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HILLGROVE RESOURCES QUARTERLY REPORT PERIOD ENDING 30 SEPTEMBER 2021 Hillgrove Resources Limited ( ASX : HGO ) report for the quarter ended 30 September 2021 For personal use SUMMARY Underground Exploration and Development The diamond drilling program targeting the underground depth extensions at Kanmantoo continued . Key intercepts during the quarter included 166.3m @ 0.9 % Cu , 0.13 g / t Au from 332m downhole¹ . This intersection occurs approximately 70m south of the previously announced 170m @ 1 % Cu² . A total of 17.2km of drilling has been completed this year and confirms : 1. The continuation of the mineralisation to ~ 500m below the open pit and still open to depth , 2. Expanded the lateral footprint of the mineralisation to the south by ~ 150m , confirming the Spitfire and South West Kavanagh zones extend at depth , and 3. Confirmed the tenor of the key Kavanagh Cu - Au lodes . Drilling in 2021 has focussed primarily on the main Kavanagh lode system below the Giant Pit . An oversubscribed placement completed in September provides the necessary funding to undertake a further 16km drill program that is focussing on bringing the Nugent , South West and Spitfire lodes into the initial mine design , and to demonstrate the depth continuity of the North Kavanagh lode system . Underground Portal Hillgrove entered into a contract with Komatsu to establish a portal , exploration decline and underground drill platforms using the Komatsu MC51 continuous miner³ . All contract fees incurred by Hillgrove during the trial are accrued and become payable only following the receipt of project financing and commencement of the capital development of the Kanmantoo Underground . The Company also received a $ 2,000,000 grant under the South Australian Government's Jobs and Economic Growth Fund ( JEGF ) 4 to trial the MC51 . The combination of the grant along with the deferred and contingent nature of the payment terms with Komatsu , enables Hillgrove to construct the underground infrastructure with minimal cash outflow . Stella The first drill hole into Stella resulted in a new gold discovery 5. Four separate mineralised zones of varying chemistry and alteration were intersected , three of which are copper - gold endowed , with the highlight being : 0.6m @ 16.86g / t Au , 10.1 Cu , 44.8 g / t Ag from 344m downhole Stella benefits from close proximity to the Kamamoto processing plant and tailing storage facility . The drilling program was co - funded via a South Australian Government Accelerated Discovery Initiative grant . 1 ASX release 1 September 2021 2 ASX release 6 May 2021 3 ASX release 22 September 2021 4 ASX release 31 August 2021 5 ASX release 26 August 2021 HILLGROVE RESOURCES LIMITED ACN 004 297 116