Earnings release
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QUARTERLY REPORT P age 1 Hillgrove Resources Limited (ASX: HGO) report for the quarter ended 31 December 2024 Record physical metrics sets strong platform for CY2025 December 2024 quarter highlights: • Development metres increased by 16% to 1,620 metres • Ore mined increased by 11% to 311kt • Processed ore increased by 24% to 329kt • Copper production of 2,637 tonnes at an all-in cost of US$3.97 per pound Outstanding drilling results at Nugent First underground grade control diamond drilling into Nugent returned outstanding results, including1: • 18.55m @ 5.69% Cu + 1.02g/t Au (uncut) from 187m downhole in 24KVUG0476 • 16.00m @ 2.96% Cu + 0.42g/t Au (uncut) from 197m downhole in 24KVUG0503 CY2025 Guidance • Copper production of 12,000 – 14,000 tonnes at an All-in Cost of US$3.40 – US$3.90 per pound CEO and Managing Director’s Statement Commenting on the December 2024 quarter, Hillgrove CEO and Managing Director, Bob Fulker said: “The record development metres, and stope tonnes delivered in the December quarter has set us up well to deliver strong operating results in our first full year of production in calendar year 2025. In line with the mine plan, stopes mined in December were lower grade than in prior months. This has set us up for a return to higher grade stopes in the March 2025 quarter. We are excited by the exceptional drill results returned at Nugent, including 18.6m @ 5.69% Cu and 1.02g/t Au, which will have the potential to provide further upside to our current life of mine plan.” Figures 1-3: Kanmantoo quarterly production metrics 1. Full results from Nugent grade control drilling are reported in the table in Appendix A of this report For personal use only
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Page 2 KANMANTOO UNDERGROUND OPERATIONS The Kanmantoo Copper Mine is situated in the Adelaide Hills region of South Australia, just 55 kilometres from Adelaide and only 3 kilomet res from the main dual carriageway to Port Adelaide. This strategic location offers significant advantages in both operating and capital costs, making it easier to attract and retain a skilled workforce that primarily resides in the area. Safety and Environment A continued focus on safety resulted in the Total Recordable Injury Frequency (TRIF) declining to 13.1 during the December quarter (September 2024 quarter: 13.3). Completion of a tailings dam lift and active management of tailings deposition has allowed for tailing deposition to commence around the entire perimeter of the TSF during future milling campaign. This has seen a material reduction in dust generation during inclement weather for both site and the wider community. Production and Costs Kanmantoo produced 2,637 tonnes of copper in 11,734dmt of concentrate at an All -In Cost of US$3.97 per pound of copper after by-product credits. Lower feed grade in the December quarter had an adverse impact on both production and unit costs. Lower grade stopes were mined in both November and December which was consistent with the mine plan and performed in line with the block model. Access to higher grade stopes has been regained in January 2025. Total costs on an absolute basis continue to improve, even with the ramp up in mining activity, with All-in costs in the December quarter declining to $34.5 million (Sep qtr: $35.7M). Quarterly records were achieved in several key physical metrics, including: • total development metres increased 16% to 1,620 meters (Sep qtr: 1,401) • inventory mined increased 11% to 311kt (Sep qtr: 280kt) • tonnes processed increased 24% to 329kt (Sep qtr: 266kt) • copper recoveries improved to 93.5% (Sep qtr: 93.3%) The main mining inventory sources for the quarter were from the Kavanagh 860 and 835 levels and the Spitfire 810 level. Underground development focussed on the Kavanagh Decline, 835, 810, 785 and 760 levels along with the Nugent incline and decline. The processing plant performed well, benefiting from continued operational improvements implemented during the quarter. This led to an increase in all key processing metrics, including tonnes processed, whilst concurrently increasing recoveries despite the lower processed grade. Table 1 below highlights the key mining, processing and cost metrics for the operation. For personal use only
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Page 3 Table 1: Kanmantoo quarterly production and cost summary Kanmantoo Production and Cost Metrics (Unaudited) Units Dec 2024 Quarter Sep 2024 Quarter3 Jun 2024 Quarter Mar 2024 Quarter Mining Physicals Total Development m 1,621 1,401 1,238 1,405 Inventory Mined kt 311 280 211 122 Grade Mined % 0.85 1.20 1.24 0.82 Processing Physicals Tonnes Processed kt 329 266 256 104 Grade Processed % 0.86 1.18 1.10 0.93 Recoveries % 93.5 93.3 91.4 82.7 Production Copper Produced t 2,637 2,923 2,584 827 Gold Produced oz 490 626 535 162 Silver Produced oz 21,854 26,372 23,377 5,810 Cost Summary1 Mining US$/lb 2.15 1.55 1.18 2.56 Processing US$/lb 0.60 0.61 0.59 1.62 Site G&A US$/lb 0.12 0.19 0.14 0.43 Transport and Offtake Charges US$/lb 0.42 0.39 0.36 0.32 Inventory Movements US$/lb (0.06) 0.06 0.13 (0.92) By-Product Credits US$/lb (0.29) (0.32) (0.24) (0.24) C1 Cash Cost US$/lb 2.94 2.48 2.16 3.77 Government Royalties US$/lb 0.19 0.19 0.17 0.19 Sustaining Capital US$/lb 0.47 0.64 0.00 0.00 All-in Sustaining Cost US$/lb 3.60 3.31 2.33 3.96 Major Capital2 US$/lb 0.37 0.40 1.40 2.92 All-in Cost US$/lb 3.97 3.71 3.73 6.88 1 AUD/USD conversion rate of 0.67 used. 2 Major Capital includes a portion of underground mine development capital as well as surface infrastructure capital. 3 September 24 Quarter Capital allocation has been adjusted to align with accounting standards, post commercial production. For personal use only
