Announcement PDF AUSTRALIA’S NEXT COPPER MINE Lachlan Wallace CEO & Managing Director December 2023 1 TRANSFORMATIONAL YEAR Dec 2022 Dec 2023 2 CORPORATE SNAPSHOT Company Overview Investment Highlights • ASX listed (‘HGO’) Australian resources company that owns and operates the Kanmantoo Copper Gold Mine in South Australia ✓ Advanced, fully permitted and funded project with key • 20 years of strong operating experience and award-winning positive stakeholder engagement ✓ One of the only near-term new copper producers on the ASX ✓ Multiple opportunities to increase resource base, annual • After completion of open pit operations in 2020, underground mine now being developed with first copper production in Q1-2024 Market Statistics infrastructure in place production and mine life through lower cost underground drilling ✓ Highly leveraged to current and forecast copper price strength Share Price – 3 years 15,000 0.14 14,000 0.12 Share Price(1) A$ 0.066 Shares on Issue M 1,912 13,000 Market Capitalisation A$M 126 12,000 101 11,000 Enterprise Value(2) A$M Liquidity - 12 Months M shares Carried forward income tax losses(3) A$M 235 Franking credits A$M 17.6 Note (1): Share price at close 29 November 2023 Note (2): Net cash at 30 September 2023 (unaudited) Note (3): At 31 December 2022 (unaudited) 584 (31%) 0.10 0.08 0.06 10,000 9,000 0.04 8,000 0.02 Copper A$/t (LHS) HGO $/share (RHS) 3 FULLY PERMITTED IN TIER 1 JURISDICTION ✓ Tier 1 location ✓ Ready workforce - No FIFO ✓ Close to Port Adelaide Top 10 jurisdiction in world Mining Investment Attractiveness 4 FULLY PERMITTED IN TIER 1 JURISDICTION ✓ Community support built over 20 years of genuine engagement 5 PLANT AND INFRASTRUCTURE ALREADY IN PLACE ✓ 3.6Mtpa processing plant ✓ All critical spares on site ✓ Maintained for quick, low-cost restart 6 TAILINGS STORAGE FACILITY WITH AMPLE CAPACITY ✓ Tailings storage with approved capacity of >7Mt, well above current mine plan of 4.5Mt ✓ Further low-cost capacity available to accommodate growing mine plan ✓ All services connected (power, water). Long term power contract provides low prices until 2027 7 ESTABLISHED WORKSHOP 8 MINING COMMENCED Nugent Portal Ventilation drive Development decline and underground drill platform 9 EXCELLENT CONDITIONS ENABLE FAST TURNOVER Underground decline commenced 10 EXCELLENT CONDITIONS ENABLE FAST TURNOVER 11 PRIMARY VENT INSTALL INCREASES PRODUCTION Primary ventilation enables additional equipment to be deployed underground, increasing mine development rates. 12 SECONDARY EGRESS BEING INSTALLED TO ENABLE STOPING First stope Secondary egress 13 UNDERGROUND DRILLING FIRMING UP INITIAL STOPES 14 UNDERGROUND DRILLING FIRMING UP INITIAL STOPES 15 ORE STOCKPILED ✓ Underground development underway ✓ First copper only 13m from portal 16 ORE STOCKPILED High grade ore on the ROM stockpile 17 MILL REFURBISHMENT ON TRACK FOR FIRST COPPER Pipe welding Float cell refurbishment Mill motor inspection 18 ROTABLE CONTAINERS ARRIVED TO PORT ADELAIDE 19 ON TRACK FOR FIRST COPPER Q1 2024 20 EXPLORATION GROWTH 21 > 100% EXPLORATION STRIKE RATE 139 holes 163 significant Cu-Au intercepts 600% increase in MRE 22 JUST SCRATCHING THE SURFACE Current Mine Plan 23 SPITFIRE ✓ 45.4m @ 1.19%Cu, 0.12 g/t Au from 428.5m downhole (KTDD243_W1) ✓ Nearest hole > 100m Refer ASX Announcement 28 August 2023 24 EMILY ✓ 71.7m @ 0.89%Cu from 132.7m downhole (KTDD239) ✓ 68.7m @ 0.9% Cu from 158.6m downhole (KTDD240), including; ✓ 35m @ 1.29%Cu from 192.2m downhole Refer ASX Announcement 3 July 2023 25 KANMANTOO DEEPS Exploration Target 50 - 80Mt 0.8 - 1.2%Cu 0.1 - 0.2g/t Au Refer ASX Announcement 11 October 2023 The Exploration Target above is for Kanmantoo Deeps only. The Exploration Target is conceptual in nature as there has been insufficient exploration to define a Mineral Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource under the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, the JORC Code” (JORC 2012). The Exploration Target is not being reported as part of any Mineral Resource or Ore Reserve. 26 AUSTRALIA’S NEXT COPPER MINE 27 Appendix 28 IMPORTANT NOTICE & DISCLAIMER Summary information This presentation contains summary information about Hillgrove Resources Limited (Hillgrove or the Company) and its activities as at 27 February 2023. The information in this presentation is of a general nature and does not purport to be complete nor does it contain all information which a prospective investor may require in evaluating a possible investment in the Company or that would be required in a prospectus or product disclosure statement prepared in accordance with the requirements of the Corporations Act. The historical information in this presentation is, or is based on, information that has been released to the ASX. This Presentation should be read in conjunction with the Company’s other periodic and continuous disclosure announcements lodged with the ASX, which are available at www.asx.com.au Any market and industry data that may be used in connection with this presentation may have been obtained from research, surveys or studies conducted by third parties, including industry or general publications. None of the Company, its representatives or advisers have independently verified that market or industry data provided by third parties or industry or general publications. Statements made in this presentation are made only as at the date of this presentation. The information in this presentation remains