Hillgrove Resources Limited is pleased to provide the following update on progress at the Kanmantoo mining operation under its new owner operated and specialised contractor mining plan:

Ore mining operations, crushing and processing are all proceeding at required rates as outlined in the mid-quarter release dated 17 September (refer HGO website), to achieve the production of copper within the guidance range of 16,500 to 18,000 t Cu for the full year. Ore grades from the main Kavanagh pit have improved now that mining has moved to the full ore body below the previously mined old Kanmantoo pit.

New daily performance records have been set this month for both ore processed through the plant and tonnes of copper produced at 10,823 t of ore and 88.9 t of copper contained within concentrate respectively.

87 new mining personnel who have undertaken specialised skills evaluation and training have been recruited by Hillgrove, with a further 15 new employees currently being trained in mining equipment operation. These new employees, mainly from the local and Adelaide Hills region, bring the
proportion of the workforce from this region working at Kanmantoo to 77%.

Through this period safety has continued to improve with the total recordable injury frequency rate reducing by 40% since the end of the half year in July 2013. The Chairman of the Board of Hillgrove Resources, The Hon. Dean Brown, has commented: “It is extremely pleasing to see the very rapid and safe ramp up of the new Kanmantoo mining operations, which has provided an increased ore feed and grade to the processing plant. The plant is now running at near maximum capacity, with an average throughput rate of over 9,400 tpd of ore during October so far. The Hillgrove Board welcomes our new employees to the Company and wishes to take this opportunity to congratulate the Kanmantoo, corporate and executive teams for this excellent outcome.” The Company will be finalising a new Ore Reserve around the end of this month, and third quarter results will be forthcoming in the Quarterly Report due out in late November.

The Chairman also advises that, with major operational improvements now in place at Kanmantoo, the Hillgrove Board will be undertaking a further strategic review of the Company during November. The strategic review will cover areas of corporate development such as the overall strategy and the Board composition, with a clear focus on continuing to improve shareholder value.