Hillgrove Resources Limited · ASX:HGO
Hillgrove Resources — Investor Presentation (May 2011)
47 slides from Hillgrove Resources's investor presentation, May 2011
Slide 1: Asia Pacific Copper Miner
ASIA PACIFIC COPPER MINER DREW SIMONSEN MANAGING DIRECTOR IIIII MAY 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: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS EXPERIENCED MANAGEMENT TEAM WITH PROVEN TRACK RECORD 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 and financial
Slide 4: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS EXPERIENCED MANAGEMENT TEAM WITH PROVEN TRACK RECORD Jim Kerr, General Manager – Exploration BSC(Geology); MSc(Mineral Economics) Joined Hillgrove Resources in late 2009 and was appointed to the role of General Manager – Exploration in July 2010 Over 20 years
Slide 5: Company Overview
COMPANY OVERVIEW AUSTRALIAN MINING COMPANY WITH AUSTRALIAN-INDONESIAN GROWTH PIPELINE Hillgrove Resources (“HGO”) is an Australian based minerals exploration and development company Bird’s Head project Principal asset is the Kanmantoo Sumba project Copper Mine project (100% owned), currently und
Slide 6: Strategic Direction and Focus
STRATEGIC DIRECTION AND FOCUS NEAR TERM PRODUCTION, HIGHLY PROSPECTIVE EXPLORATION Our Strategy: Construct Kanmantoo, on time and within budget Expand the Kanmantoo resource base Expand Kanmantoo throughput Explore/develop copper & gold in Australia and Indonesia Become a multi-mine prod
Slide 7: Corporate Snapshot
CORPORATE SNAPSHOT DETAILS AND SHAREHOLDER DISTRIBUTION ASX listed: HGO Shares on issue: 793.7 million SHAREHOLDER DISTRIBUTION Share price: A$ 0.30 (6 May 2011) Institutions Market capitalisation: A$238 million 39.0% (6 May 2011) Cash and cash equivalents: A$113 million (28 February 2011)
Slide 8: Corporate Snapshot: Top Shareholder List
CORPORATE SNAPSHOT TOP 20 SHAREHOLDER LIST Investor 31 Mar 2011 % of isc 1 JP Morgan Metals & Concentrates 55,886,772 7.0% 2 BT Investment Management 53,988,749 6.8% 3 Renaissance Smaller Companies 31,420,354 4.0% 4 Colonial First State - Growth Australian Equities 20,600,000 2.6% 5 Dimensional Fund
Slide 9: Kanmantoo Copper Mines Project
Kanmantoo Copper Mines Project
Slide 10: Kanmantoo Copper Mines: Resource Model Video
KANMANTOO COPPER MINES RESOURCE MODEL VIDEO SEE SEPARATE VIDEO FILE TO VIEW 10
Slide 11: Kanmantoo Copper Mines – Close to Adelaide
KANMANTOO COPPER MINES – CLOSE TO ADELAIDE ALL MAJOR SERVICES CLOSE BY 100%-owned by Hillgrove Located just 55km from Adelaide, in South Australia Copper has been mined in the area for Exploration Area EL4401 over 150 years Exploration License area of 500km2, and relatively unexplored Expl
Slide 12: Kanmantoo Copper Mines: 2010 – Prior to Construction
KANMANTOO COPPER MINES 2010 – PRIOR TO CONSTRUCTION New Tailings Storage facility (TSF) behind old waste dump New plant site Current pre-strip area Plant Current heap- leach operation Kanmantoo was operated by North Broken Hill, South Broken Hill and Electrolytic Zinc from 1971-1976 Approximatel
Slide 13: Kanmantoo Copper Mines: Current View of Plant Site
KANMANTOO COPPER MINES CURRENT VIEW OF PLANT SITE
Slide 14: View of Plant Site from Top of Old Waste Dump
