Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Investor Presentation (March 2012)
45 slides from Hillgrove Resources's investor presentation, Mar 8, 2012
Slide 1: Australia's Newest Copper Producer
AUSTRALIA’S NEWEST COPPER PRODUCER DREW SIMONSEN IIIII MANAGING DIRECTOR INVESTOR UPDATE – 8 MARCH 2012
Slide 2: Disclaimer
DISCLAIMER EXPECTATIONS & FORWARD LOOKING STATEMENTS This presentation contains information that is based on projected and/or estimated figures that reflect expectations, assumptions and outcomes that may or may not eventuate. Any forward-looking statements are subject to a range of risk factors, wh
Slide 3: Australian Mining Company
AUSTRALIAN MINING COMPANY AUSTRALIAN CASH FLOW WITH RIM OF FIRE UPSIDE CASH FLOW, WITH EXPLORATION UPSIDE: Bird’s Head project Cash flow - Kanmantoo Copper Mine project (100% owned), in South Sumba project Australia Rim-of-Fire exploration upside in Indonesia Sumba gold project (80% owned) Kan
Slide 4: Australian Mining Company with Australian-Indonesian Growth Pipeline
AUSTRALIAN MINING COMPANY WITH AUSTRALIAN-INDONESIAN GROWTH PIPELINE STRATEGIC OBJECTIVES Kanmantoo – copper producer: Kanmantoo ramp-up – on track Extend Kanmantoo mine life – on track Expand plant – subject to increased resources/reserves Identify additional near mine resources – targets
Slide 5: Kanmantoo Copper Mine
KANMANTOO COPPER MINE
Slide 6: Kanmantoo Copper Mine Close to Adelaide
KANMANTOO COPPER MINES CLOSE TO ADELAIDE ALL MAJOR SERVICES CLOSE BY 100%-owned by Hillgrove Just 55km from Adelaide, South Australia Exploration Area EL4401 Mining Lease is within 500km2 Exploration License, both relatively unexplored Exploration potential considered high Kanmantoo Copper M
Slide 7: Historical Mineral Province
KANMANTOO COPPER MINE HISTORICAL MINERAL PROVINCE Mining in the area since the 1850’s Small, high grade operations – Bremer Mine 3km away produced 35k tonnes at circa 8-10% copper Operations in area closed in 1920’s Kanmantoo open pit was developed and operated by North Broken Hill, South Br
Slide 8: New Kanmantoo Mine in Production
KANMANTOO COPPER MINE NEW KANMANTOO MINE IN PRODUCTION Second-hand plant (Lennard Shelf - Teck & Xstrata) – 3.0Mtpa capacity 2.4 – 2.7 Mtpa commissioned now Expansion to 3.0 - 3.5 Mtpa possible Standard flotation process: historical metallurgical data coarse grind (P80 - 212μm) low pow
Slide 9: Status and Key Targets
KANMANTOO COPPER MINE STATUS AND KEY TARGETS Commissioned December 2011 Ramp-up Now, to April/May Approximately 8,000t concentrate produced to date First revenue Received January 2012 First Shipment Now Mine life of 6.5/10 years based on current reserves/resources Mine life extension t
Slide 10: Crushing Process Flowsheet
KANMANTOO COPPER MINE CRUSHING PROCESS FLOWSHEET ROM Feed Grizzly & ROM Bin Rock Stockpile Vibratory Feeder Kobe Single Toggle 48/36 Jaw Crusher Set to 125mm Screens Metso HP 500 Cone Crusher Set to 25mm Coarse Ore Stockpile 10
Slide 11: Crushing Circuit
KANMANTOO COPPER MINE CRUSHING CIRCUIT CLOCKWISE
Slide 12: Processing Plant Flowsheet
KANMANTOO COPPER MINE PROCESSING PLANT FLOWSHEET Primary Cyclones Primary Cyclones Tails Thickener Tails Thickener Ball Mill SAG Mill Concentrate Rougher 1 Rougher 1 Scavengers 1-2 Scavengers 1-2 Concentrate Thickener Thickener Rougher/Scavenger 4-7 Rougher/Scavenger 4-7 Rougher/Scavenger 8-12 Rough
Slide 13: Processing Plant
KANMANTOO COPPER MINE PROCESSING PLANT
Slide 14: Thickener Tanks and TSF
KANMANTOO COPPER MINE THICKENER TANKS AND TSF
Slide 15: Project Ramp-Up Parameters
KANMANTOO COPPER MINE PROJECT RAMP-UP PARAMETERS Ramp up to full production planned over 4-6 months April-May 2012 Production during ramp up 100% covered via Put Options @ AUD7,500/t (expire Aug –Feb 13) Bank Completion Test June 2012 50-55% production hedged at AUD8,320/t for 40 months from
Slide 16: Processing Performance – To February 2012
KANMANTOO COPPER MINE PROCESSING PERFORMANCE – TO FEBRUARY 2012 November 11 December 11 January 12 February 12 Total Tonnes Mined Tonnes (kT) 1,053 991 1,112 1,221 Ore to long term stockpiles Tonnes (kT) 160 147 75 N/A Ore to ROM Tonnes (kT) 49 95 144 149 ROM grade Copper (%) 0.68 0.58 0.72 0.83 Ore
