Diamond drilling between last year's Kavanagh resource estimate and March has delivered a 13% increase in contained copper to 5.75 million tonnes grading 1.1% copper and 0.1 grams per tonne gold for 61,000t copper.

 

Almost 80% of the resource is now counted as measured and indicated, with just 10,000t in the inferred category. 

 

The resource continues to be constrained by the extent of the drilling, and remains open along-strike and down-dip. Resource extension drilling continues.

 

Managing director Lachlan Wallace said the company expects the mining inventory to grow as the results are incorporated into the mine plan.

 

Kavanagh's upper levels are expected to be mined early in when mining resumes after a break of several years.

 

Wallace said the company would now update its economic assessments for Kavanagh, and would complete an estimate on the Nugent resource, based on 24 holes that delivered good hits in 23, such as 14.5m at 1.6% copper and 0.34gpt gold from 175m, including 3m at 5.17% copper and 1.27gpt gold.

 

Nugent now extends over a strike of 280m and 200m below the previously mined Nugent open pit, and remains open to depth and along strike to the south-east.

 

Hillgrove is looking to lock in some $30 million funding for the Kanmantoo underground restart.

 

It has already engaged a contractor to accelerate development of the exploration decline, which last month had reached its first underground platform to support a 1200m stope drilling program of the Spitfire lode. 

 

The decline advance will cease as the stope definition drilling is undertaken. 

 

symbolic milestone was achieved last month with high-grade material from Kavanagh was recovered from the ventilation drive and delivered to stockpiles.

 

Production is planned later this year, with a final investment decision targeted by mid-year.

 

Kanmantoo produced 137,000t of copper from open pits between 2011 and 2020, before operations were suspended and the company switched its focus to underground planning.

 

The company is fully permitted, has a 3.6 million tonne per annum plant on care and maintenance, and a fully operational tailings storage facility.

 

The stage one underground project, targeting two of nine known deposits to 250m, has capital costs of just $26 million, a net present value of $166 million, and an internal rate of return of 389%.

 

It could produce 36,000t of copper and 10,000 ounces of gold.

 

Hillgrove's stock, which has traded between 4.4c-9.3c over the past year, was up 1.5% this morning to 6.7c, valuing it at almost $80 million.