KANMANTOO COPPER MINE: STRATEGY AND OPPORTUNITY SA GOVERNMENT COPPER SUMMIT GREG HALL IIIII CEO & MANAGING DIRECTOR 6 MAY 2015
STRATEGY – ENHANCING SHAREHOLDER VALUE THREE PILLARS FOR ENHANCING SHAREHOLDER VALUE REGIONAL CAPITAL KANMANTOO GROWTH MANAGEMENT Enabling the Grow reserves and Productivity and cost Company to establish extend mine life of focus in order to a foundation for Kanmantoo through maximise the free shareholder value lower costs, targeted cash flow generation enhancement and mining lease and of Kanmantoo future growth regional exploration opportunities 2
SUSTAINABLE OPERATIONS SUPPORTING GROWTH LOWER COSTS SUSTAINABLE OPERATIONS OPPORTUNITY FOR INCREASED RESOURCES BROWNFIELDS EXPLORATION NEW TECHNOLOGIES 3
SUSTAINABLE OPERATIONS Productivity and cost improvements assist to create a sustainable operation, and hence ongoing employment, through Enabling profitable operations through low price cycles Potentially enabling lower cut-off grades and hence increased resources Productivity and cost improvements in the Productivity improvements in mining process plant 48% reduction in mining unit costs Multi-stream analyser for on-line rapid 81% increase in mining production monitoring and process control 24% increase in truck efficiency new rougher cell increased float capacity and consequently residence time by 40% 17% increase in drilling efficiency new screening system has increased 17% decrease in blasting powder throughput from 2.8MTPA nameplate to factor over 3.3MTPA 24% decrease in fuel consumption – Q4 2014 achieved a 3.5MTPA rate 75% decrease in dilution new plant for effective oxide ore treatment 4
MINING PRODUCTIVITY AND COST IMPROVEMENTS 5
PROCESSING PRODUCTIVITY AND IMPROVEMENTS 6
CONTROLLED POTENTIAL SULPHIDISATION (CPS) FOR OXIDE ORE TREATMENT Sulphidise the copper oxide mineral surface (provide a copper sulphide layer) Sodium Hydrosulphide (NaHS) employed as sulphidising agent CPS much more effective than unmetered additions of sulphidising agent (utilised by Kanmantoo Mines Limited in 1970’s 1.12% Cu @ 62.2% recovery) Metallurgical test work to date: Oxide Ore: 70-75% Recovery, low to mid 30’s % Oxide Concentrate grade employing 4 stage of CPS conditioning and 5 flotation stages – no cleaning Transitional Ore: process flow design completed, cleaning tests to be completed, Other examples of mines with CPS: Northparkes Mine, NSW (Cu-Au) Boddington Gold Supergene Basement Plant, WA (Cu-Au) Osborne, QLD (Cu-Au) Golden Grove, WA (Cu-Zn) - currently under commissioning OK Tedi, PNG (Cu-Au) Dong Chuan, China (Cu) Opens up the potential for treatment of oxide copper ore overlying sulphide deposits – re-treatment of older copper stockpiles 7
LOWER COSTS – POTENTIAL LARGER GIANT PIT WITH EXISTING RESOURCE Current Confirmatory Mined Optimisation Surface Current Giant Pit Design Optimisation Options with Reduced Costs Section Line Model Legend > 0.6% Cu 0.4% < Cu <0.2% < 0.2% Cu 8
APPLYING ALTERNATE EXPLORATION TECHNIQUES TO OLD AREAS Hillgrove reported initial exploration success in a deep RC hole on the Mining Lease 200 metres to the north of the current resource profile The 433 metre deep reverse circulation (RC) hole returned the following assays at a depth of 300 metres below surface 28 metres @ 0.61% Cu , 0.14g/t Au and 2.6g/t Ag at a 0.2% Cu cut off – within a broader mineralised zone of; 39 metres @ 0.47% Cu, 0.11g/t Au and 2.1g/t Ag at a 0.1% Cu cut off, from 324 m downhole Included within the 28 metre intersection are a higher grade zone of 10 metres @ 0.88% Cu , 0.18g/t Au and 3.2 g/t Ag; and a peak one metre interval of 2.86% Cu, 0.8g/t Au and 9.4 g/t Ag 9
INITIAL EXPLORATION SUCCESS Two density inversion shells that may cause the observed surface gravity signature, and the location of KTRC995 exploration hole Conceptual 3D model of the two potential density shells. Note that the shells terminate just north of the pit due to limitations of data collection around the existing pit 10
KANMANTOO EXPLORATION NEXT STEPS 11
REGIONAL EXPLORATION – HELICOPTER-BORNE ELECTROMAGNETICS Mag Collection of 70km 2 or 500 line km of EM Via helicopter system called HeliTEM – very low impact, apart from interaction with community 100m - 200m line spacing, 35m array height ~5 days duration Potential is to direct detect new concealed sulphide environments, beyond those currently established, that may be associated with orebodies Budget: $240k Over 300 landholders/residents contacted – lands and pastoral addresses Higher density smaller land plots more difficult – having to modify fly zones constantly 12
ADELAIDE GEOSYNCLINE – POTENTIAL FOR NEW MINERAL DISCOVERIES 13
ENHANCING COPPER MINING – AREAS OF OPPORTUNITY Possible areas of opportunity for increased copper mining and discovery include Brownfields exploration: resource extension has a higher probability of success than greenfields exploration – consider portion of PACE funding for enhancing brownfields exploration, e.g. extensions, new techniques, revisiting older mining areas with new thinking Historical mining areas which may have win-win situations for companies and Government, e.g. where Government funds are set aside for rehabilitation, could be linked to corporate funds for mining/exploration for concurrent rehabilitation and mining We need to continuously work on productivity and cost improvements, as lower costs mean potentially lower cut-off grades and hence increased resources – sharing of techniques between companies – how can Government initiatives support this? e.g. a strategy to attract key mining service companies to base in Adelaide to reduce service costs and timing. Adelaide to be seen as a central base, lower costs. Keep pressure on speeding up of approvals Develop technical strategies which would improve economics for known (sub- economic) copper deposits, e.g. Oxide ore treatment (KCM), enhanced recovery (Mt Gunson), ore beneficiation (Hillside, other) 14
KEY CONTACTS For further information please contact: Greg Hall, CEO and Managing Director Ground Floor 5 – 7 King William Road Unley SA 5061 Suite 1709 Australia Square Level 17, 264 George Street Sydney NSW 2000 E: info@hillgroveresources.com.au T: 61 2 8247 9300 15
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