Hillgrove Resources (ASX:HGO) marked its first full year of underground copper production at Kanmantoo with 11,315 tonnes produced, returning to profitability and significantly boosting its Mineral Resources and Ore Reserves. The company is advancing growth projects and sustainability initiatives to underpin a production ramp-up in 2026.
- 11,315 tonnes copper produced in 2025, within guidance
- Net profit after tax of $0.1 million, reversing 2024 loss
- 43% increase in Ore Reserves and 14% increase in Mineral Resources
- Ramp-up to 1.7–1.8 million tonnes per annum targeted by mid-2026
- Sustainability focus on safety improvements and climate risk assessment
Underground Transition Drives Operational Turnaround
Hillgrove Resources (ASX:HGO) has completed its first full year of consistent underground copper production at its Kanmantoo Copper Mine in South Australia, delivering 11,315 tonnes of copper in 2025. This milestone came alongside a return to profitability, with a net profit after tax of $0.1 million reversing a $14.8 million loss in 2024. The improved operational momentum was underpinned by a ramp-up in mining activity, including the successful establishment of a second mining front at Nugent, which enhances flexibility and supports the planned increase in throughput to 1.7–1.8 million tonnes per annum by mid-2026.
Operational cash flow from mining reached $35.8 million, supporting capital investment and exploration. Despite a dip in average ore grade to 0.83%, consistent mill throughput and robust metallurgical recoveries helped maintain steady production. The company’s all-in cost (AIC) was US$4.29 per pound, at the lower end of the revised guidance range.
Significant Growth in Mineral Resources and Ore Reserves
Hillgrove reported a substantial 43% increase in Ore Reserves to 4.0 million tonnes grading 0.85% copper and 0.22g/t gold, containing 34,000 tonnes of copper and 29,000 ounces of gold. Mineral Resources grew by 14% to 22 million tonnes, with a 46% increase in contained gold to 120,000 ounces. These expansions reflect ongoing drilling and resource definition, as well as the inclusion of new areas such as Nugent and Valentines. The resource growth supports the company’s strategy to extend mine life and increase production capacity.
The updated resource and reserve figures are based on conservative long-term metal price assumptions and incorporate mining depletion to mid-2025. The company is advancing the Emily Star project, with the development of an exploration incline underway and a decision on Stage 2 development expected in the second half of 2026, contingent on positive drilling and economic assessment.
Financial Strength Bolstered by Equity Raises and Cash Build
Hillgrove strengthened its balance sheet during 2025, increasing total assets by $42.8 million to $150.2 million and ending the year with $21 million in cash and no drawn debt. The company completed two equity raisings totaling $44 million, which funded the Nugent Acceleration Project and exploration and development activities at Emily Star. Operating cash flows remained steady at $20.4 million, reflecting higher production offset by increased operating costs associated with the expanded underground operation.
Revenue rose 49% to $167.6 million, driven by higher copper, gold, and silver output and improved realised prices. EBITDA increased to $26 million, supporting the company’s return to profitability. Despite the improved earnings, the company’s all-in sustaining cost rose to US$3.96 per pound, reflecting increased sustaining capital and other costs as the operation scales.
Safety Challenges and Sustainability Commitments
Safety performance deteriorated in 2025, with the Total Recordable Injury Frequency (TRIF) increasing to 20.7 from 13.1 in 2024, coinciding with the expansion of underground activities and workforce growth. While no life-altering injuries occurred, the company has launched a structured safety improvement program focusing on critical controls, frontline leadership, contractor management, and underground hazard systems.
On the sustainability front, Hillgrove advanced its climate change risk assessment and began preparing for mandatory climate-related disclosures under the Australian Sustainability Standards Board (AASB S2). The company reported combined Scope 1 and 2 greenhouse gas emissions of 21,621 tonnes CO2-e for 2025, with over 70% of electricity sourced from renewables via the South Australian grid. Environmental stewardship efforts include progressive rehabilitation, native vegetation programs, and water management initiatives aligned with regulatory requirements.
Exploration and Growth Pipeline for 2026
Hillgrove’s 2026 exploration program aims to build on the 2025 resource gains with approximately 63,000 metres of drilling planned, predominantly underground. Focus areas include resource conversion at Kavanagh, Nugent, and Emily Star, with up to 12,000 metres dedicated to Emily Star alone. The company is also prioritising near-mine targets that leverage existing infrastructure to extend mine life and support throughput growth beyond 1.8 million tonnes per annum.
Hillgrove continues to rationalise its tenement portfolio to concentrate on the most prospective areas within the Kanmantoo Province, ensuring capital efficiency and alignment with strategic growth objectives. This disciplined approach is designed to maintain a pipeline of value-accretive opportunities while managing operational risks.
The company’s growth narrative is reinforced by recent coverage highlighting record quarterly copper production and ongoing drilling success, which collectively underpin ambitions to surpass 2 million tonnes annual throughput.
Bottom Line?
Hillgrove’s 2025 results mark a pivotal step in its underground transition and resource growth, but safety setbacks and exploration outcomes will be critical to watch as it targets higher production and cost efficiencies in 2026.
Questions in the middle?
- Will Hillgrove’s safety improvement initiatives effectively reverse the rising injury frequency amid operational scaling?
- How will drilling results and economic assessments at Emily Star influence the company’s production ramp-up plans?
- What impact will evolving environmental regulations and mandatory climate disclosures have on Hillgrove’s operating costs and capital allocation?