Hillgrove ramps up Kanmantoo amid copper tailwinds

Copper producer Hillgrove Resources (ASX:HGO) has ramped up production at its Kanmantoo Underground Mine in South Australia by 350 tonnes, citing ‘favourable’ trends of the copper price.

Production at Kanmantoo increased from 239 tonnes in February to 589 tonnes in March. The next two-week milling campaign is underway with copper sales planned next week. 

Hillgrove, which has a $152.82 million market capitalisation, says production capacity at Kanmantoo will continue to increase as additional work areas are established, enabling multiple stopes to be mined concurrently. 

According to the company, the price of copper has risen above US$4 per pound for the first time since April 2023. 

“The ramp up of production in line with the copper price positions the company well,” CEO and Managing Director Lachlan Wallace says.

“Copper production is expected to increase further as we establish the second underground work area, enabling more copper to be delivered into the rising copper price environment.”

Hillgrove’s production boost comes at a time in which the Australian Government, as flagged in its 2023 Resources and Energy quarterly report, said global copper consumption was estimated to grow by 7.3% in 2023, and Australia’s copper export earnings are forecast to reach some $12.8 billion in 2023 to 2024.

Production of the first copper concentrate from Kanmantoo was achieved within the desired and previously announced expected timeframe of Q1 2024.

In February this year, Hillgrove completed a $10 million capital raising via a two-tranche placement to ramp up production at Kanmantoo.

Funds from the placement helped to push extension drilling down-dip of existing lodes, drill other deposits within the mining lease, and drill test deep Kanmantoo targets.

Under the placement, a total of 166.665 million new shares were issued at a price of $0.60 per share. 

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.

As of 31 December 2023, the company had $10.24 million in cash and cash equivalents, according to its latest quarterly report. 

Write to Adam Drought at Mining.com.au

Images: Hillgrove Resources
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Written By Adam Drought
Born and raised in the UK, Adam is a sports fanatic with an interest in Rugby League and UFC/MMA. When not training in Muay Thai and Brazilian Jiu Jitsu, Adam attends Griffith University where he is completing his final year of a Communication & Journalism degree.