# HGO - Hillgrove Resources



## pancho (2 March 2006)

Hi anyone interested in Hillgrove Resourses? The speculator has a good report in The Bulletin this week. Hartleys the broker also.


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## Ann (2 March 2006)

*Re: HGO*

Hi Pancho,

You have just recently joined.....welcome!

I think you may have found something here Pancho.........well done.


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## Sodapop (2 March 2006)

Been watching these guys for a while - Kanmantoo looks like a good mid-size prospect... with the resource re-calc. in the next qtr. i would be expecting some more rises in the not too distant future - the gold discovery the other day was also a nice surprise - since one of the downers (in my opinion) was the low-grade nature of the Au assays... of course high grade Au and Cu has its own issues but - not insurmountable... not too sure about the CBM project but Kanmantoo alone is shaping up into a very exciting prospect...


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## pancho (4 March 2006)

Hi Ann @ sodapop,using a point@figure weekly chart points 26 to 28 cents at this stage .then there will be lots of soda pop


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## YOUNG_TRADER (15 March 2006)

Like I said in the chart breakout thread,

Is this a breakout above 22-23c or a double header at 26c time will tell, I think the stock may range between 22-26c for next few days to weeks then should push up through 26c

I don't hold    (Was on my watchlist though)


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## Sodapop (15 March 2006)

Yeah - looks like a break from its trend (which wasn't all that bad in itself...) i hope it doesn't consume itself by running too hard too fast... Looks pretty good now and it seems that the wider market has recognised it - since liquidity has gone nuts... Sempra Energy is a good sign - along with the financing and offtake agreement - they have an aggressive drilling campaign underway right now - and the past results give reason to beleive that there is more high-grade near surface Cu - with known metallurgy (and some undetermined Au) yet to be uncovered... I wish i had bought the opts in stead of the FPO's - oh well... I am wondering if there hasn't been some more info. leakage causing the recent breakout???


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## pancho (30 April 2006)

Hi all ,  my chart for  HGO  for friday looks fine to me  any opinions for next target??


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## the tipster (6 May 2006)

I think that Hillgrove Resources is an excellent diversified minerals stock with strong upside.  I especially like its gas interests in NSW and also its stake in Intermet Resources (ITT), its uranium spin off.  I also saw last weeks article in The Bulletin.  It is my opinion that both Hillgrove and Intermet have an exciting future ahead of them.


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## sleeper88 (9 October 2006)

*HGO - HILLGROVE RESOURCES LIMITED*

Hi guys.. has anyone had a look at this stock?..

it seems to have some potential, especially with its Kanmantoo project in SA, with a current mineral resource estimate of 25.375 Mt @ 1.0% Cu and 0.2g/t Au + possible garnet production

any thoughts?


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## mmmmining (10 October 2006)

*Re: HGO - HILLGROVE RESOURCES LIMITED*



			
				sleeper88 said:
			
		

> Hi guys.. has anyone had a look at this stock?..
> 
> it seems to have some potential, especially with its Kanmantoo project in SA, with a current mineral resource estimate of 25.375 Mt @ 1.0% Cu and 0.2g/t Au + possible garnet production
> 
> any thoughts?




Anglo Pacific Group Plc (AGP) holds this stock. Generally, AGP picks good mining stock, just name a few: OMC, and MRU.


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## traderandy (30 November 2006)

Third Quarter activities and cash flow report just released - looks very promising


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## Ken (15 December 2006)

interesting...


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## Absolutely (5 February 2007)

suspended today - anyone got any thoughts about this ?


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## Ruprect (30 April 2007)

HGO getting some good press lately, see article from The Australian today. Was also covered last month in the same paper, as well as good reports elsewhere about their $10+ profit for the last 12 months.

Hit its highest SP for the last 5 years over the last 2 weeks.

And today they had another good announcement of a resource upgrade, but the sp dipped slightly, after hitting high of 39cents. Closed at 36.

_"Total contained copper metal has increased to 290,000 tonnes and contained gold to 216,900 ounces."_

Im not in, anyone else showing any interest here, or have a view before i take the plunge?

*Uranium is not the only game in town

April 30, 2007 *

FORGET uranium for the moment, the rest of the resources world is more than alive with some decent offerings thank you very much.
Take the early morning announcement from Hillgrove Resources for example. 

The David Archer-led copper hopeful has lifted the total resource base for its historic Kanmantoo project by 19 per cent to 33.4 million tonnes. At the same time, it has also improved the indicated resource base by 32 per cent to 23 million tonnes. 

Total contained copper now stands at 290,000 tonnes and gold assets at 216,900 ounces. 

It is the indicated category which will form the foundations for the current Definitive Feasibility Study and will give them scope for stretching out the mine life. 

Hillgrove is looking for both an open pit and underground operation at Kanmantoo which is a veteran operation amongst Australia's rich resources history. 

David Archer has been around the block in various guises, most notably as the man behind Savage Resources which fought a legal battle with the former Western Mining over the Ernest Henry mine in outback Queensland. 

Archer was also a player in the domestic telecommunications scene at one stage. 

Kanmantoo is 55 kilometres south east of Adelaide and copper has been found there on and off for the past 160 years. 

Hillgrove has high hopes for a Kanmantoo resurrection and is looking at a mining start early 2009.

Importantly, Archer says that Hillgrove is blessed with road, rail, water, power and accommodation and that puts it in a good position to emerge as a mid-tier copper producer. 

Hillgrove is looking at 19,000 tonnes of copper production annually and 6000 ounces of gold. But who knows, all that could change if the resource keeps bulging out.


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## namkey (23 May 2007)

The hills are alive with the sound of buying. Some nice announcements lately including a claim to have the next Olympic dam ><


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## moneymajix (20 June 2007)

Been a while since anyone posted on these.

Closed today at 56.5c and had a high of 58.5c.

Part of the reason for the rise is HGOs share in ESG which has increased on positive news.


