Hillgrove shareholders have demonstrated their support for its planned start of underground copper mining at Kanmantoo by oversubscribing for its $2m share purchase plan.

The company received 335 applications totalling $4.2m from eligible shareholders, leading to a scale back of applications in line with the terms of the SPP of 38.9 million shares priced at 5.2c per share.

Along with the $10m that Hillgrove Resources (ASX:HGO) raised through its placement to new and existing institutional and sophisticated investors, it places the company in a strong financial position as it progresses towards mining the Kanmantoo Underground copper project in 2022.

This is seen as essentially restarting a previously producing mine thanks to having all infrastructure – including the 3.5 million tonne per annum processing facility, a fully permitted site and strong community support already in place.

“We appreciate the overwhelming support we received from our shareholders for the SPP, which reflects a strong endorsement of the company’s strategy of increasing the resource base ahead of a planned commencement of underground mining at Kanmantoo in 2022,” managing director Lachlan Wallace said.

“With circa $14 million in our bank accounts, we can aggressively progress the project and are now well positioned to deliver on this opportunity at a time of record copper prices.”


Resource drilling and underground development

The SPP raising comes just after the company started an extensive 16,000m drill program targeting extensions to the known lodes at Nugent Pit, Spitfire, South West, and North Kavanagh to increase resources.

Drilling at Nugent Pit, which is the initial focus of the program, will also seek to bring the deposit into the mine plan to increase the project’s production potential and add further value.

In addition to the drilling, the company is also concurrently commencing the underground exploration and development decline works at Kanmantoo through the use of the Komatsu MC51 continuous miner. These works are largely funded by the South Australian Government (through a $2.0 million grant) as well as Komatsu (with repayment only upon receipt of project financing for a mine restart).

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.