KANMANTOO COPPER MINES VIEW OF PLANT SITE FROM TOP OF OLD WASTE DUMP First copper/gold production is scheduled for November 2011 Configured as 2.4Mtpa, and ramping to 2.7Mtpa through operational efficiencies Further potential to increase to 3.5Mtpa Estimated mine life of 10 years based on cu
Slide 15: FID and Construction Started November 2010
FID AND CONSTRUCTION STARTED NOVEMBER 2010 CAPITAL AND DEVELOPMENT COSTS TO BRING KANMANTOO TO PRODUCTION TO 28/2/11 Project Total FID Capital Costs Construction Period Costs Total Capital costs Capital costs Spend Period Remaining capital costs spent to 31/8 for FID 1/9 to 28/2 Budget (AUD M) (AUD
Slide 16: Financing Plan Summary & Status
KANMANTOO COPPER MINES FINANCING PLAN SUMMARY & STATUS As at 28 February 2011 AUD 35.9 million spent, AUD 85.4 million remaining to spend Cash Balance AUD 113 million & AUD 30 million undrawn Project Finance Debt facility Total cash resources of AUD 143 million to meet remaining capex of AUD
Slide 17: Planned Project Highlights
KANMANTOO COPPER MINES PLANNED PROJECT HIGHLIGHTS Life-of-mine (“LOM”) average payable metals production 21k tonnes p.a. copper 9k ounces p.a. gold 177k ounces p.a. silver Royalties 1.5% NSR for 5 years, 5% thereafter Average LOM cash cost of USD 1.61/lb (excluding royalties, but after s
Slide 18: Processing Overview
KANMANTOO COPPER MINES PROCESSING OVERVIEW Lime Second-hand Pillara plant ROM BIN FEED PRODUCT VIBRATING BIN SCREEN GRIZZLY disassembled and relocated FEEDER JAW CRUSHER NEUTRAL- ISATION TANK from Western Australia by STOCK PILE HYDRO PROCESS WATER TANK SECONDARY Abesque Engineering CRUSHER CYCLON
Slide 19: Construction Progress
KANMANTOO COPPER MINES CONSTRUCTION PROGRESS Abesque Engineering principal contractor Parsons Brinckerhoff appointed to provide project management oversight of construction activities Construction to date 50% complete, on time and within budget Civils nearing completion 19
Slide 20: Kanmantoo Copper Mines – Current Activity
KANMANTOO COPPER MINES – CURRENT ACTIVITY SITE VIEW WITH PLANT LOCATION SCHEMATIC (FROM LEFT TO RIGHT 2 OF 2) Stockpile Concentrate Concentrate Abesque Hillgrove York Civil Feed Storage Filter Construction Administration Construction Conveyor Area Shed Office Block Office Base of Process Concentrate
Slide 21: Mining and Infrastructure Progress
KANMANTOO COPPER MINES MINING AND INFRASTRUCTURE PROGRESS Exact Mining – mining contractor Pre-strip and Tailings Storage Facility (TSF) initially Milestones to date include TSF embankments and crusher ramp commenced Initial piping system installed for Tailings Storage Facility (TSF) TSF
Slide 22: Key Milestones Through to Commissioning in November 2011
KANMANTOO COPPER MINES KEY MILESTONES THROUGH TO COMMISSIONING IN NOVEMBER 2011 C2 Commissioning Phase COMMENCES: 5th October 2011 ‐ Water commissioning of plant ‐ Duration 4‐6 Weeks Pre‐commissioning Phase COMMENCES: 7th September 2011 ‐ Bump tests ‐ Power to plant & equipment ‐ Duration 6‐8 weeks
Slide 23: Kanmantoo Copper Mines Overview
KANMANTOO COPPER MINES OVERVIEW EXPLORATION HAS IMPROVED RESOURCE CERTAINTY AND RESOURCE-RESERVE CONVERSION RATIO RESOURCE GROWTH RESERVE GROWTH 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
Slide 24: Ore Body and Near Mine Exploration
