2009 ANNUAL GENERAL MEETING STAMFORD PLAZA HOTEL, ADELAIDE 24 June 2009
Chairman’s Address Net Profit After Tax HGO - NPAT $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000 $0 2005 2006 2007 2008 2009 -$2,000,000 -$4,000,000 -$6,000,000 1
Chairman’s Address Net Assets HGO - Net Assets $90,000,000 $80,000,000 $70,000,000 $60,000,000 $50,000,000 $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 2005 2006 2007 2008 2009 2
Copper, Gold and Gas ANNUAL GENERAL MEETING Managing Director’s Presentation 24 June 2009
Disclaimer This presentation should not be relied upon as a representation of any matter that a potential investor or their adviser should consider in evaluating the Company. Potential investors must make their own independent assessment and investigation of the matters contained herein and should not rely on any statement or the adequacy or accuracy of the information provided. The Company and its related bodies corporate or any of its directors, agents, officers or employees do not make any representation or warranty, express or implied, as to the accuracy or completeness of any information, statements or representations contained in the presentation, and they do not accept any liability whatsoever (including in negligence) for any information, representation or statement made in or omitted from this presentation. This presentation may contain forward looking statements that are subject to risk factors associated with copper, gold, other minerals and gas businesses. Based on currently available information, the Company believes that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, interest and foreign exchange rates, availability of capital, political risks, project delay or advancement, approvals and cost estimates. Investors should undertake their own analysis and obtain independent advice before investing in HGO shares. All references to dollars, cents or $ in this presentation refer to Australian currency unless otherwise stated. 4
Key Assets Australian Based with Asian Expansion Hillgrove Resources Limited (ASX:HGO) • Gold and Base Metals Explorer • Kanmantoo Copper/Gold Project Indonesian Exploration • Joint Ventures: 80.0% Direct PT Akram Resources Bird’s Head PT Fathi Resources Sumba • Large scale epithermal/porphyry gold/copper targets Eastern Star Gas Limited • S&P ASX 200 - Code:ESG 17.8% Direct • Coal Seam /Conventional Gas InterMet Resources Limited • ASX:ITT 84.8% Direct • Gold, Iron Ore, Uranium, Base Metals 5
Introduction to Hillgrove Major Assets Focused on development of its near term Kanmantoo copper/gold project 60km east of Adelaide • Initial mine inventory of 12Mt supports a 6.5 year mine life producing 15 – 20kt p.a. of copper in concentrate with gold and silver credits • Excellent potential to extend mine life >10 years and identify further base metal reserves in the Kanmantoo Trough Strategic 20.6% (fully diluted) shareholding worth approximately $145 million in ASX 200 NSW coal seam gas developer Eastern Star Gas Limited (ESG) • 21PJ of 1P, 336PJ 2P, 1,300PJ 3P and 6,128PJ 3C (PEL 238 – ESG 65%) Extensive highly prospective exploration pipeline • 85% of ASX listed InterMet – iron ore, basemetals, Uranium, Gawler Craton, QLD • 80% of highly prospective Indonesian gold and gold/copper projects Source: ESG announcements and Iress share price information. ESG valuation based on share price as at 19 June 2009 and Hillgrove holdings of 151.8m ordinary shares and 24.3m $0.15 options 6
Introduction to Hillgrove Key Investment Metrics Hillgrove Resources 19/06/09 Share Price $ 0.19 Trading History 52 Week - high $ 0.34 Hillgrove Resources Price (A$) - low $ 0.08 0.40 4.5 4.0 0.35 Ordinary shares # 413.0M 3.5 0.30 3.0 0.25 Market capitalisation $ 78.5M 2.5 0.20 2.0 0.15 Cash $ 10.6M 1.5 0.10 1.0 Options # 48.9M 0.05 0.5 0.00 0.0 Bond due 30/06/11 US$ 30.0M ESG shares/options $145.6M Volume Closing Price Kanmantoo, PP&E $ 49.3M 7
Regional Pipeline – Indonesia Highly Prospective Advanced Gold Exploration Advanced projects totalling 5,248km² – with significant mineralisation already identified 8
