The company declared commercial production at the Kanmantoo mine in the September quarter of last year. Pic: Getty Images
Hillgrove accelerates Nugent copper development with $16m raise
Mining
share
- HGO is raising $13m and $3m via a placement and share purchase plan
- Fund will accelerate development of Nugent copper deposit
- Increased overall production expected to reduce Kanmantoo unit costs
Special Report: Hillgrove Resources has announced a $13m placement and $3m share purchase plan at $0.035 per share to increase copper production via its Nugent deposit, part of the company’s operating Kanmantoo copper mine in South Australia.
The combined equity raising follows recent positive results at the deposit which are significantly higher than the resource grade, and include:
- 18.55m at 5.69% copper + 1.02g/t gold (uncut) from 187m downhole (24KVUG0476); and
- 16.00m at 2.96% copper + 0.42g/t gold (uncut) from 197m downhole (24KVUG0503).
Hillgrove Resources (ASX:HGO) says the results highlighted an opportunity to accelerate the Nugent development to access potentially higher-grade zones earlier in the mine plan – and increase the overall copper production with a view to achieving a material reduction in Kanmantoo’s unit costs.
The funds from the capital raising are also expected to expand the mining and processing rate by approximately 25% from 1.4Mtpa to up to 1.8Mtpa.
“Following the success of the recent excellent Nugent drilling results, our technical team have identified a path to accelerate the Nugent production profile,” Hillgrove CEO and managing director Bob Fulker said.
“This acceleration will allow the Kanmantoo underground mine to increase production up to 1.8Mtpa, with increased production of copper units and a material consequential decrease in our unit costs.”
The raising is also expected to lead to stronger economics due to economies of scale and derisk the plan due to more ore sources, the company said.
Mining three areas to diversify feed base
Nugent ore is expected to be delivered to the company’s processing plant in the first half of calendar year 2026 when Kanmantoo will be drawing from three production areas (the currently operating Kavanagh and Spitfire deposits as well as from the opening of Nugent) – which derisks the mining plan due to more ore sources and will provide the Company with more optionality.
“Having three active mining areas will increase the efficiency and flexibility of underground mining operations at Kanmantoo as well as providing a more diversified base of feed to our plant,” Fulker said.
“It was only in the September quarter of last year that we declared commercial production at Kanmantoo.
“With the opening up of the Nugent deposit, we believe Hillgrove is particularly well placed to take advantage of our amenable underground mining conditions (with consistent ore and large stope sizes) as well as the significant value of our installed processing capacity.
“South Australia continues to be a world class jurisdiction in which to mine base metals, and we look forward to updating the market on our production and exploration activities as one of the very few ASX-listed emerging copper producers.”
The placement was strongly supported by the company’s major shareholders along with new institutions, with demand received well in excess of the targeted amount.
Hillgrove will undertake the placement in two tranches of $10.4m and $2.6m, with the share purchase plan to follow.
This article was developed in collaboration with Hillgrove Resources, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
