The company ceased open pit mining activities at Kanmantoo in May last year and completed processing ore stockpiles on March 27.
The cessation of mining resulted in the workforce downsizing from 185 employees at the beginning of last year to 55 by year end. A further downsizing is expected following the completion of processing.
Hillgrove entered an agreement in April last year with energy retailer AGL to sell the right to develop own and operate a pumped hydro energy storage project at the site but that deal was terminated in February after conditions could not be agreed to by both parties.
The Kanmantoo site will be mothballed to preserve the processing assets, and a small core group retained to focus on growth through the advancement of the Kavanagh underground studies and the continuation of a measured exploration and development program.
A company statement to the Australian Securities Exchange this morning said the restructure was part of Hillgrove’s transition from a copper producer to an exploration and development company which would focus on organic growth from existing assets and investments.
It said the company would also evaluate third party opportunities as they arose.
The company’s new direction coincides with a change in leadership and board reduction, with the number of non-executive directors dropping from four to two.
Chairman John Gooding will be replaced by Derek Carter, the former president of the South Australia Chamber of Mines and Energy, on April 24.
Board members Tony Breuer and Phil Baker have stepped down, with Baker agreeing to consult “if needed”.
Hillgrove Resources CEO and managing director Lachlan Wallace thanked Gooding for his 13-year contribution to the company.
“John has been an integral member of the board since 2007,” Wallace said.
“He has provided valuable advice and assistance over that period which has been critical in assisting the company from the commencement to the cessation of mining at Kanmantoo, and along the way through some very difficult times.”
In February, the company reported a $10 million net loss for 2019, which it said was partly due to slower than planned mining as a result of rockfalls in December 2018 as well as in February and May 2019.
Hillgrove managing director Lachlan Wallace told the ASX in February it would now focus on advancing the study of the Kavanagh Underground mining project beneath the open pit at Kanmantoo.
“After the agreed termination of the PHES agreements in February 2020, Hillgrove is no longer bound by the restrictions imposed by those agreements, ” he said.
“The Kavanagh Underground aims to access the depth extensions of the Kavanagh orebodies below the pit, using the 350m deep Giant Pit as a “quasi decline”, which, coupled with the existing processing and tailings infrastructure, significantly reduces the capital investment.
“The regulatory approvals, advanced nature of the underground study, and existing processing and tailings infrastructure, materially reduce the capital hurdles and provide an opportunity to return to production relatively quickly.”
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