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## exgeo (16 October 2007)

October 11, 2007 (www.minesite.com)

Hillgrove Is Gas Powered
By Our Man In Oz

Buy one: get one free. It sounds like the sales spiel heard in a fruit market, and not on a stock exchange. But if you look carefully at the emerging South Australian base metals miner, Hillgrove Resources, that’s pretty much what you get thanks to a well hidden asset. While most interest in Hillgrove is focused on its flagship project, re-development of the historic Kanmantoo copper mine on the outskirts of Adelaide, there appears to be little interest in a strategic position Hillgrove has in a company developing a coal-seam methane project in New South Wales. The oversight is understandable. Few investors with an interest in metals take much notice of oil and gas assets – and the other way round. It was a mistake made by Minesite’s Man in Oz when visiting Kanmantoo and chatting with the company’s chairman, Dean Brown.
After looking at the large hole which is what Kanmantoo is today, an openpit last worked in 1976 by the once-great Broken Hill South, conversation turned to funding the re-development given that the Hillgrove board expects to receive the results of a definitive feasibility study on the project in the next three-to-four weeks. That’s when Brown, a former Premier of South Australia, politely drops into conversation Hillgrove’s position in a business called Eastern Star Gas. Minesite confesses great ignorance, and Brown delights in breaking the news that Eastern Star has been somewhat of a star lately, and that Hillgrove’s stake in the business is worth close to A$100 million. 

It’s that number which momentarily stops the talk because Minesite had just been looking at Hillgrove’s capitalisation which, at the time, was about A$100 million. Please explain, was the next question to Brown. How can Hillgrove itself be valued at A$100 million when it owns an investment worth A$100 million, plus Kanmantoo and an equally promising zinc project a few miles away called Wheal Ellen? The answer is simple. The market is either overlooking Eastern Star, or it’s assigning no value to Kanmantoo – hence the remark that this really is a situation where you buy one, and get one free. 

“We see the Eastern Star position purely as an investment,” Brown said. “But it’s proving to be an extremely valuable investment.” Obviously! In fact, the investment will go a long way to providing the leverage Hillgrove needs to fund work at Kanmantoo, a project which it sees as being developed into a mine yielding around 20,000 tonnes of copper and year, plus a valuable by-product in large quantities of garnet, an industrial abrasive. Before looking at exactly what’s happening at Kanmantoo, a final word on coal seam methane. In Australia, as in the U.S. and in some other countries, coal seam gas is becoming a valuable energy source. Along Australia’s east coast, which houses the world’s biggest coal export mines, there is so much gas that Santos, the country’s second biggest oil company, is planning a liquefied gas export project based on coal gas. The Eastern Star asset, near Gunnedah in northern NSW, has the potential to be a major money-spinner as a source of energy for electricity generation. 

With a handsome plum in his pocket Brown and his fellow directors at Hillgrove, including the highly-qualified chief executive, David Archer, will soon be faced with a decision on whether to commit to turning Kanmantoo back into a working mine after 31 years in mothballs, and a one-time role as a practical classroom for South Australian mining engineering students. If the re-development wins board approval it will commit Hillgrove to a major earthmoving exercise to “lay back” the existing walls of the 120-which metre deep pit to get at the orebody which averages about 1 per cent copper. In theory, the existing pit will be expanded from one measuring 400-metres by 600-metres (and 120-metres deep) into something double the size, being 1200m x 600m and 270 metres deep. For that effort, Hillgrove can expect to extract around two million tonnes a year of ore, and about 10 million tonnes of waste. 

The good news for all that effort is that the Kanmantoo orebody appears to get richer as it gets deeper. The bad news is that it is regarded as a complex geological system, which explains why Hillgrove has undertaken a major drilling program to get the best possible understanding of the structures it proposes to mine – following in the footsteps of BH South, and generations of Cornish tin miners who migrated to South Australia from the 1840s on to try their luck in the minefields of a region better known today for its wine, beef and exquisite scenery. From the edge of the Kanmantoo pit it is possible to see mile-after-mile of rolling hillside farms, stretching almost to the south coast and prolific wine-producing country (when not in drought). 

While the Hillgrove board waits on the results of the definitive study it has been tossed a wild card which might make a development decision a little easier. The latest drilling results from Wheal Ellen are very impressive, including individual assays of up to 21 per cent zinc, 11.1 per cent lead, and 4.5 grams a tonne of gold. Investors lapped up that report, lifting Hillgrove shares by about 12 per cent on the day to A42.5 cents. The overall picture of Wheal Ellen, after allowing for lesser, but still high-grade results, is that the project is fast taking on the appearance of a look-alike to the nearby Angas zinc mine being developed by Terramin. 

More work is needed at Wheal Ellen, including a fresh drilling campaign when a rig can be located in a booming Australian exploration sector. But it is looking like Hillgrove might have a second hidden asset to join its Eastern Star investment. Wheal Ellen could easily become a Hillgrove’s second mine in a region which once dominated base metal mining in Australia, and is long overdue for revival, including a more detailed look at the regional geology and its excellent exploration potential.


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## stargazer (25 February 2008)

Long time since any comments, has been a bit of interest shown in this stock lately and some price upward movement after the big fall.

Cheers
SG


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## agro (20 May 2008)

anyone know why there is a recent increase in volume and demand for HGO

surly its not because of the strategic stake they have in ESG


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## J.B.Nimble (21 May 2008)

agro said:


> anyone know why there is a recent increase in volume and demand for HGO
> 
> surly its not because of the strategic stake they have in ESG




Well, I'm sure it doesn't hurt their sp....
HGO mc is 112 mill at 0.36

HGO hold 23.1% of ESG (mc of 485 mill at 0.69) = 112 mill... Thats nice..
They also hold 29.1% of ITT (mc 13.1 at 0.26) = 3.8 mill

Cash in January of 3.4 mill
Placement in March for 6.3 mill

Kanmantoo construction due for completion April next year!
Kanmantoo NPV assessed as 72 mill based on forward copper curves, 152 mill at 3.5 USD/lb, or 216 mill at 4 USD/lb (we're allowed to dream...) 

Exploration propsects look not too shabby and just got more interesting with the proposed merger with ITT. 

Risks - energy wasn't a scarce commodity after all and ESG sinks in to oblivion taking HGO sp with it...

Other than that, it looks like a value proposition to me...


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## Jimminy (4 June 2008)

pretty spot on J Nimble.....as a holder of ESG I have been wondering the same thing for a while.....

