Junior mineral explorer Adelaide Resources Ltd is to leave the mineral sands business, agreeing to sell its Eucla Basin assets to Iluka Resources Ltd for $5 million in cash.

The assets include Adelaide Resources' 49 per cent stake in the Colona mineral sands project in South Australia, a joint venture with Iluka.

Adelaide Resources said Iluka's focus on its larger, wholly-owned Jacinth-Ambrosia project, also in SA, meant progress on the Colona project had stalled and its development was uncertain.

"The company's directors do not consider a continuing involvement in the mineral sands industry to be warranted," Adelaide Resources said.

"Instead, the company intends to focus its future efforts towards the discovery and development of copper-gold deposits."

The sale will lift Adelaide Resources' cash balance to $8 million "thus placing it in a financial position to actively pursue opportunities created by the prevailing market", the company said.

"It will allow the company to take advantage of the current market situation and to increase our focus on gold and other interests," chairman Paul Dowd said.

Shares in Adelaide Resources were steady at 5.5 cents at 1255 AEDT while Iluka's shares were down 17 cents or 4.29 per cent to $3.79. – Associated Press