Hillgrove Resources (ASX: HGO) has found high grade copper and gold at its Mt Rhine project in South Australia.
Approximately 80km by sealed road from Hillgrove’s Kanmantoo processing plant, Mt Rhine samples revealed copper grading up to 13.1% and gold grading 49.8 grams per tonne (g/t).
Both soil geochemical and rock chip sampling have identified two 1km zones: Zone A and Zone B.
At shallow depths, previous exploration at shallow depths at Zone A also recovered zinc (5.2%), lead (0.7%), silver (239g/t) as well as gold grading up to 9.7g/t and copper grading 0.4%.
Meanwhile Zone B has been the focus of recent exploration efforts returning the high grading 13.1% copper and 49.8g/t gold.
These results at Mt Rhine follow Hillgrove’s announcement less than a week ago, it had identified copper grading 6.5% and 0.8g/t gold at its Kanappa project, which is 12km from Mt Rhine.
According to the company, Mt Rhine has similar geology as its operating Kanmantoo copper mine.
To better define the Mt Rhine mineralisation, Hillgrove has planned a drilling program for 2018.
The nearby Kanmantoo processing plant has capacity for Mt Rhine ore and operates at $7.30 per tonne. Production risks have been mitigated with the plant processing similar mineralisation from the Kanmantoo copper mine for the past six years.
At present, Hillgrove is producing 20,000 tonnes of copper a year and 11,000 ounces of gold from Kanmantoo.
The company has invested $60 million in cutting back the Kanmantoo open pit, and once complete, this is expected to generate cash flows at low stripping rations in the next 12 months.
Hillgrove’s annual export earnings from Kanmantoo range between $140 million and $170 million.
In the past 12 months, the copper price has steadily risen from just under US$5,000 per tonne to hover at US$7,000 per tonne.