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Kanmantoo underground project – Stage 1, Australia – update

Locantion map of Kanmantoo tenements, mine and exploration

Photo by Hillgrove Resources

16th February 2024

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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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 (PEA) has confirmed the project’s “excellent” potential.

In February 2023, an updated PEA concluded that the project could produce 43 500 t of copper and 11 500 oz of gold over an initial 45-month mine plan.

Mining will be focused on two of the nine known mineral lodes on the mining lease that were either drilled or mined as part of the openpit operations.

All infrastructure at the mine, including a 3.6-million-tonne-a-year processing plant and operational tailings storage facility, is already in place.

Hillgrove has reported that drilling over the past three years has successfully increased the mineral resource estimate by 600%, to almost seven-million tonnes. With an exploration target of a further 10-million to 20-million tonnes at 0.9% to 1.3% copper and 0.1 g/t to 0.3 g/t gold in close proximity to the processing plant, there is significant opportunity to expand the mine life.

Potential Job Creation
An estimated 130 new jobs will be created as the project ramps up towards full production.

Net Present Value/Internal Rate of Return
The project has an estimated net present value of A$165-million and an internal rate of return of 231%, with a payback of nine months.

Capital Expenditure
An economic assessment published in February 2023 estimated that the project could be brought online at a capital cost of A$25-million.

Planned Start/End Date
First copper concentrate production is expected in the first quarter of 2024.

Latest Developments
Hillgrove Resources has produced first concentrate from the Kanmantoo copper mine, following successful commissioning of the processing facility.

Plant commissioning and copper production were achieved within the targeted timeframe of the first quarter of 2024.

Hillgrove is now positioned as one of the few pure play copper producers on the ASX.

It has stated that a considerable opportunity exists to grow the resource and mine life.

Mains power has now been established to the underground operation, resulting in a power cost reduction of about 65%, from about $0.40/kWh to about $0.13/kWh.

Further, connection to the South Australian power grid, supplied by renewable-energy generation of more than 70%, considerably reduces Kanmantoo’s carbon footprint.

Operations will be bedded down at Kanmantoo as the company ramps up to steady-state production, with its focus shifting to expanding the business by converting future exploration and development opportunities.

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

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

Edited by Creamer Media Reporter

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