Alumina and gold-focused minnow Hill End Gold has come under the microscope of the ASX regarding statements made over its high purity alumina (HPA) project near Ballarat in Victoria and its cash situation.

In a release to the market yesterday, the Sydney-based company said it had been advised by the ASX to clarify certain statements made in announcements over the past month relating to tonnages of kaolin in deposits at the project and the target production rate from its HPA facility.

The ASX advised the statements were not in accordance with either ASX Listing Rules or the JORC Code – the Australian code that sets minimum standards for public reporting of minerals, exploration results, mineral resources and ore reserves.

In a statement from 17 July, Hill End (ASX:HEG) stated a target production rate of 10,000 tonnes per annum from the HPA facility as part of the pre-feasibility study (PFS) into the project.

Hill End was forced to clarify the statement, saying the production rate was the project development scope for the PFS and therefore was an aspirational statement and not a production target.

Under ASX Listing Rules, if a company doesn’t have sufficient information to disclose a production target, the company must publish an aspirational statement or an exploration target instead.

Hill End also had to retract a statement from its announcement on Monday which stated resource delineation drilling at the kaolin deposit at Yendon confirmed the target deposit’s tonnage of ~1 million tonnes. According to the company, the drilling also discovered a large extension to the east of the deposit for a total ~4 million tonnes of in situ material.

“Please be advised that, while these are the approximate tonnages of primary kaolin-containing material, as outlined by recent drilling, and grade is not mentioned, ASX advises that the reporting does not comply with the JORC Code so the numbers are retracted,” Hill End said.

Meanwhile, Hill End has been quizzed by the ASX over its cash position. The company at the end of the June quarter had $632,000 in the bank and is tipped to spend $500,000 in the current quarter.

In its response to the Appendix 5B query, Hill End said it was seeking to raise $600,000 through a placement of up to 10 million fully paid shares at an issue price of 6c.

Hill End said funds would be used for exploration and development activities at its HPA and gold projects, acquisitions and working capital.

“Specifically, for the HPA project, the funds will be used for the Yendon deposit resource estimation, metallurgical test work on a representative bulk sample and other activities for an anticipated 10,000 tonnes per annum HPA facility,” the company said.

“For the gold projects, both Hargraves and Red Hill will have economic feasibility studies completed over the next quarter by consulting firm, Mincore.”

CPS Capital Group has been appointed lead manager to the placement.

Hill End Gold purchased the HPA project last month after acquiring Pure Alumina Pty Ltd, a private company associated with former Syrah Resources founders Tolga Kumova and Tom Eadie.

Hill End began drilling at the Lal Lal HPA project this month to outline a JORC resource, targeting first production in 2020-21.

Hill End also owns gold projects in the historically gold-rich region of Hill End – Hargraves in central New South Wales and have existing gold resources totalling 572,000 ounces.

Shares in Hill End were trading at 6.8c at 12:10pm Thursday AEST.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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