Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Q4 CY2014 Earnings Presentation
27 slides from Hillgrove Resources's earnings presentation, Feb 2, 2015
Slide 1: Q4 and Company Update
For personal use only Q4 AND COMPANY UPDATE Reporting for October to December 2014 GREG HALL IIIII CEO & MANAGING DIRECTOR RUSSELL MIDDLETON IIIII CHIEF FINANCIAL OFFICER STEVE MCCLARE IIIII GENERAL MANAGER, KANMANTOO 2 FEBRUARY 2015
Slide 2: Corporate Snapshot
CORPORATE SNAPSHOT – AS AT 31 DECEMBER 2014 ASX listed: HGO For personal use only Shares on issue: 147.7 million (following consolidation of 8:1 on 17/09/14) Share price: $0.44 at quarter end Market capitalisation: $65.0 million Cash $8.8 million Debt $18.0 million Net Debt $9.2 millio
Slide 3: Top Shareholders
TOP SHAREHOLDERS – 31 DECEMBER 2014 For personal use only Top Shareholders % of isc SHAREHOLDER DISTRIBUTION Perennial Value Management 12.5% Platinum Partners 8.5% Overseas Renaissance Smaller Companies 6.7% 19.9% Colonial First State – 5.5% Growth Australian Equities Freepoint Metals & Concentrate
Slide 4: Kanmantoo Copper Mine and Lease Areas
KANMANTOO COPPER MINE AND LEASE AREAS 100%-owned by Hillgrove For personal use only 55km from Adelaide, South Australia Mining Lease is within 500km2 exploration Exploration license, and relatively unexplored Area EL4401 Kitticoola Organic growth potential considered high Prospect Project
Slide 5: Safety and Community
Q4 HIGHLIGHTS – SAFETY AND COMMUNITY For personal use only Total Recordable Injury Frequency Rate increased, with most injuries of low severity – initiatives are underway in order to reduce this as well as to enhance compliance with integrated risk management system and focus on frontline risk awa
Slide 6: Copper Production
Q4 HIGHLIGHTS – COPPER PRODUCTION 25,000mt For personal use only Note: Guidance now changed to 11 20,000mt month financial year 1 Feb 2014 to 31 Dec 15,000mt 20,500mt to 22,500mt Copper 10,000mt 5,000mt 0mt Feb‐14 Mar‐14 Apr‐14 May‐14 Jun‐14 Jul‐14 Aug‐14 Sep‐14 Oct‐14 Nov‐14 Dec‐14 Guidance Actual
Slide 7: Performance to End December
Q4 HIGHLIGHTS – 3 MONTH PERFORMANCE TO END DECEMBER Production, Sales and Unit Cost results for the three months ended 30 For personal use only December 2014 Copper in Concentrate produced at 4,826 tonnes Copper Concentrate Produced at 21,312 dry metric tonnes Copper Concentrate sold at 20,2
Slide 8: Production Output
Q4 HIGHLIGHTS – PRODUCTION OUTPUT FY14 to APR-14 JUL-14 SEP-14 DEC-14 Period CY14 For personal use only JAN 14 QTR QTR QTR QTR 12 MTHS 3 MTHS 3 MTHS 2 MTHS* 3 MTHS 11 MTHS Ore to ROM from Pit Ore to long term stockpiles kt kt 2,633 262 812 283 680 421 430 211 698 256 2,620 1,172 Record quarters Mi
Slide 9: Improved Mining Productivity Maintained
Q4 HIGHLIGHTS – IMPROVED MINING PRODUCTIVITY MAINTAINED For personal use only Note: Chart includes total Bank Cubic Metres (BCM) and total ore tonnes (kt) mined. Total BCM mined of 1,986k is equivalent to 6,122kt. Productivity maintained – three mining pits operated with all now in primary ore G
Slide 10: 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 Nugent and Emily Star (below) are both now in primary ore 10
Slide 11: Giant Pit Design
GIANT PIT DESIGN For personal use only Design based on PEPR constrained optimisation Main area 550m x 550m 360m depth SR 5.0 11
Slide 12: Giant Pit Design – EW Section
GIANT PIT DESIGN – EW SECTION THROUGH 6114970N West East For personal use only Current Mined Surface Strip Ratio below LOM average by RL1064 (mid 2016) Giant Pit 12
Slide 13: Ore Milled Recovery and Run Time
Q4 HIGHLIGHTS – ORE MILLED RECOVERY AND RUN TIME For personal use only * July quarter included September data again in the Milled Tonnes to replicate a three month quarter for comparison purposes. Mill throughput and reliability maintained, with planned maintenance shuts completed Mill throughpu
Slide 14: Revenue and Costs
