Adavale Resources [ASX: ADD]

Metals & Mining

Crafting a gold-weighted multi-commodity portfolio

We initiate coverage of Adavale Resources (ASX: ADD) with a 12-month target price of A$0.152, implying ~280% upside from the current share price. The company’s core focus is the Parkes Gold–Copper Project in the highly endowed Lachlan Fold Belt of New South Wales – a Tier-1 mining jurisdiction that hosts world-class deposits, including Cadia, Northparkes, and Cowal. In May 2025, Adavale delivered its maiden JORCcompliant Inferred Mineral Resource of 115,000oz Au (3.14Mt @ 1.06g/t Au) at the London–Victoria mine, successfully converting historical production into a modern resource base. Complementing this initial resource, recent drilling has materially extended the Project’s upside. The standout result, hole ALRC014, returned 48m @ 0.82g/t Au from 133m, including 25m @ 1.17g/t Au, confirming mineralisation remains open beneath the pit floor and well beyond the current resource envelope.

Parkes Project: A Tier-1 Gold-Copper Asset with Scale Potential

The Parkes Project represents a genuine Tier-1 exploration play with substantial scale potential. The recent ALRC014 intercept marked the widest gold intersection at London– Victoria in more than 30 years, underscoring the depth and continuity of the mineralised system. Beyond London-Victoria, the broader 371km² tenement package hosts multiple high-priority prospects, with rock-chip sampling returning up to 22.2g/t Au at Parkvale South. Supported by a recently completed funding round, Adavale is advancing step-out and follow-up drilling programmes designed to expand the resource base and unlock discoveries. With a combination of strong early results, district-scale tenure, and proximity to world-class deposits, Parkes stands as Adavale’s near-term growth engine and the central driver of shareholder value creation.

Strategic Uranium and Nickel Exposure for the Energy Transition

Beyond Parkes, Adavale offers commodity diversification through its South Australian Uranium Portfolio (~4,959km²) and Tanzanian Nickel Projects (~1,300km²). In South Australia, heritage approvals at MacDonnell Creek clear the path for a maiden 2,000– 3,000m Aircore programme, building on historical intercepts of up to 263ppm eU₃O₈. In Tanzania, earlier drilling at Luhuma Central confirmed nickel sulphide intersections, with EM and gravity anomalies highlighting further targets along strike from the world-class Kabanga deposit. Together, these assets provide long-term optionality in uranium and nickel, positioning Adavale to benefit from rising nuclear demand and future battery metal cycles.

Valuation range of A$0.142–0.162 per share

Using a SOTP-based valuation methodology, we value Adavale at a midpoint target of A$0.152/share. This implies a Price/NAV ratio of 0.26x and offers a substantial 279.7% upside for potential investors. We support this substantial upside given the exploration success at the Parkes Gold-Copper Project and high potential for resource upliftment to the indicated category. We anticipate that the rising gold prices will prompt market participants to reexamine ADD stock with renewed interest. Notable risks to our investment thesis include commodity price risk, funding risk and execution risk.

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