Hillgrove Resources Limited · ASX:HGO

Hillgrove Resources — Investor Presentation (February 2007)

36 slides from Hillgrove Resources's investor presentation, Feb 19, 2007

  1. Slide 1: Building a Medium Sized Resources Group

    BUILDING A MEDIUM SIZED RESOURCES GROUP 19 February 2007

  2. Slide 2: Hillgrove Structure

    HILLGROVE Structure HILLGROVE RESOURCES ASX:HGO 29% 31% S.A. DEVELOPMENT EASTERN STAR GAS INTERMET RESOURCES & EXPLORATION ASX:ESG ASX:ITT 100%/ 90% KANMANTOO MINE 65% GUNNEDAH GAWLER COPPER/GOLD/GARNET GAS PROJECT IOCG EXPLORATION 100% WHEAL ELLEN 100% WILGA PARK GAWLER LEAD/ZINC POWER STATION URAN

  3. Slide 3: Hillgrove in South Australia

    HILLGROVE In South Australia

  4. Slide 4: Why South Australia?

    KANMANTOO Why South Australia? ƒ One of the most prospective terrains in the world ƒ Ideal for application of latest exploration techniques ƒ Neglected historically ƒ Gawler is vastly under explored → major mines ƒ New greenstone domains akin to the Eastern Goldfields of WA ƒ Supportive State Govern

  5. Slide 5: Project Location

    KANMANTOO Project Location Bridgewater \ ee ee ey Nalinaroione 7 . 4 Kanmantoo Mine ---- = aa en a — eas EL3277 10 0 10 20] Kilometers Scale: 1:500,000

  6. Slide 6: Kanmantoo Copper Gold Mine 2005

    KANMANTOO Kanmantoo Copper Gold Mine 2005

  7. Slide 7: Potential Open Pit Operation

    KANMANTOO Potential Open Pit Operation

  8. Slide 8: Updated Resource

    KANMANTOO Updated Resource Kanmantoo Deposit Resource Estimate – October 2006 (0.25% Cutoff) INDICATED INFERRED TOTAL Au Au Au Cu Type Tonnes Cu Cut Tonnes Cu Cut Tonnes Cu Cut Metal Au Cut T % g/t T % g/t T % g/t Tonnes Ounces Oxide 722,995 0.82 0.23 146,510 0.70 0.23 869,505 0.80 0.23 6,972 6,353

  9. Slide 9: Updated Resource by Area

    KANMANTOO Updated Resource by Area Zone Tonnes Cu Au Cut Cu Metal Au Cut T % g/t Tonnes Ounces Main 9,421,335 1.05 0.10 98,484 30,941 South East 3,890,311 0.88 0.37 34,277 46,391 North East 1,242,539 1.14 0.28 14,139 11,329 North West 1,209,302 0.73 0.11 8,808 4,235 Eastern 977,878 1.25 0.31 12,223

  10. Slide 10: Pre-Feasibility Study Highlights

    KANMANTOO Pre-Feasibility Study Highlights Mineral resources: - Copper/Gold: 28MT at 0.94% Copper and 0.20g/t Gold Contained metal: - 262,600T Copper and 177,200oz Gold Initial planning inventory: - 12,727,554MT optimized at USD$1.80 per lb copper price Base case assumptions: - Copper price US$2.65

  11. Slide 11: Key Pre-Feasibility Study Consultants

    KANMANTOO Key Pre-Feasibility Study Consultants

  12. Slide 12: Potential Open Pit Development

    KANMANTOO Potential Open Pit Development

  13. Slide 13: Process Flow

    HILLGROVE Process Flow HILLGROVE RESOURCES LIMITED POM RY KANMANTOO COPPER PROJECT CYCLONES PRIMARY TREATMENT PLANT “ vi aY PROCESS FLOWSHEET | « TRASH SCREEN FLASH ‘ = ROUGHER #1 ROTATION i FLOTATION ROUGHER #2 FLOTATION CONDITIONING va - [aera bal FLOTATION SCAVENGER #2 FLOTATION a Ez REGRIND ———

