Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Shareholder Meeting (June 2014)
37 slides from Hillgrove Resources's shareholder meeting presentation, Jun 25, 2014
Slide 1: Annual General Meeting – Chairman's Address
For personal use only ANNUAL GENERAL MEETING CHAIRMANS ADDRESS IIIII DEAN BROWN, CHAIRMAN 10:00AM, 25 JUNE 2014 IIIII RADISSON BLU HOTEL, SYDNEY
Slide 2: Board of Directors
BOARD OF DIRECTORS For personal use only The Hon. Dean Brown, AO, Non-Executive Chairman of the Board and Chairman of Nomination Committee Former Premier and Minister of the South Australian Government and Member of the South Australian Parliament Director of Mission Australia, Scantech and Food
Slide 3: Executive Team
EXECUTIVE TEAM Greg Hall, Managing Director & Chief Executive Officer For personal use only Appointed Managing Director and CEO in February 2013 Greg trained as a mining engineer and has extensive experience across a number of mining sectors Mining Manager at Olympic Dam and nickel mines in WA
Slide 4: Current Kavanagh Pit at the Kanmantoo Copper Mine
CURRENT KAVANAGH PIT AT THE KANMANTOO COPPER MINE For personal use only 4
Slide 5: 2014 Resolutions
2014 RESOLUTIONS For personal use only Resolution 1 Adoption of the Remuneration Report in the 2014 Annual Report Resolution 2 Election of Maurice William Loomes as Director of the Company Resolution 3 Re‐election of John Edwin Gooding as Director of the Company Resolution 4 Approve issue of 3,500,0
Slide 6: Annual General Meeting – CEO Presentation
For personal use only ANNUAL GENERAL MEETING GREG HALL IIIII CHIEF EXECUTIVE OFFICER 25 JUNE 2014 PRESENATION
Slide 7: Kanmantoo Copper Mine and Exploration Area
KANMANTOO COPPER MINE AND EXPLORATION AREA For personal use only 100%-owned by Hillgrove 55km from Adelaide, South Australia Mining Lease is within 500km2 exploration Exploration Area EL4401 license, and relatively unexplored Kitticoola Organic growth potential considered high Prospect Pro
Slide 8: Exploration Assets: Indonesia
EXPLORATION ASSETS: INDONESIA For personal use only Hillgrove has an 80% direct interest in both Bird’s Head (PT Akram) and Sumba (PT Fathi), with both projects at ‘PMA’ status allowing foreign ownership of shares The Company has delineated prospective Tier One targets with porphyry copper and gol
Slide 9: Corporate Snapshot – As at April 2014
CORPORATE SNAPSHOT – AS AT 30 APRIL 2014 For personal use only ASX listed: HGO Shares on issue: 1,180.9 million Share price: $0.074 (19 June 2014) Market capitalisation: $87 million (19 June 2014) Cash and cash equivalents $14.1 million Debt $33.4 million Net Debt $19.3 million Tax l
Slide 10: Top Shareholders – April 2014
TOP SHAREHOLDERS – 30 APRIL 2014 For personal use only Top 8 Shareholders % of isc SHAREHOLDER DISTRIBUTION Perennial Value Management 12.5% Platinum Partners 8.4% Renaissance Smaller Companies 7.4% Colonial First State – 5.5% Growth Australian Equities Freepoint Metals & Concentrates 4.7% Aedos Adv
Slide 11: Hillgrove Share Price Performance
HILLGROVE SHARE PRICE PERFORMANCE For personal use only Hillgrove’s improved mining and production performance lifted share price performance late last year, with copper market sentiment impacting this year Note: Closing prices between 17 June 2013 and 16 June 2014 (rebased to 100) 11
Slide 12: Copper Market
For personal use only COPPER MARKET Kavanagh and Spitfire pits
Slide 13: Copper Market
COPPER MARKET For personal use only Global copper mine production surprised to the upside in 2H2013, leaving larger than expected global concentrate stocks coming into 2014 Although copper mine supply is expected to be in a small surplus over the next 2 - 3 years, the supply deficit gap will wid
Slide 14: Copper Future Supply – The +US$3/lb Support Level
COPPER FUTURE SUPPLY – THE +US$3/LB SUPPORT LEVEL For personal use only Top 25 copper projects IRR assuming US$3/lb Ranking of top copper projects Quebrada Blanca Top copper projects fall short of the 15% IRR benchmark Weighted average copper price of $7,010/t (US$3.18/lb) required to generate 15% I
Slide 15: Copper Price Forecast History
COPPER PRICE FORECAST HISTORY Broker long term real copper price forecast history (US$/t) For personal use only Spot: US$6,786/t Source: Broker reports; spot copper price based on LME cash copper price as of April 28, 2014: US$6,786/t (or US$3.08/lb) Brokers remain positive on copper industry fund
Slide 16: Hillgrove Strong Hedge Book
HILLGROVE STRONG HEDGE BOOK For personal use only Strong hedge book A$/mt A$/lb provides certainty for cash A$10,000 A$4.54 flows and revenue during the debt repayment period A$9,000 A$4.08 Approximately 10,200t of copper hedged in first half A$3.63 A$8,000 of the year (90% of payable copper) at
Slide 17: Overview of FY14 Results
For personal use only OVERVIEW OF FY14 RESULTS Crusher and Processing Plant
Slide 18: Highlights
HIGHLIGHTS For personal use only Transition year to full production with Replacement of primary jaw crusher in April 2013 Change out of contract mining operations to owner operator configuration in July 2013 Installation of Multi-stream analyser (MSA) in processing plant in January 2014 Fi