KANMANTOO COPPER MINES ORE BODY AND NEAR MINE EXPLORATION NW Zone Exploration Manager appointed Waste Rock Strategic review of all exploration Stockpile conducted to date to target and rank priorities within mining lease NE Zone (ML 6345) Main Zone Green Board approved AUD 1.5 million, Zone SE
Slide 25: Resource Extension and Target Reserve Conversion
KANMANTOO MINES RESOURCE EXTENSION AND TARGET RESERVE CONVERSION Phase 1 – Convert inferred resources to indicated 5,000m of RC drilling and up to 400 m of DD Plan view of resources around the pit Indicated (orange) Inferred (yellow) Sectional views provide better explanation Existing
Slide 26: Resource Extension – Target Near Mine IP Anomalies
KANMANTOO COPPER MINES RESOURCE EXTENSION - TARGET NEAR MINE IP ANOMALIES SLOT EXTENSION COOPER’S & NE ZONE FIND FALCON GREEN ZONE SOUTH MAIN ZONE SOUTH EMILY STAR SOUTH PARINGA McFARLANE’S Phase 1: Reserve Upgrade - 5000m Phase 2: Resource Extension - 2500m Convert inferred resources to indicated I
Slide 27: Cross Section A–A' Looking North Through Falcon & Main Zone
KANMANTOO COPPER MINES CROSS SECTION A – A’ LOOKING NORTH THROUGH FALCON & MAIN ZONE Phase 1 ‐ Convert inferred resources to indicated Open: No Drilling KTGC0073 – 19m @ 1.43% Cu Open: No Drilling 27
Slide 28: Cross Section B–B' Looking North Through Green & Main Zones
KANMANTOO COPPER MINES CROSS SECTION B – B’ LOOKING NORTH THROUGH GREEN & MAIN ZONES Phase 1 ‐ Convert inferred resources to indicated Open: No Drilling Open: KTRC077 – 20m No Drilling @ 1.31% Cu
Slide 29: Cross Section C–C' Looking North Through O'Neil
KANMANTOO COPPER MINES CROSS SECTION C – C’ LOOKING NORTH THROUGH O’NEIL Phase 1 ‐ Convert inferred resources to indicated Open: No Drilling KTRCD122 – 24m @ 1.00% Cu KTRCD284 – 21m Open: @ 1.27% Cu No Drilling
Slide 30: Summary
KANMANTOO COPPER MINES SUMMARY Next Australian copper producer Construction on time and on budget First production November 2011 Robust project with near term cash flows Good potential for Life of Mine extension 30
Slide 31: Exploration
EXPLORATION
Slide 32: Exploration Assets: Indonesia
EXPLORATION ASSETS: INDONESIA HIGHLY PROSPECTIVE GOLD, COPPER EXPLORATION WHY INDONESIA? Proven geological provenance for target commodities (Cu, Au) Strengthened legislative and judicial environment Favourable new mining laws allowing direct foreign ownership Experienced local partners CY20
Slide 33: Sumba Island: Hillgrove 80%
SUMBA ISLAND HILLGROVE 80% Hillgrove is an 80% Tanah Daro shareholder in PT Fathi, Project Area holding an IUP over ~1,000km2 for a period of six years Pelitalira Hillgrove responsible Masu Project for exploration and Area development activities and sole funding up to decision to mine Two main
Slide 34: Sumba Island: Masu (Southern) Project Area
SUMBA ISLAND Masu Corridor Soil Gold Values And Prospect Locations MASU (SOUTHERN) PROJECT AREA Recent exploration Soil sampling over Project now covers over 10km² Has identified 17 high priority gold anomalies (over up to1.5km in length) Soil sampling continues to identify high quality gold t
Slide 35: Sumba Island: Tanah Daro (Northern) Project
SUMBA ISLAND TANAH DARO (NORTHERN) PROJECT Pelitalira Prospect Located in Central Sumba Waterfall Vein Accessible by road Recent exploration Soil sampling delineated Tanah Daro Project Area two distinct gold anomalies with gold values up to 19.95g/t Au Earlier Waterfall Vein rock chip samp
