Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Investor Presentation (May 2008)
41 slides from Hillgrove Resources's investor presentation, May 7, 2008
Slide 1: Hillgrove Presentation
For personal use only Wednesday, 7 May 2008 HILLGROVE PRESENTATION Find attached document which has been prepared and released by Hillgrove Resources Limited (ASX:HGO) in advance of investor presentations. About Hillgrove Hillgrove is a listed Australian resources company on the Australian Stock Exc
Slide 2: Copper Producer in 2009
For personal use only COPPER PRODUCER IN 2009 May 2008
Slide 3: Introduction to Hillgrove
Introduction to Hillgrove Diversified Natural Resources Company For personal use only www.hillgroveresources.com.au 100% Kanmantoo Copper / Gold Mine 100% Wheal Ellen Lead / Zinc / Gold 100% Kanmantoo Regional Base Metals 100% Kanmantoo Regional Gold 20% 70% Alford Alf d IOCG 23.1% www.easternstar.c
Slide 4: Board and Management
Introduction to Hillgrove Board and Management For personal use only Dean Brown AO Ron Belz David Archer John Quirke John Gooding Chairman Director Managing Director Director Director Colour Code Geoff Stewart Russell Middleton Dale Ferguson Non-Executive Business Development Chief Financial Officer
Slide 5: Shareholders
SHAREHOLDERS Top 50% For personal use only RBS Sempra S 15 0% 15.0% R l Bank Royal B k off S Scotland tl d ANZ Nominees 11.6% European p shareholders RMMI 6.4% RAK Minerals - UAE investor Archer Group 5.6% Managing Director and associates Merrill Lynch 5.4% Global investment fund Argonau
Slide 6: Company Highlights
Introduction to Hillgrove Company Highlights For personal use only ASX listed natural resources company focused on development of its near term Kanmantoo copper/gold project • Initial mine inventoryy of 12Mt supports pp a minimum 6.5 yyear mine life producing 15 – 19ktpa of copper in concentrate wit
Slide 7: ASX Trading Summary
Introduction to Hillgrove ASX Trading Summary For personal use only Hillgrove Resources Price (A$) Volume (m) 0.70 6.0 Share Price 1 May 08 1-May-08 $0 280 $0.280 52 Week - High 25-Jun-07 $0.700 - Low 22-Jan-08 $0.180 0.60 5.0 Diluted Shares 318 2m 318.2m Market Capitalisation $89.1m 0.50 4.0 Net De
Slide 8: Unique Investment Opportunity
Introduction to Hillgrove Unique Investment Opportunity For personal use only First Production Estimates for • Only Australian mid-cap copper Australian Junior Copper Companies(1) developer with production planned pre 2010 (Q3 2009) CopperCo (June 2007) Producing 9 DFS complete Matrix Metals (August
Slide 9: Peer Valuation Metrics
Introduction to Hillgrove Peer Valuation Metrics For personal use only • Hillgrove is currently trading at 3,000 US$/t EV (US$) / Copper Equivalent Contained Metal (t) US$119/t off contained t i d copper Producing Development and Exploration equivalent reserve 2,500 2,406 • CopperCo and Matrix Metal
Slide 10: Copper Gold Mine
Kanmantoo Project Kanmantoo Copper Gold Mine For personal use only 8
Slide 11: South Australian Region
Kanmantoo Project South Australian Region For personal use only • South Australia is one of the most prospective ti tterrains i iin th the world ld ¾ Home of the Big One, Olympic Dam • Historicall Historically neglected and vastly astl under nder explored • Initial project at Kanmantoo will produce
Slide 12: Dedicated High Quality Project Team
Kanmantoo Project Dedicated High Quality Project Team For personal use only David Archer Managing Director Dale Ferguson Exploration/Ops Director Marty Adams Project Manager Mill, Environment David Schmitz Richard Bradeyy Andrew Reeves David Walker and Admin Managers Mining Manager Site Manager Proj
Slide 13: Snapshot
Kanmantoo Project Snapshot For personal use only • Kanmantoo was operated by NBH/SBH/ EZ as th theiri first fi t open cutt mine i ffrom 1971 1971- 1976, mining around 4.1Mt of copper ore • Hillgrove g commenced work in 2003,, and plans to recommence mining 2009 • JORC Category Mt Cu (%) Au (g/t) Ag
Slide 14: Low Risk Features
Kanmantoo Project Low Risk Features For personal use only • Operational history significantly de-risks the project • Known, Known simple metallurgy • Large database of exploration, mining and processing i f information ti • Previous mine management still in region and industry • Geotechnically sound