Slide 17: Shipping
KANMANTOO COPPER MINE SHIPPING 17
Slide 18: Resources & Exploration
KANMANTOO RESOURCES & EXPLORATION
Slide 19: Resources & Reserves
KANMANTOO COPPER MINE RESOURCES & RESERVES CURRENT RESOURCES CURRENT RESERVES Inferred Indicated Meas ured Mt Mt 20.0 Probable Proved 40.0 18.0 35.0 31.8 32.2 16.0 14.8 30.0 28.0 14.0 25.0 12.0 11.1 20.0 18.4 10.0 15.0 8.0 10.0 8.5 6.0 5.0 4.0 0.0 2.0 Dec-03 Dec-04 Oct-06 Dec-07 Nov-08 0.0 upgrade u
Slide 20: Site Plan and Pit Designs
KANMANTOO COPPER MINE SITE PLAN AND PIT DESIGNS KANMANTOO COPPER MINE EL4401 TAILINGS STORAGE FACILITY MINING AREA WASTE DUMP AND ML6345 STOCKPILES ROM CRUSHER PROCESSING PLANT AND EL4401 ADMINISTRATION ML6345 EML6340
Slide 21: Exploration Strategy 2011
KANMANTOO COPPER MINE EXPLORATION STRATEGY 2011 IP Chargeability Image IP Chargeability Image PRIORITY 1: EXTEND KANMANTOO MINE LIFE NE Zone/Slot Extension Objective is conversion of inferred resources to indicated resources by closer spaced drilling Immediately adjacent to current optimised pit
Slide 22: Resource Extension Drilling
KANMANTOO COPPER MINE RESOURCE EXTENSION DRILLING Emily Star: KTRC861 - 36m @ 0.81% Cu from 75m (29m%) incl. 21m @ 1.22% Cu from 79m (26m%) Highly significant result from previously untested area Further wide-spaced drilling is planned, to explore potential to expand Emily Star pit south, an
Slide 23: Summary
KANMANTOO COPPER MINE SUMMARY Production underway at 2.4-2.7 Mtpa rate Near-term cash flows supported by hedging Near-mine drilling indicates Life of Mine extension probable Capacity expansion to 3.0 -3.5 Mtpa looks achievable 23
Slide 24: Indonesia: Rim of Fire
INDONESIA: RIM OF FIRE
Slide 25: Exploration Assets: Indonesia
EXPLORATION ASSETS: INDONESIA SPECIFIC ASSET SELECTION BY HILLGROVE Focussed approach: only targeting large porphyry copper-gold deposits and associated epithermal gold deposits Partnership established first with professional in-country partners New laws allow for direct foreign ownership, and
Slide 26: Tenements – Security of Tenure
EXPLORATION ASSETS: INDONESIA TENEMENTS – SECURITY OF TENURE JAKARTA Hillgrove is an 100% shareholder in PT Hillgrove Indonesia Pte. Ltd PT Hillgrove Indonesia provides management (not technical) services to our interests in Indonesia SUMBA Hillgrove is an 80% shareholder in PT Fathi Resources
Slide 27: PT Hillgrove Indonesia Pte Ltd – Management Services Company
EXPLORATION ASSETS: INDONESIA PT HILLGROVE INDONESIA PTE LTD – MANAGEMENT SERVICES COMPANY HILLGROVE RESOURCES LIMITED (ASX:HGO) 100% 100% HILLGROVE HILLGROVE INDONESIA EXPLORATION PTY LIMITED PTY LIMITED (Australia) (Australia) 99% 1% PT HILLGROVE Jakarta based INDONESIA management PTE LIMITED serv
Slide 28: Sumba – PT Fathi Resources Corporate Structure
EXPLORATION ASSETS: INDONESIA SUMBA – PT FATHI RESOURCES CORPORATE STRUCTURE HILLGROVE RESOURCES LIMITED (ASX:HGO) 100% HILLGROVE INDONESIA PTY LTD (Australia) 80% 80% HILLGROVE SINGAPORE HILLGROVE SINGAPORE HOLDINGS PTE LIMITED NO. 2 PTE LIMITED (Singapore) (Singapore) 99% 1% PT FATHI RESOURCES Sum
Slide 29: Bird's Head – Security of Tenure
EXPLORATION ASSETS: INDONESIA BIRD’S HEAD – SECURITY OF TENURE Hillgrove has an 80% beneficial interest in PT Akram Resources Pte. Ltd through JV Agreement (JVA) JVA has been executed Before Hillgrove can own shares in PT Akram, it must be converted to “PMA” status, allowing direct foreign owner
Slide 30: Indonesia Bird's Head Project Regional Setting
INDONESIA BIRD’S HEAD PROJECT REGIONAL SETTING WEST PAPUA P.N.G. Bird’s Head covers part of the interpreted westward continuation 30 of the New Guinea Magmatic Arc
Slide 31: Bird's Head in West Papua
INDONESIA BIRD’S HEAD PROJECT BIRD’S HEAD IN WEST PAPUA West Delta IUP rights cover almost 1,000km2, granted to March 2017 Hillgrove responsible for sole funding and management of exploration and development activities up to Decision to Mine Ex-Normandy project: HGO acquired drilling, geophysi
Slide 32: Project Attributes