  14. Slide 14: Financials

    KANMANTOO Financials Cu Fx Discount NPV IRR NPAT (US$/lb) (A$/US$) % $’m % $’m Base Case 2.65 →1.63 0.70 8.5 75 32 141 Case 1 2.50 0.70 8.5 134 42 239 Case 2 3.00 0.70 8.5 216 60 358 ƒ Breakeven cash cost US$1.20 per lb including gold and silver revenue ƒ $5,137 capital cost per annual tonne of copp

  15. Slide 15: Key DFS Consultants

    KANMANTOO Key DFS Consultants

  16. Slide 16: Conceptual Flow Chart

    KANMANTOO Conceptual Flow Chart 2006 2007 2008 2009 Pre-feasibility Metallurgy Permitting Drilling Definitive Feasibility Study Construction & Development Mining

  17. Slide 17: Near-mine Exploration

    KANMANTOO Near-mine Exploration ƒ Exploration and resource definition drilling is ongoing and will be particularly concentrated during the Definitive Feasibility Study (DFS) which commenced in December 2006 ƒ Recent drilling intersected high-grade zones of copper mineralisation and highlighted new z

  18. Slide 18: Mine Corridor

    KANMANTOO Mine Corridor IP with Drilling and Ore Blocks

  19. Slide 19: Regional Magnetics

    KANMANTOO Regional Magnetics ƒ Regional exploration has recommenced, reconnaissance of all new magnetic targets underway ƒ 12 major magnetic targets outside Mine Corridor

  20. Slide 20: Wheal Ellen Area – Magnetics

    KANMANTOO Wheal Ellen Area – Magnetics ƒ Angus Deposit on same stratigraphic contact about 10km to the south and is a discrete magnetic high ƒ Series of magnetic targets have been identified along these targets ƒ These targets are largely unexplored with a number of targets with historic workings ƒ

  21. Slide 21: Junior Australian Emerging Copper Producers

    KANMANTOO Junior Australian Emerging Copper Producers Company Universal Copper Co Ex Co Discovery Matrix Hillgrove Resources Nickel Metals Resources Code URL CUO EXS DNL MRX HGO Mkt Cap @ 23 Jan 07 A$m 59.2 170.7 51.2 20.4 66.2 10.3 ** Cloncurry & White & Key Project Roseby Lady Annie White Dam Maun

  22. Slide 22: Intermet Resources Investment Summary

    INTERMET RESOURCES Investment Summary ƒ Issued Capital 40m shares and 31m @ 20c (10m expiry 30/11/07, 21m expiry 24/5/10) ƒ Cash 31 December 2006 of $3 million ƒ Major shareholders Hillgrove Resources 31% and Sempra Metals & Concentrates 8% ƒ Specialist Gawler Craton with over 6,000km² under title ƒ

  23. Slide 23: ITT Project Matrix

    INTERMET RESOURCES ITT Project Matrix Project Tenement No. Participants JV Commitment ($) Exploration Model Lake Gilles EL3466 ITT 100% • IOCG • Base metals related to Hiltaba Suite magmatic event • Orogenic gold EL3467 ITT and Hindmarsh $600,00 over 4 years to get 80% interest in • Unconformity-rel

  24. Slide 24: Lake Gilles Gravity Targets

    INTERMET RESOURCES Lake Gilles Gravity Targets

  25. Slide 25: Major Position in Eastern Australia

    EASTERN STAR GAS LTD Major Position in Eastern Australia

  26. Slide 26: Purchase of Hillgrove Energy Pty Ltd

    EASTERN STAR GAS LTD Purchase of Hillgrove Energy Pty Ltd ƒ Acquisition – Purchased Hillgrove Energy from Hillgrove Resources – 32.5% of PEL 238 coal seam gas (65%) – $1.5 million cash ƒ Acquisition Cost – 93 million ESG fully paid shares – 47 million Converting Notes (5 year; 1:1; no interest) – 25