So does Kevin:

DO you want to know the dumbest thing in the world?

Well, perhaps not the entire world, but at least in the small contained atmosphere that is the Australian sharemarket, which itself is sometimes prone to bouts of lunacy. 

How is it at all possible that Hillgrove Resources can have a share price of just 39.5 cents, when the shares it holds in both Eastern Star Gas and Intermet Resources are actually worth more than that? 

Let's go through the sums, with numbers that are current at time of writing. All the data has been provided to us through people associated with Hillgrove. 

The company built a 22.6 per cent stake in Eastern Star Gas (verified by resource intelligence company Intierra) after it swapped its 32.5 per cent interest in the Gunnedah Gas Project for a 19.9 per cent stake in Eastern Star. 

At a share price of 80c for Eastern Star, Hillgrove has a stake worth $142.62 million, or 43.3c per Hillgrove share, given that it has 323 million shares on issue. 

Hillgrove's stake in Intermet Resources is worth $1.86 million at an Intermet share price of 29c and given Hillgrove has a 29.1 per cent stake in the company. 

That equates to 0.6c per Hillgrove share. 

Add that 43.3c and the 0.6c together and you have a tangible value for Hillgrove stock - based on its shareholdings in both Intermet and Eastern Star - of 43.9c. 

However, and this is where it gets interesting, the market has ascribed a value of just 40c for Hillgrove scrip, giving it a market capitalisation of $129.2 million. 

Or, in other words, the value of its two stakes in Eastern Star and Intermet is worth about $12.6 million more than the market capitalisation of Hillgrove. 

In a roundabout way, Hillgrove is actually paying investors to take a stake in the company, which actually happens to have quite a decent copper project on its books. 

Hillgrove's Kanmantoo Copper Project in South Australia has a JORC resource of 34.44 million tonnes at 0.9 per cent copper and 0.2 grams per tonne of gold - in short, 290,000 tonnes of contained copper and almost 217,000 ounces of gold. 

The company is in the throes of getting a Mining Lease approved for the project along with a $100 million facility to fund its development. 

It is rare for a company to actually pay you to own its asset. 

It would be even rarer if someone out there doesn't find fault somewhere with Daily Assay's calculations. 

But then again, we're pretty sure we have crossed the t's and dotted the i's. 

http://www.theaustralian.news.com.au/story/0,25197,23809732-15023,00.html


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## b00mer (11 June 2008)

Its curious that HGO's price tracked ESG's exactly last year when ESG ran up to 70 cents yet currently there is no appetite for HGO in the market to the point where there is no value at all attributed to the Copper & other exploration assets plus a discount on their holding in ESG.

ESG based on current value of Coal seam gas has plenty of upside even from here at 90c. All that combined with Kanmantoo why the apathy in the market?

I guess it depends on what mgt does with the ESG holding and how dogmatic they want to be in terms of financing (in this market) and developing minerals side of business. In short term it may be better for shareholders if they sit back and go for the ride on ESG.

yes I'm a frustrated HGO shareholder ....but ever the optimist!

happy investing


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## BornInUSSR (11 July 2008)

Looks like Hillgrove Resources ain't going to let InterMet go for sure with their's Third Supplementary  I got a sneaky feeling the offer will be eventually accepted.


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## stargazer (15 September 2008)

Hi all

Anyone have any idea why the SP has gone from 40c only a couple of months ago when it had some movement to 17c today.

I am unable to find a reason apart from market sentiment.

Was the ITT decision that bad.

Cheers
SG


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## J.B.Nimble (15 September 2008)

stargazer said:


> Hi all
> 
> Anyone have any idea why the SP has gone from 40c only a couple of months ago when it had some movement to 17c today.
> 
> ...




The SP continues to track the ESG share price to the extent that HGO's market cap is still worth slightly less than its holding in ESG, with absolutley no value given to Kanmantoo, ITT, cash or whatever else of value they may have - it wasn't logical earlier in the year and it's no more logical now. At least it is consistent...?


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## Datsun Disguise (10 March 2009)

Howdy all - surely some attention is due to Hillgrove atm. With a mkt cap of about $40m and investments and cash of nearly $90m this would have to be a great way to get exposure to ESG (21.9%) and to some other projects. Not a bad way to get around ESG's current tyrading halt either if you believe that is going to be good news. have only done my helicopter level research so far but it certainly warrants a closer look.


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## Datsun Disguise (10 March 2009)

Here's the graph for the last while - note how HGO has not responded to ESG's latest rally - haven't found a reason why yet - any ideas around?


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## Dangerous (10 March 2009)

Datsun Disguise said:


> Howdy all - surely some attention is due to Hillgrove atm. With a mkt cap of about $40m and investments and cash of nearly $90m this would have to be a great way to get exposure to ESG (21.9%) and to some other projects. Not a bad way to get around ESG's current tyrading halt either if you believe that is going to be good news. have only done my helicopter level research so far but it certainly warrants a closer look.




I agree Dato... I bought quite a few on Monday for the sole ESG reason and will research the company more a bit later.... It is a no brainer to me and as long as esg stay above 40c there is no way i will consider selling.


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## Datsun Disguise (23 March 2009)

ESG has jumped a little today and HGO has reacted also. Some quick calcs show the following;

HGO interest in ESG is 151m shares (worth $106m @ ESG70c)

HGO shares on issue 389m (worth $53m @HGO14c)

For each 2.5c rise in ESG, HGO adds 1c to it's value (assets held NOT mkt cap).

If HGO adds value at this ratio (which it hasn't been recently) then it's percentage return is about double that of a direct holding in ESG.

2.5/70 = 3.6%   1/14 = 7.1%.

I've got a parcel of these as if/when ESG really gets going then HGO should also enjoy the ride - although at these prices it should be a more rewarding one. 

Haven't even considered the Gold and Copper projects;

*Kanmootoo* Gold & Copper 32.2Mt @0.9% Copper & 0.2% Gold 
*Birds Head* Gold drill intercepts 14.6g/t (14m), 20.8g/t (6m), 8.64 g/t (40m), 70.95 g/t (8m) 

Looks like opportunity knocking to me... 

comments?


