Hillgrove Outlines Copper Growth Path with Mutooroo Farm-In and Kanmantoo Ramp-Up

Navigating a Tightening Copper Market

Hillgrove Resources (ASX:HGO) positioned itself as a nimble player in a copper market facing structural deficits and scarce new discoveries. The company’s CEO Bob Fulker emphasised the tightening supply-demand dynamics driven by rising electrification, grid infrastructure investment, and data centre expansion. Hillgrove’s copper concentrate, enriched with gold and silver credits, stands to benefit from these trends as existing mines grapple with declining grades and rising costs.

Forecasts from S&P Global underpin this outlook, showing copper concentrate supply lagging consumption and supporting elevated LME prices. This backdrop sets the stage for Hillgrove’s growth ambitions, leveraging its low-cost, fully permitted Kanmantoo operation and latent processing capacity.

Kanmantoo Mine Scaling Up Production

The Kanmantoo copper mine remains the cornerstone of Hillgrove’s operations, with a 2025 Mineral Resource of 22 million tonnes containing 160,000 tonnes of copper and 120,000 ounces of gold. The 2025 Ore Reserve stands at 4 million tonnes with 34,000 tonnes of copper and 29,000 ounces of gold. Current mining rates are at 1.6Mtpa, with a target to ramp up to 1.7–1.8Mtpa by the end of June 2026, aiming to reduce unit costs in the second half of the year.

Hillgrove reported record quarterly copper production of 3,120 tonnes in Q1 2026, aligning with its 2026 guidance of 12,750 to 14,000 tonnes of copper and an AISC range of A$5.75 to A$6.25 per pound payable copper sold. Capital expenditure is forecast between A$8 million and A$10 million, focused on sustaining and expanding throughput.

Growth catalysts include advancing the Emily Star underground development, where Stage 1 drilling platforms are complete and a Stage 2 investment decision is expected in H2 2026. Near-mine exploration around Kanmantoo continues, targeting multiple zones such as Saddle, Paringa, Valentine, and Critchley, which could extend mine life and production capacity.

Mutooroo Farm-In Unlocks New Copper Potential

Hillgrove’s strategic farm-in deal with Havilah Resources to earn up to an 80% interest in the Mutooroo Copper Project represents a significant growth option. The project boasts a JORC Sulphide Mineral Resource of 12.5 million tonnes at 1.53% copper and 0.20 g/t gold, with mineralisation open along strike and at depth.

The phased earn-in includes a $10 million pre-feasibility study commitment over two years, funded from Hillgrove’s cash flow, and a potential $35 million Stage 2 consideration payable in a mix of cash and shares. The arrangement leverages Hillgrove’s Kanmantoo processing facility and rail logistics to reduce capital intensity and execution risk.

This farm-in deal follows Hillgrove’s recent announcement of the $10M PFS farm-in with Havilah, underscoring the company’s strategy to expand copper production beyond 20,000 tonnes per annum.

Regional Exploration Accelerates Copper Pipeline

Beyond Kanmantoo and Mutooroo, Hillgrove is actively advancing regional exploration with a clear pipeline logic to complement its core assets. The Kanappa porphyry-style copper-gold prospect is primed for a drilling campaign following environmental approvals, with an Exploration Target estimated at 5.8 to 11.5 million tonnes.

Hillgrove is integrating geophysical, structural, and historical data to prioritise targets, including the Firehawk project and newly acquired South Australian tenements. This approach aims to concentrate capital on the most prospective corridors, building a multi-asset growth pipeline. The upcoming Kanappa drilling campaign is expected to be a key catalyst in the second half of 2026.

Financial Position and Outlook

Hillgrove enters 2026 with a robust balance sheet, holding $25 million in cash and zero debt. The company also carries significant income tax losses of $280 million and franking credits of $18 million, providing potential tax shields against future profits. The market capitalisation stands at $154 million with an enterprise value of $129 million.

With a fully permitted operation, latent processing capacity, and a clear growth trajectory supported by near-mine and regional exploration, Hillgrove is well placed to capitalise on a tightening copper market. The company’s strategy to pursue both organic expansions and inorganic growth opportunities reflects a disciplined approach to scaling production while managing capital efficiently.