Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Shareholder Meeting (June 2013)
45 slides from Hillgrove Resources's shareholder meeting presentation, Jun 26, 2013
Slide 1: Annual General Meeting – Chairman's Address
ANNUAL GENERAL MEETING CHAIRMANS ADDRESS IIIII DEAN BROWN, CHAIRMAN 2:00PM, 26 JUNE 2013 IIIII CROWNE PLAZA HOTEL, ADELAIDE
Slide 2: Board of Directors
BOARD OF DIRECTORS EXPERIENCED BOARD OF DIRECTORS The Hon. Dean Brown, AO, Non-Executive Chairman Former Premier and Minister of the South Australian Government and Member of the South Australian Parliament Director of Mission Australia, Scantech and Foodbank SA, Chairman of the Playford Memoria
Slide 3: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS EXECUTIVE BOARD MEMBER AND COMPANY SECRETARY EXECUTIVE BOARD MEMBER Greg Hall, Managing Director & Chief Executive Officer Appointed Managing Director and CEO in February 2013 Greg trained as a mining engineer and has extensive experience across a number of m
Slide 4: Kanmantoo Copper Mine
HILLGROVE ANNUAL GENERAL MEETING KANMANTOO COPPER MINE Crusher circuit at left, crushed ore stockpile and processing plant at right, with the beginnings of the Emily Star pit in the background 4
Slide 5: Financial Results
FINANCIAL RESULTS YEAR END 2013 31 January 31 January 31 January 31 January 31 January Results for the Year Ended (A$M) 2013 2012 2011 2010 2009 Revenue and other income 116.6 14.7 9.0 98.2 46.8 Profit/(loss) after tax (11.8) (8.5) (14.2) 55.6 11.1 Earnings per share – diluted (cents) (1.2) (1.0) (2
Slide 6: Indonesia Project Areas – Birds Head, West Papua and Sumba Island
HILLGROVE ANNUAL GENERAL MEETING INDONESIA PROJECT AREAS – BIRDS HEAD, WEST PAPUA AND SUMBA ISLAND 6
Slide 7: Resolutions
ANNUAL GENERAL MEETING RESOLUTIONS Resolution 1 Adoption of the Remuneration Report in the 2013 Annual Report Resolution 2 Re‐election of The Hon. Dean Craig Brown, AO as Director of the Company Resolution 3 Election of Gregory Campbell Hall as Managing Director of the Company Resolution 4 Approval
Slide 8: Greg Hall, CEO & Managing Director
ANNUAL GENERAL MEETING GREG HALL IIIII CEO & MANAGING DIRECTOR 26 JUNE 2013 IIIII CROWNE PLAZA ADELAIDE
Slide 9: Production and Exploration Assets
HILLGROVE ANNUAL GENERAL MEETING PRODUCTION AND EXPLORATION ASSETS Bird’s Head project Production and cash flow in Australia Sumba project Kanmantoo Copper Mine (100% owned), South Australia Rim-of-Fire exploration assets in Indonesia Sumba gold project (80% owned) Kanmantoo Bird’s Head co
Slide 10: First Half Highlights
HILLGROVE ANNUAL GENERAL MEETING FIRST HALF HIGHLIGHTS New primary crusher circuit replacement at Kanmantoo has been successfully completed with all underperforming elements replaced and throughput now achieving 2.8Mtpa Record quarter in the Kanmantoo operation for a number of metrics, including
Slide 11: Corporate Snapshot
CORPORATE SNAPSHOT 11
Slide 12: Corporate Snapshot as at April 2013
HILLGROVE ANNUAL GENERAL MEETING CORPORATE SNAPSHOT AS AT 30 APRIL 2013 ASX listed: HGO SHAREHOLDER DISTRIBUTION Shares on issue: 1,022.8 million Share price: AUD0.060* Market capitalisation: AUD61.4 million* Cash and cash equivalents: Retail Institutions 51.7% 42.8% AUD16.8 million Debt
Slide 13: Share Price Comparison
HILLGROVE ANNUAL GENERAL MEETING SHARE PRICE COMPARISON Hillgrove Share Performance vs S&P/ASX Small Resources Index 120 100 80 60 40 20 0 Jun‐12 Jul‐12 Aug‐12 Sep‐12 Oct‐12 Nov‐12 Dec‐12 Jan‐13 Feb‐13 Mar‐13 Apr‐13 May‐13 Hillgrove S&P/ASX Small Resources 13
Slide 14: Refinancing and Loans
HILLGROVE ANNUAL GENERAL MEETING REFINANCING AND LOANS Hillgrove restructured and revised finance agreements in April 2013 in order to better match cash flows. Key details are as follows: Hillgrove Copper Project Loan Facility ($30 million) First principal repayment to commence on 31 October 201
Slide 15: Kanmantoo Copper Mine
KANMANTOO COPPER MINE 15
Slide 16: Kanmantoo Copper Mine and Exploration Area
