Australian Junior Resources Blue Chip Australian Junior Resources Blue Chip EMERGING STARS IN RESOURCES 2010 EMERGING STARS IN RESOURCES 2010 Proactive Investors Australia Conference Proactive Investors Australia Conference Proactive Investors Australia Conference Proactive Investors Australia Conference 10 February 2010 10 February 2010
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, do ot a e a y ep ese tat o o a a ty, e p ess o p ed, as to t e accu acy o co p ete ess o a y o at o , 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 g y p y p 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 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. Comments in relation to exploration targets, exploration potential and resource potential referenced in this document have been made based on both historical and company technical data at hand of the time of writing. It is important to note that these targets are conceptual in nature as there has been insufficient exploration to date to define a mineral resource and it g p p is uncertain if further exploration will result in the determination of a mineral resource. Interested parties should form their own view on these exploration targets. 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 All references to dollars, cents or $ in this presentation refer to Australian currency unless otherwise stated.
Key Assets Australian Mining Company with Asian Growth Pipeline g p y p Mining � Kanmantoo : oxide Kanmantoo : oxide copper heap leach – 100% Development � Kanmantoo Copper/Gold Mine: a a oo Coppe /Go d e 2.0MTPA -> 3.0MTPA – 100% Exploration � Bird’s Head, Indonesia: gold and copper/gold – 80% � Sumba, Indonesia: gold – 80% � Kanmantoo: copper/gold, silver/lead/zinc silver/lead/zinc – 100% 100% � Wheal Ellen: silver/lead/zinc/gold – 100% � Cocata and Coulta: Cocata and Coulta: uranium – 100% � Watson: uranium – 50% � Munderra: base metals – 100% � Mt. Lucy: magnetite – 100% initially 2
Metals Outlook Copper on the Move pp “Right Commodities at the Right Time” Macquarie Bank Commodities 9 June 2009 Macquarie Bank Commodities, 9 June 2009 “ Looking further out, in our view, copper has the best fundamentals of any of the base metals, and should go into an economic upturn with low stocks, limited idle capacity and a lack of committed new projects. Over the 2011/12 period, copper could easily be as tight as it was at the height of the recent bull market. at the height of the recent bull market ” Fraser Institute 2009 “ Commodity shortages could hinder recovery, Commodity shortages could hinder recovery, the world may face a shortage of raw materials and skyrocketing commodity prices as the world economy moves past the recession and into renewed growth.” 3
Metals Outlook World Industrial Production & Commodity Prices y Core of argument for secular reversal of g the long term decline of real commodity prices 4
Kanmantoo Project South Australian Region g • South Australia is one of the most prospective terrains in most prospective terrains in the world � Home of the Big One; Olympic Dam Olympic Dam • Historically neglected and vastly under explored • Initial project at Kanmantoo will produce cash flow to fund Hillgrove’s exploration and development development • Strategy to commence new developments once mine underway d � Upside from additional regional satellite reserves � Underground high grade targets e.g. Bremer Mine Hillgrove’s Near Term Focus
Kanmantoo Project Kanmantoo Copper/Gold Mine 2009 pp 6
Kanmantoo Project Ore Body 7
Kanmantoo Project Snapshot p • Kanmantoo was operated by NBH/ SBH/EZ as their first open p cut mine from 1971-1976, mining around 4.1Mt of copper ore • Hillgrove commenced work at Hillgrove commenced work at Kanmantoo in 2003, with production planned in 2011 • Low cost access to critical water • Low cost access to critical water, power and transport infrastructure • Attractive employment costs compared to remote fly-in fly-out d t t fl i fl t mine operations • Total (0.25% Cu Cut Off Grade Model) Tonnes Cu Au Ag Cu Metal Au Ag Type Kt % g/t g/t Tonnes Ounces Ounces Oxide 1,125 0.8 0.2 3.3 8,600 6,900 121,000 Transitional Transitional 1 620 1,620 0 8 0.8 0 2 0.2 2 9 2.9 12,200 12 200 9 600 9,600 152 000 152,000 Fresh 29,447 0.9 0.2 3.2 271,500 174,600 3,040,700 Total 32,192 0.9 0.2 3.2 292,200 191,100 3,313,600 8
Kanmantoo Project Summary y 292,700 tonnes copper @ 0.9% Resources: 194,700 ounces gold @ 0.2g/t 3,326,300 ounces silver @ 3.2g/t Mining Stage 1: Oxide heap leach operation 450tpa contained copper Mining Stage 2: 2.0Mtpa sulphide float operation to produce ~20,000tpa copper in concentrate produce 20 000tpa copper in concentrate Open cut with underground potential Mining method: 6.5 year mine life with potential to extend Mine life: Capex : AUD$98 million Production : ~20,000tpa copper in concentrate Q1-Q2 2011 Cash operating cost : USD$1-50/lb @ Cu price USD$2.60 AUD/USD = 0.80 60-114,000tpa @ 24% copper, 3.5g/t gold, 66g/t silver Concentrate: 9
Kanmantoo Project Low Risk Features • Operational histor significantl de risks the project Operational history significantly de-risks the project • Known, simple metallurgy with excellent recoveries • Large database of exploration, mining and processing information • Capital cost per tonne of annual copper in concentrate produced Capital cost per tonne of annual copper in concentrate produced <50% of global average • Head grade > the weighted average global head grade Head grade the weighted average global head grade • Low cost power, water, transport and labour • Geotechnically sound ground conditions • Low political risk environment 10
Kanmantoo Project Pillara Plant/Heap Leach Operation p p Pillara Mine’s process plant and associated equipment and buildings equipment and buildings Kanmantoo Project‘s oxide ore heap leach processing operation 11
Exploration Focus Kanmantoo Near Mine Prospects 12
Kanmantoo Project Uniquely Positioned q y • Only Australian mid-cap copper developer with production planned to start in 2011: � $98 million capex � Mining Lease 6345 granted � MARP conditionally approved � All feasibility studies, metalurgical testing completed � Freehold land of 835ha (2,063 acres) acquired � Pillara process plant acquired � Long lead time equipment acquired Progressing project financing → FID � • Short latency project ideally positioned to come on stream at the start • Short latency project ideally positioned to come on stream at the start of a global synchronised global economic recovery 13
Regional Pipeline – Indonesia Highly Prospective Advanced Gold Exploration g y p p 14
Bird’s Head Project Regional Setting g g Bird’s Head covers part of the interpreted westward continuation of the New Guinea ‘Orogenic Belt’ 15
Bird’s Head Project Indonesia/New Guinea Gold-Rich Porphyry Cu Deposits y y Five of Top 20 Know Gold-Rich Porphyry Copper Deposits 1 Rank Deposit p Province Tonnage g Au Au Cu Cu (Mt) (g/t) (t) (Wt %) (Mt) 1. Grasberg East Papua 2,480 1.05 2,604 1.13 28.02 7. Panguna Bougainville 1,415 0.57 799 0.46 6.51 9 9. Batu Hijau B t Hij S Sumbawa b 1 644 1,644 0 35 0.35 572 572 0 44 0.44 7 23 7.23 11. Ok Tedi PNG 700 0.64 446 0.64 4.48 17. Frieda River PNG 1,103 0.32 354 0.61 6.73 Source: Economic Geology, Volume 100, p. 803 ____________________ 1. Ranked on contained gold. 16
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