Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Q4 FY2014 Earnings Presentation
26 slides from Hillgrove Resources's earnings presentation, Feb 25, 2014
Slide 1: Q4 and Company Update
For personal use only Q4 AND COMPANY UPDATE GREG HALL IIIII CEO & MANAGING DIRECTOR RUSSELL MIDDLETON IIIII CHIEF FINANCIAL OFFICER 25 FEBRUARY 2014
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 Advanced greenfield exploration in Indonesia Sumba gold project (80% owned) Kanmantoo Bird’s Head copper/gold proj
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 Exploration Mining Lease is within 500km2 Exploration Area EL4401 License, and relatively unexplored Organic growth potential considered high Kanmantoo Project enjoy
Slide 4: Indonesia Projects – Birds Head, West Papua and Sumba Island
INDONESIA PROJECTS – BIRDS HEAD, WEST PAPUA AND SUMBA ISLAND Advanced greenfield exploration in Indonesia For personal use only Sumba gold project (80% owned) Bird’s Head copper/gold project (80% owned) Hillgrove has an 80% direct interest in both Bird’s Head (PT Akram) and Sumba (PT Fathi)
Slide 5: Corporate Snapshot – January 2014
CORPORATE SNAPSHOT – 31 JANUARY 2014 For personal use only ASX listed: HGO SHAREHOLDER DISTRIBUTION Shares on issue: 1,179.9 million Share price: AUD0.09 Market capitalisation: AUD106.2 million Retail Institutions Cash and cash equivalents: 52.0% 48.0% AUD16.5 million Debt AUD40.8 millio
Slide 6: Corporate Snapshot – January 2014 (Top Shareholders)
CORPORATE SNAPSHOT – 31 JANUARY 2014 For personal use only Top Shareholders % of isc Perennial Value Management 11.8% Renaissance Smaller Companies 7.4% Colonial First State - Growth Australian Equities 5.5% Freepoint Metals & Concentrates 4.7% Aedos Advisers 4.3% Dimensional Fund Advisors 3.9% Aria
Slide 7: 4Q Highlights – Mining Operations and Production
4Q HIGHLIGHTS – MINING OPERATIONS AND PRODUCTION For personal use only Record production with 5,838 tonnes of copper in concentrate for the quarter, within guidance range for year High grade ore in the main Kavanagh Pit at base of old Kanmantoo mine pit now being augmented with first primary ore
Slide 8: 4Q Highlights – Mining Operations and Production
4Q HIGHLIGHTS – MINING OPERATIONS AND PRODUCTION Continued ramp up of mining capacity with one new Liebherr 9350 300 tonne For personal use only excavator commissioned and a second arriving, with full crew training completed Safety at Kanmantoo continues to improve with the 12 month TRIFR reduci
Slide 9: 4Q FY14 Production Output
4Q FY14 PRODUCTION OUTPUT Apr-13 Jul-13 Oct-13 Jan-14 FY 2014 Period FY 2012 FY 2013 For personal use only QTR QTR QTR QTR Ore to ROM from Pit kt 495 2,221 689 555 656 733 2,633 Ore to/(from) kt 1,267 849 (137) (84) 3 148 (70) long term stockpiles Mined Waste kt 7,446 11,777 2,728 2,158 1,658 3,483
Slide 10: Improved Mining Production Output
IMPROVED MINING PRODUCTION OUTPUT For personal use only New Liebherr excavators lifting mining rates to planned level – up to 600k bcm per month Kavanagh and Nugent pits being mined with Emily Star to commence in March 10
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 11
Slide 12: Ore Milled and Feed Grade
ORE MILLED AND FEED GRADE For personal use only Mill and wet plant continued to perform well during the quarter Mill throughput was a record, with 760kt of ore milled for the quarter (at 3Mtpa rates) Mined ore fed directly to mill with only minor additions of low grade due to high milling rate
Slide 13: Contained Copper Rates Increased
CONTAINED COPPER RATES INCREASED For personal use only Kanmantoo produced 5,838t of copper in concentrate, reaching target following the changeout of mining services Total copper production for FY14 was 17,184t Cu – in line with guidance 13
Slide 14: Process Plant Performance
PROCESS PLANT PERFORMANCE For personal use only Multi stream analyser will further optimise recoveries and cost Mill run time steady – only impacted by planned outages 14
Slide 15: 4Q and Company Highlights – Revenue and Costs
4Q AND COMPANY HIGHLIGHTS – REVENUE AND COSTS Revenue for the quarter was AUD46.8M (Q3 AUD32.8M) at an average realised For personal use only price for copper of AUD3.59/lb (USD3.33/lb) C1 unit costs for the quarter were USD2.00/lb Full year C1 costs were USD2.39/lb Period Apr-13 Jul-13 Oct-13
Slide 16: Lower Processing Costs Maintained
LOWER PROCESSING COSTS MAINTAINED For personal use only Continued low processing unit costs While $/t milled were slightly up, processing costs/lb were substantially reduced from increased grade Ongoing maintenance optimisation work to further improve reliability and reduce costs 16
Slide 17: Strong Hedge Book
STRONG HEDGE BOOK For personal use only A$/mt A$/lb A$10,000 A$4.54 Strong hedge book A$9,000 A$4.08 provides certainty for cash flows and A$8,000 A$3.63 revenue during the debt repayment period A$7,000 A$3.18 Average hedge price of A$7,900/t or $3.58/lb to March 2016 A$6,000 A$2.72 Aug‐10 Nov‐1
Slide 18: Safety and Community
SAFETY AND COMMUNITY For personal use only Safety remained at improved low level for Quarter, with a 40% improvement over the year Hillgrove continues to work with the State and Federal Governments and local community on its application for a further two year life of mine extension 18
Slide 19: Significant Increase in Regional Recruitment
SIGNIFICANT INCREASE IN REGIONAL RECRUITMENT Hillgrove seeks to support the community and reduce travel times and risk by For personal use only concentrating recruitment on employees who live within the region wherever possible 20% employees from Local Region (Callington/Kanmantoo) 53% employe
Slide 20: Sensitivities and Guidance
SENSITIVITIES AND GUIDANCE Based on current performance and planned operational improvements, Hillgrove provides For personal use only the following guidance for financial year 2015: 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% Co
Slide 21: Debt Reduction
DEBT REDUCTION Hillgrove again made a significant reduction to its debt balance during the quarter For personal use only Total debt reduced from AUD44.5M to AUD40.8M at 31 January 2014 A Gold Loan repayment of AUD1.2M (852oz) was made in addition to the repayment of AUD2.5M Senior Debt princip
Slide 22: Continuous Improvement Initiatives
CONTINUOUS IMPROVEMENT INITIATIVES For personal use only Multi stream analyser to further optimise recoveries and costs New Liebherr excavators to enhance truck productivity by approximately 40% Multiple pit sources for ore supply Revised drill and blast practices and reconfigured bench arra
Slide 23: Summary
SUMMARY For personal use only Revenue for the quarter was AUD46.8M at an average realised price for copper of AUD3.59/lb (USD3.33/lb) Increased production guidance for FY15 of 22,300t to 24,600t Cu in concentrate Strong positive operating cash generation in FY15, with copper price certainty as
Slide 24: 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 24
Slide 25: 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) Measured 2.63 0.88 0.10 1.95 company listed on the Australian S
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
Hillgrove Resources — Q4 FY2014 Earnings Presentation on 6ix