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Page 4 HILLGROVE RESOURCES Financials Net revenue from metal sales in the December 2024 quarter was $34.6 million. At the end of the quarter, Hillgrove had cash, receivables, and unsold concentrate of $9.7 million. Table 2: Company Liquidity Unaudited (A$M) Dec 2024 Sep 2024 Jun 2024 Mar 2024 Quarter Quarter Quarter Quarter Cash 3.3 7.8 7.4 7.4 Receivables 2.9 2.2 3.5 2.6 Unsold Concentrate 3.5 2.2 4.4 1.7 TOTAL 9.7 12.2 15.3 11.7 The reduction in liquidity was a direct result of the lower mined grades, which resulted in reduced copper production and revenues. This is expected to reverse in the upcoming quarters, as a result of: • Mining transitioning past the lower grade zones, • Increased development rates opening additional mining fronts, • Increased stope tonnes as the mining efficiency improves with the introduction of emulsion firing, and • I ncreased plant utilisation. During the December quarter, the Company invested $0.3 million in exploration and $7.2 million in mine development (Sep qtr restated: $8.2m). The Company paid executive director salaries and non- executive director fees of $249, 148 during the quarter. Hillgrove remains debt free with the A$10 million debt facility undrawn. On 31 December 2024, the Company had 7,900 tonnes of hedging outstanding at a weighted average price of A$14,056 per tonne scheduled for delivery between January 2025 and September 2026. For personal use only
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Page 5 2025 Guidance The successful mining ramp up and plant commissioning at the Kanmantoo Copper Mine has established a solid platform for delivery in the calendar 2025 year. Group copper production is expected to increase significantly from 2024 due to a combination of increased quarterly production rates and a full 12 months of production. Costs are expected to stabilise during the first quarter of 2025. A ll-in costs per pound are planned to improve as the year progresses as further efficiencies are realised and mining rates continue to ramp up. Cost guidance is calculated using copper metal price assumption of A$14,000 per tonne at a AUD:USD exchange rate of 0.64. All-in costs include C1 costs plus all site sustaining and major capital. Metric Guidance Range Copper Produced (tonnes) 12,000 – 14,000 All-in Cost (US$/lb)1 3.40 – 3.90 1. Assumes AUD:USD exchange rate of 0.64 KANMANTOO EXPLORATION Mineral Resource Drilling The Company drilled a further 65 holes from underground during the three months to 31 December 2024. 9,468m of drilling was achieved within the Kanmantoo mineral system. Of these, 23 holes were targeting the Nugent area, with the remaining 42 holes targeting the Kavanagh mineral systems within the underground mining footprint. Outstanding results were returned from the initial grade control drilling of the Nugent Mineral System. The results of this drilling to date are included in the table in Appendix A of this report. Significant Nugent drill intersections include: • 18.55m @ 5.69% Cu + 1.02g/t Au (uncut) from 187m downhole in 24KVUG0476 • 16.00m @ 2.96% Cu + 0.42g/t Au (uncut) from 197m downhole in 24KVUG0503 • 9.40m @ 1.07% Cu + 0.07g/t Au (uncut) from 204m downhole in 24KVUG0451 • 15.00m @ 0.85% Cu + 0.36g/t Au (uncut) from 196m downhole in 24KVUG0449 This underground diamond drilling into Nugent has continued to provide information on the continuity of the Nugent mineral system. Outstanding results were achieved at the eastern end of the Nugent system, where high grade copper and gold intercepts have been identified in holes 24KVUG0476 and 24KVUG0503. These holes represent a zone of 30 vertical metres between the 960 and 930m RL. Hole 24KVUG0477 targeted the strike extension of this zone but was ended 2m into the mineralised zone due to water being intersected. Follow up drilling will be planned for this area. This drill program into the Nugent Mineral System has included a number of holes targeting geotechnical information for development of underground infrastructure and the boundaries of possible mineralised pods which has resulted in holes with no significant intersections. For personal use only
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Page 6 Figure 4: Long Section of all Nugent drilling to December 2024 Viewed to the North Figure 5: Plan view of Underground Nugent Drilling Completed to the end of Dec 2024 For personal use only
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Page 7 Mine Lease Exploration The extensive copper exploration targets on the Kanmantoo mining lease include: • Along strike and down-dip extensions of the Kavanagh and Nugent Cu-Au Mineral Resources • The Emily Star down dip extension • Valentine, Critchley and Paringa, and • The Coopers and North Kavanagh deposits to the north of the Kavanagh underground development These are classified as the North and South copper hubs, where exploration activities will be targeted as underground development allows. During the December quarter, the focus has been on grade control definition drilling and resource drilling into strike extensions of Kavanagh on the SW Kavanagh lode and Nugent. The first Nugent underground drill platform was commissioned in October 2024 for drilling grade control holes for the Nugent