Hillgrove Resources Ramps Up Copper Production at Kanmantoo as Copper Price Soar

Hillgrove Resources Ltd (ASX: HGO) is Australia’s newest copper producer, and the company is wasting no time in ramping up production at its Kanmantoo underground mine in South Australia.

Hillgrove has completed its second copper production campaign, exceeding February’s output by nearly 150% with 589 tonnes of copper produced in March.

The next two-week milling campaign is underway, with copper sales expected next week.

This production increase will continue as Hillgrove establishes additional work areas, enabling them to mine multiple stopes simultaneously.

Strong Resource Base and Proven Infrastructure

Kanmantoo boasts a significant resource base, with current estimates indicating over 6.9 million tonnes of ore at an attractive grade of 1.08% copper and 0.16 grams per tonne of gold. Notably, the open pit at Kanmantoo previously operated for a decade, producing over 137,000 tonnes of copper and 55,000 ounces of gold.

Well positioned

Hillgrove is well-positioned to capitalise on the current copper price rally.

May futures are trading above US$4.20 a pound, representing an impressive 8% increase year-to-date.

The company is also debt-free and boasts a healthy $17 million in franking credits, potentially enabling over $50 million in fully franked dividends in the future.

Exploration and Expansion

Hillgrove is focused on extending the life of the Kanmantoo mine by pursuing existing lodes and drilling the highly prospective Kanmantoo Deeps target.

A significant advantage for Hillgrove is the existing infrastructure at Kanmantoo, including a fully operational 3.6 million tonne per annum processing plant and a tailings storage facility with ample capacity.

The mine’s prime location, just 55 kilometers from Adelaide with easy access to Port Adelaide (70 kilometers away), further strengthens its operational efficiency.

Additionally, Hillgrove has secured a large inventory of critical spares to minimise downtime risks and a long-term, low-cost electricity contract extending until 2027.

Hedging for Stability

Hillgrove has implemented a 16,000-tonne copper hedging facility, with 3,000 tonnes currently hedged at an average price of $12,500 per tonne.

This strategy provides the company with price stability while it ramps up production.

With a strong resource base, experienced team, and strategic planning, Hillgrove Resources is well-positioned to become a significant player in Australia’s copper production landscape, particularly as the copper price continues its upward trajectory.

Articles of Interest