Copper producer Hillgrove Resources (ASX:HGO) has laid out its plan to grow production at its Kanmantoo Mine in South Australia in an address at the company’s recent annual general meeting.
Chairman Derek Carter says the focus for Hillgrove for the rest of 2024 will be on the ramp-up to steady state production, as well as expanding annual production and/or the mine life.
To do this, Hillgrove will drill test the mineralised zones below and adjacent to the open pit.
“Of initial interest will be Kavanagh Deeps, where we have identified a large geophysical anomaly, 1km in strike length, and potentially representing a faulted extension of the Kavanagh ore body,” Carter says.
“Other nearby lodes will also be tested.”
Carter says production numbers for February, March, and April have trended upwards, with milled tonnes, grade, and recoveries all increasing each month.
Copper output rose to 719 tonnes in April, from 239 tonnes in February and 589 tonnes in March, and demonstrated copper recoveries of 90%.
“We will provide an update to the market on May production shortly, however we expect this increasing trend to continue,” Carter says.
The restart of the Kanmantoo Mine coincided with the price of copper reaching record levels this year.
“We are currently seeing record copper prices — having traded above US$11,000 per tonne and more importantly for us, above A$16,000 per tonne recently,” Carter says.
“This compares to the A$13,500 per tonne assumption used in our updated economic assessment.
“Not only does this increase the company’s operating margins, but enables us to examine mining at a reduced cut off grade to feed the processing plant, which has latent capacity — and ultimately, increase free cash flow generation.”
Hillgrove reached first revenues within a year of completion of funding.
The Kanmantoo Mine sits 55km from Adelaide and was previously operated as a series of open pits from 2010 to 2020, producing about 137,000 tonnes of copper and over 55,000 ounces of gold.
Write to Angela East at Mining.com.au
Images: Hillgrove Resources