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## Dangerous (23 March 2009)

Datsun Disguise said:


> ESG has jumped a little today and HGO has reacted also. Some quick calcs show the following;
> 
> HGO interest in ESG is 151m shares (worth $106m @ ESG70c)
> 
> ...




I agree Dato, when i found this one i was pumped.  However, there is 150 $US200K convertible bonds outstanding (30 june 2011)

Perhaps they are getting a kick from the AUD strength?  There is certainly a bit of volume behind them today and if you like ESG i think you better off holding HGO.

My calcs are the same but I add 43M to the 53M, meaning the diff between cap and assets is only 10M, not 50M.... great stock though, i think it a winner


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## Datsun Disguise (23 March 2009)

Dangerous said:


> My calcs are the same but I add 43M to the 53M, meaning the diff between cap and assets is only 10M, not 50M.... great stock though, i think it a winner




Ah, I hadn't stumbled over the convertible notes. Does your 43m account for all future dilution? Have to count the cash generated by any options being exercised as well. But anyway, my point is not really about the gap between assets and market cap but more about the potential leverage available on the ESG share price. 

I note that ESG's response to todays speeding ticket was a "We know nothing about a Santos takeover as reported in the AFR". Now that would be a juicy piece of news if it was proved true...


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## Datsun Disguise (13 May 2009)

Moving up nicely... up about 100% since I first posted on this in March. By comparison ESG has improved by about 40% - there's the leverage for you!

I've heard the speculation that Santos may be looking at ESG as a good place to spend some of their capital raising. Surely a great way to get into it would be through HGO. A 20% holding is not to be disregarded. So 2 ways - a takeover of HGO - maybe not likely, the other projects are not exactly core and taking over a company just has to be a pain in the neck. So perhaps an offer to take on HGO's equity in ESG?

Any other thoughts on what might make sense to STO if, IF, they were looking to get at their hands on ESG's assets?


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## Dangerous (13 May 2009)

Datsun Disguise said:


> Moving up nicely... up about 100% since I first posted on this in March. By comparison ESG has improved by about 40% - there's the leverage for you!




NICE WORK DATO!.... 

Usually when i double anything i get rid of half (the remainder are in effect free), but not this one.

This is a ripper.... still mkt cap = ESG holding less convertible notes/bonds.  In addition $4M has been raised for other projects which tells you they are not getting rid of ESG cheap


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## dandyjac (2 July 2009)

Hopefully hillgroves share price may get a move on tommorow with the news of santos buying into esg. $176 mill to hillgrove should be a good cash injection to help in the development of the kanmantoo project & birds head project in indonesia

http://news.smh.com.au/breaking-news-business/santos-buys-stake-in-eastern-star-20090702-d6en.html


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## Dangerous (2 July 2009)

take convertible note out of the mix and they have 33c/share of net cash... should be good day and MEL should get a nice kick


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## philly (6 July 2009)

Datsun Disguise said:


> Moving up nicely... up about 100% since I first posted on this in March. By comparison ESG has improved by about 40% - there's the leverage for you!
> 
> I've heard the speculation that Santos may be looking at ESG as a good place to spend some of their capital raising. Surely a great way to get into it would be through HGO. A 20% holding is not to be disregarded. So 2 ways - a takeover of HGO - maybe not likely, the other projects are not exactly core and taking over a company just has to be a pain in the neck. So perhaps an offer to take on HGO's equity in ESG?
> 
> Any other thoughts on what might make sense to STO if, IF, they were looking to get at their hands on ESG's assets?




Well done Dato, you correctly picked Santos going for HGO's interest in ESG.
HGO will pick up $176,956,050.00 and this represents 44 cents per HGO share [$176,986,050.00 cash / 389,000,000 shares on issue]
Plus HGO will get the cash in 2 weeks.
As of today it seems the market hasn't factored this into the SP [currently @24 cents] and also fails to factor in HGO's 84.8% interest in ITT and the Kanmantoo Copper / Gold project
IMHO HGO has largely been  ignored by the market [ no broker reports since August 2008] Time for the sleeping dragon to awaken. Good luck to all holders


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## Dangerous (6 July 2009)

philly said:


> Well done Dato, you correctly picked Santos going for HGO's interest in ESG.
> HGO will pick up $176,956,050.00 and this represents 44 cents per HGO share [$176,986,050.00 cash / 389,000,000 shares on issue]
> Plus HGO will get the cash in 2 weeks.
> As of today it seems the market hasn't factored this into the SP [currently @24 cents] and also fails to factor in HGO's 84.8% interest in ITT and the Kanmantoo Copper / Gold project
> IMHO HGO has largely been  ignored by the market [ no broker reports since August 2008] Time for the sleeping dragon to awaken. Good luck to all holders




You need to remember that the price of ESG was already taken into account in the share price prior to STO offering over $1 for the holdings....

I work out their net cash less the convertible note (see financial statements) to be 33c/share.  Obviously they have to burn cash to get these mines up and going, so i would have thought 27-30c would be about right.  Their fuzzy strategy would not be helping to instill the mkt with confidence.

Just interest alone though would be almost 2c/share.

Could the directors pay a dividend this year, which is quite common after large divestments?


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## DVEOUS (9 July 2009)

philly said:


> HGO will pick up $176,956,050.00 and this represents 44 cents per HGO share [$176,986,050.00 cash / 389,000,000 shares on issue]



Philly, is that a typo, or where is this extra $5million coming from?


> Hillgrove Resources Limited (ASX: HGO) advises that it has entered into a securities sale
> agreement with Santos Limited for the sale by Hillgrove of a 19.99% interest in Eastern Star
> Gas Limited (“Eastern Star”) for a total consideration of $171,986,050 cash.
> Settlement of the transaction is anticipated to occur by no later than Monday, 20 July 2009.



In the bigger picture, this is probably insignificant though.

There's plenty of buyers hovering @22.5c this afternoon.

This one could be worth a punt.
By Monday week, the market _has_ to take into account the STO payment, surely?