subject to change without notice. The Company reserves the right to withdraw the offer or vary the timetable for the offer without notice. Not an offer This presentation is not an offer or invitation to acquire new shares in the Company or any other financial products and is not a prospectus, product disclosure statement or other offering document under Australian law (and will not be lodged with ASIC) or any other law. This presentation is for information purposes only and is not an invitation or offer of securities for subscription, purchase or sale in any jurisdiction. Not financial product advice This presentation does not constitute financial product or investment advice or any recommendation to acquire new shares or accounting, legal or tax advice. It has been prepared without taking into account the objectives, financial or tax situation or needs of individuals. Before making an investment decision, prospective investors should consider the appropriateness of the information having regard to their own objectives, financial and tax situation and needs and obtain legal and taxation advice appropriate to their jurisdiction. Hillgrove is not licensed to provide financial product advice. Cooling off rights do not apply to the acquisition of new shares under the Offer. Future performance This presentation includes both information that is historical in character and information that consists of forward-looking statements. Forward-looking statements are not based on historical facts, but are based on current expectations of future results or events. This presentation contains or may contain certain “forwardlooking statements” and comments about future events, that are based on Hillgrove management's beliefs, assumptions and expectations and on information currently available to management as at the date of this presentation. Often, but not always, forward-looking statements can generally be identified by the use of forward looking words such as "may", "will", "expect", "plan", "believes", "estimate", "anticipate", "outlook", and "guidance", or similar expressions, and may include, without limitation, statements regarding plans, strategies and objectives of management, anticipated production and production potential, estimates of future 29 Mineral Resources and Ore Reserves. IMPORTANT NOTICE & DISCLAIMER Future performance continued The forward looking statements are subject to risks, stakeholder engagement, uncertainties and assumptions which could cause actual results, timing, or events to differ materially from the expectations described in such forward-looking statements. Those risks and uncertainties include factors and risks specific to the industry in which Hillgrove operates, any applicable legal requirements, as well as matters such as general economic conditions. These factors include, but are not limited to the potential that any of Hillgrove's projects may experience technical, geological, metallurgical and mechanical problems, changes in market prices and other risks not anticipated by Hillgrove, changes in exchange rate assumptions, changes in product pricing assumptions, major changes in mine plans and/or resources, changes in equipment life or capability, emergence of previously underestimated technical challenges, increased costs, and demand for production inputs. While Hillgrove believes that the expectations reflected in the forward looking statements in this presentation are reasonable, neither Hillgrove nor its directors or any other person named in the presentation can assure you that such expectations will prove to be correct or that implied results will be achieved. These forward looking statements do not constitute any representation as to future performance and should not be relied upon as financial advice of any nature. Any forward looking statement contained in this document is qualified by this cautionary statement. Mineral Resources and Ore Reserves Estimates The Economic Assessment discussed in this Presentation, has been undertaken to explore the technical and economic feasibility of developing an underground mine to economically and sustainably exploit the Kanmantoo Copper Gold Deposit, located in South Australia. The Kanmantoo Copper Gold Project (Kanmantoo or Project) is 100% owned by Hillgrove Resources Limited. The Production Target and financial forecasts presented in the Economic Assessment are shown on a 100% Project basis. The Production Target underpinning the Base Case financial forecasts included in the Economic Assessment comprises 74% Measured and Indicated Resources, and 26% Inferred Resources. The Production Target included in the Economic Assessment relating to the project payback period of 9 months post the completion of pre-production works comprises 84% Measured and Indicated Resources, and 16% Inferred Resources. As an Australian company with securities listed on the Australian Securities Exchange (ASX), Hillgrove is subject to Australian disclosure requirements and standards, including the requirements of the Corporations Act and the ASX. Investors should note that it is a requirement of the ASX listing rules that the reporting of ore reserves and mineral resources in Australia comply with the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code) and that the Mineral Resource Estimate underpinning the Base Case Production Target has been prepared by a Competent Person in accordance with the requirements in the JORC Code 2012. 