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August 23, 2022
Hillgrove Resources Limited (Hillgrove, the Company) (ASX:HGO) is pleased to announce that it has entered into a royalty agreement with Freepoint Metals & Concentrates LLC (Freepoint) in relation to its 100% owned Kanmantoo copper gold project located in South Australia.
Summary
- Hillgrove has entered into a royalty agreement with Freepoint Metals & Concentrates LLC.
- Hillgrove to receive cash payment of $6 million in return.
- Freepoint Metals & Concentrates LLC to receive 2.5% of net smelter returns for the first 85,000 tonnes of payable copper, reducing to 0.5% thereafter.
- Royalty payments will only occur from future production.
Commenting on the agreement, Hillgrove CEO and Managing Director, Lachlan Wallace said:
“Freepoint is a long-standing partner and supporter of our Company, both as a significant shareholder, and as our offtake partner. We are very pleased to continue this partnership with Freepoint through the Royalty agreement, which, given the Royalty is based on future production from Kanmantoo, demonstrates their strong commitment to the development of the Kanmantoo underground project and appreciation of the on-lease exploration upside.
The agreement highlights the robustness of the Kanmantoo Underground project, as demonstrated in the Economic Assessment1, with subsequent updates to the Kavanagh2 and Nugent3 Mineral Resource Estimates expected to increase mine life. Moreover, both Nugent and Kavanagh remain open at depth and along strike, and are only two of nine mineral systems that have either been drilled or partially mined within the permitted lease, representing an excellent opportunity to expand the mine life with further drilling.The consideration for the royalty immediately boosts our cash position without shareholder dilution, enabling the Company to consider a range of restart and resource expansion options, particularly in light of recent changes in the global copper market.”
Click here for the full ASX Release
This article includes content from Hillgrove Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
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