Slide 36: Indonesia Bird's Head Project Regional Setting
INDONESIA BIRD’S HEAD PROJECT REGIONAL SETTING Sorong Bird’s Head covers part of the interpreted westward continuation of the New Guinea ‘Orogenic Belt’ 36
Slide 37: Bird's Head Project: Hillgrove 80%
BIRD’S HEAD PROJECT HILLGROVE 80% Hillgrove is an 80% beneficial shareholder in PT Akram As with PT Fathi, we are moving to a corporatised ownership structure IUP rights cover almost 1,000km2 , granted for six years Hillgrove responsible for exploration and development activities and sole fu
Slide 38: Bird's Head Project: Green Cliffs Prospect
BIRD’S HEAD PROJECT GREEN CLIFFS PROSPECT Green Cliffs Breccia Target 3D magnetic inversion modelling of West Delta area showing magnetic targets Strong magnetic anomalies associated Magnetic High Inversion with intense hydrothermal alteration, Modelling Outlines Diorite intrusives and copper va
Slide 39: Bird's Head Project: West Delta Prospect
BIRD’S HEAD PROJECT WEST DELTA PROSPECT Trenching highlights : 32m @ 0.73% Cu including 20m @ 0.95% Cu 52m @ 0.35% Cu including 12m @ 0.75% Cu 132m @ 0.29% Cu including 18m @ 0.65% Cu 54m @ 0.48%Cu including 22m @ 0.97% Cu Rock chip sampling with geological mapping has encountered strong
Slide 40: Bird's Head Project: Delta Prospect
BIRD’S HEAD PROJECT DELTA PROSPECT Very large remnant litho-cap material on high ridge tops indicates the system is partially eroded Copper grades at surface ~0.2%-0.6% are common Outcropping Copper Mineralization, Green Cliffs Prospect 40
Slide 41: 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 41
Slide 42: Bird's Head Project: West Delta Prospect
BIRD’S HEAD PROJECT WEST DELTA PROSPECT Geological mapping, historical soil sampling, aeromagnetic survey results, trenching and alteration mapping Zonation intensity increases towards Green Cliffs, determining Porphyry Targets Porphys core target area There are multiple porphyry targets prese
Slide 43: Bird's Head Project: West Delta Prospect
BIRD’S HEAD PROJECT WEST DELTA PROSPECT Have done as much as we can through surface exploration Next step is to drill-test these porphyry targets (to 600m) Experienced drilling contractor has been selected Drill rig en-route to site Awaiting necessary permitting to undertake drilling activ
Slide 44: Corporate Snapshot: Financing Plan Status
CORPORATE SNAPSHOT FINANCING PLAN STATUS Hillgrove Resources Limited (HGO) Producing asset in November 2011 (7 months) High optionality through: Resource expansion at Kanmantoo (target doubling of resources) Expanded throughput at Kanmantoo (2.4 to 3.5 mtpa), subject to resource definition
Slide 45: Hillgrove Resources vs Broker Valuations
CORPORATE SNAPSHOT HILLGROVE RESOURCES vs BROKER VALUATIONS $1.00 Intersuisse Austock Wilson $0.41 $0.54 $0.64 $0.80 Broker valuations are significantly $0.60 higher than the existing share price $0.40 Little or no value attributed to the $0.20 Indonesian assets $0.00 April ‘10 1 year HGO share
Slide 46: Appendix
ll RESOURCES
Slide 47: Management Team & Board of Directors
MANAGEMENT TEAM & BOARD OF DIRECTORS EXPERIENCED BOARD OF DIRECTORS WITH PROVEN TRACK RECORD 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 o
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