Slide 15: Financials: Summary of Definitive Financial Study
Kanmantoo Project Financials For personal use only Summary of Definitive Financial Study Model Copper Price Foreign Exchange Discount NPV IRR NCFAT Base Case Forward Curve 30/11/07 Forward Curve 03/12/07 8.5% $72 million 21% $167 million $3 50 Model $3.50 $3 50 Flat $3.50 Forward Curve 03/12/07 8 5%
Slide 16: Mine Plan - Summary
Kanmantoo Project Mine Plan - Summary For personal use only • Forecast production based on initial 11.1Mt probable reserve: kt kt 80 71 74 25 69 64 56 58 20 60 20 19 15 17 17 16 40 15 10 20 5 2 0 0 1 2009 2010 2011 2012 2013 2014 2015 Concentrate (LHS) Cu eq. (RHS) • Potential to expand resource to
Slide 17: Sulphide Mineralisation
Kanmantoo Project Sulphide Mineralisation For personal use only Magnetite Chalcopyrite Garnet Pyrrhotite 15
Slide 18: Resource Growth
Kanmantoo Project Resource Growth For personal use only Mt Increasing Certainty 40 31.4 Mt at 0.9% Cu 32.1 Mt at 0.9% Cu and 0.2 g/t Au and 0.2 g/t Au 28.00 Mt at 00.9% 28 9% Cu 30 and 0.2 g/t Au 18.4 Mt at 1.1% Cu and 0.2 0 2 g/t Au 20 8.5 Mt at 1.2% Cu and 0.2 0 2 g/t Au 10 0 Original Resource Dec
Slide 19: Mining Inventory
Kanmantoo Project Mining Inventory For personal use only Mining Copper Gold Silver Classification Inventory % g/t g/t Measured 0.0 0.00 0.00 0.00 Indicated 11.1 0.93 0.20 3.33 Inferred 0.9 0.68 0.24 3.53 Total 12.0 0.91 0.20 3.35 Hillgrove includes an additional 0.9MT (total 12.0MT) of resource in t
Slide 20: Proposed Kanmantoo Site Layout
Kanmantoo Project Proposed Kanmantoo Site Layout For personal use only 18
Slide 21: Resource Update – February 2008
Kanmantoo Project Resource Update – February 2008 For personal use only Around 650RC and diamond holes for over 90,000m 90 000m are included in the resource Main Pit Emily Star O’Neil N Resource Categories Measured = Yellow Indicated = Dark Blue February 2008 block model Inferred = Light Blue constr
Slide 22: Derivation of Mining Inventory
Kanmantoo Project Derivation of Mining Inventory For personal use only The grey shaded zone highlights the extent of the total in-situ Greyresource shaded used zone to derive the showing the mining inventory extent of the in‐situ resource used to derive the open cut mining inventory. Emily Emily Sta
Slide 23: Derivation of Mining Inventory – Cross Section
Kanmantoo Project Derivation of Mining Inventory – Cross Section For personal use only Proposed Main Existing Pit Pit Outline Outline South North Section looking west through proposed mine showing the block model (blue blocks). The grey shaded zone Areas outside of the grey zone highlights the limit
Slide 24: High Level Development Timetable
Kanmantoo Project High Level Development Timetable For personal use only 2006 2007 2008 2009 Pre-feasibility Metallurgy Permitting D illi Drilling Definitive Feasibility Study Detailed Engineering Co st uct o & Construction Development Mining Production 22
Slide 25: Metallurgical Work Completed
Kanmantoo Project Metallurgical Work Completed For personal use only Testing work as part of the DFS and further design has included: • Float test work on Main, South East, O’Neil and Emily Star on all ore types fresh, transitional and oxide (Ammtec) • Mineralogical Mi l i l IInvestigations ti ti (T
Slide 26: Key Metallurgical Outcomes - Recoveries
Kanmantoo Project Key Metallurgical Outcomes - Recoveries For personal use only Corrected Life of Mine Concentrate Grades and Recoveries Mine Confidence Limits • Th The mine i schedule h d l iis bbasedd Schedule Adjusted Lower Upper on Perth tap water actual Primary Ore recoveries and adjusted for R
Slide 27: Key Metallurgical Outcomes
Kanmantoo Project Key Metallurgical Outcomes For personal use only Comminution • Target flotation feed of 250tph at p80 212µm • Hardness Testing Combined with Circuit Modelling estimates 3.2MW grinding power requirement • Single stage 7.3 x 3.8m SAG MILL specified to draw 3.6MW power • Outotec O t t
Slide 28: Process Flow
Kanmantoo Project Kanmantoo Process Flow For personal use only 26
Slide 29: Basis of Cost Estimates
