Hillgrove Resources returns multiple high-grade copper hits within +100-metre zones at Kanmantoo"s Kavanagh system – Proactive Investors Australia

10:06 Mon 21 Mar 2022
Hillgrove Resources pioneers electrically powered ‘continuous miner’ at Kanmantoo Copper-Gold Mine
Upon completion of the drilling program at Nugent, Hillgrove will update the respective MRE for the Kavanagh and Nugent lode systems, which is expected to grow the MRE in both size and geological confidence.
Hillgrove Resources Ltd (ASX:HGO)’s four new diamond holes in the Kavanagh mineral zone at Kanmantoo Copper Project in South Australia, have all intersected strong copper-gold mineralisation. 
The Kavanagh surface drilling program is now complete with drilling continuing at Nugent.
Upon completion of the drilling program at Nugent, Hillgrove will update the respective mineral resource estimates (MRE) for the Kavanagh and Nugent lode systems, which is expected to grow the MRE in size and geological confidence. 
Funding discussions for the Kanmantoo Underground restart have advanced to definitive agreements stage, with the required capital of $26 million expected to be funded entirely by debt. 

Hillgrove CEO and managing director Lachlan Wallace said: “It is a very predictable mineral system to drill, with every drill hole since May 2021 yielding significant intersections of copper.
“The recent drilling results continue this trend, with multiple high-grade zones being delineated within wider zones of copper mineralisation of around 100 metres in downhole length.
“As these holes are incorporated into the geological model, it is expected the resource estimate will grow both in size and in geological confidence.
“The broader mineral zones in holes KTDD208 W1 and W4 complement previous drill results in 2021, including 170 metres at 1.0% copper and 166 metres at 0.9% copper, and demonstrate the presence of a large copper system at Kanmantoo.

“These wide mineralised zones provide a significant opportunity to increase annual copper production above the Stage 1 plan presented last year, which forecast almost $200 million of free cash flow in the initial three years, at prices below current spot, and only requires $26 million of working capital.
“With ample processing and tailings storage capacity already on site, any increase in copper production will not require additional capital or permitting and would be expected to reduce the average all-in sustaining cost per tonne of copper produced.
“On the back of the continuing strong copper demand and the expectation that debt funding for the entire restart capital will be secured in the near term, we are bringing forward potential copper production by accelerating the decline development through a short-term mining contract using traditional drill and blast practices.
“The Komatsu MC51 mechanical cutting machine continues its trial by cutting the second portal for the ventilation circuit, providing valuable infrastructure development which will also assist in realising earlier copper production.
“Kanmantoo remains a unique proposition as one of the few ASX-listed developers that can ramp into production quickly and at low cost to take advantage of the record copper price environment.
“With funding discussions advancing to documentation stage, and the contract tender process underway, we remain firmly on track to commence operations in 2022.”
This drilling update demonstrates the confidence the company has in the geometry and tenor of mineralisation in the Kavanagh mineral system as it continues to advance towards recommencing copper concentrate production in the current high price environment for copper metal.
The highlights includes:
➢ 170.65 metres at 1.01% copper, 0.11 g/t gold from 339 metres downhole (KTDD2051 ), including:
➢ 166.3 metres at 0.9% copper, 0.13 g/t gold from 332 metres downhole (KTDD2082 ) including 30.25 metres at 1.32% copper, 0.08 g/t gold from 332 metres and 106.3 metres at 0.95% copper, 0.17 g/t gold from 392.0 metres including:
To date, assays have been received for 72 drill holes into the Kavanagh, Nugent, Spitfire and South-West Kavanagh copper-gold mineralisation, yielding 100 copper-gold intersections greater than 3 metres in width with >0.6% copper, and only six holes with sub-grade copper.
This is a positive achievement given the strong structural controls of the mineralisation.
Overall, every drill hole since the May 2021 drilling updates has delivered a copper-gold intercept that confirms the underground opportunity at Kanmantoo.
The drill results demonstrate several important features of the Kanmantoo mineralisation:
➢ Infill drilling of the Kavanagh and associated copper-gold mineral system has assured the company of the continuity and tenor of the copper-gold mineralisation in these areas;
➢ Extensional down-dip drilling continues to intersect copper-gold mineralisation to a depth of over 800 metres below surface and open;
➢ Along-strike drilling continues to expand the areal footprint of the mineralisation; and
➢ Initial drilling of the Spitfire and South-West Kavanagh copper-gold mineralisation affirms these targets for future drilling and possible inclusion in the underground feasibility studies.
The success of the program to date has continued to increase the robustness of the MRE and solidifies the production restart plan.
These latest drilling results are expected to grow the resource in both size and geological confidence and the company intends to release an updated MRE after the completion of the Nugent and Kavanagh drilling program.
The continued strong demand in copper and advanced discussions with debt providers for the entire production restart capital, Hillgrove is considering bringing forward planned copper production and is accelerating development efforts to fastrack access to ore.
With funding discussions advanced and at definitive agreements stage, subject to board approval, the company expects to be in a position to commence production restart in 2022 as scheduled.
The company will provide further information on its targeted timeline closer to the completion of its debt financing.
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Hillgrove Resources Ltd's Lachlan Wallace tells Proactive about an updated mineral resource and economic assessment for the Kanmantoo copper-gold project in South Australia. He says the 5.7-million-tonne mineral resource and low capital intensity underpin Kanmantoo's potential as the company…
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