The company is currently planning to invest $20 million in its mining infrastructure, including a new primary crusher at Kanmantoo, and is also at an advanced stage of permitting for a further two year extension of mining.
Hillgrove managing director Greg Hall said at the Paydirt conference in Adelaide yesterday that the company forecast production for its 2015 FY of between 22,200 tonnes and 24,600 tonnes of copper concentrate, thanks to new onsite operational efficiencies.
This estimate is nearly a third higher than the recently completed financial year output of 17,184 tonnes, and well above the 2013FY output of 13,744 tonnes.
Hall said the mine output was expected to deliver a copper grade in the range of 0.83% to 0.88% with a production side credit of 7000 to 9000 ounces of gold.
The gold production forecast is also above last year’s gold output of 5,962 ounces.
“Global copper mine production surprised in the upside in 2H2013, leaving larger than expected global concentrate stocks coming into 2014,” Hall said.
“Although copper mine supply is expected to be in a small surplus over the next three years, the supply deficit gap will widen after 2016.
“Copper producers in all percentiles have experienced cost escalations.
“Globally, US$3.50 per pound is now required to clear weighted average capital costs for forecast mine supply, with average grades continue to decline.
“New investments will be required to offset degradation in grades.
The global benchmark compares with Hillgrove’s direct cash costs of US$2.39 per pound, which is expected to further improve to around US$2.00 by the year’s end.
Hillgrove reported revenue of $139.2 million for its FY14, for a net profit of $1.5 million on record production.