  27. Slide 27: Post-Hillgrove Energy Purchase Structure

    EASTERN STAR GAS LTD Post-Hillgrove Energy Purchase Structure ƒ Shares on Issue – 457 million shares – 59 million shares in Converting Notes – 25 million - 3 year; 15 cent Eastern Star options ƒ Market Capitalisation – $156 million ƒ Finances – Cash: $3 million

  28. Slide 28: Resource Parameters

    EASTERN STAR GAS LTD Resource Parameters ƒ PEL238 covers 2.2 million acres ƒ Largest onshore gas resource in Australia. 17TCF P10 gas potential in Maules Creek coals alone (35TCF including Black Jack) ƒ 8.7TCF of gas resources (Netherland and Sewell 2000). Equivalent to more than 20 years of NSW con

  29. Slide 29: PEL 238: Development Strategy

    EASTERN STAR GAS LTD PEL 238: Development Strategy January, 2005 July, 2005 March, 2006 December, 2006 December, 2007 CSG: Drill/Frac Confined Drill Unconfined Production Pilot Confined Production Pilot Production Pilots Reserves Frac Reserves Certification Certification Continue Decide Expansion Co

  30. Slide 30: Eastern Star Gas Summary

    EASTERN STAR GAS LTD Summary ƒ HGO holds a 28.1% fully diluted strategic stake in ESG ƒ ESG poised to be the key player in NSW gas production ƒ Context of lowered green house gas emissions from gas generated electricity sets scene for use in electricity generation ƒ Improving gas prices with demise

  31. Slide 31: Key People

    HILLGROVE Key People Directors ƒ Dean Brown, Chairman – Former Premier of South Australia ƒ David Archer, Managing Director – Founded Savage Resources and PowerTel Ltd ƒ John Quirke, Non-executive Director – Former Senator, SA Member of Parliament ƒ Ron Belz, Non-executive Director – Certified pract

  32. Slide 32: Capital Structure

    HILLGROVE Capital Structure Ordinary Shares HGO 242.1 million Options – 30 cents 2009 Unlisted 12.5 million Options – other expiry - ESOP Unlisted 7.5 million Options – other expiry - Sempra Unlisted 18.0 million Market Cap (@ 25 cents per share) $60.5 million Cash (incl. options $7.2m + placement)

  33. Slide 33: Shareholders

    SHAREHOLDERS Top 35% ƒ D & V Archer 8.2% Chairman and Managing Director ƒ Sempra Metals 7.0% Fortune 500, American energy & Concentrates and metals trading group ƒ SegaInterSettle 7.5% Swiss Nominee ƒ Anglo Pacific 3.5% London based investment fund ƒ Colonial Global 3.5% Large Australian pensions in

  34. Slide 34: Value Proposition

    HILLGROVE Value Proposition $ Kanmantoo Copper Gold Mine (NPV range) 75 - 215 million Eastern Star Gas shares/notes/options 20 - 60 million InterMet (12.35M shares, 9.0M options) @ 29cps 4.9 million Kanmantoo Exploration 5.0 million Investments 1.0 million

  35. Slide 35: Upside

    KANMANTOO Upside Cost per lb ƒ Resource increase by 40% to target 40MT, throughput 2.5MT/pa NPV@8.5% $102M Improves 6c ƒ Increase head grade > 1.1% NPV@8.5% $122M Improves 11c ƒ Concurrent/ subsequent underground mining $? ƒ Revenues from garnet by- product $8-20M ƒ Treat Wheal Ellen lead/ zinc, sat

  36. Slide 36: Disclaimer

    DISCLAIMER This presentation may contain forward looking statements that are subject to risk factors associated with copper, gold and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in un

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