Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Mining South Australia Conference 2013
27 slides from Hillgrove Resources's conference presentation, Nov 26, 2013
Slide 1: Mining South Australia Conference
MINING SOUTH AUSTRALIA CONFERENCE STEVEN MCCLARE IIIII GENERAL MANAGER 26 NOVEMBER 2013
Slide 2: Assets, Board and Management Team
ASSETS, BOARD AND MANAGEMENT TEAM Production and cash flow in Australia Bird’s Head project Kanmantoo Copper Mine (100% owned), South Australia Sumba project Rim-of-Fire exploration in Indonesia Sumba gold project (80% owned) Bird’s Head copper/gold project (80% owned) Kanmantoo Hillgrove Boar
Slide 3: Kanmantoo Copper Mine and Exploration Area
KANMANTOO COPPER MINE AND EXPLORATION AREA 100%-owned 55km from Adelaide, South Australia Exploration Mining Lease is within 500km2 Exploration Area EL4401 License Exploration potential considered high Kanmantoo The project enjoys commensurate capital Copper Mine cost advantages Wheal Elle
Slide 4: Corporate Snapshot – October 2013
CORPORATE SNAPSHOT – 31 OCTOBER 2013 ASX listed: HGO SHAREHOLDER DISTRIBUTION Shares on issue: 1,178.6 million Share price: AUD0.09 Market capitalisation: AUD106.1 million Cash and cash equivalents: AUD16.5 million Debt AUD44.5 million 49% Institutional shareholders Source: Orient Capi
Slide 5: 3Q and Company Highlights – Mining Services
3Q AND COMPANY HIGHLIGHTS – MINING SERVICES Complete change out of the mining services Supply, Maintain and Repair Contract (SMARC) Recruitment of Hillgrove employees and supervisors Specialised Drillers Explosives Supply Focus on safety, quality, efficiency and costs 5
Slide 6: 3Q and Company Highlights – Mining Operations and Production
3Q AND COMPANY HIGHLIGHTS – MINING OPERATIONS AND PRODUCTION Record production of 4,306 tonnes of copper High grade ore at the base of Kanmantoo pit being mined New Reserve with a substantial increase in mine life 6
Slide 7: Q3 FY14 Production Output
Q3 FY14 PRODUCTION OUTPUT Apr-13 Jul-13 Oct-13 FY 2014 Period FY 2012 FY 2013 QTR QTR QTR YTD Ore to ROM from Pit kt 495 2,221 689 555 656 1,900 Ore to/(from) kt 1,267 849 (137) (84) 3 (218) Rates increasing long term stockpiles Mined Waste kt 7,446 11,777 2,728 2,158 1,658 6,544 with mining Total
Slide 8: Safety – Kanmantoo Copper Mine TRIFR
SAFETY – KANMANTOO COPPER MINE TRIFR 8
Slide 9: Total Tonnes of Ore Mined
TOTAL TONNES OF ORE MINED Monthly Mined Bank Cubic Metres (bcm) 700,000 600,000 500,000 400,000 300,000 200,000 100,000 Q1-13 (Feb-Apr) Q2-13 (May-Jul) Aug-13 Sep-13 Oct-13 Mining rate impacted by weather and changeover New fleet operational by 7 August, ramping to nominal capacity by mid-Septem
Slide 10: Ore Milled and Feed Grade
ORE MILLED AND FEED GRADE 0.80 Milled Tonnes 756,129 800,000 Feed Grade 708,280 719,986 0.70 648,055 700,000 595,016 0.60 572,289 600,000 Tonnes Copper (Dry) 488,130 0.50 500,000 0.40 400,000 0.30 300,000 0.20 200,000 0.10 100,000 ‐ 0 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Mill co
Slide 11: Contained Copper Rates Increased
CONTAINED COPPER RATES INCREASED Kanmantoo produced 4,306 tonnes of copper in concentrate Guidance for FY14 on target for 16,500 to 18,000t Cu 11
Slide 12: Mining Status – Kavanagh and Giant Cross Section
MINING STATUS – KAVANAGH AND GIANT Cross Section (6115000N Looking North) Reserve 2013 Model Blocks Shown > 0.2% Cu KAVANAGH GIANT EOM Survey July 2013 12
Slide 13: Mining Status – Kavanagh and Giant Cross Section
MINING STATUS – KAVANAGH AND GIANT Cross Section (318200E Looking West) NORTH KAVANAGH KAVANAGH GIANT Reserve 2013 Model Blocks Shown > 0.2% Cu EOM Survey July 2013 13
Slide 14: 3Q and Company Highlights – Revenue and Costs
3Q AND COMPANY HIGHLIGHTS – REVENUE AND COSTS Revenue for quarter was AUD32.8 million at an average realised price C1 unit costs for the quarter were USD2.80 per pound Year to date C1 costs USD2.63 per pound, and projected to be maintained within previous guidance throughout remainder of the f
Slide 15: Processing Costs Reduced
