Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Investor Presentation (September 2011)
48 slides from Hillgrove Resources's investor presentation, Sep 15, 2011
Slide 1: Company Update
COMPANY UPDATE DREW SIMONSEN IIIII MANAGING DIRECTOR 15 SEPTEMBER 2011
Slide 2: Disclaimer
DISCLAIMER No representation or warranty is or will be made by any person (including Hillgrove Resources Limited ACN 004 297 116 (Hillgrove) and its officers, directors, employees, advisers and agents) in relation to the accuracy or completeness of all or part of this document (the Presentation), or
Slide 3: Australian Mining Company with Australian-Indonesian Growth Pipeline
AUSTRALIAN MINING COMPANY WITH AUSTRALIAN-INDONESIAN GROWTH PIPELINE KEY ASSETS: Principal asset is the Kanmantoo Bird’s Head project Copper Mine project (100% owned), in South Australia Sumba project Highly prospective, exploration assets in Indonesia Sumba gold project (80% owned) Bird’s H
Slide 4: Strategic Objectives
AUSTRALIAN MINING COMPANY WITH AUSTRALIAN-INDONESIAN GROWTH PIPELINE STRATEGIC OBJECTIVES Kanmantoo – copper producer in October: Kanmantoo constructed on time and within budget – on track Identify additional near mine resources – on track Extend Kanmantoo mine life and throughput – on track
Slide 5: Investment Opportunity
HILLGROVE RESOURCES LIMITED INVESTMENT OPPORTUNITY Kanmantoo plant construction significantly de-risked Robust project with near term cash flows Producing asset in November 2011 (weeks) High optionality through: Resource expansion at Kanmantoo (target doubling of resources) Reserve expan
Slide 6: Kanmantoo
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Slide 7: Kanmantoo Copper Mine South Australia
KANMANTOO COPPER MINE SOUTH AUSTRALIA CLOSE TO ADELAIDE ALL MAJOR SERVICES NEAR BY Kanmantoo 100%-owned by Hillgrove Capital cost advantages due to location Exploration Local workforce Area EL4401 Grid power Recycled water pipeline Kanmantoo Copper Mine 3km from main highway Wheal Ellen
Slide 8: Production Imminent
KANMANTOO COPPER MINE PRODUCTION IMMINENT NEXT AUSTRALIAN COPPER PRODUCER KEY TARGETS First concentrate Late October 2011 Practical Completion of Plant 1 November 2011 First revenue November 2011 Ramp up to full production over 4-6 months March-May 2012 Bank Completion Test June 2012 Pla
Slide 9: Kanmantoo Copper Mine Aerial View April 2011
KANMANTOO COPPER MINE AERIAL VIEW OF SITE 20 APRIL 2011
Slide 10: Construction & Mining
HILLGROVE CONSTRUCTION & MINING
Slide 11: Construction Capital and Development Costs
CONSTRUCTION CAPITAL AND DEVELOPMENT COSTS TO BRING KANMANTOO TO PRODUCTION – AS AT 31 JUL 2011 Project Total FID Capital Costs Construction Period Costs Total Capital costs Capital costs Spend Remaining Estimated capital costs spent to for FID Period Budget Cost at 31/8/11 9/10 to 7/11 Completion (
Slide 12: Processing Plant Overview
KANMANTOO COPPER MINE PROCESSING PLANT OVERVIEW Capital cost savings with Lime ROM BIN FEED PRODUCT second-hand plant from WA VIBRATING GRIZZLY BIN SCREEN NEUTRAL- FEEDER ISATION TANK Abesque Engineering – JAW CRUSHER STOCK PROCESS PILE HYDRO WATER TANK SECONDARY principal contractor CRUSHER CYC