lode from underground and to provide a platform for geotechnical holes prior to Nugent decline/incline development. Near Mine Exploration The Cu-Au targets within 10 kilometres of the Kanmantoo processing plant include the South Kanmantoo, Stella, Mullewa and North West Kanmantoo geochemical and geophysical targets. There was no work undertaken on these prospects in the December 2024 quarter. REGIONAL EXPLORATION The regional area comprises 4,187 km2 of exploration licences within the Kanmantoo Province in the south-east of South Australia. The work plan for the coming year will focus on target areas to provide key geological knowledge to assist in identifying high value potential economic areas of interest. Continued interpretation of new mineral system models operating within the Kanmantoo Province along with a review of existing data has been a focus for Hillgrove’s regional exploration activities, following on from work completed by the Geological Survey of South Australia (GSSA) and MINEX -CRC within the Kanmantoo Provence on magmatic related copper-gold endowment. Competent Persons Statement The information in this report that relates to Exploration Targets, Exploration Results, Mineral Resources is based on information compiled by Caitlin Rowett, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy. Caitlin Rowett is a full -time Employee and Shareholder of the company. Caitlin Rowett 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 Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Caitlin Rowett has consented to the inclusion in the release of the matters based on their information in the form and context in which it appears. For personal use only
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Page 8 The information in this report that relates to the 2024 Kanmantoo Mineral Resource Estimate were initially reported by the Company to the ASX on the 18th of October 2024. Further information is available on the Hillgrove Resources website at www.hillgroveresources.com.au The information in this report that relates to the previously reported Nugent Drill holes were initially reported by the Company to the ASX on the 6 th of May 2022 and the 3 rd of September 2020. Further information is available on the Hillgrove Resources website at www.hillgroveresources.com.au The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement s and that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. For personal use only
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Page 9 CORPORATE INFORMATION Issued Share Capital at 31 December 2024 Ordinary shares Unlisted Options Employee Performance Rights Share price activity for the Quarter High Low Last (31 December 2024) 2,095,555,567 66,000,000 43,525,000 0.069 0.049 0.052 SHARE REGISTRY REGISTERED OFFICE Boardroom Limited GPO Box 3993 Sydney NSW 2001, Australia F: +61 2 9279 0664 T: (within Australia) 1300 737 760 T: (outside Australia) +61 2 9290 9600 Hillgrove Resources Limited Ground Floor 5-7 King William Road Unley, South Australia, Australia E: info@hillgroveresources.com.au T: +61 8 7070 1698 For more information contact: Mr Bob Fulker Mr Joe Sutanto CEO & Managing Director CFO & Company Secretary Tel: +61 8 7070 1698 Tel: +61 8 7070 1698 SCHEDULE OF TENEMENTS AS AT 31 DECEMBER 2024 Tenement Location Percentage ML 6345 Kanmantoo, South Australia 100% ML 6436 Kanmantoo, South Australia 100% EML 6340 Kanmantoo, South Australia 100% EL 6526 Kanmantoo, South Australia 100% EL 6174 Coomandook, South Australia 100% EL 6175 Coonalpyn, South Australia 100% EL 6207 Tintinara, South Australia 100% EL 6294 Wynarka, South Australia 100% EL 6397 Laffer, South Australia 100% For personal use only
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Page 10 APPENDIX A: List of all drill intercepts in this report Intercepts tabulated in the table are amalgamated over a minimum down hole length of 3m > 0.3% Cu with a maximum of 2m internal dilution < 0.3% Cu. Or a minimum down hole length of 3m > 0.3g/t Au with a maximum of 1m internal dilution < 0.3g/t Au. No assays were cut before amalgamating the intercept. Hole ID Ore Zone Target Assay Method Depth From Depth To Interval Length Cu% Au g/t Ag g/t 24KVUG0340 Nugent - Geotech PXRF of <1mm 394 397 3 1.26 NA NA 24KVUG0448 Nugent PXRF of <1mm NSI 24KVUG0449 Nugent 4-Acid/ICP- MS 196 211 15 0.85 0.36 2.61 24KVUG0450 Nugent PXRF of <1mm NSI 24KVUG0451 Nugent 4-Acid/ICP- MS 204 213.4 9.4 1.07 0.07 1.53 24KVUG0452 Nugent PXRF of <1mm NSI 24KVUG0453 Nugent Not Sampled NSI 24KVUG0454 Nugent - Geotech Not Sampled NSI 24KVUG0455 Nugent - Geotech Not Sampled NSI 24KVUG0456 Nugent - Geotech PXRF of <1mm NSI 24KVUG0473 Nugent PXRF of <1mm 179 183 4 0.49 NA NA 24KVUG0474 Nugent PXRF of <1mm NSI 24KVUG0475 Nugent PXRF of <1mm 189.55 199 9.45 0.34 NA NA 24KVUG0476 Nugent 4-Acid/ICP- MS 187 205.55 18.55 5.69 1.02 10.76 24KVUG0477 Nugent PXRF of <1mm 191 193.1 2.1 1.65 NA NA 24KVUG0494 Nugent PXRF of <1mm NSI 24KVUG0495 Nugent PXRF of <1mm NSI 24KVUG0496 Nugent PXRF of <1mm 155 166 11 0.6 NA NA 24KVUG0497 Nugent PXRF of <1mm 144 153 9 0.42 NA NA 24KVUG0503 Nugent 4-Acid/ICP- MS 197 213 16 2.96 0.42 6.59 For personal use only
