Adavale Resources granted ex-BHP tenements near Kabanga nickel project
Lake in Tanzania in the Ngorogoro Valley
Australia’s Adavale Resources (ASX: ADD) has been granted two new nickel sulphide tenements adjoining the world-class Kabanga nickel project in Tanzania.
The country’s Ministry of Minerals and Mining Commission officially granted the Kabanga North and Kabanga North East tenements, covering 400 square kilometres along the Karagwe-Ankolean system, two months after Adavale submitted its applications.
The company plans to test the targets which were originally identified through historic data by BHP Billiton (ASX: BHP), with field work to commence soon after.
The adjoining Kabanga project is considered one of the world’s largest undeveloped high-grade nickel sulphide deposits.
It holds a JORC resource of 57 million tonnes at 2.62% nickel and has demonstrated an easily-floated sulphide ore with approximately 70% of the resource in measured and indicated categories.
Data suggests the quality of the mineralisation is “exceptional with low-risk sulphide metallurgy” to produce a low impurity nickel.
Adavale chairman Louis Clinton welcomed the tenement granting, claiming they provide a “significant opportunity” for the company.
“[Our] board and management intend to work closely with the team on the ground to assess the high priority targets and we look forward to updating the market further.”
In recent times, there has been significant interest in acquiring the adjoining Kabanga nickel project.
The world’s top three lithium-ion battery producers and some of the world’s largest nickel producers have expressed interest including Jervois Mining (ASX: JRV), which reported in February last year it was in talks with Tanzania’s Minister for Minerals Doto Biteko regarding the project.
Adavale is currently in discussions with potential joint venture partners regarding tendering for the asset.
Kabanga background
Glencore and Barrick Gold were the most recent operators of Kabanga – spending more than US$250 million on advancing the asset before mothballing it when the nickel prices crashed.
Kabanga came up for grabs in early 2018 after the Tanzanian Government cancelled 11 retention licences on projects in the country.
Shareholders welcomed this morning’s news – pushing Adavale’s share price up 60% to trade at $0.04 mid-morning.