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## philly (9 July 2009)

Hi Dveous,
just a typo I'm afraid.
I would have thought that with the $$$ payable on 20/7/09 the SP may have edged a bit higher. IMHO the SP does not reflect the value of HGO's assets.
Maybe I need to be a bit more patient


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## DVEOUS (10 July 2009)

I've just been reading through HGO's last quarterly report, and I see different figures.

Please correct me, if I am misinterpreting anything.

As of 30 April 2009, there are 378,693,978 ordinary shares.

The market value of Hillgrove's investment portfolio as at 30 April 2009 was approximately $135.4 million.

Cash on hand as at 30 April 2009 was $8.1 million.

Investments + Cash (ie; 135.4 + 8.1) = $143.5 million.

Also, after the quarter closed, on 18 May 2009 an additional share placement of 34,333,333 shares was finalised, raising an additional $5.15 million.

So, by my reckoning, that's;
$143.5 million + $5.15 million = $148.65 million

And, 378,693,978 + 34,333,333 = 413,027,311 ordinary shares. ($0.36/share)

Add the $171,986,050 cash from STO, and that would be: $148.65m + $171.986m = $320.6million ($0.78/share)

Am I missing something here? 
I haven't factored in a cash burn for the three months since (MAY/JUN/JUL) of around $2 million (assuming similar to previous quarter). It doesn't make much difference anyway.

I am trying to understand why the market is ignoring the intrinsic value of this company.


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## Binxx (10 July 2009)

Sleeping giant this one I reckon.

Wait till this gets on the radars and see it shoot up. 

I think this should be seriously looked at. 

Could the chartists / predictors / astrologers and the gurus on this site care to opine


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## cheeyeen (10 July 2009)

DVEOUS said:


> I've just been reading through HGO's last quarterly report, and I see different figures.
> 
> Please correct me, if I am misinterpreting anything.
> 
> ...




You are double counting the "investment portfolio".  The money from Santos is for the ESG shares that HGO holds in the "investment portfolio".


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## Sean K (10 July 2009)

Binxx said:


> Sleeping giant this one I reckon.
> 
> Wait till this gets on the radars and see it shoot up.



Maybe you could tell us why *you* think this. 

If it sounds good, I might have a look at it.

Cheers,
kennas


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## skc (10 July 2009)

DVEOUS said:


> I've just been reading through HGO's last quarterly report, and I see different figures.
> 
> Please correct me, if I am misinterpreting anything.
> 
> ...




You also ignored the debt which is a convertible bond that is highly dilutive. 

The true intrinsic value is around $0.3 / share when you ignore any of the companies assets. No idea what their assets are worth, but probably $0.05 if you take a big discount on the book value.


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## DVEOUS (10 July 2009)

cheeyeen said:


> You are double counting the "investment portfolio".  The money from Santos is for the ESG shares that HGO holds in the "investment portfolio".



Yes, this occurred to me whilst laying in bed last night thinking about it.

You can't just add the $172million from Santos, without removing their ESG equity component of their investment portfolio. On the quarterly report this was valued at $131.9 million, based on $0.77 ESG share.


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## Binxx (10 July 2009)

kennas said:


> Maybe you could tell us why *you* think this.
> 
> If it sounds good, I might have a look at it.
> 
> ...




There are plenty of posts here stating that the shares should now be valued at 30c+ and if current price is 25%+ less than that then from a newbie’s perspective that's gold 

Hence my request for the guru's to post their thoughts


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## Sean K (10 July 2009)

Binxx said:


> There are plenty of posts here stating that the shares should now be valued at 30c+ and if current price is 25%+ less than that then from a newbie’s perspective that's gold
> 
> Hence my request for the guru's to post their thoughts



Binxx, YOU stated that YOU thought this was going to take off, or something.

So YOU think that because some other internet avatar posted up some numbers?

You are new to this forum, and perhaps to investing, so I suggest you take some time to check the stats others have posted, check the chart, go to the company's website and read their past quarterlies and presentations and then post up your own thoughts.

I'm just trying to point you in the right direction, and that is away from relying on some internet avatar to give to financial advice.

Cheers.


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## DVEOUS (10 July 2009)

skc said:


> You also ignored the debt which is a convertible bond that is highly dilutive.
> 
> The true intrinsic value is around $0.3 / share when you ignore any of the companies assets. No idea what their assets are worth, but probably $0.05 if you take a big discount on the book value.



I don't fully understand how options work, but out of the 48.25 million options that exist, less than 5.2 million of them have an exercise price of $0.26 or lower (of these, only 2.6 million expire later this year), and another 16.5 million at $0.26-$0.30, with the balance $0.34 and well above.
Excuse my ignorance, but how is this "highly" dilutive?

One thing that is for sure, the STO payment is based on ESG ~$1.00/share, and ESG is currently trading around $0.83.  
HGO hold 173,882,627 shares in ESG.
(Premium = 173,882,627 x $0.17 / 413m HGO shares)
= ~$0.07 premium.


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## Binxx (10 July 2009)

kennas said:


> Binxx, YOU stated that YOU thought this was going to take off, or something. - Yes
> 
> So YOU think that because some other internet avatar posted up some numbers? - Yes
> 
> ...




If new guys cannot rely on advice from people with over 1000 posts on this forum and may I add the thoughts of whom do match with the general consensus, then who else could a new comer turn to?  

Correct me again if I'm wrong but maybe this is not a right approach at all? 

And yes, I do appreciate your suggestion and will do as you state


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## Sean K (10 July 2009)

Binxx said:


> If new guys cannot rely on advice from people with over 1000 posts on this forum and may I add the thoughts of whom do match with the general consensus, then who else could a new comer turn to?
> 
> Correct me again if I'm wrong but maybe this is not a right approach at all?
> 
> And yes, I do appreciate your suggestion and will do as you state



Binxx, I have over 1K posts and I don't know a thing! 

You must make your own evaluations. 

When a poster says a stock has X number of shares on issue and they have XYZ Petajoules in the bag and have a JV with BG, then you *must* check these facts. If you make an investment decision, or judgement, based on anything but the facts (as best as they can be) then you'll just get yourself in the poo. 

Research, research, research....

Study the sector you are wanting to invest in, understand the market, research a company's results and management, check the charts, and put it all together. It's not easy, but it's money on the line.


