Hillgrove’s activities for the quarter August 31, 2009

During the second quarter of 2009, Hillgrove Resources (ASX: HGO) sold its investment in Eastern Star Gas Limited. At the same time, Hillgrove bought back the Convertible Bonds on issue. Hillgrove’s key operating assets now comprise the Kanmantoo Copper Gold Project, its Indonesian exploration acreage where it is targeting the discovery of Tier 1 gold and copper gold ore bodies and cash of $127 million.

HIGHLIGHTS
* Hillgrove sold a 19.99% interest in Eastern Star Gas Limited to Santos Limited for
$171,986,050 cash.
* Significant upside retained if change of control of ESG occurs within 18 months.
* Convertible bonds bought back for USD$39 million and cancelled clearing all debt.
* Cash balance at 31 July of $127 million or $0.31 per Hillgrove share before tax.
* Permitting of Kanmantoo Copper/Gold Mine Project development is nearing completion.
* A programme to identify potential joint venture partners for the development of Kanmantoo is at an early stage with an Information Memorandum expected to be issued in early September.
* Preparation starting in earnest for the exploration programmes to be undertaken at Bird’s Head and Sumba Projects in eastern Indonesia.
* Investment portfolio and cash totalled $130.1 million at the end of the quarter.

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For further information, please contact:

David Archer
Managing Director
Mob: +61 (0)414 737 767

Dale Ferguson
General Manager – Exploration & Operations
Mob: +61 (0)439 886 019

Russell Middleton
Company Secretary
Tel: +61 (0)2 8221 0404