Hillgrove boosts output, to cut debt, extend life of Kanmantoo copper gold mine in South Australia Kanmantoo copper mine general manager Steve McClare and Hillgrove Resources chief executive Greg Hall at Kanmantoo mine. HILLGROVE Resources has recently boosted output at its Kanmantoo copper and gold mine, announced an aim to run the mine for another decade, and has a goal to be debt free in the near future. The company has also welcomed new managing director Greg Hall, formerly of Adelaide uranium company Toro Energy, who is excited to be involved in the transformation of the company. Mr Hall actually did a mine design project on Kanmantoo as a student in the 1970s, when it was run by North Broken Hill Holdings and Broken Hill South, which mined 4.1 million tonnes of copper ore over five years. He gives credit to chief financial officer Russell Middleton and Steve McClare, general manager Kanmantoo, for getting the ball rolling on the changes which are now delivering cost savings of $400,000 a month. The company has installed a new primary crushing circuit, which has increased ore processing from 2.4 million tonnes a year to 2.8 million. The company also has confidence that exploration very close to the current open pit will bear fruit, and be able to be fed into a plant that will be paid off within the next three years. The 10-year mine life is partly made up of exploration targets. "But all of that exploration target range is in the immediate 200m around the existing ore body," Mr Hall said. Some of this has been drilled last year and will come into the new resource statement. There are extensions to the immediate ore body which we haven't drilled yet. We're quite comfortable that that 10 years is all encompassed around the existing ore body. Separate to that in the last two years there's been some regional exploration done. While no significant resources were found, the company gained a much better understanding of the structures hosting mineralisation in the area. Once we get the cashflow sorted this year we'll revisit that exploration program starting next year. Mr Hall said the move from a temporary crushing arrangement, which it used for about nine months, to the new crusher, produced the $400,000 in savings per month. But as well as improving production, the company was also getting into higher grade ore. Really from May onwards we're right into the teeth of the ore body. Mr Hall said the company was now planning to be debt free by late 2015 . The company currently has about $27.4 million in cash and about $50.4 million in debt. The important thing about that is now we're doing everything out of cash. The new crusher was out of cash. We'll have slight extension to the tailings dam and that will be out of cash. Mr Hall said the company was in a good hedging position with at least 50 per cent of forward production hedged. For the remainder of this year we've got hedges at plus-$8000 a tonne compared to the current price of $7000 or a bit under. Mr Hall, who joined the company in February, says he likes the fact that the mine is, literally, in "copper country" - there's even a sign which says so. It says that for a reason, There were up to 17 copper mines there 100 or so years ago. This was quite a unique copper area. The company also has two Indonesian exploration projects Bird's Head and Sumba. Mr Hall said they had reached the stage where they were ready for investment by larger companies. Indonesian companies were in the process of assessing the projects, with Hillgrove keen to make a joint venture or farm-in deal.