Adavale Resources : Quarterly Activities and Cashflow Report

ASX ANNOUNCEMENT

21 April 2022

ASX: ADD

Quarterly Activities Report

DIRECTORS & OFFICERS

March 2022

GRANT PIERCE CHAIRMAN

DAVID RIEKIE EXECUTIVE DIRECTOR

EXPLORATION NICKEL

JOHN HICKS DIRECTOR

• • Adavale finalised an exclusive 12 month right to explore the highly prospective Luhuma Nickel Project

  ALLAN RITCHIE

  CHIEF EXECUTIVE OFFICER

• • Initial ground-based gravity survey team arrived on site from early March to survey all of Adavale's southern tenements

  LEONARD MATH

  CFO & COMPANY SECRETARY

• • Post quarter end - Additional gravity survey teams mobilised to focus on highly prospective Luhuma corridor following Adavale's Target 7 drill success in late 2021

ISSUED CAPITAL

Shares: ~356 million Unlisted options: 26.5 million Performance rights: 17 million

EXPLORATION URANIUM

ABOUT ADAVALE

• • Positive geochemistry results confirmed:

  • o 11 of 28 rock chip samples returned values over 100ppm uranium, 7 of which are greater than 200ppm uranium

  • o Maximum uranium value of 356ppm

  • o Sample values are greater than 20 times the background values estimated from the spectrometer survey

  • o Elevated values of uranium coincident with elevated gamma mapped from the spectrometer survey

  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

• • Planning, work access and clearances for next phases of exploration, including air core drilling, progressing well

CORPORATE

• • Experienced mining executive, David Riekie appointed as Executive Director effective 1 January 2022

Adavale Resources Limited (ASX: ADD) ("Adavale" or "the Company") is pleased to provide the following report on its activities for the quarter ended 31 March 2022.

NICKEL EXPLORATION

Luhuma Nickel Project (Farm-in - Option to acquire up to 100%) - Tanzania

In December 2021, the Company executed a binding farm-in agreement for 2 licences PL11692/2021 and PL11693/2021 (Luhuma Nickel Project) with significant nickel sulphide exploration potential (see Figure 1). The licences are contiguous to Adavale's Kabanga NE licence and total 99km2 and brings Adavale's total exploration area to 1,243km2.

During the quarter, all conditions precedent has been met and the Stage 1 payment of US$12.5k cash and US$25k worth of Adavale shares per license have been paid. The completion of Stage 1 payment provides the Company immediate and exclusive right to explore and evaluate the licenses for the next 12 months.

Figure 1: Plan showing location of the Luhuma Nickel Project (PL11692 and PL11693) contiguous to

Adavale Kabanga Jirani NE Nickel Project

Kabanga Jirani Nickel Project (Tanzania)

The Kabanga Jirani Nickel Project that comprises 7 licenses offer potential to contain high-grade Ni-Cu-Co-Cr-PGE sulphide deposits similar to the Kabanga Nickel sulphide deposit. They are located within the Karagwe-Ankole Belt which is known to host layered Mesoproterozoic (1.6-1Ga) mafic ultramafic intrusions which have intruded into sulphide rich sediments facilitating the process of sulphide saturation which is partly what enables nickel sulphide deposits to form.

The project lies adjacent and along strike from Kabanga Nickel Project, the world's largest to be developed high-grade Ni-sulphide resource of 58Mt @ 2.62% Ni.

Figure 2: Location of Adavale's Kabanga Jirani Nickel Project (southern Licences) adjacent to the world largest undeveloped nickel deposit and Northern Licence package Burigi. Burigi NE and Ruiza NE.

Exploration Activities during the quarter

Ground based surveys and exploration on the Luhuma Nickel Project and Kabanga Jirani Nickel Project commenced during the quarter including soil sampling, DHEM and the key gravity survey work programs.

The first gravity survey team arrived on site during the quarter and commenced the gravity survey, a key component of the Company's 2022 exploration program. Additional teams are planned to expedite the work in order to cover all the Company's southern prospecting licences (the license locations are shown in Figure 3).

In the later part of 2021, the Company introduced gravity surveying into its target selection techniques.

The addition of gravity to its magnetics and electromagnetic techniques significantly improved the Company's success in identifying mafic-ultramafic intrusions under cover and directly led to the identification of mafic-ultramafic intrusions at Targets 7, 16 and 21 (See Figure 3).

The Company has designed and implemented a large ground-based gravity survey program encompassing the entire southern Licence area of the Kabanga Jirani Nickel Project.

Figure 3: Locality of targets 7, 16 and 21 as well as the Luhuma corridor and planned regional gravity survey on Adavale's southern Prospecting Licenses in Tanzania

The survey will be conducted on 400m spaced lines with readings taken every 100m. Approximately 24,000 gravity readings will be collected with approximately 5,400 in Kabanga East, 11,200 in

Kabanga NE, 2,900 in Kabanga North and 4,400 in Kabanga West. The Company anticipates the deployment of up to four gravity survey crews to fast-track the program.

Surveying has commenced with an initial crew on site with an additional two crews anticipated on site by early April and depending on progress, a further crew will be deployed during April.

The focus of the initial crew is the completion of a more detailed survey over the Luhuma Corridor

(around Target 7 as shown in Figure 3) which is an under explored area of known mineralised mafic-ultramafic intrusions. Within the Luhuma corridor is the historic drillhole LUH06 which returned an intersection of 1.14% Ni over 8.4m and Adavale's Target 7 drill hole RCDDKNE 13-07-02. This

drillhole intersected finely disseminated sulphide mineralisation hosted within a mafic intrusion over a broad interval of 248m until the end of hole (refer to Company ASX announcement dated 16

December 2021 "Adavale Discovers Significant Mafic - Ultramafic Intrusion"). The possible geophysical correlation between Target 7 and LUH06 is shown below in Figure 4.

Figure 4: Gravity surveys showing potential continuation of Luhuma Corridor