Slide 1: Q3 and Company Update
For personal use only Q3 AND COMPANY UPDATE GREG HALL IIIII CEO & MANAGING DIRECTOR RUSSELL MIDDLETON IIIII CHIEF FINANCIAL OFFICER 20 NOVEMBER 2013
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 Rim-of-Fire exploration in Indonesia Sumba gold project (80% owned) Kanmantoo Bird’s Head copper/gold project (80%
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 Mining Lease is within 500km2 Exploration Exploration Area EL4401 License, and relatively unexplored Exploration potential considered high The project enjoys commens
Slide 4: Indonesia Projects – Birds Head, West Papua and Sumba Island
INDONESIA PROJECTS – BIRDS HEAD, WEST PAPUA AND SUMBA ISLAND Rim-of-Fire exploration in Indonesia For personal use only Sumba gold project (80% owned) Bird’s Head copper/gold project (80% owned) Hillgrove now has 80% direct interest in both Bird’s Head (PT Akram) and Sumba (PT Fathi) project
Slide 5: Corporate Snapshot – October 2013
CORPORATE SNAPSHOT – 31 OCTOBER 2013 For personal use only 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 shareholde
Slide 6: 3Q and Company Highlights – Mining Services
3Q AND COMPANY HIGHLIGHTS – MINING SERVICES Complete change out of the mining services was finalised with the introduction For personal use only of a new fleet of mobile equipment and the recruitment of Hillgrove employees and supervisors Safety at Kanmantoo continues to improve with the 12 mont
Slide 7: 3Q and Company Highlights – Mining Operations and Production
3Q AND COMPANY HIGHLIGHTS – MINING OPERATIONS AND PRODUCTION Record production with 4,306 tonnes of copper in concentrate for the quarter, For personal use only achieving set targets following change out of mining service activities in August High grade ore in the main Kavanagh Pit at base of ol
Slide 8: 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 For personal use only 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 generally long term stockpiles Mined Waste kt 7,446 11,777 2,728 2,158 1,658 6,
Slide 9: Total Tonnes of Ore Mined
TOTAL TONNES OF ORE MINED For personal use only The mining rate was impacted by weather and the mining services changeover New mining fleet on site and operational by 7 August, ramping up to nominal mining capacity by mid-September Base of old Kanmantoo pit reached, and access to improved ore
Slide 10: Ore Milled and Feed Grade
ORE MILLED AND FEED GRADE For personal use only 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
Slide 11: Contained Copper Rates Increased
CONTAINED COPPER RATES INCREASED For personal use only Kanmantoo produced 4,306 tonnes of copper in concentrate, reaching target following the changeout of mining services Total copper production 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) For personal use only 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) For personal use only 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 the quarter was AUD32.8 million at an average realised price For personal use only for copper of AUD3.58/lb 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 wit
Slide 15: Processing Costs Reduced
PROCESSING COSTS REDUCED For personal use only Quarterly Processing Unit Costs Including Mobile Crushing ($/t Milled) 16.00 Continued reduction 14.00 in processing unit 12.00 costs due to higher production rates and 10.00 Costs ($/t) continuous feed 8.00 6.00 Further reduction is expected with 4
Slide 16: Strong Hedge Book
STRONG HEDGE BOOK For personal use only Hillgrove AUD Copper Position A$10,000 Strong hedge book provides certainty for cashflows and revenue A$9,000 in future periods Approximately 33,000 A$8,000 tonnes of copper swaps remain A$7,000 65-70% of forecast copper production A$6,000 hedged to Marc
Slide 17: Safety – Kanmantoo Copper Mine TRIFR
SAFETY – KANMANTOO COPPER MINE TRIFR For personal use only 17
Slide 18: Significant Increase in Regional Recruitment
SIGNIFICANT INCREASE IN REGIONAL RECRUITMENT Eighty eight new Hillgrove employees recruited since Hillgrove moved to For personal use only Owner/Operator, representing: 147% employee increase from Local Region (Callington / Kanmantoo) 141% employee increase from Adelaide Hills Region 26% emp
Slide 19: Life of Mine and Reserve
LIFE OF MINE AND RESERVE LOM plan to encompass Note: For personal use only 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 acces
Slide 20: 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 21: 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 21
Slide 22: Sensitivities and Guidance
SENSITIVITIES AND GUIDANCE SENSITIVITIES TO REVENUE For personal use only 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/US
Slide 23: Capital Raising and Debt Reduction
CAPITAL RAISING AND DEBT REDUCTION Capital Raise For personal use only 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
Slide 24: Summary
SUMMARY Revenue for the quarter was AUD32.8 For personal use only 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
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: 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 For personal use only 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