Slide 13: Current Activity: Crusher and Stockpile Area
KANMANTOO COPPER MINE CURRENT ACTIVITY CRUSHER AND STOCKPILE AREA WITH PLANT IN BACKGROUND 30 AUGUST 2011 Crusher Area Crushed Ore Crushed Ore Dust Containment and Ore Feed Stockpile Feed Stockpile Reclaim Crushed Ore Cone Almost Conveyor Conveyor Conveyor Tunnel Stockpile Complete 13
Slide 14: Current Activity: Processing Plant
KANMANTOO COPPER MINE CURRENT ACTIVITY PROCESSING PLANT 1 SEPTEMBER 2011 Crushed Ore Regrind Flotation Cyclone SAG Feed Conveyor Mill Tanks Tower Mill 14
Slide 15: Current Activity: Concentrate Storage Shed
KANMANTOO COPPER MINE CURRENT ACTIVITY CONCENTRATE STORAGE SHED & CONCENTRATE AREA 30 AUGUST 2011 Concentrate Concentrate Concentrate Concentrator Storage Shed Filter Shed Thickener Shed 15
Slide 16: Mining and Production Milestones
KANMANTOO COPPER MINE MINING AND PRODUCTION MILESTONES Ore stockpiling underway - approximately 500,000t Oxide and Transition ore Stockpiling sulphide ore – expect circa 100,000t for plant start-up Payable metals production at steady state: 20k tonnes p.a. copper 10k ounces p.a. gold 180
Slide 17: Operating Costs and Forward Sales
KANMANTOO COPPER MINE OPERATING COSTS AND FORWARD SALES OPERATING COSTS Average LOM cash cost of USD 1.61/lb including smelter charges and after by-product credits (Au AUD 900oz and Ag AUD 13oz), excluding royalties LOM off-take contract with J.P. Morgan Metals & Concentrates LLC Terms set f
Slide 18: Resources & Exploration
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Slide 19: Resources/Reserves
KANMANTOO COPPER MINE RESOURCES/RESERVES EXPLORATION HAS IMPROVED RESOURCE CERTAINTY AND CONVERSION RATIO CURRENT RESOURCES CURRENT RESERVES Inferred Indicated Meas ured Mt Mt 20.0 Probable Proved 40.0 18.0 35.0 31.8 32.2 16.0 14.8 30.0 28.0 14.0 25.0 12.0 11.1 20.0 18.4 10.0 15.0 8.0 10.0 8.5 6.0 5
Slide 20: Near Mine Exploration
KANMANTOO COPPER MINE NEAR MINE EXPLORATION NW Zone Priority objective is to add to open pit reserves to extend mine life Waste Rock Stockpile Two phase drilling program NE Zone Main Convert inferred resources Zone to indicated (thus into Green Plant reserves) Zone SE Zone Site Identify addi
Slide 21: Exploration Strategy – First Stage
KANMANTOO COPPER MINE EXPLORATION STRATEGY – FIRST STAGE IP Chargeability Image IP Chargeability Image Priority 1: Extend Kanmantoo mine life 32Mt resource, with 14.8 reserves NE Zone/Slot Extension Initially plan to convert resources to reserves by closer spaced drilling Targeting four zones
Slide 22: O'Neil/Nugent Zone Cross Section
KANMANTOO COPPER MINE O’NEIL/NUGENT ZONE CROSS SECTION 20260N (LOOKING NORTH) Indicated Pit Shell O’Neil/Nugent Zone Inferred Pit Shell Open: No Drilling Open: No Drilling 100m below surface KTRCD284 – 21m @ 1.27% Cu KTRCD122 – 24m @ 1.00% Cu Open: No Drilling 22
Slide 23: O'Neil/Nugent Zone Pierce Point Long Section
KANMANTOO COPPER MINES O’NEIL/NUGENT ZONE PIERCE POINT LONG SECTION (LOOKING WEST) (FOLLOWING 1ST PHASE 2011 RC DRILLING) North 0m 100m 2011 Drilling Pierce Points O’Neil/Nugent Zone 2011 Drilling Planned Untested Pit Outline Target Pierce Points Open: No Drilling Infill Drilling Required KTRC763 KT
Slide 24: Conversion Success!
