Kanmantoo Garnet Project Targets 50,000 Tonnes Annual Production Starting Q4 2026
Heavy Minerals Limited has formalised a binding agreement with Hillgrove Resources to develop a pioneering garnet extraction project at the Kanmantoo Copper Mine, aiming to start production in late 2026.
- Binding Tailings Processing Agreement executed with Hillgrove Resources
- Initial production capped at 50,000 tonnes per annum, with potential to double
- Project financing targeted at AU$25-30 million via debt, pre-sales, and royalties
- Heavy Minerals responsible for environmental and operational obligations
- Strategic focus on domestic and international waterjet garnet markets
A New Chapter for Industrial Garnet Production in Australia
Heavy Minerals Limited (ASX, HVY) has taken a significant step forward by signing a binding tailings processing agreement with Hillgrove Resources (ASX, HGO) to develop the Kanmantoo Hardrock Almandine Garnet Project in South Australia. This agreement marks the culmination of 18 months of detailed negotiations, technical studies, and financial modelling, setting the stage for Heavy Minerals to become a key player in the industrial garnet market.
The project will extract high-quality garnet from the tailings of the Kanmantoo Copper Mine, utilising advanced waterjet cutting technology. The initial production phase is capped at 50,000 tonnes per annum, with plans to upgrade the processing plant to handle up to 100,000 tonnes annually. Heavy Minerals aims to commence production by the fourth quarter of 2026, subject to securing the necessary funding and approvals.
Financial and Operational Framework
The agreement outlines a structured financial arrangement whereby Heavy Minerals will pay Hillgrove an initial fee, followed by exclusivity payments and royalties based on gross revenue. Notably, Heavy Minerals will be responsible for all government royalties and environmental rehabilitation obligations associated with its operations, including taking over full site responsibility once Hillgrove ceases mining activities.
Funding remains a critical focus, with the company targeting AU$25-30 million through a mix of debt, pre-sales, and royalties. Discussions with potential financiers and distributors in Australia, the USA, and Europe are well advanced, reflecting the project's promising market potential. The company emphasises a preference for non-dilutive funding methods to preserve shareholder value.
Strategic Positioning and Market Outlook
Heavy Minerals is positioning the Kanmantoo project as a world-class, low-cost producer of industrial waterjet garnet, a niche but growing segment within the industrial minerals sector. The project benefits from proximity to established markets and existing infrastructure at the Kanmantoo site, including allocated processing and storage facilities.
Beyond Kanmantoo, Heavy Minerals continues to advance its larger-scale Port Gregory and Red Hill projects in Western Australia, with the Kanmantoo operation serving as a strategic stepping stone. The company’s executive chairman, Adam Schofield, highlighted the importance of establishing a strong international distribution network ahead of broader production ramp-up.
Technical Validation and Next Steps
The project’s technical viability has been rigorously tested, including bulk sampling from live tailings, processing trials by IHC Mining, and waterjet cutting performance assessments by CSIRO. These efforts underpin the confidence in product quality and operational design.
Looking ahead, Heavy Minerals plans to release a pre-feasibility study shortly, providing further clarity on project economics and timelines. The company anticipates making a final investment decision in the near term, with equipment orders expected to follow promptly.
Bottom Line?
Heavy Minerals’ Kanmantoo agreement sets a promising foundation, but funding and execution will be critical to unlocking its full potential.
Questions in the middle?
- Will Heavy Minerals secure the targeted AU$25-30 million funding on favourable terms?
- How will the company manage environmental responsibilities once mining operations transition?
- What is the timeline and likelihood for scaling production beyond the initial 50,000 tonnes?
