Hillgrove Reports 92% Jump in Mine Cash Flow, Raises $18M for Growth
Hillgrove Resources reported a robust March quarter with a 12% increase in copper production and a 92% rise in mine operating cash flow, underpinned by a successful $18 million capital raise to accelerate growth at Kanmantoo.
- 12% increase in copper production to 2,952 tonnes
- 92% rise in mine operating cash flow to $12.7 million
- $20.5 million liquidity post $18 million capital raise
- Accelerated Nugent underground development underway
- Promising exploration results extending Nugent mineralisation
Operational Momentum at Kanmantoo
Hillgrove Resources Limited (ASX: HGO) has delivered a strong operational and financial performance in the March 2025 quarter, marked by a 12% increase in copper production to 2,952 tonnes and a near doubling of mine operating cash flow to $12.7 million. These gains reflect improved processing efficiencies and a strategic focus on accelerating growth projects at the Kanmantoo Copper Mine in South Australia.
The Kanmantoo operation, located just 55 kilometres from Adelaide, benefits from its proximity to infrastructure and skilled labour, factors that have supported the company’s ability to ramp up production while maintaining cost discipline. The processing plant’s utilisation remains at approximately 40%, indicating significant capacity for future expansion as new ore sources come online.
Capital Raising Fuels Growth Ambitions
Hillgrove successfully raised $18 million through a combination of a placement and an oversubscribed share purchase plan (SPP), boosting total liquidity to $20.5 million. This capital injection underpins the accelerated development of the Nugent deposit, with underground contractors mobilised and first ore expected to be processed by the December 2025 quarter. The Nugent project is central to Hillgrove’s strategy to increase throughput from 1.4 million tonnes per annum (Mtpa) to approximately 1.8 Mtpa by mid-2026, targeting a 25% production uplift.
The company’s CEO, Bob Fulker, highlighted the significance of these developments, noting that the improved liquidity and operational performance position Hillgrove well to pursue both the Nugent acceleration and greenfield exploration opportunities within the Kanmantoo mining lease and surrounding regional tenements.
Exploration Success Extends Mineralisation
Exploration drilling continued apace with nearly 10,000 metres completed during the quarter, focusing on the Nugent, Kavanagh, and Valentines areas. Notably, the Nugent mineral system yielded high-grade copper-gold intersections, including 21.4 metres grading 1.79% copper and 0.65 g/t gold, extending the known mineralisation footprint. These results reinforce the potential for resource expansion and underpin the planned increase in underground development.
Beyond Nugent, Hillgrove is targeting multiple exploration hubs within the Kanmantoo lease, including the North and South copper hubs, with a comprehensive 60,000-metre drilling program planned for 2025. This aggressive exploration agenda aims to unlock additional ore sources to feed the processing plant and sustain production growth.
Financial and Operational Discipline
Hillgrove reported a C1 operating cost of $4.19 per pound of copper sold and an all-in cost of $5.92 per pound, reflecting ongoing cost management amid rising production. Sustaining and growth capital expenditures totaled $7.7 million, with $6.5 million dedicated to mine development, including $2.6 million at Nugent. The company’s net mine cash flow stood at $5 million for the quarter.
Safety remains a focus, although the Total Recordable Injury Frequency (TRIF) increased to 18.3, prompting management to intensify efforts to improve workplace safety. Environmental management progressed with the completion of a tailings dam lift, reducing dust generation and supporting future milling campaigns.
Looking Ahead
Hillgrove remains on track to meet its 2025 production guidance of 12,000 to 14,000 tonnes of copper at an all-in cost between US$3.40 and US$3.90 per pound. The company’s hedging program covers 7,850 tonnes of copper at an average price of $14,375 per tonne through to September 2026, providing some revenue certainty amid market volatility.
With the Nugent development accelerating and exploration drilling delivering promising results, Hillgrove is poised to enhance its production profile and shareholder value. However, the company must navigate safety challenges and secure final approvals for the Tranche 2 placement, which remains subject to regulatory and shareholder consent.
Bottom Line?
Hillgrove’s operational gains and capital raise set the stage for a pivotal year as Nugent development and exploration progress converge.
Questions in the middle?
- How will Hillgrove manage and improve safety metrics following the rise in recordable injuries?
- What impact will the Tranche 2 placement approval have on funding and project timelines?
- Can exploration success at Valentines and other targets translate into sustained production growth beyond Nugent?