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Page 11 APPENDIX B: List of all Drill Collar details HOLE_ID SITE TYPE MAX DEPTH SURVEY METHOD NAT_GRID_ID EASTING NORTHING HEIGHT 24KVUG0340 DDH 459.3 TOTAL STATION MGA94_54 318243.608 6114864.05 899.032 24KVUG0448 DDH 215 TOTAL STATION MGA94_54 318315.8827 6114641.904 923.4459 24KVUG0449 DDH 227.12 TOTAL STATION MGA94_54 318315.6518 6114642.409 923.4365 24KVUG0450 DDH 59.6 TOTAL STATION MGA94_54 318315.9835 6114642.412 923.4103 24KVUG0451 DDH 239.7 TOTAL STATION MGA94_54 318316.0026 6114642.59 923.4214 24KVUG0452 DDH 254.9 TOTAL STATION MGA94_54 318315.9115 6114642.78 923.4257 24KVUG0453 DDH 263.68 TOTAL STATION MGA94_54 318315.8949 6114642.978 923.4122 24KVUG0454 DDH 85.6 TOTAL STATION MGA94_54 318315.9332 6114641.26 925.1713 24KVUG0455 DDH 116.8 TOTAL STATION MGA94_54 318315.4842 6114641.602 922.4786 24KVUG0456 DDH 125.3 TOTAL STATION MGA94_54 318312.4173 6114640.529 923.4606 24KVUG0473 DDH 206.4 TOTAL STATION MGA94_54 318316.1803 6114641.888 923.841 24KVUG0474 DDH 210.23 TOTAL STATION MGA94_54 318316.0978 6114642.114 923.8188 24KVUG0475 DDH 221.56 TOTAL STATION MGA94_54 318315.767 6114642.348 923.7493 24KVUG0476 DDH 230.67 TOTAL STATION MGA94_54 318315.7668 6114642.348 923.7492 24KVUG0477 DDH 193.1 TOTAL STATION MGA94_54 318315.8183 6114642.605 923.7235 24KVUG0494 DDH 206.73 TOTAL STATION MGA94_54 318315.8158 6114641.654 923.4536 24KVUG0495 DDH 195.1 TOTAL STATION MGA94_54 318315.7364 6114641.419 923.4897 24KVUG0496 DDH 194.2 TOTAL STATION MGA94_54 318315.5769 6114641.18 923.4907 24KVUG0497 DDH 191.5 TOTAL STATION MGA94_54 318315.2048 6114641.166 923.471 24KVUG0503 DDH 237 TOTAL STATION MGA94_54 318315.5794 6114642.196 923.4125 For personal use only
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Page 12 APPENDIX C: List of all Drill Survey Details HOLE_ID DEPTH A ZIMUTH DIP HOLE_ID DEPTH AZIMUTH DIP HOLE_ID DEPTH AZIMUTH DIP HOLE_ID DEPTH AZIMUTH DIP 24KVUG0340 0 167.99 10.2 24KVUG0451 150 96.74 4.34 24KVUG0473 30 109.86 10.54 24KVUG0494 30 112.81 2.14 24KVUG0340 15 167.69 10.3 24KVUG0451 180 96.8 5.12 24KVUG0473 60 110.35 11.31 24KVUG0494 60 112.87 2.72 24KVUG0340 30 167.28 10.4 24KVUG0451 210 96.39 5.43 24KVUG0473 90 110.13 11.63 24KVUG0494 90 112.28 4.02 24KVUG0340 60 166.36 10.1 24KVUG0451 239 96.73 5.73 24KVUG0473 120 109.6 11.84 24KVUG0494 120 111.74 4.19 24KVUG0340 90 165.92 10.3 24KVUG0452 0 94 1.2 24KVUG0473 150 109.5 11.78 24KVUG0494 150 111.01 4.42 24KVUG0340 120 165.3 10.5 24KVUG0452 15 94 1 24KVUG0473 180 108.74 11.77 24KVUG0494 180 110.4 4.04 24KVUG0340 150 164.69 11.1 24KVUG0452 30 94.18 1.44 24KVUG0473 205 108.42 11.84 24KVUG0494 205 110.46 4.38 24KVUG0340 180 164.58 11.5 24KVUG0452 60 94.17 2.09 24KVUG0474 0 107 8.63 24KVUG0495 0 117.9 2.3 24KVUG0340 210 164.62 12 24KVUG0452 90 94.38 2.54 24KVUG0474 15 106.89 8.64 24KVUG0495 15 117.81 2.34 24KVUG0340 240 163.46 12.7 24KVUG0452 120 94.39 3.29 24KVUG0474 30 106.85 8.76 24KVUG0495 30 117.66 2.94 24KVUG0340 270 163.1 13.1 24KVUG0452 150 94.18 2.95 24KVUG0474 60 106.8 9.77 24KVUG0495 60 117.45 3.23 24KVUG0340 300 162.5 13.3 24KVUG0452 180 94.3 5.99 24KVUG0474 90 106.76 10.45 24KVUG0495 90 117.04 4.04 24KVUG0340 330 161.58 13.6 24KVUG0452 210 94.3 6.54 24KVUG0474 120 106.17 11.12 24KVUG0495 120 116.37 4.72 24KVUG0340 360 160.2 14 24KVUG0452 240 94.2 6.81 24KVUG0474 150 105.53 10.94 24KVUG0495 150 114.9 4.99 24KVUG0340 390 159.33 16.2 24KVUG0452 254.9 94.09 6.99 24KVUG0474 180 105.38 10.75 24KVUG0495 180 114.14 4.89 24KVUG0340 420 161.68 16.4 24KVUG0453 0 87.99 1.21 24KVUG0475 0 104 7.87 24KVUG0495 195 112.09 5.63 24KVUG0340 450 159.28 16.8 24KVUG0453 15 88.05 1.34 24KVUG0475 15 103.82 8.09 24KVUG0496 0 122.99 2.82 24KVUG0340 459.3 157.15 17.2 24KVUG0453 30 88.15 1.68 24KVUG0475 30 103.73 8.96 24KVUG0496 15 122.76 2.76 24KVUG0448 0 108 1.3 24KVUG0453 60 88.28 2.15 24KVUG0475 60 103.93 10.42 24KVUG0496 30 122.14 4.31 24KVUG0448 15 107.89 1.18 24KVUG0453 90 88.63 3.39 24KVUG0475 90 103.51 10.74 24KVUG0496 60 121.4 4.95 24KVUG0448 30 107.99 1.59 24KVUG0453 120 89.46 4.43 24KVUG0475 120 103.44 11.12 24KVUG0496 90 120.76 5.48 24KVUG0448 60 107.79 2.07 24KVUG0453 150 88.72 2.86 24KVUG0475 150 102.47 10.83 24KVUG0496 128 119.8 5.94 24KVUG0448 90 107.53 2.94 24KVUG0453 180 89.33 4.12 24KVUG0475 180 102.69 10.64 24KVUG0496 150 119.45 5.63 24KVUG0448 120 107.3 3.59 24KVUG0453 210 89.21 6.96 24KVUG0475 210 102.07 10.4 24KVUG0496 180 119.35 5.59 24KVUG0448 1 50 107.39 3.54 24KVUG0453 240 89.25 8.4 24KVUG0475 220 101.62 10.12 24KVUG0496 194.2 119.36 5.46 24KVUG0448 180 107.24 3.85 24KVUG0453 263 89.76 8.67 24KVUG0476 0 100 7.7 24KVUG0497 0 129 2.81 24KVUG0448 215 107.8 4.04 24KVUG0454 0 125 29.06 24KVUG0476 15 100 7.8 24KVUG0497 15 128.32 2.96 24KVUG0449 0 103.99 2.34 24KVUG0454 15 125.34 28.62 24KVUG0476 30 99.92 8.39 24KVUG0497 30 128.12 3.04 24KVUG0449 15 103.98 2.32 24KVUG0454 30 125.37 28.11 24KVUG0476 60 99.97 9.67 24KVUG0497 60 126.56 4.02 24KVUG0449 30 103.99 2.63 24KVUG0454 60 124.5 27.12 24KVUG0476 90 100.83 11.58 24KVUG0497 90 125.51 5.04 24KVUG0449 60 104.08 3.21 24KVUG0454 85 124.24 26.17 24KVUG0476 120 102.26 13.04 24KVUG0497 120 124.43 5.86 24KVUG0449 90 104.12 4 24KVUG0455 0 125 -29.13 24KVUG0476 150 101.67 13.17 24KVUG0497 150 122.86 7.14 24KVUG0449 120 103.93 4.25 24KVUG0455 15 124.57 -28.87 24KVUG0476 180 101.84 13.06 24KVUG0497 180 121.51 7.4 24KVUG0449 150 104.09 4.57 24KVUG0455 30 124.03 -28.23 24KVUG0476 210 101.03 12.08 24KVUG0497 190 120.98 7.74 24KVUG0449 180 104.18 4.91 24KVUG0455 60 123.92 -27.35 24KVUG0476 230 100.63 12.4 24KVUG0503 0 102.2 -0.42 24KVUG0449 225 104.55 5.25 24KVUG0455 90 123.84 -26.96 24KVUG0477 0 97 7.86 24KVUG0503 15 102.05 -0.43 24KVUG0450 0 99.99 1.94 24KVUG0455 116 123.12 -24.97 24KVUG0477 15 97.29 7.73 24KVUG0503 30 101.66 0.75 24KVUG0450 15 99.97 2.53 24KVUG0456 0 199.99 10 24KVUG0477 30 97.36 8.22 24KVUG0503 60 101.64 1.84 24KVUG0450 30 99.87 3.01 24KVUG0456 15 200 9.23 24KVUG0477 60 97.39 9.03 24KVUG0503 90 101.64 2.76 24KVUG0451 0 96.99 3.77 24KVUG0456 30 200.73 8.98 24KVUG0477 90 97.34 9.46 24KVUG0503 120 100.79 3.15 24KVUG0451 15 96.99 3.8 24KVUG0456 60 201.55 8.56 24KVUG0477 120 97.08 10.35 24KVUG0503 150 100.65 4.53 24KVUG0451 30 96.99 3.85 24KVUG0456 90 203.53 8.58 24KVUG0477 150 97.73 11.35 24KVUG0503 180 99.67 5.44 24KVUG0451 60 97.27 4.97 24KVUG0456 120 204.77 9.38 24KVUG0477 180 98.13 11.93 24KVUG0503 210 99.47 5.22 24KVUG0451 90 97.24 5.44 24KVUG0473 0 110.59 8.87 24KVUG0494 0 112.99 1.77 24KVUG0503 235 98.44 5.58 24KVUG0451 120 96.72 3.54 24KVUG0473 15 110.24 9.31 24KVUG0494 15 112.79 1.86 For personal use only