KANMANTOO COPPER MINE CONVERSION SUCCESS! RTP Aeromagnetics Image Emily Star Wide, shallow, high-grade intercepts Nugent/O’Neil Critchley 18m @ 1.29% Cu from 135m (23m%) 14m @ 1.54% Cu from 75m (22m%) KTRC784 & KTRC785 31m @ 0.77% Cu from 99m (24m%) Emily Star KTRC794 23m @ 0.97% Cu fr
Slide 25: Resource Conversion Drilling Outcomes
KANMANTOO COPPER MINE RESOURCE CONVERSION DRILLING OUTCOMES Resource conversion drilling has been highly successful at both O’Neil/Nugent and Emily Star 48 RC holes completed for 7,691m to 31 July Nominal 30 x 30m drill spacing for Indicated classification ~ 3,000m Resource conversion drilli
Slide 26: Looking Forward – Second Stage
KANMANTOO COPPER MINE LOOKING FORWARD – SECOND STAGE IP Chargeability Image Priority 2: provide copper “pipeline” for new mill Cooper’s Find Longer term and wider exploration focus (but initially still within Mining Lease) Falcon Further geophysics (IP) underway, geochemistry and geology to gene
Slide 27: Summary
KANMANTOO COPPER MINE SUMMARY Construction on time and on budget First production October/November 2011 (weeks) Robust project with near term cash flows Near-mine drilling indicates Life of Mine extension probable 27
Slide 28: Indonesia
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Slide 29: Exploration Assets: Indonesia – Why Indonesia?
EXPLORATION ASSETS: INDONESIA HIGHLY PROSPECTIVE GOLD, COPPER EXPLORATION Two key exploration projects: Sumba Project (HGO 80%) Bird’s Head Project (HGO 80%) WHY INDONESIA? Proven geological provenance for target commodities (Cu, Au) Improving legislative and judicial environment CY2009 PR
Slide 30: Sumba Island
SUMBA ISLAND Tanah Daro HILLGROVE 80% Project Area Pelitalira Hillgrove is an 80% Masu Project shareholder in PT Fathi, Area holding an IUP over ~1,000km2 to December 2016 Two main project areas Masu (Southern) Project area Tanah Daro (Northern) Project area 17 high priority gold anomalies P
Slide 31: Sumba Island: Masu (Southern) Project Area
SUMBA ISLAND MASU (SOUTHERN) PROJECT AREA Karipi-Kanjilu Prospect RECENT EXPLORATION Soil sampling over project >10km² Karipi-Kanjilu trenching indicates broad gold anomaly over 800m 22m @ 2.66ppm Au 80m @ 3.18ppm Au 73m @ 4.72ppm Au Separate to Karipi surface sampling identified paralle
Slide 32: Sumba Island: Tanah Daro (Northern) Project
SUMBA ISLAND TANAH DARO (NORTHERN) PROJECT PELITALIRA PROSPECT Located in north central Sumba Waterfall Vein Accessible by road RECENT EXPLORATION Tanah Daro Project Area Soil sampling delineated two distinct gold anomalies with gold values up to 19.95g/t Au Scout drilling (9 holes to 150m)
Slide 33: Indonesia Bird's Head Project Regional Setting
INDONESIA BIRD’S HEAD PROJECT REGIONAL SETTING WEST PAPUA P.N.G. Bird’s Head covers part of the interpreted westward continuation of the New Guinea ‘Orogenic Belt’ 33
Slide 34: Bird's Head Project
BIRD’S HEAD PROJECT HILLGROVE 80% Hillgrove has an 80% beneficial interest in PT Akram through JV Agreement As with PT Fathi, we are moving to a corporatised ownership structure IUP rights cover almost 1,000km2 , granted to March 2017 Hillgrove responsible for exploration and development act
Slide 35: Bird's Head Project: Green Cliffs Prospect
BIRD’S HEAD PROJECT GREEN CLIFFS PROSPECT 3D magnetic inversion modelling Green Cliffs Breccia Target of West Delta area showing magnetic targets (Normandy data) Strong magnetic anomalies associated with intense hydro- thermal alteration, Diorite intrusives Magnetic High Inversion and copper val
Slide 36: Bird's Head Project Rock Chip Copper Values
BIRD’S HEAD PROJECT RECENT GEOCHEM FROM SOUTHERN PORPHYRIES AND RAK RAK ROCK CHIP COPPER VALUES Sample No Prospect Type Cu % 2501 Rak-Rak RCH 1.83 2603 Suben RO 2.93 2604 Suben RO 3.86 3D magnetic inversion modelling Green Cliffs 2606 Suben RO 3.80 of West Delta area showing 2612 Suben RO 1.51 mag
