” Adavale chairman Louis Clinton said.
“We will work hard to prove that the potential of an exciting high-grade nickel resource exists on our tenements which would lead to a major re-rating for the company while adding value within our current tenements and looking for other opportunities in the new energy space,” he added.
Kabanga nickel project
Glencore and Barrick Gold were the previous owners of Kabanga and had spent more than US$250 million on advancing the asset before it was mothballed when the nickel price crashed.
Prior to being mothballed, the joint venture had firmed up a resource of 57Mt at 2.62% nickel for the project.
In early 2018, the Tanzanian Government cancelled 11 retention licences over the asset leaving it up for grabs.
According to Adavale, other bidders for the project include at least one top three lithium-ion battery producer and some of the world’s largest nickel producers.
Adavale is currently evaluating whether to join the tendering process itself for the project.
Meanwhile, at the adjoining tenements where it has submitted applications, Adavale is planning to test some high-grade targets that have been identified after reviewing historic data that includes an airborne radiometric survey conducted by BHP.
Investors reacted positively to the news, with Adavale’s share price surging more than 73% to $0.033 by late afternoon trade.