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## skc (10 July 2009)

DVEOUS said:


> I don't fully understand how options work, but out of the 48.25 million options that exist, less than 5.2 million of them have an exercise price of $0.26 or lower (of these, only 2.6 million expire later this year), and another 16.5 million at $0.26-$0.30, with the balance $0.34 and well above.
> Excuse my ignorance, but how is this "highly" dilutive?
> 
> One thing that is for sure, the STO payment is based on ESG ~$1.00/share, and ESG is currently trading around $0.83.
> ...




Options are not debt. 

As you pointed out, with ~5m or so in the money, the options are only _*slightly *_dilutive.

The convertible bonds, on the other hand, is $US30m convertible at $0.19c per share. That is $30m / $0.19 / 0.945 (the contract exchange rate) = 167m shares. Hence *highly *dilutive, but only when they are converted. 

Note HGO may be able to buy back the bonds rather than let the bond holders convert, but the net effect on value per share is similar. i.e. Less money over same amount of shares or same money over more shares.


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## DVEOUS (10 July 2009)

skc said:


> Options are not debt.
> 
> As you pointed out, with ~5m or so in the money, the options are only _*slightly *_dilutive.
> 
> ...



skc, thanks for the clarification, I appreciate it.
I missed the 4% convertible bonds due 2011, right there in the last quarterly.
I have actually learnt quite a bit from this exercise in the last 24 hours.

Assuming the bonds were converted, then the extra 167m shares would dilute the HGO SP down to ~$0.30.

I wonder what the deciding factor would be for the bond holders to convert?

Assuming the entire bonds weren't converted by Tuesday next week, I calculate HGO would still have an intrinsic value of approx $0.44/share immediate after the STO payment. In this I have included a $2m cash burn since 30 April, but not included any options being cashed in. 

I was looking at HGO as a short-term play anyway, a few weeks max, just something to play with.


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## skc (10 July 2009)

DVEOUS said:


> skc, thanks for the clarification, I appreciate it.
> I missed the 4% convertible bonds due 2011, right there in the last quarterly.
> I have actually learnt quite a bit from this exercise in the last 24 hours.
> 
> ...




The maths is actually very basic. Take santos cash coming in, less the debt and divide by shares outstanding you get ~$0.33. This assumes the rest of the company worthless. 

The market actually thinks the rest of the company is worth -$0.09. This is testiment to the respect they have for the board and management.

Do ask yourself the question though... you have done some maths and decided that, with a reasonably high certainty, the company is worth more than the market value. You decided to trade base on that knowledge. How do you manage the risk and trade according to this knowledge? Is a short term play the right way to go? I don't know the answer, but just make sure your action is congruent to your analysis.


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## DVEOUS (16 July 2009)

Looks like the STO payment to HGO was completed before next Monday... and came and went, without much fanfare at all. 

HGO get a positive write-up on minesite.com today;
http://www.minesite.com/nc/aus/minews/singlenews/article/hillgrove-now-has-a-king-sized-cashpile-to-support-its-hunt-for-golden-elephants-in-indonesia/1.html

I think this might be a good one to sit on for much longer than I first anticipated. After reading that minesite article, there appears to be a lot of upside with this cashed-up cow.


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## skc (16 July 2009)

DVEOUS said:


> Looks like the STO payment to HGO was completed before next Monday... and came and went, without much fanfare at all.
> 
> HGO get a positive write-up on minesite.com today;
> http://www.minesite.com/nc/aus/minews/singlenews/article/hillgrove-now-has-a-king-sized-cashpile-to-support-its-hunt-for-golden-elephants-in-indonesia/1.html
> ...




Thanks for the link. 

There are 2 reasons why a situation like HGO can exist. 

1. The market simply doesn't know it has all the cash. To me this is unlikely, as all of HGO's announcements are shared by ESG and STO, which have substantial following. Someone reading those bound to check the HGO share price while they are at it.

This leaves the second reason.

2. The market thinks HGO management will just pi$$ the money up the wall and not deliver value with it. That's exactly the market reaction yesterday and today. HGO said they had no real plans for the cash. Their share fell 8% when the market rallied 5% over the 2 days.

They should just give the cash out as a special dividend. $0.2 per share will do, leaving them with enough cash to do whatever it is that they do.


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## Datsun Disguise (18 July 2009)

skc said:


> They should just give the cash out as a special dividend. $0.2 per share will do, leaving them with enough cash to do whatever it is that they do.




Crikey - what would that leave the SP looking like!! I reckon they'll sink a decent potion into birdshead - they'll need to fund their private army to protect their staff after all...


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## DVEOUS (27 July 2009)

Looks like Copulos Group are accumulating more HGO again.
They did this less than 2 weeks ago, and again back in May.

Copulos Group now have just under 10% voting power of Hillgrove.

From what I have Googled on them, Copulos seem to invest in quite a few small miners.

What do they know, that the rest of us should know? !!!
What is their track record like?


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## Binxx (30 July 2009)

This went up 8.7% this morning.

Is this a delayed impact of the actions by the Copulos group?


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## DVEOUS (30 July 2009)

No, probably because of what appeared in Alan Kohler's subscription-based "Eureka Report" yesterday?


The Speculator
By David Haselhurst
July 29, 2009

"Our punt this week is not yet in production but it is selling under its cash backing and its Kanmantoo copper-gold project, 60 kilometres from Adelaide, is likely to be up and running in early 2011.

Adelaide-based Hillgrove Resources Ltd (HGO) rose from a 12-month low of 7.2 ¢ a share to a recent high of 28 ¢ on the back of its 19.9% interest in Eastern Star Gas (ESG), the coal seam gas (CSG) explorer..."

blah blah blah.
Nothing we already know.

This journalist has added 20,000 HGO to his portfolio.

There's no point providing the URL to the article, because you have to be a subscriber anyway.


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## kenny (30 July 2009)

Speculator picks have a usual spike then a drift down in the following weeks as the enthusiasm over the article wanes and those that believe get set and wait.

As Dveous said, nothing new revealed except that Haselhurst is keen enough to add to his notional portfolio.

