BUILDING A MID- -TIER RESOURCES GROUP TIER RESOURCES GROUP BUILDING A MID Annual General Meeting Annual General Meeting 23 May 2007 23 May 2007
HILLGROVE Structure 2.
HILLGROVE In South Australia 3.
KANMANTOO Why South Australia? � One of the most prospective terrains in the world – home of the Big One – Olympic Dam � Ideal for application of latest exploration techniques � Neglected historically Gawler is vastly under explored → major mines � � New greenstone domains akin to the Eastern Goldfields of WA � Supportive State Government � Sixth most desirable region in the world to explore (Fraser Institute) � Projects located close to infrastructure Result → SA will host Australia’s major mineral discoveries 4.
KANMANTOO Project Location � Low operating cost setting � Existing infrastructure 5.
KANMANTOO Kanmantoo Copper Gold Mine 2007 6.
KANMANTOO Resource Zones 7.
KANMANTOO Drilling Results Highlights Main Zone: 81m @ 1.35% cu North East: 16m @ 4.34% cu and 0.65 g/t au O’Neil Zone: 11m @ 2.05% cu and 6.47 g/t au South East Zone: 22m @ 1.51% cu and 0.78 g/t au East Zone: 20m @ 1.13% cu and 0.1 g/t au 8.
KANMANTOO May 2007 Resource Kanmantoo Deposit Resource Estimate - April 2007 (0.25%Cu Cutoff) Indicated Inferred Total Type Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Cu Metal Au Cut Ag T % g/t g/t T % g/t g/t T % g/t g/t Tonnes Ounces Ounces Oxide 950,200 0.8 0.2 3.3 195,200 0.6 0.2 1.4 1,145,400 0.8 0.2 2.9 8,800 7,100 108,500 Transitional 1,093,000 0.8 0.2 3.1 523,000 0.7 0.2 1.7 1,616,000 0.8 0.2 2.7 12,300 9,800 138,000 Fresh 20,920,000 0.9 0.2 3.1 9,759,000 0.8 0.2 2.3 30,679,000 0.9 0.2 2.8 268,900 200,100 2,802,400 Total 22,963,000 0.9 0.2 3.1 10,477,000 0.8 0.2 2.3 33,440,000 0.9 0.2 2.8 290,000 216,900 3,048,800 9.
KANMANTOO Potential Open Pit Development 10.
KANMANTOO Resource Growth 50 Inferred Tonnes Indicated Tonnes 40 33.44Mt at .9% cu Resource Million Tonnes & 0.2g/t gold 28Mt at .94% cu & 0.2 g/t gold 30 18.4Mt at 1.1% cu & 0.2 g/t gold 20 8.5Mt at 1.2% cu & 0.2 g/t gold 10 0 Original 12/04 Upgrade 10/06 Upgrade 4/07 Upgrade Target Resource 11.
KANMANTOO Pre-Feasibility Study Highlights Mineral resources: - Copper/Gold: 28MT at 0.94% Copper and 0.20g/t Gold Contained metal: - 262,600T Copper and 177,200oz Gold Initial planning inventory: - 12,727,554MT optimized at USD$1.80 per lb copper price - Copper price US$2.65 → US$1.63 Base case assumptions: - Exchange rate (A$/US$) A$0.70 flat Open pit: - 1.2km long X 600m wide X 270m deep - Ore mined 2MT PA with potential to expand to 2.5MT PA - Initial minimum mine life 6.5 years Processing: - Conventional crushing, grinding and flotation - Mill throughput 2MT PA with potential to expand to 2.5MT PA Average head grade: - 0.95% Copper, 0.23g/t Gold, 3.55g/t Silver Average recovery: - Copper 80% - 96% depending on ore type - Gold 15% - 53% depending on ore type - 61,000 - 82,000 dry TPA Concentrate: - High quality, medium copper content, low impurities Concentrate grade: - > 25% Copper, 2.0 - 3.7g/t Gold, 39.3 – 61.4g/t Silver Average metal in cons: - 19,000T PA Copper - 6,000oz PA Gold - 113,000oz PA Silver Initial Capex: - A$98.3 Million 12.
KANMANTOO Process Flow 13.
KANMANTOO Proposed Site Layout 14.