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Page 13 APPENDIX D: Grade Control Methodology The objective of the ongoing underground (UG) diamond drilling program has been to infill the exploration drilling through the Kanmantoo including both Kavanagh and Nugent mineral systems within the Kanmantoo Mine Lease for the purpose of final ore development and stope planning and design. Appendix E JORC Tables 1 and 2 describe the drilling, sampling, and assaying processes. Summary descriptions are provided below. Drilling All holes are collared and drilled using conventional UG NQ diamond drilling tools. No directional drilling is required for the underground drilling. Collar co-ordinates and collar surveys of the holes reported in this release are provided in Appendix B & C . Drilling is undertaken by a single contractor with experienced drillers. Drilling rates vary from 20m to 90m per shift and average 45m per shift including all non- drilling activities. Drill hole collars and alignments are surveyed by a qualified surveyor and downhole surveyed with Gyro. Similar to the exploration drilling, the UG drill core recovery is excellent and RQD > 95%. Logging and Sampling Geological and geotechnical logging is undertaken or supervised by Hillgrove geologists who have been involved in the exploration drilling over the past few years. Core photography and sampling is undertaken or supervised by the technician crews who have worked with Hillgrove’s exploration programs over the past few years. Assaying Selected holes (identified in Table 1) were assayed by the same process as utilised for exploration drilling. • Core saw to slab drill core in half, and 50% of sample interval despatched to ALS • Crush to 70% < 2mm whole sample • Spilt and 1kg pulverised to 85% < 75um • Spilt and 0.5 gram assay by 4- acid digest and ICP-MS analysis and Au by 30g Fire Assay and AA finish The ##KVUG UG drill holes have predominantly been assayed by an on-site XRF assay facility with several drill holes duplicate assayed by the ALS assay process as a QA/QC check of the XRF results. Where a drill hole has been assayed by both XRF and ALS, the ALS results are prioritised in the database and used for all re source interpretations and grade modelling. Table 1 shows the drill holes that have been reported with the XRF or with the ALS methods. A the XRF process does not provide useful lower limits of detection for Ag or Au these elements are not reported in the drill intersection table (NA is annotated therein). The XRF process used for copper grades of the UG drill core is the same as that successfully developed and utilised for all grade control in the Giant open pit from 2016 to 2019. During the open pit period the on-site XRF process for Cu reconciled excellently against mill reconciled copper grade. The onsite XRF process for UG drill core is • Crush whole drill core interval in Orbis OM100 crusher to 70% < 2mm (no core saw splitting) • Rotary split to 1kg • Sieve split to < 1mm and retain fine fraction • Riffle split and manual split to 20 grams and pelletised • Benchtop portable XRF of pellet For both methods extensive blanks, and appropriate standards are inserted into the sample sequence. Blanks, in particular are authorised by the logging geologist for intervals following high sulphides to capture any crusher/pulveriser contamination with additional routine blanks inserted every 20 samples. For personal use only
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Page 14 QA of the veracity of the XRF copper assays has been diligently reviewed with on- going duplicate sampling and assaying. Figure 1 shows an example of the comparison of the duplicate XRF and ALS assays from drill hole 24KVUG0476. The duplicate assaying shows 1. Excellent delineation of the economic interval at 0.4% Cu and 0.6% Cu cutoff grades 2. Excellent estimates of the mean Cu grade of the economic intervals Figure 1: Comparison of XRF and ALS assays for Cu – hole 24KVUG0476 In conclusion, the XRF assaying for Cu at Kanmantoo continues to be a reliable estimate of the drill core copper values subject to on-going QA/QC of drill core ALS assaying from the different lode systems. For personal use only