Cheers,

Kenny


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## Pallen (31 July 2009)

Um, surprised no one has mentioned the esculation clause in the sale of the ESG parcel to Santos.

Assuming ESG is bought out in the next 18  months we can make some rudimentary sums.

Hill Grove has 390 million shares on issue.

For every 10 cents that ESG goes up above a dollar, Hill Grove gets $17,600,000 from Santos. This translates to 17,600,000/390,000,000 per share = 4.5 cents a share. 


Now, given that Santos is likely to takeover ESG, were Santos to pay $2 a share, that's a ****load of cash to line the pockets of  HGO.


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## Datsun Disguise (31 July 2009)

Pallen said:


> Um, surprised no one has mentioned the esculation clause in the sale of the ESG parcel to Santos.
> 
> Assuming ESG is bought out in the next 18  months we can make some rudimentary sums.
> 
> ...




That was a nifty little clause in the contract I thought - cudos to HGO for swinging it. Then again Santos may only have agreed with the knoweledge that they have no intention of buying out ESG.......


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## Pallen (31 July 2009)

Datsun Disguise said:


> That was a nifty little clause in the contract I thought - cudos to HGO for swinging it. Then again Santos may only have agreed with the knoweledge that they have no intention of buying out ESG.......





Very nifty. Hopefully someone forces their hand and makes a play for ESG. If that day ever comes, personally I think it will, this sector is booming, I will be a happy man.

Bought HGO at 17, hoping to get out with a healthy profit, maybe triple :


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## Sainter (31 July 2009)

I really doubt HGO would have sold ESG at that price without that clause. Yes, STO may not make a takeover offer in the timeframe, if it had it's own way. But the point is ESG continues to develop the field and with each positive announcement, others will become more interested. If one of those other companies makes a play for it, then it is game on. I think an 18 month window is sufficient for that to happen (although I would have preferred a 3 year window, just to be sure!)
Cheers!


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## DVEOUS (9 September 2009)

YAY!!!

We have a 2 cent dividend coming, 1c in October, and then the final 1c in November.

It doesn't sound like much, but if you got in around 23-24cents like I did, 8.5%.
Not too shabby.

The news earlier this week about finding veins of gold and silver is also welcome.
Half yearly report released today says assets worth 35c/share and cash in bank alone worth 31c/share, so still trading at a discount.

I wonder what it's going to take, for mainstream investors to pick up on this one.  
Bear in mind the gold safe haven has been hovering $1,000/oz, and in the news of late.
Concerns about management have been noted here before, and although I am relatively new to HGO, they do show evidence of moving forward. 
Once their new processing plant (purchased last month) comes online in Kanmantoo during 2010, that should really get the attention of the skeptics.


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## kenny (10 September 2009)

Here's what the Australian's Criterion has to say today about HGO. It's hard to go past a small resource stock with no debt post div and little value attributed to their assets.

Cheers,

Kenny



> *Hillgrove Resources (HGO) $28.5c
> *
> 
> CRITERION: Tim Boreham | September 10, 2009
> ...


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## McCoy Pauley (23 December 2009)

Watching this one with some interest.  Seems to be testing the $0.40/share level at the moment and it's been steadily going up in share price since the start of the year.

I haven't yet had a chance to dig through the company's financials in any great detail.  Anyone got an opinion on HGO?


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## wbosher (26 December 2009)

Closed above the 40c resistance level, very low volume though. I suppose low volume is to be expected on Xmas eve. 

Hopefully 40c will become support and it continues the up trend from here.


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## tehnoob (15 January 2010)

So HGO has done quite well oer the last few weeks, hitting a high of 0.52 on the Monday the 11th. Presumably this is due to the approval of their MARP for Kanmantoo.

Now what has me confused is why they are doing a share placement with 'sophisticated' investors when they have oodles of cash at bank???

Also, I noticed that 15 million odd options expired at an exercise price of 0.65. Am I right in thinking that is beneficial to shareholders as there is no dilution of shares?

Cheers


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## doogie_goes_off (15 January 2010)

The expiry of options is always good unless replaced by cheaper ones (pays to vote against generous offers made to staff/directors at AGM's). As a previously borderline copper operation the resource now looks valuable and the increase in SP is not only from the MARP approval but also the increase in in ground value. Depending on what site works are to cost a further placement could be good and maybe there are further studies to be done to get the operation going. I am pleased they are raising money now (could be arond  45c) as opposed to a few months ago (could have been more like 25c). This means whoever gets the placement shares gets a smaller slice of the pie for the same $. HGO appear to be well run and I am still bullish on their outlook.


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## xenith69 (19 December 2010)

Wow
Not much of a following for HGO here of late!
They not doing much but waiting on drilling of Kanmantoo next year!


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## Gladman (4 January 2011)

Good movement here in the last couple of weeks. Solid company, cashed up nicely too at the moment after a cap raising and selling of ESG a while back. Their main mine (Kanmantoo, SA) is due to open soon, so they will be making the transition from explorer to producer. Also have some really nice first test results from a few of their Indonesian explorations. Sumba and Birds Head seem to be very promising. Hopefully they can continue on with them and use the cash from Kanmantoo to fund further exploration and production possibilities. 

I've been a holder now for about 4-5 years and have been frustrated at times by the management team and some of their decisions, but I feel in the next 12-24 months some big things will happen with HGO.

In my opinion, this stock is one of the least risky (due to high cash reserves) and highest potential upside (great initial results, about to become producer) copper and gold plays out there at the moment. Well worth a look if you want some exposure to copper and gold.


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## dandyjac (5 January 2011)

Gladman said:


> Good movement here in the last couple of weeks. Solid company, cashed up nicely too at the moment after a cap raising and selling of ESG a while back. Their main mine (Kanmantoo, SA) is due to open soon, so they will be making the transition from explorer to producer. Also have some really nice first test results from a few of their Indonesian explorations. Sumba and Birds Head seem to be very promising. Hopefully they can continue on with them and use the cash from Kanmantoo to fund further exploration and production possibilities.
> 
> I've been a holder now for about 4-5 years and have been frustrated at times by the management team and some of their decisions, but I feel in the next 12-24 months some big things will happen with HGO.
> 
> In my opinion, this stock is one of the least risky (due to high cash reserves) and highest potential upside (great initial results, about to become producer) copper and gold plays out there at the moment. Well worth a look if you want some exposure to copper and gold.





