ASX Quarterly Wrap: Hillgrove ramps up project development, with Hastings not far behind

It’s the quarterly season again as the ASX market announcements page becomes increasingly flooded with update lodgements.

To save you the trouble of trudging through it all, we’ve wrapped up the highlights from some of the reports that caught our eye.

Hillgrove Resources (ASX:HGO)

During the quarter, the company made the key final investment decision to proceed with the Stage 1 development of its Kanmantoo underground copper mine in South Australia.

The development decision, which is fully funded through a recently completed $38m placement, is the culmination of some two years of work aimed at confirming sufficient underground resources to support a restart.

It leverages the presence of existing infrastructure such as the 3.6Mtpa processing facility and operational tailings facility used by the previously operating open cut mine to lower costs.

Since making the decision in early June, the company has entered into the underground development contracts and has appointed key employees for the underground development, which commenced in May 2023 and quickly ramped up to planned underground development rates.

Copper concentrate production is expected to start in the first quarter of 2024.

Hillgrove has also progressed mine life extension drilling, which indicates that the Emily Star copper-gold system has wide zones of mineralisation within which higher grade copper-gold zones occur continued.

Emily Star is believed to have the potential to expand the mine life and annual copper production at Kanmantoo, with underground development at Emily Star as part of a broader South Hub expansion.

“In the immediate future, the primary focus remains to deliver first copper production on time and budget,” managing director Lachlan Wallace said in its quarterly.

“As such, the next quarter sees the commencement of underground stope definition drilling, primary ventilation circuit installation, and the establishment of development drives ahead of future stoping activities.”

Hastings Technology Metals (ASX:HAS)

Another company that’s stepping on the development path is Hastings, which has announced a staged development strategy for its Yangibana rare earths project to reduce initial funding requirements and project execution risks as well as provide early cash flows.

Stage 1 is expected to cost $470m (inclusive of contingency) and will focus on the construction of the Yangibana mine and beneficiation plant to produce 37,000 tonnes per annum (tpa) of REE concentrate at 27% TREO which will be trucked from site during the first quarter of 2025.

This will provide post-tax net present value (NPV) and internal rate of return (IRR) of $538m and 27.54% respectively.

Stage 2 involves the construction of a hydrometallurgy plant at Onslow that will produce 15,000t of REE carbonate up to a TREO grade of 59%, and has been pegged to provide a post-tax NPV and IRR of $1.018bn and 50.93% respectively.

This will increase overall project cost to $948m though this is expected to be funded through cashflow from the first stage.

Early infrastructure works at Yangibana nearing completion with the finalisation of the airstrip, site access road, water supply infrastructure and 50% of the new Kurrbili Village becoming operational.

Hastings has reached a binding fixed price EPC contract agreed with GR Engineering Services Limited for delivery of beneficiation plant to minimise risk of capital cost increases and provide guarantees on project schedule and product throughput.

It has also signed a non-binding heads of agreement with Neo Performance Materials outlining framework to negotiate commercial offtake agreement for supply of Stage 1 rare earth concentrate and is advancing discussions with multiple interested project financiers while reviewing the optimal funding source.

“The June quarter marked a period of significant momentum for the Yangibana Project with early infrastructure works nearing completion and the dispatch of long-lead critical path items, both vital to maintaining our fast-track development schedule to achieve first rare earths concentrate sale in Q1 2025,” executive chairman Charles Lew said in the company’s quarterly report.

OD6 Metals (ASX:OD6)

For OD6 Metals, the June quarter was marked by second phase aircore drilling at Splinter Rock delivering strong rare earth assays and metallurgical testwork of material from the project, which achieved very high recoveries using a simple hydrochloric acid leach.

The drilling was successful with 74 of the 83 holes drilled returning significant grades – averaging in excess of 1,000 parts per million (ppm) total rare earth oxides (TREO) – and clay thickness of between 20m and 80m.

Not only do the results show continuity of grade and thickness over multiple kilometres of drill lines, they also demonstrate a high quantity (22%) of valuable magnet REEs.

Adding further interest, the drill results strongly correlate with interpreted data from airborne electromagnetic survey, which validates geological modelling and exploration program design.

Meanwhile, the metallurgical test work returned average recovery of 71% magnet REEs from the Prop prospect, 62% from the Centre prospect as well as 64% and 76% magnet REE recovery from the Scrum and Flanker prospects respectively.

This work provides sufficient confidence to proceed with further optimisation test work in parallel with targeted infill drill programs at the four main prospect areas.

OD6 has also started Phase Three drilling at Splinter Rock – a 188 hole program to test the strike length of the main prospects – and has secured a $180,000 co-funded drilling grant from the Western Australian Government’s Exploration Incentive Scheme.

Southern Hemisphere Mining (ASX:SUH)

During the June quarter, Southern Hemisphere continued to expand the mineralised footprint of its large Llahuin copper-gold-molybdenum porphyry project in Chile with rock chip sampling returning results of up to 7.28% copper, 18.65 grams per tonne (g/t) gold and 55g/t silver.

Geological mapping of previously unexplored areas has also identified additional mineralised veins in areas outside known resources in the project area while over 4,000 pulp composites are being analysed to assist with understanding the multi-element signature of the deposit.

This understanding is a vital part of refining the highly anticipated drill program scheduled for the fourth quarter of this year.

Gold was also panned in five samples taken from a 500m stretch north of the resource zone at the 1.9km-long Cerro Ferro porphyry-hosted geochemistry target.

The company has also increased Indicated and Inferred Resources at its Los Pumas battery metal manganese project in northern Chile by 27.5% to 30.26Mt grading 6.24% manganese, 5.74% aluminium, 2.95% potassium and 0.05% phosphorous.

This upgrade concludes the exploration stage of the project and moves it to the scoping and metallurgical study phase.

At Stockhead we tell it like it is. While Hillgrove Resources, Hastings Technology Metals and OD6 Metals are Stockhead advertisers, they did not sponsor this article.