30 IMPORTANT NOTICE & DISCLAIMER Mineral Resources and Ore Reserves Estimates continued There is a lower level of geological and grade continuity confidence associated with Inferred Resources and there is no certainty that further exploration work will result in the conversion of Inferred Resource estimates to Indicated Resource estimates or return the same grade and tonnage distribution. The economic outcomes associated with the Economic Assessment are based on certain assumptions made for commodity prices, concentrate treatment and recovery charges, exchange rates and other economic variables, which are not within the Company's control and subject to change from time to time. Changes in such assumptions may have a material impact on economic outcomes. To achieve the range of outcomes indicated in the Economic Assessment, additional funding will likely be required. Investors should note that there is no certainty that Hillgrove will be able to raise that amount of funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Hillgrove’s existing shares. Disclaimer To the maximum extent permitted by law, neither Hillgrove nor its related corporations, directors, officers, employees or agents, nor any other person, accepts any liability, including, without limitation, any liability arising from fault or negligence, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. Hillgrove is under no obligation to release any updates or revisions to this presentation to reflect any change in expectation or assumptions and disclaim all responsibility and liability for these forward-looking statements (including, without limitation, liability for fraud or negligence). Kanmantoo Underground Mineral Resource Estimate Deposits JORC 2012 Tonnage Cu Au Cu Metal Classification (kt) (%) (g/t) (kt) Measured 780 1.28 0.10 9.9 Kavanagh 2022 Indicated 3,640 1.03 0.06 38 (0.6% Cu COG) Inferred 1,300 1.0 0.1 10 Sub-Total 5,750 1.10 0.10 61 Indicated 865 1.19 0.64 10.3 Inferred 400 1.1 0.3 5 Sub-Total 1,270 1.18 0.54 15 Measured 780 1.28 0.1 9.9 Indicated 4,505 1.06 0.2 48 Inferred 1,700 1 0.1 15 Total 6,985 1.08 0.16 75.9 Nugent 2022 (0.7% Cu COG) Totals Note: Due to appropriate rounding, numbers may not sum 31 IMPORTANT NOTICE & DISCLAIMER Competent Person’s Statement The information in this report that relates to Exploration Target and Exploration Results is based on and fairly represents information and supporting documentation compiled by Peter Rolley, a Competent Person, a full-time employee of Hillgrove Resources Limited, and a member of the Australian Institute of Geoscientists. Mr Rolley has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 edition of the ‘Australian Code for Reporting Exploration Results, Mineral Resources and Ore Reserves’. Mr Rolley consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Further information on the Kanmantoo UG Mineral Resources was released to the ASX on 11 May 2022 and 26 July 2022, which is also available on the Hillgrove Resources website at www.hillgroveresources.com.au Hillgrove Resources confirms that it is not aware of any new information or data that materially affects the information included in that market announcement and, in the case of estimates of Mineral Resources that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. Hillgrove Resources confirms that the form and context in which the findings of the Competent Persons (Peter Rolley in relation to the Exploration Target and to the Mineral Resource Estimates) are presented, have not been materially modified from the original market announcement. 32 INVESTMENT RISKS Potential investors should be aware that there are risks associated with investing in Hillgrove. Certain risks are beyond the control of Hillgrove and its Directors and Management and may have a material impact on Hillgrove's future operating and financial performance, and/or the financial position of Hillgrove, its prospects and/or the value of the Shares. Some of the key risks associated with an investment in Hillgrove are described as follows. • In the event that Hillgrove undertakes a development project, then that development could be delayed or unsuccessful for a number of reasons including extreme weather, unanticipated operational occurrences, failure to obtain necessary approvals, insufficient funds, a drop-in commodity price, supply chain failure, unavailability of appropriate labour, or an increase in costs. If one or more of these occurrences has a material impact, then Hillgrove's operational and financial performance may be negatively affected. • Adverse weather conditions events, unforeseen increases in establishment costs, mechanical failures, human errors, industrial disputes or other unforeseen events, could lead to increased costs or delay to the Company's activities. The Company will mitigate this risk by, amongst other things, taking out appropriate insurance in line with industry practice. • Commodity prices (in particular prices for copper and gold), concentrate treatment and recovery charges, exchange rates and other economic variables, will have a material influence on the financial performance of the Company. It is impossible to predict future commodity prices with confidence and the factors which impact it include, but are not limited to, global political situations, military conflicts, technological changes, output controls and global consumption which are all outside the control of Hillgrove. • The enactment of new legislation or adoption