I have to agree with you Gladman as I have also been a holder of HGO for about the same time. I feel all share holders will be rewarded over the next 12-24 months heres hoping anyway


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## kermit345 (7 February 2011)

Somehow this passed through my value investing screener even though it isn't actively making a profit yet, I see there is quite a bit of potential here.

Contemplating an entry at the 31c level as I think if they can move into production phase successfully then there should be quite a bit of upside in next 12-18 months.

Just looking to grasp the thoughts on their company as a whole from any others that have been involved for quite some time, any price targets?


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## doogie_goes_off (20 October 2011)

Quick bump for HGO. I hold but am wary of movement in the Cu price. Production of copper concentrate looks to be on track. Does anyone have a fundamental valuation based on projected production figures??


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## matty77 (20 October 2011)

It is my understanding the first shipment of Copper Cons from Kanmantoo should be completed before the end of the year, I have heard the pricing in regards to the contracts are pretty good, not all spot pricing but 50% fixed 50% spot. Dont quote me on that though. I am not a holder but have been watching for quite some time. Probably worth a punt next time the market has a heart attack.


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## doogie_goes_off (13 June 2012)

Well HGO has taken a dive and Cu price isn't that great with their grades but presales should make things pretty staeady with approx $10M cashflow/month from production. Would have to see how much debt is getting paid down in the half yearly data (ie what production costs are like) but looks promising. The Indonesian gold projects look typically low-moderate grade and are unlikely to become much in the short term, just a bit of a waste of cashflow if you ask me. The Cu and Mo grades from the birds head prospect are however encouraging for the long term. Any more downward pressure seems unwarranted. I got out a while ago, but not adverse to the idea of getting back in.



matty77 said:


> It is my understanding the first shipment of Copper Cons from Kanmantoo should be completed before the end of the year, I have heard the pricing in regards to the contracts are pretty good, not all spot pricing but 50% fixed 50% spot. Dont quote me on that though. I am not a holder but have been watching for quite some time. Probably worth a punt next time the market has a heart attack.


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## burglar (13 June 2012)

Drilling results are in:

"Strong Drilling Results from Indonesia"

http://www.asx.com.au/asx/statistics/displayAnnouncement.do?display=pdf&idsId=01305104

I don't hold.


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## greggles (30 April 2018)

Nice little share price lift for Hillgrove Resources today after the release of its Quarterly Activities Report.

At the company's Kanmantoo Copper mine in South Australia copper production is up, mining costs are down compared to CY17, and ore stockpiles are increasing enabling the company to focus on higher grade ore. Mine life is short (to mid-2019) but they have enough ore to last until Q3 2020. Looks to be plenty of cashflow out of the operation between now and then.


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## greggles (31 August 2021)

Some good news for Hillgrove Resources this morning:



> The South Australian Government has awarded a $2m grant to Hillgrove Resources to trial new underground mining technology that is being developed in Australia by Komatsu Limited (“Komatsu”), a global manufacturer and distributor of earthmoving and mining equipment.
> 
> The Komatsu MC51 continuous mining machine utilises Komatsu’s DynaCut mechanical cutting technology which has the potential to revolutionise underground mine development by making underground operations safer, faster and more cost effective, in addition to reducing operational emissions for mine sites.
> 
> ...




As grants go, $2 million is a pretty nice chunk of change to get handed to you by the government. There is obviously a lot of confidence that the money spent is going to generate a return and the good publicity that goes along with it.

Unsurprisingly, HGO is up 16.3% to 5.7c this morning and, after a decline from 8.5c to 4.5c since mid-May, it is looking like it may have finally turned the corner.


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## Sean K (6 September 2021)

Hillgrove still going off the back of the 160m @ .9% Cu drill result. 

Frustrating to see this little run when you have something like HCH which has delivered result after result far eclipsing this just sleeping in the corner. Sth Aust v Chile.


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## Sean K (6 September 2021)

Oh, just had a better look at this and they actually have a plant there ready to go so a different kettle of fish.


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## signalFollower (2 March 2022)

Sean K said:


> Oh, just had a better look at this and they actually have a plant there ready to go so a different kettle of fish.
> 
> View attachment 129904



I think the dilutive effect of the cap raise at these depressed prices might be a concern ?


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## signalFollower (2 March 2022)

although just found this invterview with the CEO and it does paint a pretty bright picture

especially those potential of fully franked dividens mentioned and the use of the accumulated tax losses


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## The Triangle (19 March 2022)

signalFollower said:


> although just found this invterview with the CEO and it does paint a pretty bright picture
> 
> especially those potential of fully franked dividens mentioned and the use of the accumulated tax losses




 That old chestnut...  talk of fully franked dividends from a junior.....  Does a CEO ever paint a dim picture of their company?  

Kanmantoo Underground Economic Assessment Study results look unbelievable (not the good kind of unbelievable) to me.   Page 65 stuck out.  $47/tonne mining cost?  I don't think I've seen numbers that low for a while.  29 Metals Golden Grove operations (based on the quarterly report p16/17) Looks like they cost about $125/tonne for mining.  Not apples to apples I know...  But still... 

Found this on the internet after searching for all of about 30 seconds.  https://www.srk.com/en/publications/operating-cost-for-miners.  Costs per tonne are are my fav go to number on a mining study.


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## signalFollower (24 March 2022)

The Triangle said:


> That old chestnut...  talk of fully franked dividends from a junior.....  Does a CEO ever paint a dim picture of their company?
> 
> Kanmantoo Underground Economic Assessment Study results look unbelievable (not the good kind of unbelievable) to me.   Page 65 stuck out.  $47/tonne mining cost?  I don't think I've seen numbers that low for a while.  29 Metals Golden Grove operations (based on the quarterly report p16/17) Looks like they cost about $125/tonne for mining.  Not apples to apples I know...  But still...
> 
> ...



I notice the stock price has moved this week ?


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## signalFollower (6 July 2022)

I had to take advantage (IMO) of the drop in HGO share price today and accumulate

Anyone else ?


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