Hillgrove Resources (ASX:HGO) has made a Final Investment Decision (FID) to proceed with the stage one development of the Kanmantoo underground copper mine in South Australia.
Located 25km away from Mount Baker in the Adelaide Hills region, the project is expected to deliver 43,500 tonnes of copper in concentrate over the initial stage one 4-year schedule.
The stage one mine plan focuses on 2 of the 9 known mineral lodes on the mining lease that were either drilled or mined as part of the open pit. These lodes remain open at depth and along strike and drilling is already underway to aimed at expanding mine life and annual copper production.
Hillgrove Resources reports anticipation of a positive investment decision, the underground development commenced in May. The $105.15 million market capitalisation company says initial cuts validate the productivity and ground support assumptions, with development rates in line with the schedule.
With all infrastructure, including a 3.6Mtpa processing plant and operational tailings storage facility already in place, the cost and risk to first copper production is relatively low and on track for early 2024.
Commenting on the positive FID, Hillgrove Managing Director Lachlan Wallace says: “The formal decision to commence mining at Kanmantoo is an exciting milestone for the company. It comes on the back of completing a $38m placement and share purchase plan, which was strongly supported by existing and new shareholders, and positions the Company to commence development without any debt.
This in turn de-risks the project by providing operational flexibility, and enables the mine to be developed with a focus on delivering project value, rather than a debt repayment schedule potentially influencing operational decisions.
“In anticipation of a positive investment decision, a great team has been established with a high level of underground experience…”
In anticipation of a positive investment decision, a great team has been established with a high level of underground experience, and they have wasted no time in getting the underground development underway. The first underground blast occurred in May and the development rate has quickly ramped up to planned levels. Ore intersected in the primary decline and ventilation drive is being stockpiled ahead of first copper production, which is planned to occur in the first quarter of 2024.”
The company notes that a further 130 new jobs will be created as it ramps up towards full production over the next 6 months.
Stage one represents the first step in developing the Kanmantoo asset and surrounding region. Drilling over the past 3 years has increased the Mineral Resource Estimate by 600%, to almost 7Mt, and with an exploration target of a further 10-20Mt at 0.9-1.3% Cu and 0.1 0.3 g/t Au in close proximity to the processing plant, there is a great opportunity to expand the mine life further.
In addition, within 10km of the mine site, there are a number of exploration opportunities, which have the potential to leverage the existing processing and tailings infrastructure.
Minister for Infrastructure, Transport, Energy & Mining, Tom Koutsantonis says: “It’s fantastic to see the Kanmantoo Copper Mine reaching financial investment decision and on track to produce first copper early next year. Copper is arguably the most important critical mineral as the world looks to decarbonise. Mines such as this stand to help address the copper deficit while stimulating the state and local economy.
The project already enjoys support from the local community, and the creation of 160 new jobs will be welcome news.”
Write to Adam Orlando at Mining.com.au
Images: Hillgrove Resources Ltd