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Page 15 APPENDIX E: JORC (2012) Table 1 Section 1 Sampling Techniques and Data Criteria Commentary Sampling techniques • The Diamond Drill Hole (DDH) sampling was conducted as per the Hillgrove Resources procedures and QAQC protocols. • Sample intervals from 1.25m to 0.25m as determined by geology through visibly mineralised zones were split from the drill core • Where samples are despatched to ALS the sample intervals are split from the drill core, with the drill core sawn in half with a diamond core saw and half-core sample crushed to 75% < 2mm by ALS’s Boyd Crusher • Where samples are assayed by the on-site XRF, the whole interval of drill core is crushed to 75% < 2m by Hillgrove’s Orbis OM100 Crusher Drilling techniques • All UG drilling is undertaken by external drilling contractor, DRC Drilling. All holes drilled with NQ. NQ Core size is 47.6mm in diameter. Drill sample recovery • Recovered drill core metres were measured and compared to length of drill hole advance to calculate core recovery for every core run. On average sample recovery is >98%. There is no correlation between sample recovery and copper grades in this DDH drill program. Logging • All drill core was logged for lithology, alteration, weathering and mineralisation by Hillgrove geologists in accordance with Hillgrove’s Core Logging Procedure. Colour and any additional qualitative comments were also recorded. • High quality photographs of all drill core before being sampled were taken under controlled light at the HGO core yard at Kanmantoo. • All drill core is stored at Hillgrove’s Kanmantoo core yard facility. • All geological logging is recorded into Geobank for Field Teams (a database product from Micromine) templates and visually validated before being imported into the Hillgrove drill hole database. Additional validation is conducted automatically on import. • In addition, a geotechnical log of all drill core is recorded utilising standard geotechnical logging indexes. RQD is 98-100%. UG drill core is not oriented. Where required, orientation of structure relative to the dominant S2 foliation is recorded. Sub- sampling techniques and sample preparation • For the intervals despatched to ALS the core is sawn in half and the half core despatched to ALS for each sample interval and the entire half-core sample then crushed and 1kg rotary split from the crushed mass and the 1kg sub-sample then pulverised to 85%< 75um. A sub-split of 200 grams of the pulverised material is then split by ALS and retained, and the reject pulverised material returned to Hillgrove. From the 200 gram sub-split a 2 gram aliquot is scooped and weighed by ALS for 4- acid digestion. • For the intervals retained on-site for the onsite XRF laboratory, the core is not sawn in half. The entire core from the marked sample interval is crushed in a crusher and 1kg riffle rotary split from the crushed mass. The remaining crushed material is bagged and retained. The 1kg of crushed material is then screened to < 1mm and only the fines retained. A sub-split of 10 grams of the fines material is scooped and pelletised and presented to the Olympus Vanta VMR XRF instrument. • Hillgrove have detailed sampling and QAQC procedures in place to ensure sample collection is carried out to maximise representivity of the samples, to minimise For personal use only
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Page 16 contamination, and to maintain sample numbering integrity. Quality of assay data and laboratory tests • For the samples submitted to ALS for analysis. ALS code ME-MS61 using a 4-acid digest with determination by Mass Spectrometry. If the copper result was greater than 1%, the analysis was repeated using a modified acid digestion technique. • For the samples submitted to ALS, Gold is assayed by 30g Fire Assay. If > 10 g/t then repeated by fire assay with a gravimetric finish. • For the samples submitted to the Hillgrove on-site laboratory, the pelletised fines samples are presented to the Olympus XRF instrument and energised for 40 sec. The results are automatically recorded to a database. • The QAQC of sample preparation and analysis processes were via the following samples: o Certified reference materials (CRM’s) are inserted into the sample sequence with appropriate standard types selected for XRF o Laboratory inserted QAQC samples were inserted with a minimum of two standards and one blank for every batch of 40 samples for Cu and one in 80 Au analysis. o Analysis of inserted blank samples to test for contamination Figure 2: Blank Samples Results o Comparison of the 4 Acid ICPMS and XRF results as outlined in Appendix D o Results from all returned QAQC samples provide reasonable confidence as to the accuracy of the assay results used in the estimation. • Quartz flushes are introduced to the bowl pulverisers after each sample interval. These are monitored and where Cu contamination of the quartz flush occurs the batch is repeated by the assay lab. For the holes reported there are no examples of sulphides contaminating successive samples via sample preparation processes. • Quartz washes are also utilised through the onsite crusher where high sulphides are present and identified by the logging geologist and at minimum of every 20 samples. • Hillgrove‘s quality policy is that at a minimum of 5% of all samples are CRM’s, and 5% of samples submitted are blanks thus ensuring that as a minimum, 10% of all For personal use only
