With buoyant copper prices on the horizon and $38m in the coffers, Hillgrove Resources is blasting ahead with the development of its Kanmantoo project in South Australia.

It’s now fully-funded for its flagship Kanmantoo copper-gold project after receiving FIRB approval for the $17.2m placement with Freepoint Metals and Concentrates.

While open pit operations were completed in 2020, some astute management, belief from investors, the resurgence of Cu prices and successful underground exploration means it’s finally “all systems go” for the team at Hillgrove Resources (ASX:HGO).

A kickstart to the historical Kanmantoo mine is now underway – and, as a testament to their patience – current custodians Hillgrove have been proving up resources while waiting for the stars to align. It looks like it’s all about to pay off.

With a production start date of Q1 2024, well-funded HGO is expecting to deliver 43,500t of copper and 11,500oz of gold from 4.5 million tonnes of ore, across an initial mine plan of 45 months.

That’s very likely to increase as well, as ongoing drilling to prove up more copper and gold looks to add further mining inventory.

So, what’s on the cards?

We’re glad you asked. So are HGO. All major contracts have been executed – including the supply of explosives and other lead items, as well as the supply and maintenance of the underground fleet which is now mobilised.

Hillgrove said it expects to hire an additional 130 staff over the next six months as the mine expands with the preparation of the process plant, in readiness for first copper production.

If that wasn’t enough, the developer is STILL spinning the exploration drill to increase annual production from Kanmantoo and extend its mine life.

Delayed projects are often like rubber bands; where only the imperturbable are able to see the light at the end of the tunnel while things slowly pull back as they eagerly await that moment of lift-off.

HGO MD Lachlan Wallace says a final investment decision (FID) is imminent and boots are already on the ground concentrating on preliminary works and the development of the decline.

“In anticipation of a positive FID, underground development has already commenced,” Wallace says.

“The first underground blast occurred in May and the development rate has quickly ramped up to planned levels.”

First copper is scheduled for the first quarter of 2024.

“In addition to this, a hedging agreement with Freepoint has been executed which enables up to 16,000mt of copper to be hedged,” Wallace said.

Freepoint’s commitment to the project has helped keep things progressing Kanmantoo’s projected $205m of after-tax cash flow at an IRR of 231%.

The Hillgrove MD is confident that the funding and hedging package is more than sufficient to progress and expand the copper mine and add significant value along the way through further exploration success.

“Subject to the positive FID, and the copper price anticipated to meet the requisite hurdle under the hedging agreements, we expect to place the first 6,000mt of AUD copper hedging to protect early revenues,” Wallace said.

“We look forward to providing regular updates on the status of works in the coming weeks and months.”

The placement completes a broader funding package which enables the start of the Kanmantoo underground and the continuation of mine expansion drilling debt-free.

“We’re in the enviable position of starting the mining operation without debt, enabling the team to focus on delivering the mine plan and growing the mining inventory,” Wallace said.

“Since the announcement of the capital raising we have been actively progressing the project on a number of fronts to make sure we remain on track for first copper production in early 2024.”

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.

Read MoreCopperGold

Featured Companies

You might be interested in