Hillgrove (HGO) kicks off copper production at Kanmantoo, SA

• Hillgrove Resources (ASX:HGO) has completed the commissioning of the processing facility at its Kanmantoo mine
• The company has now produced its first copper concentrate
• The JORC target for the project ranges from 60 to 100 million metric tons at 0.9 per cent to 1.2 per cent Copper (Cu) and 0.1 grams per tonne to 0.2 gram per tonne Gold (Au)
• HGO last traded at 7.8 cents, at 12pm AEDT

Hillgrove Resources (ASX:HGO) has completed the commissioning of the processing facility at its Kanmantoo mine, producing the first copper concentrate on-site.

HGO shares were up 1.35 per cent at 2pm AEDT at 7.5cps but hit 7.8cps in early trades.

Today’s announcement cements Hillgrove’s position as a copper producer on the ASX, with expected revenue from copper concentrate sales starting this week.

Commodity prices for the metal – needed for copper wire among myriad applications revolving around electrification and decarbonisation initiatives – are down nearly -10% year on year (YoY).

However, the metal hasn’t been slammed as hard as its peer nickel or rare earths have been, largely tied to real and perceived demand from China, still in deflation.

This is because that even if there wasn’t a net zero push happening in most countries – the world would still need increasing supplies of copper regardless.

Prices shot up during COVID-19, and unlike most other metals – see: lithium – copper prices still remain where they were around mid-2021.

Transition and project focus

“Completing this transition from explorer to producer makes Hillgrove Resources one of only a few copper producers on the ASX,” Hillgrove CEO and Managing Director Lachlan Wallace said.

“Doing so in eight months highlights the Company’s capability to deliver on stated objectives.”

Wallace sees the company now in a good place to tap into the ongoing decarbonisation thematic.

Dual opportunity

The JORC Exploration Target for the project, ranges from 60 to 100 million metric tons at 0.9 per cent to 1.2 per cent Copper (Cu) and 0.1 grams per tonne to 0.2 gram per tonne Gold (Au).

Key drilling results included, 36.6 meters at 3.35 per cent (Copper) Cu from 43 meters downhole in East Kavanagh, 45.4 meters at 1.19 per cent Cu and 0.12 g/t Au from Spitfire at 428.5 meters downhole, and 40 meters at 1.27 per cent Cu from 43 meters downhole in Central Kavanagh.

Power has been introduced to the underground operation, leading to a reduction in costs of 65 per cent, decreasing from around 40 cents per kilowatt hour to 13 cents per kilowatt hour.

As for the broad slow recovery in enthusiasm for ESG considerations, connection to the South Australian power grid – which uses more than 70 per cent renewable energy – further reduces Kanmantoo’s carbon footprint.

HGO last traded at 7.8 cents, at 12pm AEDT.