Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Mines & Money Hong Kong 2014
29 slides from Hillgrove Resources's conference presentation, Mar 27, 2014
Slide 1: Mines & Money Company Update
For personal use only MINES & MONEY COMPANY UPDATE GREG HALL IIIII CEO & MANAGING DIRECTOR RUSSELL MIDDLETON IIIII CHIEF FINANCIAL OFFICER HONG KONG IIIII 25 MARCH 2014
Slide 2: Assets, Board and Management Team
ASSETS, BOARD AND MANAGEMENT TEAM Bird’s Head project Production and cash flow in Australia For personal use only Sumba project Kanmantoo Copper Mine (100% owned), South Australia Advanced greenfield exploration in Indonesia Sumba gold project (80% owned) Kanmantoo Bird’s Head copper/gold proj
Slide 3: Kanmantoo Copper Mine and Exploration Area
KANMANTOO COPPER MINE AND EXPLORATION AREA 100%-owned by Hillgrove For personal use only 55km from Adelaide, South Australia Exploration Mining Lease is within 500km2 Exploration Area EL4401 License, and relatively unexplored Organic growth potential considered high Kanmantoo Project enjoy
Slide 4: Indonesia Projects – Birds Head, West Papua and Sumba Island
INDONESIA PROJECTS – BIRDS HEAD, WEST PAPUA AND SUMBA ISLAND Advanced greenfield exploration in Indonesia For personal use only Sumba gold project (80% owned) Bird’s Head copper/gold project (80% owned) Hillgrove has an 80% direct interest in both Bird’s Head (PT Akram) and Sumba (PT Fathi)
Slide 5: Corporate Snapshot – January 2014
CORPORATE SNAPSHOT – 31 JANUARY 2014 For personal use only ASX listed: HGO SHAREHOLDER DISTRIBUTION Shares on issue: 1,179.9 million Share price: A$0.09 Market capitalisation: A$106.2 million Retail Institutions Cash and cash equivalents: 52.0% 48.0% A$16.5 million Debt A$40.8 million
Slide 6: Corporate Snapshot – January 2014
CORPORATE SNAPSHOT – 31 JANUARY 2014 For personal use only Top Shareholders % of isc Perennial Value Management 11.8% Renaissance Smaller Companies 7.4% Colonial First State - Growth Australian Equities 5.5% Freepoint Metals & Concentrates 4.7% Aedos Advisers 4.3% Dimensional Fund Advisors 3.9% Aria
Slide 7: Copper Market
COPPER MARKET Global copper mine production surprised to the upside in 2H2013, leaving larger For personal use only than expected global concentrate stocks coming into 2014 Although copper mine supply is expected to be in a small surplus over the next 3 years, the supply deficit gap will widen a
Slide 8: Q4 Highlights – Mining Operations and Production
Q4 HIGHLIGHTS – MINING OPERATIONS AND PRODUCTION For personal use only Record production with 5,838 tonnes of copper in concentrate for the quarter, 17,184t for full year – within guidance range for year High grade ore in the main Kavanagh Pit at base of old Kanmantoo mine pit now being augmente
Slide 9: Q4 Highlights – Mining Operations and Production
Q4 HIGHLIGHTS – MINING OPERATIONS AND PRODUCTION Continued ramp up of mining capacity with one new Liebherr 9350 300 tonne For personal use only excavator commissioned and a second arriving, with full crew training completed Safety at Kanmantoo continues to improve with the 12 month TRIFR reduci
Slide 10: FY14 Production Output
FY14 PRODUCTION OUTPUT Apr-13 Jul-13 Oct-13 Jan-14 FY 2014 Period FY 2012 FY 2013 For personal use only QTR QTR QTR QTR Ore to ROM from Pit kt 495 2,221 689 555 656 733 2,633 Ore to/(from) kt 1,267 849 (137) (84) 3 148 (70) long term stockpiles Mined Waste kt 7,446 11,777 2,728 2,158 1,658 3,483 10,
Slide 11: Improved Mining Production Output
IMPROVED MINING PRODUCTION OUTPUT For personal use only New Liebherr excavators lifting mining rates to planned level – targeting 550-600k bcm per month Kavanagh and Nugent pits being mined with Emily Star to commence in March 11
Slide 12: Mining Operations and Production
MINING OPERATIONS AND PRODUCTION For personal use only Note: Rodda will include Emily Star; and Giant will include Giles, Lean and Valentine 12
Slide 13: Ore Milled and Feed Grade
ORE MILLED AND FEED GRADE For personal use only Mill and wet plant continued to perform well during the quarter Mill throughput was a record, with 760kt of ore milled for the quarter (at 3Mtpa rates) Mined ore fed directly to mill with only minor additions of low grade due to high milling rate
Slide 14: Contained Copper Rates Increased