Slide 37: Bird's Head Project: West Delta Prospect
BIRD’S HEAD PROJECT WEST DELTA PROSPECT Geological interpretation is of: A young (Tertiary) intrusive complex Overlapping hydrothermal alteration systems in a 6.5 x 1.5 km corridor Trenching highlights: 32m @ 0.73% Cu including 20m @ 0.95% Copper mineralisation in quartz vein/breccia float
Slide 38: Copper Porphyry Signatures at West Delta
BIRD’S HEAD PROJECT COPPER PORPHYRY SIGNATURES AT WEST DELTA WIDESPREAD SURFACE CU MINERALISATION ADVANCED ARGILLIC ALTERATION Green Cliffs Breccia Target PROPYLITIC ALTERATION PHYLLIC ALTERATION POTASSIC ALTERATION MAGNETIC ANOMALIES 38
Slide 39: Bird's Head Project: Targeting Tier One Discovery
BIRD’S HEAD PROJECT TARGETING TIER ONE DISCOVERY Ideal location close to coast Multiple porphyry targets present in area NEXT STEPS Porphyry Targets Porphys Obtain necessary permitting Porphyry PoTargets Drill-test porphyry targets (to 600m) 39
Slide 40: Corporate Overview
CORPORATE OVERVIEW
Slide 41: Corporate Snapshot
CORPORATE SNAPSHOT DETAILS AND SHAREHOLDER DISTRIBUTION ASX listed: HGO Shares on issue: 793.7 million SHAREHOLDER DISTRIBUTION Share price: AUD 0.265 (13 Sep 2011) Institutions 38.0% Market capitalisation: AUD 210 million (13 Sep 2011) Cash and cash equivalents: AUD 55.3 million (31 Jul 2
Slide 42: Broad-Based Top Investors
HILLGROVE RESOURCES LIMITED ASX:HGO BROAD-BASED TOP 20 INVESTORS Investor 31 Aug 2011 % of isc City 1 BT Investment Management 59,181,259 7.5% Sydney 2 JP Morgan Metals & Concentrates 55,886,772 7.0% Columbus 3 Renaissance Smaller Companies 32,405,382 4.1% Sydney 4 Dimensional Fund Advisors 28,057,0
Slide 43: Hillgrove Resources vs Broker Valuations
CORPORATE SNAPSHOT HILLGROVE RESOURCES vs BROKER VALUATIONS $1.00 Intersuisse $0.43 ‐ $0.90 $0.80 Broker valuations Wilson Austock are significantly $0.60 OM Evans Ptns $0.53 $0.55 higher than the $0.41 $0.45 existing share price $0.40 Little or no value $0.20 attributed to the Indonesian assets
Slide 44: Investment Opportunity – Compelling!
HILLGROVE RESOURCES LIMITED INVESTMENT OPPORTUNITY – COMPELLING! Kanmantoo plant construction significantly de-risked Robust project with near term cash flows Producing asset in November 2011 (weeks) High optionality through: Resource expansion at Kanmantoo (target doubling of resources)
Slide 45: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS EXECUTIVE BOARD MEMBER AND COMPANY SECRETARY EXECUTIVE BOARD MEMBER Drew Simonsen, Managing Director & Chief Executive Officer BE (Mining); Dip Geo Sci (Min Eco); GAICD Appointed MD & CEO in August 2010 35 years in resources, investment and commercial banking
Slide 46: Management Team
MANAGEMENT TEAM EXPERIENCED MANAGEMENT TEAM Cam Schubert, General Manager – Kanmantoo Project BSc (Hons); MAppSc; MEngSc; MAusIMM Started January 2010, with 21 years experience in the resource industry Previously served as Mine Operations Development Manager for BHP Billiton's Olympic Dam Expans
Slide 47: Management Team
MANAGEMENT TEAM EXPERIENCED MANAGEMENT TEAM Geoff Stewart, General Manager – Business Development B.Com. (Acc.) Joined Hillgrove in June 2007 He has an extensive network cultivated through 30 years of trusted interaction and cooperation Strong entrepreneurial and marketing background identifyi
Slide 48: Board of Directors
BOARD OF DIRECTORS EXPERIENCED BOARD OF DIRECTORS Hon. Dean Brown AO, Non-Executive Chairman Former Premier and Minister of the South Australian Government and Member of the South Australian Parliament Chairman of InterMet Resources Limited, a Director of Scantech Limited and Foodbank SA, the Pr
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