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Page 17 samples submitted for analysis are Hillgrove QAQC samples. Verification of sampling and assaying • Sample data sheets are prepared in Geobank: Field Team and printed for technicians use. All core is marked for sampling and confirmed by the logging geologist. Sample Sheets also include the sample number sequence and the sample numbers to be assigned to the QAQC samples. Sample intervals input from the excel spreadsheet into an SQL database via Geobank. Data was visually checked by the Geologist prior to import and additional validation was carried out by the database upon import. Copper results were reported in ppm units from the laboratories and then converted to a % value within the database. Location of data points • The map projection of Map Grid of Australia 1994 - Zone 54, (MGA94-54) is used for all work undertaken for this drilling. • All drill hole collars are surveyed with a Leica survey station. The accuracy of this instrument is 0.01m. All pick-ups were reported in MGA94-54 coordinate system. • The UG rigs set ups are aligned by qualified surveyors setting up the drill rigs in the UG drill access. • Downhole surveys were determined using a gyro survey instrument at 12m intervals and recorded in Grid North. Data spacing and distribution • See Appendix B + C and Figures in the body of the text for drill hole locations. Orientation of data in relation to geological structure • All holes are angled drill holes, dipping between -29 to +29 deg through the mineralised zone. All holes are oriented towards 88-205deg (True North). • Dominant mineralisation trends as measured from in-pit mapping are strike 040deg and dip -75deg which is the expected orientation of the target. Sample security • A Hillgrove employee is responsible for collecting and organising the samples ready for assay. Hillgrove has a detailed sample collection/submission procedure in place to ensure sample security. • Drill core is transported from the UG drill site to Hillgrove’s core yard at Kanmantoo under the supervision of Hillgrove staff. • Transport of the half-sawn drill core samples for ALS assaying is by dedicated road transport to the Adelaide sample preparation facility. All samples are transported in sealed plastic bags and are accompanied by a detailed sample submission form. • At ALS, on receiving a batch of samples, the receiving laboratory checks received samples against a sample dispatch sheet supplied by Hillgrove personnel. On completion of this check a sample reconciliation report is provided for each batch received. Audits or reviews • There has not been an external review of this DDH drilling program. Previous audits of the Hillgrove sampling methods were reviewed by independent consultant and were considered to be of a very high standard. For personal use only
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Page 18 Section 2 Reporting of Exploration Results Criteria Commentary Mineral tenement and land tenure status • The Drill target is located in the Kanmantoo Cu-Au mine is situated on Mining Lease ML6345 + ML6436 and is owned 100% by Hillgrove Resources Limited (HGO). • HGO owns the land covered by the Mining Lease. Exploration done by other parties • Hillgrove Resources commenced exploration drilling in 2004 and since then has completed a number of exploration sampling, geophysical and mapping campaigns which have resulted in defining the drill targets. Geology • Mineralisation occurs as an epigenetic system of structurally controlled veins and disseminations of chalcopyrite, pyrrhotite, pyrite, magnetite, within a quartz + biotite + andalusite ± garnet ± chlorite +/- staurolite schist host rock. Structural studies suggest the mineralisation is within brittle structures that have been re- activated. Drill hole Information • Drill collars, surveys, intercepts are reported Appendix A, B + C of the release along with the Report body Data aggregation methods • Intercepts tabulated in the table are amalgamated over a minimum down hole length of 3m > 0.3% Cu with a maximum of 2m internal dilution < 0.3% Cu. Or a minimum down hole length of 3m > 0.3g/t Au with a maximum of 1m internal dilution < 0.3g/t Au. No assays were cut before amalgamating the intercept Mineralisation widths • Table of downhole mineralised intercepts is reported in appendix A of this release. Diagrams • Diagrams that are relevant to this release have been included in the body of the release. Balanced reporting • All drill holes have been reported. Other exploration data • In situ rock density has been measured by wet immersion method. The results indicate that the default bulk rock density of 3.1t/m3 as used at the Kavanagh mine site is still a reasonable representation of bulk density for all mineralisation. Further work • Geological interpretation of the geology and assays to estimate a resource suitable for underground evaluation studies. For personal use only
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Rule 5.5 ASX Listing Rules Appendix 5B (17/07/20) Page 1 + See chapter 19 of the ASX Listing Rules for defined terms. Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report Name of entity Hillgrove Resources Limited ABN Quarter ended (“current quarter”) 73 004 297 116 31 December 2024 Consolidated statement of cash flows Current quarter $A’000 Year to date (12 months) $A’000 1. Cash flows from operating activities 31,745 106,099 1.1 Receipts from customers 1.2 Payments for - - (a) exploration & evaluation (b) development - - (c) production (24,546) (67,853) (d) staff costs (6,793) (23,001) (e) administration and corporate costs (944) (3,451) 1.3 Dividends received (see note 3) - - 1.4 Interest received 4 65 1.5 Interest and other costs of finance paid (4) (4) 1.6 Income taxes paid - - 1.7 Government grants and tax incentives - - 1.8 Other (GST) 3,115 11,273 1.9 Net cash from / (used in) operating activities 2,577 23,128 2. Cash flows from investing activities - - 2.1 Payments to acquire or for: (a) entities (b) tenements - - (c) property, plant and equipment (5,809) (33,555) (d) exploration & evaluation (259) (2,272) (e) investments - - (f) other non-current assets - - For personal use only
