Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Q3 2014 Earnings Presentation
27 slides from Hillgrove Resources's earnings presentation, Oct 20, 2014
Slide 1: Q3 and Company Update
For personal use only Q3 AND COMPANY UPDATE Reporting for August and September GREG HALL IIIII CEO & MANAGING DIRECTOR RUSSELL MIDDLETON IIIII CHIEF FINANCIAL OFFICER 20 OCTOBER 2014
Slide 2: Corporate Snapshot – as at 30 September 2014
CORPORATE SNAPSHOT – AS AT 30 SEPTEMBER 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: $0.62 at quarter end Market capitalisation: $91.6 million Cash and receivables $18.8 million Debt $23.0 million Ne
Slide 3: Top Shareholders – 30 September 2014
TOP SHAREHOLDERS – 30 SEPTEMBER 2014 For personal use only Top Shareholders % of isc SHAREHOLDER DISTRIBUTION Perennial Value Management 12.5% Platinum Partners 8.4% Overseas Renaissance Smaller Companies 7.4% 18.9% Colonial First State – 5.5% Growth Australian Equities Freepoint Metals & Concentrat
Slide 4: Peer Snapshot – as at September 2014
PEER SNAPSHOT – AS AT 30 SEPTEMBER 2014 For personal use only Hillgrove Share Price Performance vs Peers 200 180 160 140 120 100 80 60 40 20 0 Oct‐13 Nov‐13 Dec‐13 Jan‐14 Feb‐14 Mar‐14 Apr‐14 May‐14 Jun‐14 Jul‐14 Aug‐14 Sep‐14 Hillgrove Sandfire PanAust Oz Minerals Tiger Resources Altona Mining Hi
Slide 5: 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 6: Safety and Community
Q3 HIGHLIGHTS – SAFETY AND COMMUNITY For personal use only Total Recordable Injury Frequency Rate increased over quarter Community meetings continued discussing Kanmantoo regional dust, mine operations, environmental rehabilitation program and local traffic issues Now greater than 80% of Hillg
Slide 7: Copper Production
Q3 HIGHLIGHTS – COPPER PRODUCTION For personal use only For the two month quarter, 4,429 tonnes of copper in 20,500mt to concentrate was produced, 22,500mt Copper remaining above guidance on a year to date basis 7
Slide 8: Record Month Performance to End September
Q3 HIGHLIGHTS – RECORD 3 MONTH PERFORMANCE TO END SEPTEMBER Record Production, Sales and Unit Cost results for the three months ended For personal use only 30 September 2014 Copper in Concentrate produced at 6,331 tonnes Copper Concentrate Produced at 27,007 dry metric tonnes Copper Concentr
Slide 9: Production Output
Q3 HIGHLIGHTS – PRODUCTION OUTPUT FY14 to APR-14 JUL-14 SEP-14 CY14 SEP-14* Period JAN 14 QTR QTR QTR YTD INC. JULY Total tonnes For personal use only 12 MTHS 3 MTHS 3 MTHS 2 MTHS 8 MTHS 3 MTHS Ore to ROM from Pit kt 2,633 812 680 430 1,492 617 mined on track Ore to long term stockpiles kt 262 283
Slide 10: Improved Mining Productivity Maintained
Q3 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 1,159k is equivalent to 3,567kt. Productivity maintained – three mining pits operated with all now in primary ore K
Slide 11: 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 11
Slide 12: 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 12
Slide 13: 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 13
Slide 14: Ore Milled Recovery and Run Time
Q3 HIGHLIGHTS – ORE MILLED RECOVERY AND RUN TIME For personal use only * July included again replicating three month quarter. Mill throughput and reliability maintained, with planned maintenance shuts completed Mill throughput was 534kt ore milled for the quarter and 798kt for the three months
Slide 15: Revenue and Costs
Q3 HIGHLIGHTS – REVENUE AND COSTS Period FY14 to APR-14 JUL-14 SEP-14 CY14 SEP-14* US cents per lb JAN 14 QTR QTR QTR YTD INC. JULY For personal use only 12 MTHS 3 MTHS 3 MTHS 2 MTHS 8 MTHS 3 MTHS Total Mining Cost 165 178 156 145 161 146 Deferred Mining -14 50 -13 -1 12 -2 Pre-strip -33 -87 -10 -5
Slide 16: Improved Mining Costs Maintained
Q3 HIGHLIGHTS – IMPROVED MINING COSTS MAINTAINED For personal use only Mining Expense per BCM Moved ($) 25.00 21.34 20.00 18.07 17.05 15.75 15.00 12.99 12.77 12.28 10.00 5.00 ‐ Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Sep 2014 Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 CY14 Q2 CY14 Q3 CY14 Co
Slide 17: Lower Processing Costs Maintained
Q3 HIGHLIGHTS – LOWER PROCESSING COSTS MAINTAINED Continued low For personal use only processing unit costs achieved due to optimisation work and a focus on saving initiatives New suspended screening unit operating successfully and other maintenance improvements ongoing Re-grind capacity utili
Slide 18: Broader Exploration Programme Underway
BROADER EXPLORATION PROGRAMME UNDERWAY Progress made on Kanmantoo lease and For personal use only regional exploration Renewals and lease reports updated Exploration Area EL4401 Initial work program for the Wheal Ellen Kitticoola Prospect Cu-AU-Zn prospect submitted Kanmantoo Planning underway
Slide 19: Strong Hedge Book for Near Term Revenue Certainty
STRONG HEDGE BOOK FOR NEAR TERM REVENUE CERTAINTY Strong hedge book For personal use only A$/mt A$/lb provides certainty for A$4.54 cash flows and revenue during debt repayment periods A$4.08 Additional 1,487t of copper hedged at A$3.63 AUD7,642/mt (AUD3.47/lb) from Aug A$3.18 to Nov during firm
Slide 20: Guidance to December 2014 – Maintained
GUIDANCE TO DECEMBER 2014 – MAINTAINED Adjusted below for the new 11 month year; Hillgrove maintains its guidance levels, For personal use only based on current performance and planned operational improvements Guidance For CY14 Ore mined 2,850kt to 3,000kt Ore processed 2,900kt to 3,000kt Ore grade
Slide 21: Continuous Improvement Initiatives
CONTINUOUS IMPROVEMENT INITIATIVES New screen installation providing crushing efficiency and maintenance For personal use only improvements Controlled Potential Sulphidisation (CPS) for oxide treatment – benchmarking trip, independent review of design and plan underway, project execution plan co
Slide 22: Strategic Focus
STRATEGIC FOCUS The strategic focus is on further improvements in performance of the Kanmantoo For personal use only Mine, expansion of the Kanmantoo region Resource through exploration, realisation of value from the Indonesian assets and creation of value for shareholders Achieve CY14 budget targ
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
Q3 HIGHLIGHTS – SUMMARY Revenue for the two month quarter was AUD36.0M at an average realised price For personal use only for copper of AUD3.50/lb (USD3.29/lb) Record quarterly production with YTD production exceeding the upper end of guidance Production guidance revised for CY14 to 20,500t –
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