HILLGROVE ANNUAL GENERAL MEETING KANMANTOO COPPER MINE AND EXPLORATION AREA 100%-owned by Hillgrove 55km from Adelaide, South Australia Mining Lease is within 500km2 Exploration Exploration Area EL4401 License, and relatively unexplored Exploration potential considered high The project enj
Slide 17: Safety – Kanmantoo Copper Mine TRIFR
HILLGROVE ANNUAL GENERAL MEETING SAFETY – KANMANTOO COPPER MINE TRIFR Total Recordable Injury Frequency Rate: May 2012 ‐ Apr 2013 60 120 52.8 51.0 49.3 50 46.6 100 53.9 49.6 42.9 46.1 40 80 41.2 39.8 64.9 38.1 37.2 30 102.5 60 35.4 34.0 20 40 20.5 19.6 17.3 18.4 18.9 16.3 19.9 10 20 0.0 0 0 Monthly
Slide 18: Performance in Line with Expectations During Crusher Changeover
HILLGROVE ANNUAL GENERAL MEETING PERFORMANCE IN LINE WITH EXPECTATIONS DURING CRUSHER CHANGEOVER New primary crusher installation was completed successfully in March and commissioned by early April with throughput reaching targeted 2.8Mtpa 3,590t of copper was produced during the quarter, in lin
Slide 19: New Primary Crusher Circuit
HILLGROVE ANNUAL MEETING NEW PRIMARY CRUSHER CIRCUIT The second hand primary crusher circuit installed in 2011 continued to constrain performance A decision was made to replaced it with work completed in April 2013 19
Slide 20: New Primary Crusher
HILLGROVE ANNUAL GENERAL MEETING NEW PRIMARY CRUSHER All underperforming elements were successfully replaced, including the primary crusher, to achieve increased throughput up from 2.4Mtpa to 2.8Mtpa The new system also allows a more consistent product size into the mill, resulting in increased
Slide 21: ROM Clear of Supplementary Equipment
HILLGROVE ANNUAL GENERAL MEETING ROM CLEAR OF SUPPLEMENTARY EQUIPMENT Ancillary crushing equipment has been removed from ROM and direct tipping is underway again with minimal rehandling which will lead directly to lower unit costs and a substantial increase to mill throughput Exact has reduced t
Slide 22: Production Output
HILLGROVE ANNUAL GENERAL MEETING PRODUCTION OUTPUT Period* FY 2012 FY 2013 Q4 13 Q1 14 Ore to ROM from Pit (kt) 495 2,221 639 689 Record quarter for a Ore to / (from) long term stockpiles (kt) 1,267 849 98 (137) number of metrics, Mined Waste (kt) 7,446 11,777 3,650 2,728 including: Total Tonnes M
Slide 23: Primary Ore to ROM
HILLGROVE ANNUAL GENERAL MEETING PRIMARY ORE TO ROM Ore Mined 800t 700t 600t 500t 400t 300t 200t 100t 0t 1Q 2013 2Q 2013 3Q 2013 4Q 2013 1Q 2014 Kavanagh (Tonnes) Spitfire (Tonnes) Steady and consistent increase in the primary ore material to the ROM, transition towards feed from the Kavanagh pit
Slide 24: Ore Milled and Copper Production
HILLGROVE ANNUAL GENERAL MEETING ORE MILLED AND COPPER PRODUCTION Ore Milled and Copper Produced Record plant performance each quarter has not as yet translated into higher copper production as a result of lower feed grades… 24
Slide 25: Mined and Milled Feed Grades
HILLGROVE ANNUAL GENERAL MEETING MINED AND MILLED FEED GRADES 3Q 2013 New mining practices, reducing dilution 3Q 2013 Decision to move to new LOM plan, with benefits expected to be realised in 2Q 2014 … as a result of a conscious management decision to move to a new life of mine plan 25
Slide 26: Total Movements and Strip Ratio
HILLGROVE ANNUAL GENERAL MEETING TOTAL MOVEMENTS AND STRIP RATIO Total Movements and Strip Ratio This new life of mine plan and previous capital investment in mining waste allows us to focus on mining ore and reduce strip ratios 26
Slide 27: Tailings Storage Facility
HILLGROVE ANNUAL GENERAL MEETING TAILINGS STORAGE FACIILTY A large portion of strip waste generated in the first half of the year was used to extend the height of the Tailings Storage Facility (TSF) which must be raised on a regular basis to maintain capacity 27
Slide 28: Mining Operations – Life of Mine – Pit Locations
HILLGROVE ANNUAL GENERAL MEETING MINING OPERATIONS - LIFE OF MINE – PIT LOCATIONS 28
Slide 29: Kavanagh Pit
HILLGROVE ANNUAL GENERAL MEETING KAVANAGH PIT 29
Slide 30: Kavanagh Pit Cross Section – Block Model