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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report ASX Listing Rules Appendix 5B (17/07/20) Page 2 + See chapter 19 of the ASX Listing Rules for defined terms. Consolidated statement of cash flows Current quarter $A’000 Year to date (12 months) $A’000 2.2 Proceeds from the disposal of: - - (a) entities (b) tenements - - (c) property, plant and equipment - 200 (d) investments - - (e) other non-current assets - - 2.3 Cash flows from loans to other entities - - 2.4 Dividends received (see note 3) - - 2.5 Other (provide details if material) - - 2.6 Net cash from / (used in) investing activities (6,068) (35,627) 3. Cash flows from financing activities - 10,287 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities - - 3.3 Proceeds from exercise of options - - 3.4 Transaction costs related to issues of equity securities or convertible debt securities - (589) 3.5 Proceeds from borrowings - - 3.6 Repayment of borrowings - - 3.7 Transaction costs related to loans and borrowings - - 3.8 Dividends paid - - 3.9 Other (payment of lease liabilities) (999) (4,178) 3.10 Net cash from / (used in) financing activities (999) 5,519 4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 7,750 10,240 4.2 Net cash from / (used in) operating activities (item 1.9 above) 2,577 23,128 4.3 Net cash from / (used in) investing activities (item 2.6 above) (6,068) (35,627) 4.4 Net cash from / (used in) financing activities (item 3.10 above) (999) 5,519 For personal use only
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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report ASX Listing Rules Appendix 5B (17/07/20) Page 3 + See chapter 19 of the ASX Listing Rules for defined terms. Consolidated statement of cash flows Current quarter $A’000 Year to date (12 months) $A’000 4.5 Effect of movement in exchange rates on cash held - - 4.6 Cash and cash equivalents at end of period 3,260 3,260 5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts Current quarter $A’000 Previous quarter $A’000 5.1 Bank balances 3,260 7,750 5.2 Call deposits - - 5.3 Bank overdrafts - - 5.4 Other (provide details) - - 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 3,260 7,750 6. Payments to related parties of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to related parties and their associates included in item 1 249 6.2 Aggregate amount of payments to related parties and their associates included in item 2 - Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. The amount in item 6.1 comprises executive director salaries and non executive director fees during the quarter. For personal use only
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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report ASX Listing Rules Appendix 5B (17/07/20) Page 4 + See chapter 19 of the ASX Listing Rules for defined terms. 7. Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 7.1 Loan facilities 10,000 - 7.2 Credit standby arrangements - - 7.3 Other (please specify) - - 7.4 Total financing facilities - - 7.5 Unused financing facilities available at quarter end 10,000 7.6 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well. Refer to the ASX announcement “Hillgrove Secures $10 Million Standby Debt Facility” released on 23/10/2024. 8. Estimated cash available for future operating activities $A’000 8.1 Net cash from / (used in) operating activities (item 1.9) 2,577 8.2 (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (259) 8.3 Total relevant outgoings (item 8.1 + item 8.2) 2,318 8.4 Cash and cash equivalents at quarter end (item 4.6) 3,260 8.5 Unused finance facilities available at quarter end (item 7.5) 10,000 8.6 Total available funding (item 8.4 + item 8.5) 13,260 8.7 Estimated quarters of funding available (item 8.6 divided by item 8.3) 5.7 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. 8.8 If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not? N/A 8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful? N/A 8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis? Yes. Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered. For personal use only
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Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report ASX Listing Rules Appendix 5B (17/07/20) Page 5 + See c hapter 19 of the ASX Listing Rules for defined terms. Compliance statement 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A. 2 This statement gives a true and fair view of the matters disclosed. 21 January 2025 D ate: ................................................................................... B y the Board Authorised by: ................................................................................... (Name of body or officer authorising release – see note 4) Notes 1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the ent ity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so. 2. If this quarterly cash flow report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash F lows apply to this report. If this quarterly cash flow report has been prepared in accordance with other accounti ng s tandards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report. 3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity. 4. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [nam e of board committee – eg Audit and Risk Committee] ”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”. 5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and R ecommendations, the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity , and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively. For personal use only