Hillgrove Resources : MD Presentation at AGM

ersonal use only

AUSTRALIA'S NEXT COPPER MINE

Lachlan Wallace

CEO & Managing Director

20 May 2022

IMPORTANT NOTICE

CAUTIONARY STATEMENT

The Economic Assessment discussed herein has been undertaken to explore the technical and economic feasibility of developing an underground mine to economically and sustainably exploit the Kanmantoo Copper Gold Deposit, located in South Australia. The Kanmantoo Copper Gold Project (Kanmantoo or Project) is 100% owned by Hillgrove Resources Limited. The Production Target and financial forecasts presented in the Economic Assessment are shown on a 100% Project basis. The Production Target underpinning the Base Case financial forecasts included in the Economic Assessment comprises 72% Indicated Resources and 28% Inferred Resources. The Production Target included in the Economic Assessment relating to the project payback period of 7 months post the completion of pre-production works comprises 82% Indicated Resources and 18% Inferred Resources. The Mineral Resource Estimate underpinning the Base Case Production Target has been prepared by a Competent Person in accordance with the requirements in the JORC Code 2012. There is a lower level of geological and grade continuity confidence associated with Inferred Resources and there is no certainty that further exploration work will result in the conversion of Inferred Resource estimates to Indicated Resource estimates or return the same grade and tonnage distribution.

onlyThe economic outcomes associated with the Economic Assessment are based on certain assumptions made for commodity prices, concentrate treatment and recovery charges, exchange rates and other economic variables, which are not within the Company's control and subject to

change from time to time. Changes in such assumptions may have a material impact on economic outcomes. To achieve the range of outcomes indicated in the Economic Assessment, additional funding will likely be required. Investors should note that there is no certainty that Hillgrove Resources will be able to raise that amount of funding when needed. It is also possible that such funding may only be available on terms that may be dilutive to or otherwise affect the value of Hillgrove's existing shares. This announcement contains forward-looking statements. Hillgrove has conc uded it has a reasonable basis for providing the forward-looking statements included in this announcement and believes it has a reasonable basis to expect it will be able to fund the development of the project. However, several factors could cause actual results, or future expectatio s to differ materially from the results expressed or implied in the forward-looking statements. Given the uncertainties involved, investors should not make any investment decisions based solely on the results of the Economic Assessment.

DISCLAIMER

No representation or warranty is or will be made by any person (including Hillgrove Resources Limited ACN 004 297 116 ("Hillgrove", "HGO", or the "Company") and its officers, directors, employees, advisers and agents) in relation to the accuracy or completeness of all or part of this d cument (the "Document"), or the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in, or implied by, this Document or any part of it. This Document includes information derived from third party sources that has not been independently verified.

This Document contains certain forward-looking statements with respect to the financial condition, results of operations and business of Hillgrove and certain plans and objectives of the management of Hillgrove. Forward-looking statements can generally be identified by the use of

usewords such as 'project', 'foresee', 'plan', 'expect', 'aim', 'intend', 'anticipate', 'believe', 'estimate', 'may', 'should', 'will' or similar expressions. Indications of, and guidance on, production targets, targeted output, mine development or timelines, exploration or expansion timelines,

infrastructure alternatives and financial position and performance are also forward-looking statements. Any forecast or other forward-looking statement contained in this Document involves known and unknown risks and uncertainties and may involve significant elements of subjective judgm nt and assumptions as to future events which may or may not be correct. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Hillgrove, and may cau e actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements.

Various factors may cause actual results or performance to differ materially. These include without limitation the following: risks specific to Hillgrove's operations; credit risk; levels of supply and demand and market prices; legislation or regulations throughout the world that affect Hillgrove's business; insurance expenses; the risk of an adverse decision or other outcome relating to governmental investigations; class actions or other claims; growth in costs and expenses; and risk of adverse or unanticipated market, financial or political developments (including witho t limitation in relation to commodity markets).

You are cautioned not to place undue reliance on forward-looking statements. These forward-looking statements are based on information available to us as of the date of this Document. Except as required by law or regulation (including the ASX Listing Rules) we undertake no obligation to update these forward-looking statements. This Document is provided for informational purposes only and is subject to change without notice. Subject to any obligations under applicable laws, regulations or securities exchange listing rules, Hillgrove disclaims any obligation

ersonalor undertaking to release any updates or revisions to this Document to reflect any change in expectations or assumptions. Nothing in this Document should be interpreted to mean that future earnings per share of Hillgrove will necessarily match or exceed its historical published earnings per share, or that there has been no change in the affairs of Hillgrove since the date of this Document.

