Name of the Project
Kanmantoo underground project – Stage 1.

Location
Adelaide Hills, South Australia.

Project Owner/s
Hillgrove Resources.

Project Description
A project economic assessment has (PEA) confirmed the project’s “excellent” potential.

The project has estimated mineral resources of 5.7-million tonnes grading at 1.1% copper and 0.3 g/t gold, with additional drilling under way.

In February 2023, an updated PEA concluded that the project could produce 43 500 t of copper and 11 500 oz of gold over an initial 45-month mine plan.

The existing infrastructure and the short distance from the portal to the copper lodes position Kanmantoo as one of the lowest capital intensity copper development projects in Australia.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated net present value of A$165-million and an internal rate of return of 231%, with a payback of nine months.

Capital Expenditure
An economic assessment published in February 2023 estimated that the project could be brought online at a capital cost of A$25-million.

Planned Start/End Date
First copper sales are expected within seven months of a final investment decision.

Latest Developments
Hillgrove Resources has announced a A$39-million institutional placement and share purchase plan to fund the restart of the Kanmantoo copper project.

The company has successfully completed a bookbuild to raise A$19-million in a two-tranche share placement to institutional and sophisticated investors.

More than 358.4-million shares will be issued at 5.3c each, with more than 293.5-million issued in the first tranche under Hillgrove’s existing placement capacity. The second tranche of more than 64.9-million shares will be subject to shareholder approval at a meeting planned for late April.

The company has also entered into a binding, conditional termsheet with Freepoint Metals & Concentrate to raise a further A$17-million through an additional two-tranche share placement.

Hillgrove will issue more than 324.5-million shares in total, also at 5.3c each, subject to shareholder appointment and the completion of a share purchase plan and share placement.

The second tranche placement to Freepoint, which would comprise more than 236.2-million of the shares on issue, would be subject to governmental approvals.

In addition to the placement, Hillgrove will also undertake a share purchase plan to raise A$3-million, allowing shareholders to subscribe for up to A$30 000 of additional shares in the company, also at 5.3c each.

Hillgrove CEO and MD Lachlan Wallacehas has said the quantum of funding provides sufficient operational contingency, as well as significant exploration budget to allow for mine expansion drilling to continue concurrently with the underground development.

Concurrent with the capital raise, Hillgrove has also entered into a binding termsheet for a hedging programme with Freepoint, covering at least 16 000 t of copper in concentrate, amounting to nearly half of the first two years of production.

The hedging programme will assist the company in achieving pricing stability for its copper product and will underpin financials for the mine plan. The hedging is subject to meeting several conditions, including the completion of due diligence, the approval by Freepoint’s board of directors and the copper price being greater than A$12 500/t plus hedging margin. The hedging is also subject to the completion of the placement and the second tranche placement to Freepoint.

Key Contracts, Suppliers and Consultants
Pybar (exploration decline).

Contact Details for Project Information
Hillgrove Resources, tel +61 8 7070 1698.