Kanmantoo moves to mine development

  A Definitive Feasibility Study (DFS) of Hillgrove Resources’ Kanmantoo Copper Gold project in South Australia is now complete, and confirms Kanmantoo is an attractive two million tonne per annum new mine development, with an estimated net cash flow after tax of $167m from the currently defined resource.Hillgrove’s Managing Director, David Archer said the company was delighted by the findings of the DFS, and will now proceed with the development of its first mine, which will be South Australia’s next major copper gold operation, following Prominent Hill. According to Hillgrove, a key finding of the DFS is that the Kanmantoo Mine can be successfully developed as a two-pit open cut operation. The mine will have an operating life of at least six and a half years, and considerably longer if underground operations occur. “The development of the Kanmantoo mine is anticipated to cost $130m million, with plant commissioning and first copper concentrate production planned to occur in the second quarter of 2009,” Mr Archer said. “Kanmantoo will be one of a very small group of new Australian copper mines launched this decade to meet burgeoning metals demand from newly industrialising countries. The feasibility studies for the Kanmantoo project were based around an 11.1Mt Probable Ore Reserve and 0.9Mt of Inferred Resource contained within a Mineral Resource of 31.8Mt at 0.9% copper, 0.2g/t gold and 3.1g/t silver, containing 290,700 tonnes of copper, 189,300 ounces of gold and 3,218,400 ounces of silver. Hillgrove said the ore as modelled is amenable to conventional treatment methods and will produce an export concentrate in high demand by overseas smelters. Production can commence within a year and a half. Hillgrove will now move to issue a tender for contract mining of the deposit and project financing. The company has lodged a Mining Lease Proposal with Primary Industries and Resources South Australia as a lead up to the anticipated issue of Mining Leases in the second quarter of 2008. The development of the project is subject to its successful permitting. “With today’s decision to proceed with the development of Kanmantoo, Hillgrove Resources is firmly on the path to attaining its goal of becoming a mid-tier copper and gold producer in the near term,” Mr Archer said.