Nothing contained in this Document constitutes investment, legal, tax or other advice. The information in this Document does not take into account the investment objectives, financial situation or particular needs of any recipient. Before making an investment decision, each recipient of this Document should make its own assessment and take independent professional advice in relation to this Document and any action taken on the basis of this Document. All currency referred to is Australian dollars ($) unless otherwise indicated (e.g. US$).

COMPETENT PERSONS STATEMENT

The i formation in this release that relates to Exploration Results, Exploration Targets and Mineral Resource Estimates is based on information compiled by Mr Peter Rolley, who is a Member of The Australian Institute of Geoscientists. Mr Rolley is a full-time employee of Hillgrove Res urces Limited and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code)'. Mr Rolley has consented to the inclusion in the release of the matters based on their information in the form and context in which it appears. All exploration drill results, soil sampling images, and rock chip results have previously been reported to the ASX by a C mpetent Person at the time.

This information was prepared and first disclosed under the JORC Code 2004. The information is extracted from the ASX reports dated 6/07/2006, 14/02/2007, 28/03/2007, 23/04/2007, and 25/06/2007. The company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcement. The company confirms that the form and context in which the Competent Person's findings are presented have not been materially modified from the original market announcement.

AUTHORISATION

This announcement is authorised for market release by Hillgrove Resources' Managing Director and CEO, Lachlan Wallace.

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Highlights

SINCE LAST AGM IN 2021

■ Drilling continued in Nugent and Kavanagh - mineralisation continuing at depth at 500m below pit

■	Mineral Resource Estimate increased from 2.2Mt to 6.4Mt (34kt to 69kt Cu metal)
only■	Economic Assessment - strong cash flows, low capital, near term
■	Portals established for main decline and ventilation drive
■	Underground stope definition drilling commenced
use■	Funding terms sheets agreed - documentation underway
ersonal		On track to
NEXT 12 MONTHS
■	Finalise funding and major contracts	commence
■	Pending FID, commence underground mining and processing
mining in 2022
■ Expand mining inventory with further drilling

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16,000

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13,000

12,000

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10,000

9,000

8,000

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6,000

✓

✓

Share Price - 2 years

Highly leveraged to current and forecast copper price strength

for a <$30M capex restart

✓ One of the only near term new copper producers on the ASX

✓ Multiple opportunities to increase resource base, annual production and mine life through lower cost underground drilling

Advanced, fully permitted project with key infrastructure in place

Investment Highlights

Hillgrove Resources: Corporate Snapshot

Company Overview

only

• ASX listed ('HGO') Australian resources company that owns and operates the Kanmantoo Copper Gold Mine in South Australia

• 15+ years of strong operating experience and award-winning positive stakeholder engagement

• After completion of open pit operations in 2020, underground mine

use	now being developed with aim to resume production in 2022
	Market Statistics
ersonal	Share Price(1)	A$	0.069
Shares on Issue	M	1,174
	Market Capitalisation	A$M	81
	Enterprise Value(2)	A$M	70
	Liquidity - 12 Months	M shares	334 (29%)
	Carried forward income tax losses	A$M	222
	Franking credits	A$M	17.6

Note (1): Share price at close 18 May 2022

Note (2): Net cash as at 31 December 2021

0.14

0.12

0.10

0.08

0.06

0.04

0.02

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Copper A$/t (LHS)

HGO $/share (RHS)

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Kanmantoo - A unique opportunity in copper

only		Ability for a fast, low capex restart
	✓	Fully permitted
	✓	3.6Mtpa plant maintained on C&M
	✓	Fully operational TSF with additional capacity
use	✓	Local workforce with key hires already recruited
✓	Same geology, geotech and metallurgy as open pit which
		produced 137kt Cu in concentrate
	✓	Tier 1 jurisdiction(1)
ersonal		With substantial further upside
•	Mine plan only includes 2 of 9 known deposits on permitted lease
	•	Latent mill capacity enables project to incorporate additional
		lodes for no further processing capital or permitting
	•	3 advanced exploration projects within 10km of processing plant
		which have a far lower hurdle due to existing infrastructure

Note (1): South Australia ranked 7th best jurisdiction for global investment attractiveness by Fraser Institute Annual Survey of Mining Companies 2020

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