Bird’s Head Project Mineralisation Model • Magmatic arc deposits are classified by the depth at which they form • Bird’s Head has seen a number of phases of tectonic activity, including uplift and associated mineralising events that have led to the over printing or telescoping of epithermal mineralisation onto porphyry style mineralisation 9
Bird’s Head, Indonesia Regional Setting Bird’s Head covers part of the interpreted westward continuation of the New Guinea ‘Orogenic Belt’ 10
Bird’s Head Project West Papua – Mineral Occurrences 11
Bird’s Head Project Project Scale Geology & Geomorphology Multiple Diorite – Granodiorite Intrusives, Magmatic Centre’s – Widespread Hydrothermal Activity 12
Bird’s Head Project 3D Geology & Geomorphology • Overall northward younging of the strata caused by the interaction of the topography and the overall shallow northward dips. The topography is broadly “dip slope” in character • The major Sansapor fault (and probably also the Sorong fault) may be reverse faults or thrusts north Delta Alpha 13
Bird’s Head Project Historical Drainage Anomalies Stream Sediment Anomalies by Gold Work by Normandy and past explorers highlighted 16 high order anomalies, with Bird’s Head containing 10 of these 14
Bird’s Head Delta Prospect Kali Sute Copper Soil Geochemistry • Extensive Cu anomalism in main target corridor 6 x 1.5km • Cu mineralisation assoc. with West Delta granodiorite/diorite intrusive, same host rocks as large deposits like Grasberg • Surface expression of a porphyry e.g. Batu Hijau in Sumbawa is only 400 x 200m (4.8Mt Copper) Batu Hijau • WDD7 100m @ 0.21% copper
Delta Prospect Geochemistry - Copper Delta Copper in Soils • Soil anomalism (Au & Cu) are coincident with circular features which in turn appear to relate to a diorite body, magmatic centre, key driver for mineralising system • This is a key component to all mineralising systems through the belt 16
Delta Prospect West: Geology & Soils • Multi phased diorite – granodiorite magmatic centre • Strong Correlation with copper geochemistry • Clear evidence of mineralised porphyry system • WDD7 100m @ 0.21% copper 17
Delta Prospect West Delta Area
Delta Prospect Geochemistry - Gold Delta Gold in soils • Delta Gold mineralization is fault controlled low- sulphidation epithermal • Two steep pervasive fracture sets are evident. Also, the prospect is transected by some strong 120 degree trending faults 19
Delta Prospect Kali Sute Significant Trench Intercepts Trenching results confirmed presence of high grade epithermal mineralisation Follow up drilling has intersected: • 14.35m @ 1.71g/t gold and 2.55g/t silver from 13m in KSD1, incl. 7.55m @ 2.97g/t gold and 3.56g/t silver • 6.1m @ 1.25g/t gold and 2.96g/t silver from 19.1m and 6.6m @ 5.96g/t gold and 3.18g/t silver from 54.9m KSD6 • Drilling has been sparse and erratic to date; shoot geometry in an epithermal deposit usually necessitates a high density of drilling 2 Kilometres
Alpha Prospect Structural Setting • Fault controlled low- sulphidation epithermal • Two steep fracture sets are evident • Mineralisation occurs at a dilational jog in the fault system • Circular features potential magmatic centres • Alpha high ground appears to be capped by a palaeoregolith remnant, possibly masking underlying geochemistry 21
Alpha Prospect Radiometrics Discrete Potassium anomaly on western side of Delta 22
Alpha Prospect Air Magnetics Coincident magnetic and potassium anomaly just west of Alpha suggestive of magmatic source 23
Bird’s Head Project Alpha Prospect Gold (g/t) Soil Geochemistry 1 Kilometre Batu Hijau Extensive gold mineralisation, which appear to be strongly structurally controlled 24
Bird’s Head Project Alpha – Soils (Gold) and Geology 25
Bird’s Head Project Alpha – Soils (Gold) and Alteration Strong genetic relationship for mineralisation 26
Bird’s Head Project Alpha Prospect Drilling, Trenching Locations on Gold (g/t) Soil Geochemistry B15 Anomaly • Bonanza trenching A17/19 Anomaly grades, gold associated with epithermal quartz veins • Very limited drilling completed to date, only 5 drill holes A18 Anomaly • Significant scout drilling results including 17.45m @ 2.16g/t gold, 18.36g/t silver, 0.29% copper, 2.08% lead and 5.31% zinc in AD1 • 1.6m @ 108.5g/t gold and 16g/t silver in AD4 27
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