CONTAINED COPPER RATES INCREASED For personal use only Kanmantoo produced 5,838t of copper in concentrate, reaching target following the changeout of mining services Total copper production for FY14 was 17,184t Cu – in line with guidance 14
Slide 15: Process Plant Performance
PROCESS PLANT PERFORMANCE For personal use only Multi stream analyser will further optimise recoveries and cost Mill run time steady – only impacted by planned outages 15
Slide 16: Q4 Highlights – Revenue and Costs
Q4 HIGHLIGHTS – REVENUE AND COSTS Revenue for the quarter was A$46.8M (Q3 A$32.8M) at an average realised price For personal use only for copper of A$3.59/lb (US$3.33/lb) C1 unit costs for the quarter were US$2.00/lb Full year C1 costs were US$2.39/lb Period Apr-13 Jul-13 Oct-13 Jan 14 FY 2013
Slide 17: Lower Processing Costs Maintained
LOWER PROCESSING COSTS MAINTAINED For personal use only Continued low processing unit costs While $/t milled were slightly up, processing costs/lb were substantially reduced from increased grade Ongoing maintenance optimisation work to further improve reliability and reduce costs 17
Slide 18: Strong Hedge Book
STRONG HEDGE BOOK For personal use only A$/mt A$/lb Strong hedge book A$10,000 A$4.54 provides certainty for cash flows and revenue during debt A$9,000 A$4.08 repayment period A$3.63 Additional hedging put A$8,000 in place in January at A$8,300/t A$7,000 A$3.18 Production to end July hedged 90
Slide 19: Safety and Community
SAFETY AND COMMUNITY For personal use only Safety remained at improved low level for Quarter, with a 40% improvement over the year Hillgrove continues to work with the State and Federal Governments and local community on its application for a further two year life of mine extension 19
Slide 20: Significant Increase in Regional Recruitment
SIGNIFICANT INCREASE IN REGIONAL RECRUITMENT Hillgrove seeks to support the community and reduce travel times and risk by For personal use only concentrating recruitment on employees who live within the region wherever possible 20% employees from Local Region (Callington/Kanmantoo) 53% employe
Slide 21: Sensitivities and Guidance
SENSITIVITIES AND GUIDANCE Based on current performance and planned operational improvements, Hillgrove provides For personal use only the following guidance for financial year 2015: Guidance For FY15 Ore mined 3,000kt to 3,250kt Ore processed 2,900kt to 3,000kt Ore grade processed 0.83% to 0.88% Co
Slide 22: Debt Reduction
DEBT REDUCTION Hillgrove again made a significant reduction to its debt balance during the quarter For personal use only Total debt reduced from A$44.5M to A$40.8M at 31 January 2014 A Gold Loan repayment of A$1.2M (852oz) was made in addition to the repayment of A$2.5M Senior Debt principal r
Slide 23: Continuous Improvement Initiatives
CONTINUOUS IMPROVEMENT INITIATIVES For personal use only Multi stream analyser to further optimise recoveries and costs New Liebherr excavators to enhance truck productivity by approximately 40% Multiple pit sources for ore supply Revised drill and blast practices and reconfigured bench arra
Slide 24: Summary
SUMMARY For personal use only Revenue for the quarter was A$46.8M at an average realised price for copper of A$3.59/lb (US$3.33/lb) Increased production guidance for FY15 of 22,300t to 24,600t Cu in concentrate Strong positive operating cash generation in FY15, with copper price certainty as a
Slide 25: Key Contacts
KEY CONTACTS For personal use only 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: info@hillgroveresources.com.au T: 61 2 8247 9300 25
Slide 26: Competent Person Statements
COMPETENT PERSON STATEMENTS Kanmantoo Global Mineral Resource Estimate at End February 2013 ABOUT HILLGROVE For personal use only JORC 2012 Tonnage Cu Au Ag Classification (Mt) (%) (g/t) (g/t) Hillgrove Resources is an Australian mining Measured 2.63 0.88 0.10 1.95 company listed on the Australian S
Slide 27: 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 28: 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 For personal use only 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 S
Slide 29: New 2012 JORC Mineral Reserve
NEW 2012 JORC MINERAL RESERVE For personal use only New Ore Reserve shows an increase in both Reserve confidence and contained metal when compared to the May 2010 Ore Reserve, after taking into account reserve depletion from mining 29