Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Q2 CY14 Earnings Presentation
21 slides from Hillgrove Resources's earnings presentation, Aug 25, 2014
Slide 1: Q2 and Company Update
For personal use only Q2 AND COMPANY UPDATE GREG HALL IIIII CEO & MANAGING DIRECTOR RUSSELL MIDDLETON IIIII CHIEF FINANCIAL OFFICER STEVE MCCLARE IIIII GENERAL MANAGER KANMANTOO 25 AUGUST 2014
Slide 2: Corporate Snapshot – as at 31 July 2014
CORPORATE SNAPSHOT – AS AT 31 JULY 2014 For personal use only ASX listed: HGO Shares on issue: 1,181.7 million Share price: $0.077 (20/08/14) Market capitalisation: $91.0 million (20/08/14) Cash and cash equivalents $12.1 million Debt $25.2 million Net Debt $13.1 million Tax losses c
Slide 3: Top Shareholders – 31 July 2014
TOP SHAREHOLDERS – 31 JULY 2014 For personal use only Top Shareholders % of isc SHAREHOLDER DISTRIBUTION Perennial Value Management 12.5% Platinum Partners 8.4% Overseas Renaissance Smaller Companies 7.4% 18.8% Colonial First State - Growth Aust. Equities 5.5% Freepoint Metals & Concentrates 4.7% In
Slide 4: Q2 Highlights - Safety and Community
Q2 HIGHLIGHTS - SAFETY AND COMMUNITY For personal use only Total Recordable Injury FR lowest since operations commenced at Kanmantoo Community meetings continued discussing Kanmantoo region dust impacts, mine life extension approval and local vehicle traffic issues Now greater than 80% of Hill
Slide 5: Q2 Highlights – Copper Production
Q2 HIGHLIGHTS – COPPER PRODUCTION For personal use only A record 5,884 tonnes of copper in concentrate produced for the quarter, tracking above the 20,500mt to guidance range for the year 22,500mt Copper 5
Slide 6: Production Output
PRODUCTION OUTPUT For personal use only FY13 FY14 APR-14 JUL-14 CY14 Period to JAN 13 to JAN 14 QTR QTR YTD Total tonnes Ore to ROM from Pit kt 2,221 2,633 812 680 1,492 Ore to long term stockpiles kt 849 262 283 421 705 mined down due Mined Waste kt 11,777 10,027 4,164 3,643 7,806 to heavy rain T
Slide 7: Improved Mining Productivity Maintained
IMPROVED MINING PRODUCTIVITY MAINTAINED For personal use only Note: Chart includes total Bank Cubic Metres (BCM) and total ore tonnes (kt) mined. Total BCM mined of 1,535k is equivalent to 4,744kt. Heavy rain impacts despite scheduling for rain days – truck productivity maintained – three mining p
Slide 8: 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 Nugent now in primary ore and Emily Star (below) in trans/oxide ore 8
Slide 9: Ore Milled Recovery and Run Time
ORE MILLED RECOVERY AND RUN TIME For personal use only Mill throughput and reliability maintained, with planned maintenance shuts completed Mill throughput above nameplate capacity with 838kt of ore milled for the quarter Mined ore blended with additions of low grade ore to maintain high milli
Slide 10: Q2 Highlights – Revenue and Costs
Q2 HIGHLIGHTS – REVENUE AND COSTS For personal use only Period FY13 FY14 APR-14 JUL-14 CY14 US cents per lb to JAN 13 to JAN 14 QTR QTR YTD Total Mining Cost 229 165 178 156 167 Deferred Mining 0 -14 50 -13 18 Prestrip -88 -33 -87 -10 -48 Ore Inventory Adjustment -49 -1 -30 -44 -37 Mining Costs – C1
Slide 11: Improved Mining Costs Maintained
IMPROVED MINING COSTS MAINTAINED For personal use only Mining Expense per BCM Moved ($) 25.00 21.34 20.00 18.07 17.05 15.75 15.07 15.00 12.99 12.85 10.00 5.00 ‐ Jan 2013 Apr 2013 Jul 2013 Oct 2013 Jan 2014 Apr 2014 Jul 2014 Q4 FY13 Q1 FY14 Q2 FY14 Q3 FY14 Q4 FY14 Q1 CY14 Q2 CY14 Consistent reducti
Slide 12: Lower Processing Costs Maintained
LOWER PROCESSING COSTS MAINTAINED For personal use only Continued low processing unit costs achieved due to optimisation work and a focus on saving initiatives New suspended screening unit installed and other maintenance improvements ongoing Re-grind capacity utilisation increased giving impro
Slide 13: Strong Hedge Book for Near Term Revenue Certainty
STRONG HEDGE BOOK FOR NEAR TERM REVENUE CERTAINTY For personal use only Strong hedge book A$/mt A$/lb provides certainty for A$4.54 cash flows and revenue during debt repayment periods A$4.08 An additional 1,487t of A$3.63 copper hedged at AUD7,642/t (AUD3.47/lb) A$3.18 from Aug to Nov during fi
Slide 14: Guidance to December 2014 – Maintained
GUIDANCE TO DECEMBER 2014 – MAINTAINED For personal use only Adjusted below for the new 11 month year; Hillgrove maintains its guidance levels, based on current performance and planned operational improvements Guidance For CY14 Ore mined 2,850kt to 3,000kt Ore processed 2,900kt to 3,000kt Ore grade
Slide 15: Debt Reduction
DEBT REDUCTION For personal use only Hillgrove made further significant reductions to its debt balance during the quarter Total debt reduced from AUD33.4M to AUD25.2M at 31 July 2014 A Gold Loan repayment of AUD2.2M (1,328oz) was made in addition to the repayment of AUD6.0M Senior Debt princip
Slide 16: Continuous Improvement Initiatives
CONTINUOUS IMPROVEMENT INITIATIVES For personal use only New screen installation providing crushing efficiency and maintenance improvements Controlled Potential Sulphidisation (CPS) for oxide treatment – benchmarking trip, independent review of design and plan underway, project execution plan co
Slide 17: 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 CY14 budget targ
Slide 18: Summary
SUMMARY For personal use only Revenue for the quarter was AUD46.9M at an average realised price for copper of AUD3.74/lb (USD3.47/lb) Record quarterly production with YTD production exceeding the upper end of guidance Production guidance revised for CY14 to 20,500t – 22,500t Cu in concentrate
Slide 19: 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 19
Slide 20: 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 21: 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