Q4 HIGHLIGHTS – REVENUE AND COSTS Period FY14 to APR-14 JUL-14 SEP-14 DEC-14 CY14 For personal use only US cents per lb JAN 14 QTR QTR QTR QTR 12 MTHS 3 MTHS 3 MTHS 2 MTHS* 3 MTHS 11 MTHS Total Mining Cost 165 178 156 145 195 169 Deferred Mining -14 50 -13 -1 -9 7 Pre-strip -33 -87 -10 -5 -46 -38 Or
Slide 15: Improved Mining Costs Maintained
Q4 HIGHLIGHTS – IMPROVED MINING COSTS MAINTAINED For personal use only Mining Unit Costs by Quarter 25.00 20.00 15.00 10.00 5.00 0.00 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Sep 2014 Dec 2014 Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 CY14 Q2 CY14 Q3 CY14 Q4 CY14 Mining Contractor HGO Historic
Slide 16: Lower Processing Costs Maintained
Q4 HIGHLIGHTS – LOWER PROCESSING COSTS MAINTAINED For personal use only Quarterly Processing Unit Costs Including Mobile Crushing ($/t Milled) Continued low 14.00 processing unit 12.00 costs achieved due to optimisation 10.00 work and a focus on cost saving Costs ($/t) 8.00 initiatives 6.00 New
Slide 17: Broader Exploration Programme Underway
BROADER EXPLORATION PROGRAMME UNDERWAY Progress made on Kanmantoo lease and For personal use only regional exploration Initial drill results for the Wheal Ellen Exploration Area EL4401 Cu-AU-Zn drilling received Kitticoola Prospect Detailed gravity surveys to north of Kavanagh / Giant have indic
Slide 18: Broader Exploration Programme Underway
BROADER EXPLORATION PROGRAMME UNDERWAY Wheal Ellen exploration during quarter of reverse circulation holes, not indicating any For personal use only significant results, however a 180m diamond drill hole confirmed mineralisation remains open at depth including 6m at 8% Zn, 4.3% Pb, 1.1g/t Au, 0.7%
Slide 19: Strong Hedge Book for Medium Term Revenue Certainty
STRONG HEDGE BOOK FOR MEDIUM TERM REVENUE CERTAINTY Strong hedge book provides For personal use only certainty for cash flows and revenue during debt repayment periods Additional 2,887t of copper hedges added at a price of AUD7,749/t (AUD3.51/lb) during the quarter Company has 78% of payable c
Slide 20: Guidance to December 2015 – Adjusted for Full Months
GUIDANCE TO DECEMBER 2015 – ADJUSTED FOR FULL 12 MONTHS Kanmantoo guidance levels, based on current performance and planned improvements For personal use only Guidance For FY15 Total Ore Mined 2,800kt to 3,000kt Primary Ore Processed 2,300kt to 2,600kt Primary Ore Grade Processed 0.68% to 0.72% Copp
Slide 21: Continuous Improvement Initiatives
CONTINUOUS IMPROVEMENT INITIATIVES Controlled Potential Sulphidisation (CPS) for stockpiled oxide ore treatment – For personal use only construction underway, approximately 52% complete at end of quarter, two ~10 day trials targeted for May and July 2015, plan for 4 month batch treatment from Nove
Slide 22: Strategic Focus
STRATEGIC FOCUS Hillgrove views the next 12 months to be a challenging period with short term For personal use only uncertainty regarding the copper price and overall resources market environment. In the context of the Company’s response to the potential impact of this environment the following init
Slide 23: Enhancing Shareholder Value
ENHANCING SHAREHOLDER VALUE For personal use only THREE PILLARS FOR ENHANCING SHAREHOLDER VALUE REGIONAL CAPITAL KANMANTOO GROWTH MANAGEMENT Enabling the Productivity and cost Grow reserves and Company to establish focus in order to extend mine life of a foundation for maximise the free Kanmantoo th
Slide 24: Summary
Q4 HIGHLIGHTS – SUMMARY Revenue was AUD38.5M at an average realised price for copper of AUD3.46/lb For personal use only (USD3.08/lb), with year to date revenue of AUD167.0M Copper hedging strategy continues to significantly support revenue stream, with 2,887t added at a price of AUD$7,749/t (AU
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 is an Australian mining company Measured 2.63 0.88 0.10 1.95 listed on the Australian Securities
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
Hillgrove Resources — Q4 CY2014 Earnings Presentation on 6ix