Hillgrove presents new Kanmantoo updates January 5, 2012

Hillgrove Resources Limited (ASX: HGO) has provided shareholders with an update for operations at the Kanmantoo Copper Mine during the month of December 2011.

• 154,000 dry tonnes crushed and milled, representing 77% of annual throughput rate of 200,000 tonnes per month, and above plan for this stage of ramp-up.
• Average crushing rate achieved was 387 dry tonnes per hour (tph), representing 94% of design of 411 tph.
• Average milling rate achieved was 259 dry tph, representing 83% of design throughput of 311 dry tph.
• 2,159 dry tonnes of copper concentrate produced, grading 30% copper and 5.3 g/t gold, both above plan of 26% and 2.6 g/t respectively. A total of 2,425 dry tonnes of concentrate has now been produced since start-up.
• Approximately 1,615 dry tonnes of concentrate transported to storage at Port Adelaide, with approximately 810 tonnes in the concentrate shed at Kanmantoo.
• Average copper recovery of 70%, reflecting some oxide and transitional material in the early stage, low grade, commissioning ore feed to the mill. Recovery has steadily increased over the month, and is now running at approximately 85%.
• Close-off of additions of exploration drilling data to the Kanmantoo resource database occurred, with work commencing on a new resource estimate, with results expected in Q2, 2012.
• Settlement of the construction contractor claim, with deferral of overrun monies to be paid on a monthly basis from April 2012.
• Execution and drawdown of the previously announced AUD 10 million Mezzanine Finance Facility occurred in late December.
• Reduction in the minimum permitted balance in the Kanmantoo Proceeds account from AUD 10 million to AUD 5 million, as agreed with the project lenders.

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For further information, please contact:

Drew Simonsen
Managing Director
Tel: +61 (0)2 8247 9300

Media Enquiries:

Fortbridge
Luke Dean
T:  + 61 2 9003 0477
M: +61 414 535 433
E luke.dean@fortbridge.com