INDONESIA BIRD’S HEAD PROJECT PROJECT ATTRIBUTES Close to the coast – significant advantage for future development Known porphyry-related copper mineralisation Significant previous exploration database ex Normandy West Delta 32
Slide 33: Magnetic Signatures and Copper Geochemistry Point to Our Targets
INDONESIA BIRD’S HEAD PROJECT MAGNETIC SIGNATURES AND COPPER GEOCHEMISTRY POINT TO OUR TARGETS West Delta Arc –normal transfer structure Rock Chip Cu ppm Analytical Signal Magnetics Stream Sediment - Cu 1st VD TMI Magnetics 33
Slide 34: West Delta Prospect
INDONESIA BIRD’S HEAD PROJECT WEST DELTA PROSPECT Geological interpretation is of: A young (Tertiary) intrusive complex Overlapping hydrothermal alteration systems in a 6.5 x 1.5 km corridor Porphyry does not outcrop Copper mineralisation in quartz vein/breccia float Trenching highlights:
Slide 35: Drill Plan
BIRD’S HEAD PROJECT WEST DELTA DRILL PLAN Rig being unloaded at site now Drilling to commence in next week First pad prepared Three 500m+ holes from Site A, and reasess 5,000m program planned 35 Bald Hill, Southern Porphyry prospect Project Manager at Green Cliffs breccia outcrop
Slide 36: Indonesia Sumba Island
INDONESIA SUMBA ISLAND HILLGROVE 80% Tanah Daro Masu Lewitu IUP rights cover almost 1,000km2, granted to March 2017 Hillgrove responsible for exploration and development activities and sole funding up to Decision to Mine under JV Agreement Ex BHP project; HGO acquired key data package Target
Slide 37: Masu
INDONESIA SUMBA ISLAND MASU Initial mapping, soil sampling, trenching and scout drilling completed to date 17 high grade gold anomalies identified Karipi Aeromagnetic/radiometric survey just completed Trenching at Karipi has intersected significant gold mineralisation Lewitu prospect – pot
Slide 38: Karipi Prospect
INDONESIA SUMBA ISLAND KARIPI PROSPECT Thin sediment masks prospective lithology but gold observed in exposed basement rock over large areas Highly prospective gold targets Targets! Magnetic signatures indicate strike Karipi continuation of prospective structures beneath sediments Soil gold Sh
Slide 39: Karipi Prospect
INDONESIA SUMBA ISLAND KARIPI PROSPECT Sedimentary Karipi-Kanjilu trenching Cover continues to indicate broad gold anomaly over 1120 g/t Au 800m 20m @ 1.58g/t Au 4m @ 10.57g/t Au (refer recent quarterly) Rock Chips reporting bonanza grades to 1,270g/t Au, 450g/t Au Drilling has re-starte
Slide 40: Masu Exploration Karipi Next Steps
INDONESIA SUMBA ISLAND MASU EXPLORATION KARIPI NEXT STEPS Aerial view of Karipi, looking SE Much groundwork on community liaison in last 6 months Additional staff hired Landowner and community agreements signed Very significant anomalous surface gold mineralisation Drilling has re-commence
Slide 41: Corporate Overview
HILLGROVE CORPORATE OVERVIEW
Slide 42: Corporate Snapshot
CORPORATE SNAPSHOT DETAILS AND SHAREHOLDER DISTRIBUTION ASX listed: HGO Shares on issue: 793.7 million SHAREHOLDER DISTRIBUTION Share price: AUD 0.25 (5 Mar 2012) Institutions 38.0% Market capitalisation: AUD 198.4 million (5 Mar 2012) Cash and cash equivalents: AUD 22.5 million (31 Jan 20
Slide 43: Corporate Snapshot: Executive Alignment Through Conditions on Equity Incentives
CORPORATE SNAPSHOT EXECUTIVE ALIGNMENT THROUGH CONDITIONS ON EQUITY INCENTIVES Criteria 2010 2011 Type Performance Rights (ZEPO) Performance Rights (ZEPO) Number 4,720,000 4,595,000 Fully diluted ownership by management ~0.6% ~ 1.1% Service Condition 3 years from award 3 years from award TSR ‐ Peer
Slide 44: Compelling Investment Opportunity
HILLGROVE RESOURCES LIMITED COMPELLING INVESTMENT OPPORTUNITY Kanmantoo processing plant production ramp-up well underway Robust economics supported by hedging Producing asset Now High optionality through: Kanmantoo mine life extension (target 10 year reserve life) Kanmantoo capacity exp
Slide 45: Disclaimer: Competent Persons
DISCLAIMER COMPETENT PERSONS The information in this report that relates to Exploration Results is based on information compiled by Mr Jim Kerr, who is a Member of The Australasian Institute of Geoscientists. Mr Kerr is General Manager – Exploration for Hillgrove Resources and has sufficient relevan
Hillgrove Resources — Investor Presentation (March 2012) on 6ix