Kanmantoo Project Basis of Cost Estimates For personal use only • Preliminary Feasibility Study ¾ Completed October 2006 • Definitive Feasibility Study prepared by Lycopodium ¾ Completed December 2007 ¾ Specialised input from Snowden on mine design ¾ Other reputable parties involved include Coffey,
Slide 30: Exploration Focus
Exploration Focus Hillgrove Strategy For personal use only Near Mine • Optimising O existing resource base • Extending existing resource both along strike and down dip • Exploring the potential for an underground development • High priority near mine exploration targets • Building mine life High pri
Slide 31: Kanmantoo Regional Prospects
Exploration Focus Kanmantoo Regional Prospects For personal use only • Kanmantoo first operated in 1846 • Approx 500km2 of tenure 100% owned by Hillgrove • Multiple copper, gold and base metal occurrences • Region vastly astl under nder eexplored plored with ith little modern exploration • Hillgrove
Slide 32: Kanmantoo Mine Corridor
Resource Inventory Focus Kanmantoo Mine Corridor For personal use only • Work to date has defined a large mineralised system at least 3.5km 3 5km long and over 1km in width • Strong relationship between mineralisation and IP response • Less ess than a 50% oof eexisting s g aanomaly o ay has been tes
Slide 33: Wheal Ellen and Further Exploration Potential
Exploration Focus Wheal Ellen and Further Exploration Potential For personal use only • Regional magnetics identified 12 high priority exploration targets outside Kanmantoo Mine Corridor • Initial high grade lead and zinc resource at Wheal Ellen expected by year end ¾ 5m at 8.7% zinc, 5.9% lead, 2.3
Slide 34: Wheal Ellen Drill Intercepts and Cross Section
Lead/Zinc Wheal Ellen Drill Intercepts and Cross Section For personal use only 32
Slide 35: Alford Project Interpreted Geology
Exploration Focus Alford Project Interpreted Geology For personal use only • Iron Oxide Copper Gold target on the eastern margin of the Gawler Craton ¾ Similar to Olympic Dam • Potential large scale low grade copper heap leach operation • Extensive initial investigation g demonstrates abundant miner
Slide 36: 30% Interest in InterMet Resources
Exploration Focus 30% Interest in InterMet Resources For personal use only Principal Activities Key Projects InterMet Resources (ITT) is focused on exploration for Lake L k Gillies, Gilli IP survey defined d fi d numerous ttargets t gold, nickel, uranium and base metals in the highly South Australia
Slide 37: Eastern Star Gas Company Overview
Eastern Star Gas Company Overview For personal use only Principal Activities Key Assets Eastern E t Star St GasG Ltd (ESG) is i poised i d to t become b a PEL 238 CSG (65%) 17 TCF gas resource key player in gas exploration and production from PEL 238 Conventional (100%) 1.4 TCF* unrisked gas in plac
Slide 38: Eastern Star Gas ASX Trading Summary
Eastern Star Gas ASX Trading Summary For personal use only Eastern Star Gas Price (A$) Volume (m) 0 80 0.80 25 0 25.0 Sh Price Share Pi 1 M 08 1-May-08 $0 500 $0.500 52 Week - High 26-Jun-07 $0.790 0.70 - Low 22-Jan-08 $0.250 20.0 Diluted Shares 778 6m 778.6m 0.60 Market Capitalisation $389.3m Net D
Slide 39: Peer Analysis – Enterprise Value / Reserves
Eastern Star Gas Peer Analysis – Enterprise Value / Reserves For personal use only • ESG is currentlyy A$/GJ 4 50 4.50 trading at A$2.87 EV / 2P Reserves EV / 3P Reserves per GJ of 2P 4.00 3.92 reserves 3 50 3.50 • Targeting 600PJ 2.94 3.00 2.87 of 2P reserves in 2009 and 2.50 2 24 2.24 2.44 1,200PJ
Slide 40: Summary
Summary For personal use only 9 Imminent Copper Production: Kanmantoo production targeted for Q3 2009 production, DFS complete, approvals imminent, further extension and garnet potential. potential 9 People: Leading team of corporate, exploration, development and mining professionals. 9 Prospective
Slide 41: Disclaimer
Disclaimer For personal use only This presentation should not be relied upon as a representation of any matter that a potential investor or their adviser should consider in evaluating the Company. Potential investors must make their own independent assessment and investigation of the matters contain
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