KANMANTOO Communities and Stakeholders � We act with integrity, transparency and honesty. � We recognise, respect and support the right of Kanmantoo’s local communities to be consulted: – Committee/Focus group meetings – Community meetings – Site tours, newsletters and community webpage. � We aim to consult with major local stakeholders – Business/ community/ landowners – Adelaide Hills Regional Development Board – Mount Barker Council. � We aim to meet or exceed the highest environmental standards. � We aim to engage and contribute to the life of the Kanmantoo communities – Sport – Education – Employment. � Result to build community’s understanding, mutual respect and support for Hillgrove’s work. 15.
KANMANTOO Key DFS Consultants 16.
KANMANTOO Conceptual Flow Chart 2006 2007 2008 2009 Pre-feasibility Metallurgy Permitting Drilling Definitive Feasibility Study Construction & Development Mining 17.
KANMANTOO Near-mine Exploration � Exploration and resource definition drilling is ongoing and will be particularly concentrated during the Definitive Feasibility Study (DFS) which commenced in December 2006 � Recent drilling intersected high-grade zones of copper mineralisation and highlighted new zones not incorporated in the latest resource or the PFS economic model � The programme confirmed the prospectivity of the area and potential for a mineralised system of considerable size � Both the resource tonnage and the confidence level have increased � Given the substantial gaps and possible strike extensions targeted for drilling, there is excellent potential for further significant copper resource growth in and around the old open cut 18.
KANMANTOO Mine Corridor IP with Drilling and Ore Blocks 19.
KANMANTOO Regional Magnetics � Regional exploration has recommenced, reconnaissance of all new magnetic targets underway � 12 major magnetic targets outside Mine Corridor 20.
KANMANTOO Wheal Ellen Area – Magnetics � Angas Deposit on same stratigraphic contact about 10km to the south and is a discrete magnetic high � Series of magnetic targets have been identified along these targets � These targets are largely unexplored with a number of targets with historic workings � Rock chips up to 24g/t gold, 147g/t silver, 18% lead and 21% zinc 21.
ALFORD PROJECT Summary – Similarities to Tennant Creek and Rum Jungle � Past drilling has identified significant widths of copper mineralisation associated with haematite alteration including 76m at 0.95% Copper including 12m at 2.18% Copper in ALDDH001 � Key similarities to Iron-Oxide-Copper-Gold (IOCG) deposits such as Olympic Dam, Prominent Hill and Carrapateena – similar granites/age, copper/uranium mineralisation present, on same linement/rim fault system, presence of basement highs � Copper mineralisation associated with a number of discrete gravity features, a key association for IOCG deposits � Uranium potential with past drilling returning excellent first pass with assay results up to 290ppm Uranium � Past exploration has defined a series of copper anomalies along the Alford Shear Zone for over 7km in strike � 2007 exploration program underway which will include calcrete sampling, aircore drilling, diamond drilling and assaying of past work for uranium 22.
ALFORD PROJECT Interpreted Geology Highlights 75m @ 0.95% copper and 4m @ 290ppm uranium 23.
ALFORD PROJECT May Drilling Brecciated and Pyrite with lesser haematite altered Chalcopyrite siltstones with common pyrite and lesser chalcopyrite Pyrite with ALDDH008 lesser Chalcopyrite 138.6 – 143m Strongly brecciated and haematite altered siltstones ALDDH008 27.9 – 32.5m
INTERMET RESOURCES Investment Summary � Issued capital – 40m shares and 31m @ 20c (10m expiry 30/11/07, 21m expiry 24/5/10) � Cash 31 December 2006 of $3 million � Tightly held structure – major shareholders Hillgrove 31% and Sempra Metals & Concentrates 8% � Specialist Gawler Craton explorer with over 8,500km² under title � World class team of exploration professionals – Managing Director, Gary Ferris, and Director, Dr Neville Alley � Very active 2007 programme targeting company makers 25.
INTERMET RESOURCES Competitive Advantage � Detailed understanding of the tectonic history and mineral systems on the Gawler Craton � Technical expertise – Exploration team has extensive experience on the Gawler Craton and gold systems � Uranium expertise – strategic JV’s with proven uranium explorers – UEQ, Mega Uranium � Association with Hillgrove Resources – keeps costs down and provides access to drill rigs � Concurrent multiple exploration programmes – constant stream of results due in 2007 � JV’s and cash leverage ITT’s probability of success 26.
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