Hillgrove Reports 10.7% Rise in Mine Development Despite Lower Copper Output

Operational Progress Despite Grade Setbacks

Hillgrove Resources’ June 2025 quarter report reveals a company in transition, balancing short-term production challenges with strategic investments aimed at long-term growth. While copper production dipped 12.2% to 2,593 tonnes due to lower ore grades, operational metrics tell a more optimistic story. Underground development surged 10.7% to 2,011 metres, and tonnes processed increased by 11.7% to 353,000 tonnes, reflecting a concerted effort to ramp up capacity and efficiency.

CEO Bob Fulker acknowledged the temporary setback caused by delayed access to higher-grade ore but highlighted the company’s strong operational base and progress on the Nugent acceleration project. This initiative is designed to alleviate production bottlenecks and improve stope cycles, with the goal of boosting mill throughput from 1.4 million tonnes per annum (Mtpa) to between 1.7 and 1.8 Mtpa in early 2026.

Nugent Project, Ahead of Schedule and Strategic

The Nugent acceleration project stands out as a key highlight. Contractors began accelerated development in late April, achieving early intersection of the orebody and delivering first ore to the Kanmantoo mill well ahead of the December 2025 target. This early milestone not only demonstrates operational agility but also positions Hillgrove to increase production flexibility by establishing multiple mining fronts.

However, this rapid development pace is expected to moderate in coming months as contractor activity winds down, returning to a sustainable long-term development rate of approximately 1,800 metres per quarter. The company anticipates that this will coincide with reduced capital expenditure and improved unit costs.

Financial Health and Cost Management

Financially, Hillgrove completed a capital raising during the quarter, bolstering liquidity to support its growth initiatives. Operating mine cashflow reached $6.4 million, though net mine cashflow was negative $4.8 million due to sustaining and major capital investments, including $5.1 million dedicated to Nugent acceleration.

Unit costs rose to US$4.44 per pound of copper sold, up from US$3.79 in the prior quarter, primarily reflecting the impact of lower grades on production volumes. Despite this, the company maintained its full-year cost guidance of US$3.40 to US$3.90 per pound, excluding Nugent acceleration costs, signaling confidence in operational improvements and cost control measures ahead.

Exploration Success Fuels Resource Growth

Exploration efforts continue to underpin Hillgrove’s growth strategy. The June quarter saw extensive drilling programs targeting both extensional and infill opportunities at Kanmantoo, Nugent, Kavanagh, and Valentine deposits. Significant copper-gold intersections were reported, including high-grade zones that extend known mineralisation beyond current resources.

This dual approach aims to enhance geological confidence for mine planning and extend the mine life by unlocking new zones of mineralisation. Additionally, regional exploration initiatives are underway to identify further targets within the Kanmantoo Province, with geophysical surveys and stakeholder engagement progressing.

Sustainability and Community Engagement

Hillgrove also reported positive community relations, partnering with local committees to refresh the Kanmantoo and Callington Community Consultative Committee Master Plan. Environmental management remains a focus, with active tailings deposition control and no community complaints during the quarter. Safety metrics showed a slight increase in recordable injuries, prompting renewed efforts on compliance and training.