HILLGROVE ANNUAL GENERAL MEETING KAVANAGH PIT CROSS SECTION – BLOCK MODEL AS AT END OF MAY 2013 Remaining original 1976 pit 30 May month end – pit mining surface
Slide 31: Kavanagh V20 Design
HILLGROVE ANNUAL GENERAL MEETING KAVANAGH V20 DESIGN Grid 100m x 100m 1 3 EOM April 2013 Survey 1096RL 1078RL 2 4 Uncertainty around 1970’s final pit surface 1087RL 1069RL 31
Slide 32: Kavanagh Pit – Bench Tonnes and Grade Profile
HILLGROVE ANNUAL GENERAL MEETING KAVANAGH PIT – BENCH TONNES AND GRADE PROFILE During the Second Quarter, we will be accessing benches with increasing ore tonnes and grade Since the implementation of the new LOM plan in November 2012, performance has resulted in mining being approximately one mo
Slide 33: Kanmantoo Extension of Mine Life
HILLGROVE ANNUAL GENERAL MEETING KANMANTOO EXTENSION OF MINE LIFE New LOM planning with long-term pit optimisation provides a reasonable basis for indicative future planning and likely extension of mine life to 2023 Estimated period of operation initially increasing from 6.5 to 10 years New pl
Slide 34: C1 Production Costs
HILLGROVE ANNUAL GENERAL MEETING C1 PRODUCTION COSTS Period FY Jan‐13 Apr‐13 US cents per lb 2013 QTR QTR C1 cash costs of production was USD3.15/lb Mining Costs 120 155 191 (average AUD/USD Processing Costs 97 94 97 exchange rate of 1.035) Other Direct Cash Costs 23 19 24 C1 cost was impacted b
Slide 35: Strong Hedge Book
HILLGROVE ANNUAL GENERAL MEETING STRONG HEDGE BOOK Hillgrove AUD Copper Position Strong hedge book provides certainty A$10,000 for cashflows and revenue in future A$9,000 periods Approximately A$8,000 41,000 tonnes of copper swaps A$7,000 Approximately 70% of forecast copper A$6,000 production
Slide 36: Sensitivities and Guidance
HILLGROVE ANNUAL GENERAL MEETING SENSITIVITIES AND GUIDANCE SENSITIVITIES TO REVENUE AUD/USD +/- 5% AUD 2.8 million Copper Price +/- 10% AUD 4.5 million Gold Price +/- 10% AUD 0.8 million GUIDANCE FOR FY2014 Production Concentrate 75,000 – 80,000 dry metric tonnes Copper 18,000 – 20,000 to
Slide 37: Indonesia
INDONESIA 37
Slide 38: Birds Head Project Attributes
HILLGROVE ANNUAL GENERAL MEETING BIRDS HEAD PROJECT ATTRIBUTES Hillgrove has an 80% beneficial interest in PT Akram through a JV Agreement Moving to a corporatised ownership structure – PMA conversion in progress IUP rights granted to March 2017 cover almost 1,000km² Hillgrove responsible fo
Slide 39: Sumba Island Project Attributes
HILLGROVE ANNUAL GENERAL MEETING SUMBA ISLAND PROJECT ATTRIBUTES Hillgrove has an 80% direct shareholding in PT Fathi Resources through Singapore holding structures, which has been converted to PMA status IUP rights granted to December 2016 cover ~1,000km² – reducing to 750km² Hillgrove respon
Slide 40: Status Update
HILLGROVE ANNUAL GENERAL MEETING STATUS UPDATE Hillgrove has taken the decision to wind down the exploration activity at Bird’s Head and Sumba: majors reviewing greenfield exploration activities no recognition of value of these assets by Hillgrove investors Based on the above, expenditure wi
Slide 41: Summary
SUMMARY 41
Slide 42: Summary
HILLGROVE ANNUAL GENERAL MEETING SUMMARY Revenue for the latest quarter was AUD29.6M at an average realised price for copper of USD3.62/lb Revised finance arrangements completed with new LOM plan in place Kanmantoo is tracking as forecast through crusher changeover and remains set to meet guid
Slide 43: Key Contacts
HILLGROVE ANNUAL GENERAL MEETING KEY CONTACTS For further information please contact: Greg Hall, CEO and Managing Director or 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
Slide 44: Disclaimer
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 or
Slide 45: Disclaimer – Competent Persons
DISCLAIMER COMPETENT PERSONS The information in this release that relates to Exploration Results and Exploration Targets for the Kanmantoo Copper Mine is based upon information compiled by Mr Steven McClare, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr McClare is a full
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