Slide 19: Highlights
HIGHLIGHTS For personal use only Revenue of $139.2 million and adjusted EBITDA at $37.3 million for full year Full year Net Profit After Tax of $1.5 million Sales of 74,051 tonnes of copper concentrate Record production levels achieved with 75,423t of concentrate containing 17,184t copper, 5
Slide 20: Safety and Community
SAFETY AND COMMUNITY For personal use only Safety results improved by 60% last year, and are being maintained Our Community Engagement Plan outlines our objectives, identifies our community, governs how we engage with stakeholders and provides mechanisms for feedback Key areas of ongoing discu
Slide 21: Timeline of Key Milestones
TIMELINE OF KEY MILESTONES For personal use only April 2013: October 2013: March 2014: July 2014: Complete new primary Nugent Pit Emily Star Final drainage layer crusher installation, pre-strip pre-strip and major lift of TSF increasing through put underway recommenced to be completed from 2.4Mtpa t
Slide 22: First Quarter on Plan
For personal use only FIRST QUARTER ON PLAN Nugent Pit – June 2014
Slide 23: Q1 Highlights – Mining Operations and Production
Q1 HIGHLIGHTS – MINING OPERATIONS AND PRODUCTION For personal use only 5,554 tonnes of copper in concentrate produced for the quarter, tracking above the guidance range for year 25,000mt 20,000mt 15,000mt 10,000mt 22,300mt to 24,600mt Copper 5,000mt 0mt Guidance Actual Production 6,000mt 4,000mt 2
Slide 24: Q1 Improved Mining Production Output
Q1 IMPROVED MINING PRODUCTION OUTPUT For personal use only Two new Liebherr excavators, multiple pits and other productivity improvements lifting mining rates to planned level up to ~600k bcm per month Note: The chart above includes total Bank Cubic Metres (BCM) mined, and total ore tonnes (kt) mi
Slide 25: Q1 Ore Milled and Costs
Q1 ORE MILLED AND COSTS For personal use only Mill and wet plant continued to perform well during the quarter Mill throughput above nameplate capacity, with 757kt of ore milled for the quarter Mined ore fed directly to mill with only minor additions of low grade due to high milling rate Reco
Slide 26: Q1 Highlights – Revenue and Costs
Q1 HIGHLIGHTS – REVENUE AND COSTS For personal use only Period FY 2013 FY 2014 APR-14 US cents per lb to JAN 13 to JAN 14 QTR Mining Costs 92 117 111 Processing Costs 97 72 47 Other Direct Cash Costs 23 22 16 Total Onsite Costs 212 211 174 Transport & Shipping 18 17 16 Treatment, Refining & Smelter
Slide 27: Kanmantoo Continuous Improvement Initiatives
KANMANTOO CONTINUOUS IMPROVEMENT INITIATIVES For personal use only Multi stream analyser installed to further optimise recoveries and costs Load and haul productivity improvements Larger blast hole diameters as well as reconfigured burden and spacing Multiple pit sources for ore supply Enh
Slide 28: Kanmantoo Mining Operations
KANMANTOO MINING OPERATIONS For personal use only Note: Rodda will include Emily Star; and Giant will include Giles, Lean and Valentine Above: Mining in Kavanagh Below: New Liebherr pre-stripping Nugent 28
Slide 29: Kavanagh Pit Progress
KAVANAGH PIT PROGRESS For personal use only 1 May 2014 2 June 2014 Photos courtesy of Roc-Drill Pty Ltd
Slide 30: Forward Guidance
For personal use only FORWARD GUIDANCE Tailings Storage Facilty
Slide 31: Guidance
GUIDANCE For personal use only Based on current performance and planned operational improvements, Hillgrove maintains the following guidance for financial year 2015 (to end January 2014) 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
Slide 32: Aggressive Repayment of Debt
AGGRESSIVE REPAYMENT OF DEBT For personal use only A$60m A$50m A$40m A$30m A$20m A$10m A$0m Apr‐12 Jan‐14 Apr‐14 Jul‐14 Oct‐14 Jan‐15 Apr‐15 Jul‐15 Gold Loan Project Finance Mezzanine Debt Strong project cash flow generation has led to the ability to aggressively repay debt Gold loan repayments
Slide 33: Strategic Focus
STRATEGIC FOCUS For personal use only The strategic focus is on further improvements in performance of the Kanmantoo Mine, expansion of the Kanmantoo region Resource through exploration, realisation of value from the Indonesian assets and creation of value for shareholders Achieve FY15 budget targ
Slide 34: Hillgrove Management Team
HILLGROVE MANAGEMENT TEAM For personal use only Sydney Kanmantoo Russell Middleton Steve McClare Shanthi Smith Lachlan Wallace Winston Velayuthen Glenn Norris Lisa Saw Peter Hedger Catherine Davis Erryn Munchenberg Uwe Ebert 34
Slide 35: For personal use only
For personal use only Greg Hall, CEO and Managing Director Suite 1709 Australia Square Level 17, 264 George Street Sydney NSW 2000 E: info@hillgroveresources.com.au T: 61 2 8247 9300 35
Slide 36: Competent Person Statements
COMPETENT PERSON STATEMENTS For personal use only Kanmantoo Global Mineral Resource Estimate at End February 2013 ABOUT HILLGROVE 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 37: Disclaimer – Important Notice
DISCLAIMER – IMPORTANT NOTICE For personal use only 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
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