Hillgrove Resources Limited
ACN 004 297 116
Level 41 Australia Square, 264 George Street, Sydney NSW 2000
Tel: 02 8221 0404 Fax: 02 8221 0407
www.hillgroveresources.com.au
Monday, 18 January 2010
HILLGROVE COMPLETES $25M SHARE PLACEMENT AND
LAUNCHES SHARE PURCHASE PLAN
Hillgrove Resources Limited (ASX:HGO) advises that it has placed a total of approximately
62.3 million ordinary shares at 40 cents per share to raise $24.9 million (Placement).
In
parallel with this, the Company will be launching a Share Purchase Plan (SPP) to raise a
maximum of $10 million at an offer price equivalent to the placement price.
The funds
raised will be used principally to help finance the development of the Kanmantoo
Copper/Gold Project and for general working capital.
The Placement and SPP create additional
financial capacity to move the Company"s
flagship Kanmantoo Copper Gold Project
towards production and pursue growth
opportunities whilst maintaining the current
strong cash position of the Company.
David Archer, the Managing Director of
Hillgrove said today "the improved global
economic environment matched with very
healthy metals prices and the robust
outlook for copper has widened the range
of financing options for the development of
copper/gold projects such as Kanmantoo".
Mr Archer commented that "the placement met with strong interest from Australian and
overseas institutional investors and underscores the uniqueness of the Kanmantoo
opportunity.
There was strong support from institutions for Hillgrove to go it alone with the
development of Kanmantoo and thereby keeping 100% of the earnings stream and the
upside.
As a result we are now not intending to develop the mine with a joint venture
partner".
"Following detailed assessment of the alternative funding options, we believe it is in the best
interests of our shareholders to move Kanmantoo towards production as a wholly owned
project.
The Directors believe this approach will ensure that Hillgrove shareholders get the
full undiluted benefit of exposure to the strong demand for copper and the positive pricing
outlook for the metal and the significant further exploration upside that the Project offers."
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Hillgrove Resources Limited
Kanmantoo Project Process Plant
The proceeds of the capital raising and
SPP of up to $35 million, combined with
existing pre-tax cash reserves of
approximately $105 million and an
anticipated conservative debt/equity ratio
project financing for the Kanmantoo project
(total project capital expenditure estimated
to be AUD $98 million) will provide the
Company with funding flexibility to pursue
exploration activities at Kanmantoo, in
Indonesia and Queensland, whilst
retaining a conservative cash reserve.
Hillgrove has initiated discussions with a number of banks for the provision of project
finance for the project and is meeting with solid interest.
A final investment decision for the
mine"s development will be made once a project finance package has been agreed.
The Placement, which was arranged by Evans & Partners, was taken up by a number of
Australian and overseas investment institutions and sophisticated investors and closed
oversubscribed.
In addition to the Placement, the Company will be offering existing shareholders the
opportunity to participate in the Share Purchase Plan (SPP) on essentially the same terms
as the Placement.
The SPP will provide eligible shareholders with the opportunity to
subscribe for a maximum $15,000 worth (subject to an application for relief from Listing
Rule 7.2, Exception 15 which the Company is confident will be forthcoming) of Hillgrove
ordinary shares without incurring brokerage or other transaction costs.
The SPP is not
underwritten.
Hillgrove reserves the right to scale back applications if the total demand
exceeds $10.0 million.
"We are pleased to be able to offer existing shareholders this opportunity to support the
growth of the company at the same price as institutional and sophisticated investors.
Full
details of the SPP will be provided to eligible shareholders within the next 10 working days,"
Mr Archer said.
The SPP will be open to eligible shareholders who are registered as holders of Hillgrove
shares at the close of business today, Monday 18 January 2010.
In order to be registered
as holders by this time investors would have purchased shares on the market by
Wednesday 12 January, given the Company was in trading halt this week.
The SPP will open on Monday, 25 January 2010 and is scheduled to close on Friday, 12
February 2010.
About Hillgrove
Hillgrove is an Australian mining company listed on the Australian Securities Exchange
(ASX: HGO) focused on developing its Indonesian, South Australian and Queensland base
and precious metals projects.
The Company is targeting the discovery of world class
epithermal gold and porphyry copper/gold deposits in Eastern Indonesia.
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Hillgrove Resources Limited
Hillgrove"s flagship development is the Kanmantoo Copper Gold Project, located less than
60km from Adelaide in South Australia.
Kanmantoo currently hosts a Mineral Resource of
32.2Mt (2.3Mt Measured, 22.5Mt Indicated and 7.4Mt Inferred) grading 0.9% copper and
0.20g/t gold, containing 292,200 tonnes of copper, 191,100 ounces of gold and 3,313,600
ounces of silver.
With completion of construction targeted for the first quarter of 2011,
Kanmantoo will be a 2Mt p.a.
open-cut mine producing approximately 17,000 tonnes of
copper in concentrate and 8,000 ounces of gold per annum.
The information in this report that relates to Exploration Results is based on information compiled by Mr Dale
Ferguson, who is a Member of The Australasian Institute of Mining and Metallurgy.
Mr Ferguson is the General
Manager - Exploration and Operations of Hillgrove Resources and has sufficient relevant experience to qualify as a
Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves".
Mr Ferguson consents to the inclusion in the report of the matters based on
his information in the form and context in which it appears.
The Mineral Resource estimate is based on information compiled by Mr Paul Payne, who is a Member of The
Australasian Institute of Mining and Metallurgy.
Mr Payne is the Principal of Resource Evaluations Pty Ltd and has
sufficient relevant experience to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian
Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves".
Mr Payne consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
For more information contact:
Mr David Archer Mr Russell Middleton
Managing Director Chief Financial Officer
Hillgrove Resources Limited Hillgrove Resources Limited
Tel: +61 2 8221 0404 Tel: +61 2 8221 0404
Mobile: 0414 737 767 Mobile: 0418 497 678
