Copper production at Kanmantoo is on track for Q1 2024. Picture: Getty Images.
Mining
Special Report: Infill drilling at Hillgrove Resources’ Kanmantoo copper-gold project has confirmed previous high-grade results at the Kavanagh and Spitfire zones while enabling completion of individual stope designs ahead of production in 2024.
Following the completion of open pit operations in 2020, Hillgrove Resources (ASX:HGO) undertook exploration to prove up an underground extension at the Kanmantoo copper mine in the Adelaide Hills. has been powering ahead to restart copper production at the project, which is on track to begin in the first quarter of 2024.
The fully-funded Stage 1 development of the Kanmantoo underground mine will access about 4.5Mt of project’s current underground resource of almost 7Mt to produce 43,500t of copper and 11,500oz of gold over 45 months.
Capex is a low $25m – thanks to existing infrastructure such as the 3.6Mtpa processing facility – while all-in sustaining cost is just $8051/t of copper equivalent.
This delivers impressive net present value and internal rate of return – both measures of a project’s profitability – of $165m and 231% respectively.
What is interesting is that the Stage 1 mine plan only covers two of the nine known mineral lodes on the mining lease that were either drilled or mined as part of the previously producing open pit.
These lodes remain open at depth and along strike with an exploration target of between 10Mt and 20Mt grading 0.9% to 1.3% copper and 0.1g/t to 0.3g/t gold.
More recently, the company identified that the Kanmantoo Deeps zone could be a repeat of the entire Kanmantoo copper-gold deposit, only 400m from the planned decline.
This area has an exploration target of between 50Mt and 80Mt, with grade ranging from 0.8 to 1.2% copper and 0.1 to 0.2 g/t gold, an order of magnitude greater than the current mine plan of 4.5Mt
Long section showing the underground decline (blue) and the Kanmantoo Deeps exploration target. Pic: Supplied (HGO).
Infill underground drilling to map the grade continuity of the main Kavanagh mineral system has now confirmed previously reported exploration drilling results.
Key intersections include 36.6m intercept grading 3.35% copper from 43m down-hole including 2.1m at 24.76% copper.
Long section through all underground drill holes drilled since 2022 (no exploration holes). Pic: Supplied (HGO).
The company adds that the infill drilling has demonstrated that previously unidentified higher-grade copper breccias are present within the Kavanagh mineralised zones outlined by the exploration drilling.
HGO adds that underground drill results to date confirm that the restart of copper production at Kanmantoo remains on track.
“It is always pleasing to see trays full of high-grade drill core, such as this run of 36.6m at 3.35%Cu. The infill drilling increases the geological data density, enabling individual stope designs to be completed as we prepare for the commencement of copper production early next year,” managing director Lachlan Wallace said.
“The geological reconciliation of the early stopes which are relied upon for first revenues remain the priority target for infill drilling.
“These areas will be drilled as the decline advances and additional underground drill platforms are established. Additional drilling capacity has been mobilised to accelerate the drilling information from the early stopes as drill locations become available.
“The additional drilling capacity is also following up on the recent step out hole at Spitfire, which recorded 45.4m at 1.19% copper and 0.12 g/t gold.
“This intersection was more than 100m away from the nearest hole, providing an opportunity for increased mineral resources in this area with further drilling.”
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.
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