Hillgrove Resources Limited (Hillgrove, the Company) (ASX: HGO) is pleased to provide the following updated Mineral Resource Estimate for the Kavanagh deposit located at Kanmantoo 55kms southeast of Adelaide in South Australia.

The resource has been estimated only for the Kavanagh mineralised zones and does not include any update for the Nugent deposit and is reported in accordance with The JORC Code 2012 Edition. This resource estimate update includes the results of the 2021-2022 diamond drilling programme at Kavanagh to 31 March 2022, the results of which were reported on 1 September 2021 and 21 March 2022. Overall, as with all HGO's previous drill programs at Kavanagh, this drill program has again resulted in an increase in the resources at Kavanagh and a conversion of Inferred Resources to lower risk classification categories.

Commenting on the mineral resource update for the Kavanagh deposit, Hillgrove CEO and Managing Director, Lachlan Wallace said: 'The latest drilling has increased the Kavanagh Mineral Resource Estimate in both size and geological confidence. We expect the mining inventory to grow as these results are incorporated into the mine plan. The upgrade in resource classification reflects the increased drill hole density in the upper levels of Kavanagh. Increasing the geological confidence in this area is a noteworthy achievement as these levels are mined early in the plan and determine the recommencement of processing and early cash generation. Importantly, the resource is constrained only by the extent of the drilling and remains open alongstrike and down-dip, providing an excellent opportunity to further increase the resource with further drilling.'

Contact:

Mr Lachlan Wallace

Tel: +61 (0)8 7070 1698

ABOUT HILLGROVE

Hillgrove is an Australian mining company listed on the Australian Securities Exchange (ASX: HGO) focused on the operation of the Kanmantoo Copper Mine in South Australia. The Kanmantoo Copper Mine is located less than 55 kilometres from Adelaide in South Australia.

The March 2022 Kavanagh MRE has been estimated by Neil Schofield of FSSI Consultants (Australia) using a Multiple Indicator Kriging (MIK) process to estimate the Cu, Au, and Bi grades of a 3D grid of panels through the Kavanagh mineralised zones below the Giant open pit from the diamond drill hole data. There is no reconciliation of this MIK panel model, as these deposits have not been mined by underground mining methods by Hillgrove. However, an MIK estimate of the open pit resource has been used by Hillgrove since 2016 to model the mineralisation with great success and gives the Company reasonable assurance that the MIK method is the correct choice for modelling this style of mineralisation. The MIK modelling method has been successfully used for modelling underground copper deposits as early as 1991, for example at the Cobar underground copper mine2. All diamond drill holes drilled by HGO to 31 March 2022 have been used to estimate the block grades in this MRE. No RC or percussion drill hole data have been included, and grade control data have not been used in the estimation of the spatial continuity or grade estimates. The grade control data have been used to assist interpreting the general trends of the mineralised zones. Core recovery is excellent with 98% of all mineralised core intervals recording >98% core recovery. Unsampled intervals have been assigned background Cu, Au, Bi, Ag values and then the drill hole samples composited to 2 metre downhole lengths from drill hole collar for all data analysis and estimation. Neil Schofield of FSSI Consultants (Australia) has undertaken the variography, MIK resource estimation and initial panel risk classification. Variography of Cu, Au, Bi mineralisation has been modelled and a Multiple Indicator Kriging algorithm applied to the composited data. Silver has been estimated by regression from copper grades due to its strong correlation with copper. The search strategy is a weighted ellipse oriented at -90 deg to 112 deg (dip/dip-direction). Measured Resource panels are only located within the Central Kavanagh lode system and have been estimated from 20 composites within four quadrants within an ellipse of 5m (across-strike) by 50m along-strike and 35m down-dip. The panels identified as estimated from this first search strategy have then been reviewed by the geology team and those that are within a single area within the Central Kavanagh lode system and closely identify with the highest drill density area are classified as Measured and the remainder are re-coded as Indicated.

Panels are also classified as Indicated if estimated within a search strategy based on locating the nearest 20 composites within four quadrants within a 7.5m (across-strike) by 52.5m (down-dip) by 75m (alongstrike). Inferred panels are estimated where the same search strategy only locates 10 composites within two quadrants. All estimated panels below 600mRL have been classified as Inferred. Panels are 4m (east) by 20m (north) by 25m (elevation) and are oriented along the strike of the mineralisation at 022deg. In each panel the proportion of the panel above a nominated Cu cut-off grade is estimated, and the Cu, Bi, Au grade above the relevant Cu COG is also estimated. In this model, the volume and grade of the proportion of each panel at 0.6% Cu has been estimated. All the mineralisation is in fresh rock and bulk densities from drill samples have been collected to assign an average bulk density of 3.1 t/m3 to all blocks (which is consistent with the bulk density when open pit mining of higher-grade material).

The cross section indicates that the MIK method has modelled the copper mineralisation and its geologic uncertainty appropriately.

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