Material mined increased 80% over the three months to January, resulting in 36% rise in production of copper contained in concentrates to 5838 tonnes, which compares to the quarterly production guidance of 5400-5600t of copper.

The operations also recorded plant throughput of 760,000t of ore and increased mill grade 32% over the quarter to 0.83% copper.

Recovery rates were up 2% to 92.4% and total concentrate sold was 31% higher at 24,800 dry tonnes.

“The change in mine practices through the newly configured and Hillgrove-operated mining fleet has continued to reap dividends for the Kanmantoo operating performance,” Hillgrove managing director and chief executive Greg Hall said.

“This can clearly be seen in the reduction in mining dilution, increased mining tonnes and improved feed grades to the mill.”

Mining rates reached 507,000 bank cubic metres for the month of January and are planned to be lifted further during the coming months with the recently arrived 300-tonne excavators expected to both improve productivity and lower costs.

C1 costs have been forecast to be in the low $US2 range per pound of copper for the quarter.

A full quarterly report including unit costs and details of the company’s cash position is due to be realised later this month.

“This quarter has set the foundation for the operating performance for the next 12 months,” Hall said.

“We will continue to work on the improvements that our employees have identified through the operating planning and implementation processes.”

The company set its production guidance for the 2015 financial year at 22,300-24,600t of copper in concentrate and 7000-9000 ounces of gold in concentrate.

It also highlighted a hedging strategy by which about 90% of its payable copper production to the end of July 2014 would have an average price of $A8140 per tonne.

Kanmantoo is located in the Adelaide Hills region, which the company describes as one of the most underexplored and prospective base metal provinces in the country.

Resources at the project stand at 31.3 million tonnes grading 0.78% copper and 0.2 grams per tonne gold, while reserves total 22.1Mt at 0.71% copper and 0.18gpt gold.

Shares in Hillgrove were last trading 3.3% higher at 9.3c.