Name of the Project
Kanmantoo underground project – Stage 1.

Location
Adelaide Hills, South Australia.

Project Owner/s
Hillgrove Resources.

Project Description
A project economic assessment has confirmed the project’s “excellent” potential.

The project has estimated mineral resources of 5.7-million tonnes grading at 1.1% copper and 0.3 g/t gold, with additional drilling under way.

The project has a three-year mine plan of 3.3-million tonnes, targeting production of 36 000 t of copper and 10 000 oz of gold.

The existing infrastructure and the short distance from the portal to the copper lodes position Kanmantoo as one of the lowest capital intensity copper development projects in Australia.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated net present value, at an 8% discount rate, of A$166-million and an internal rate of return of 389%, with a payback of seven months after the completion of preproduction works.

Capital Expenditure
The project requires only $26-million of development capital, owing to the existing processing facility and tailings storage infrastructure, both of which are being maintained in a ready-to-restart condition.

Planned Start/End Date
First copper sales are expected within seven months of a final investment decision.

Latest Developments
Hillgrove Resources has reported that the Komatsu MC51 continuous miner has successfully completed the portal of the exploration decline and has started cutting the portal for the ventilation drive. Hillgrove received A$800 000 in state government funding to support the Komatsu MC51 continuous mining trial.

Hillgrove has said that the decline and portal quality is proving superior to traditional drill-and-blast methods, with virtually no damage to the backs and walls. Thin spray-on liner trials have been undertaken as faster, less expensive alternatives to shotcrete, with positive results. However, the rate of advance has been slower than expected.

Mining contractor Pybar has been engaged to extend the exploration decline using traditional drill-and-blast practices to bring forward first copper, pending a positive investment decision to start the underground.

Key Contracts, Suppliers and Consultants
Pybar (exploration decline).

Contact Details for Project Information
Hillgrove Resources, tel +61 8 7070 1698.