of new requirements of a governmental authority may restrict or affect Hillgrove's ability to: o conduct mining activities and exploit the Kanmantoo Copper Gold Deposit (or any other project / resource) efficiently and effectively; or o sell product to particular consumers, which may affect the financial performance of the Company (e.g. the implementation of sanction laws preventing the sale of product to consumers in certain countries). • There is a risk that community disapproval may lead to direct action which impedes Hillgrove's ability to carry out its lawful operations, resulting in project delay, reputational damage and increased costs and thus impact the financial performance of the Company. Development risk Operational risk Price risk Regulatory risk Community opposition risk 33 INVESTMENT RISKS • The future success of the Company depends, to a significant extent, upon the continued services of the members of the management team of the Company. There can be no assurance that the Company will be able to retain or hire all personnel necessary for the development and operation of its business. The loss of senior managers could harm the Company’s business and its future prospects. • Prospective investors should also consider the following risks associated with investments in equity capital such as Hillgrove shares: Key person dependence General risk factors o Investment risks, such as changes in the Company’s own assessment of the economics of developing its assets or the market perception of the value of the Company's assets and shares; o Share market and liquidity risks involved in the listing and trading of shares on the ASX; o Economic, political and social factors, including activism and pandemics, and the effect on the market price of shares of movements in equities markets, commodity process, currency fluctuations and interest rates, and local and global political and economic conditions; o Epidemics and pandemics such as COVID-19; o Geo-political instability, including international hostilities and acts of terrorism; o Circumstances requiring Hillgrove to change its strategy; o The Australian economy deteriorating; and o Stock market sentiment fluctuations impacting on the Hillgrove share price. • These risks are associated with an investment in Shares but are not an exhaustive list. As a Shareholder, you will continue to be exposed to such risks. There may also be additional risks and uncertainties not currently known which may have an adverse effect on Hillgrove's business and the value of the Shares. Where possible, Hillgrove will seek to minimise its exposure to, and mitigate the effects of, these risks. However, certain risks relate to matters that are outside the control of Hillgrove, and there can be no assurance that any steps that HIllgrove takes will successfully protect it from any particular risk. • The risks identified do not take into account the investment objectives, financial situation, tax position or other circumstances of any particular Shareholder. Shareholders should have regard to their own investment objectives and financial circumstances and seek professional advice from their legal, financial or other independent adviser before determining whether or not to participate in the institutional placement or share purchase plan. 34 REFERENCES All exploration drill results, exploration information and Mineral Resource Estimates have previously been reported to the ASX by Competent Person at the time. The results reported herein are reported in the form and context of the original ASX releases. Refer http://www.hillgroveresources.com.au/announcements • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 20 Jun 2019 10 Oct 2019 31 Oct 2019 5 Nov 2019 2 Jun 2020 11 Aug 2020 3 Sep 2020 7 Dec 2020 3 May 2021 6 May 2021 24 May 2021 26 Aug 2021 1 Sep 2021 21 Mar 2022 28 Apr 2022 6 May 2022 11 May 2022 26 Jul 2022 8 Aug 2022 27 Feb 2023 2 Marc 2023 14 Mar 2023 17 Mar 2023 23 Mar 2023 19 Jun 2023 3 Jul 2023 28 Aug 2023 11 Oct 2023 13 Nov 2023 Drilling of Kanmantoo Cu-Au Deeps to Commence Excellent Drill Results from Kanmantoo Cu-Au Deposit Maiden Kavanagh Underground Mineral Resource Estimate Additional Information to Maiden Kavanagh Underground Underground Drilling Program Recommences Excellent Gold Recoveries from Kanmantoo Drilling Expands Cu-Au Footprint at Kanmantoo Underground Updated Kanmantoo Underground Mineral Resource Estimates Drilling Confirms Down-Dip Cu-Au Mineralisation at Kanmantoo Hillgrove Hits 170m of Copper Mineralisation at Kanmantoo Hillgrove Awarded Two Exploration Grants by SA Government New Gold Discovery Confirmed at Stella Hillgrove Hits 166m of Copper Mineralisation at Kanmantoo Multiple High-Grade Intersections within a Broader +100 metre Zone of Copper Mineralisation First Underground Drilling Platform Established Nugent Copper Gold Zone Delivers Excellent Results – Amended Updated Kavanagh Mineral Resource Estimate Updated Nugent Mineral Resource Estimate Spitfire Drilling Results Updated Economic Assessment Expands Mine Life $39m Institutional Placement and SPP for Kanmantoo Restart Mine Extension Drilling to Commence at Kanmantoo Works for Kanmantoo Copper Mine Restart Now Underway Kanmantoo Exploration Target Update Kanmantoo Positive Investment Decision Emily Star Drilling Results Step Out Hole at Kavanagh Hits 45.4m @ 1.2% Cu Kanmantoo Deeps Exploration Target Update – Restated Kanmantoo Underground Confirmation Drilling Results 35