PROCESSING COSTS REDUCED Quarterly Processing Unit Costs Including Mobile Crushing ($/t Milled) 16.00 14.00 12.00 10.00 Costs ($/t) 8.00 6.00 4.00 2.00 ‐ Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 15
Slide 16: Strong Hedge Book
STRONG HEDGE BOOK Hillgrove AUD Copper Position A$10,000 Strong hedge book provides certainty A$9,000 Approximately 33,000 tonnes of copper swaps remain A$8,000 65-70% of forecast copper production A$7,000 hedged to March 2016 at an average price of A$6,000 ~AUD7,950/tonne Feb‐11 Apr‐11 Feb‐12
Slide 17: Significant Increase in Regional Recruitment
SIGNIFICANT INCREASE IN REGIONAL RECRUITMENT Eighty eight new Hillgrove employees recruited since Hillgrove moved to Owner/Operator, representing: 147% employee increase from Local Region (Callington / Kanmantoo) 141% employee increase from Adelaide Hills Region 26% employee increase from th
Slide 18: Life of Mine and Reserve
LIFE OF MINE AND RESERVE LOM plan to encompass Note: Rodda will include Emily immediate resource areas – Star; and Giant will include Giles, Lean and Valentine targeting 10 year life of operations Mining performance currently focussed on Kavanagh pit, with the pit now accessing the higher grade
Slide 19: Global Mineral Reserve Estimate at End February 2013
GLOBAL MINERAL RESERVE ESTIMATE AT END FEBRUARY 2013 Kanmantoo Global Mineral Reserve Estimate at End February 2013 JORC 2012 Tonnage Cu Au Ag Classification (Mt) (%) (g/t) (g/t) Proven 2.5 0.77 0.08 1.7 In Situ Reserve Probable 18.2 0.72 0.20 2.0 20.7 0.73 0.18 1.9 Long Term Stockpiles Proven 1.4 0
Slide 20: New 2012 JORC Mineral Reserve
NEW 2012 JORC MINERAL RESERVE New Ore Reserve shows an increase in both Reserve confidence and contained metal 20
Slide 21: Sensitivities and Guidance
SENSITIVITIES AND GUIDANCE SENSITIVITIES TO REVENUE AUD/USD +/- 10% AUD 2.0 million Copper Price +/- 10% AUD 2.3 million Gold Price +/- 10% AUD 1.1 million GUIDANCE FOR FY2014 Production – Copper 16,500 – 18,000 tonnes Costs – C1 Costs USD 2.25 – 2.50 per pound (at AUD/USD of 1.00) 21
Slide 22: Capital Raising and Debt Reduction
CAPITAL RAISING AND DEBT REDUCTION Capital Raise Hillgrove completed placement to raise AUD10.8 million through issue of 153.7 million ordinary shares Placement price of AUD0.07 per share represents a discount of 12.0% to volume weighted average price during 5 trading days up to and including 18
Slide 23: Summary
SUMMARY Revenue for the quarter was AUD32.8 million (USD29.5 million) at an average realised price for copper of AUD3.58/lb (USD3.29/lb) Kanmantoo guidance for FY14 remains on target for 16,500 to 18,000t Cu Positive cash generation in FY14, with copper price certainty as a result of strong co
Slide 24: Key Contacts
KEY CONTACTS For further information please contact: Greg Hall, CEO and Managing Director Russell Middleton, Chief Financial Officer Suite 1709 Australia Square Level 17, 264 George Street Sydney NSW 2000 E: [email protected] T: 61 2 8247 9300 24
Slide 25: Broker Reports Generated
BROKER REPORTS GENERATED Shaw Stockbroking – On The Mend. Upgrading Price Target to 10.8/share “It is important to note however, that HGO had a quarter of transition, where mining was taken in-house and that the month of October produced 46.8% (2,014t) of the quarter’s total copper production at a m
Slide 26: Disclaimer - Important Notice
DISCLAIMER - IMPORTANT NOTICE No representation or warranty is or will be made by any person (including Hillgrove Resources Limited ACN 004 297 116 (“Hillgrove”, “HGO”, or the “Company”) and its officers, directors, employees, advisers and agents) in relation to the accuracy or completeness of all o
Slide 27: Competent Person Statements
COMPETENT PERSON STATEMENTS Kanmantoo Global Mineral Resource Estimate at End February 2013 ABOUT HILLGROVE JORC 2012 Tonnage Cu Au Ag Hillgrove Resources is an Australian mining Classification (Mt) (%) (g/t) (g/t) company listed on the Australian Securities Measured 2.63 0.88 0.10 1.95 In Situ Reso
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