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Hillgrove cancels Kanmantoo contract

26th July 2013

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

  

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PERTH (miningweekly.com) – In a move to further cut costs, copper miner Hillgrove Resources on Friday announced that it had terminated a mining contract with Exact Mining Services over its Kanmantoo copper mine, in South Australia.

The mutually-agreed termination agreement would see Exact personnel leave the Kanmantoo site immediately upon the finalization of the agreement.

Hillgrove MD Greg Hall noted that as a result of the current mining contract market conditions, and the general state of the industry, the company had been able to secure quotes for replacement mining services, at competitive prices.

Alternate contract arrangements were already in place and would see ore feed continue into the plant from the run-of-mine and low-grade stockpiled ore, maintaining a mill throughput at Kanmantoo, and producing copper at around 60% or 70% of the operation’s nameplate capacity.

Hillgrove had also started the mobilization of an alternate mining fleet that would enable the resumption of pit mining operations in about two weeks, while suitable longer-term mining services arrangements were implemented.

Once these long-term arrangements were in place, pit mining was expected to ramp up to normal operations, in around six weeks.

“Hillgrove views this as a short-term transition to a stronger, more competitive outcome for the company and shareholders. Through this changeover process, the Kanmantoo copper mine is forecast to remain cash flow positive,” Hall told shareholders.

He noted that the company would also be using the opportunity to further review its mining and technical arrangements to further reduce mining costs at Kanmantoo, and to implement process and production improvements.

In May this year, Hillgrove announced that it would be winding down activity at its Indonesian assets in order to preserve cash.

Edited by Creamer Media Reporter

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