Fresh off a successful capital raising aimed at accelerating future developments, Hillgrove Resources (ASX: HGO) has achieved a new monthly production record at its Kanmantoo project in South Australia.

The 1,105 tonnes of copper produced in February 2025 is the highest since the company commenced processing from underground material in February 2024.

Hillgrove’s CY2025 production outlook remains on track for 12,000t to 14,000t and is expected to grow further into 2026 with the accelerated development of the Nugent-Kanmantoo underground mine.

‘Delivering tangible results’

Hillgrove chief executive officer Bob Fulker noted the company achieved the record despite February being a 28-day month.

“There were record daily averages for both development and ore mining [and] the excellent operational delivery in these key metrics shows our continual improvement and debottlenecking of the mine that is delivering tangible results.”

“We are confident mine performance will continue to strengthen as we accelerate the development of Nugent.”

Positive drilling results

The company recently announced positive drilling results at the Nugent deposit at Kanmantoo, which returned significantly higher numbers than the resource grade.

These included 18.55 metres at 5.69% copper and 1.02 grams per tonne gold from 187m down-hole.

The results provide the company with an opportunity to accelerate the Nugent development to potentially access higher-grade zones and increase overall copper production, while reducing costs.

Successful capital raise

Hillgrove has also announced a combined equity raising of up to $16 million, comprising a $13m placement to institutional and sophisticated investors and a share purchase plan to raise up to $3m, in which existing eligible shareholders will be able to participate.

Mr Fulker said the company’s major shareholders and new institutions strongly supported the placement, resulting in demand being well in excess of the targeted amount.

The company has undertaken the capital raising to expand the mining and processing rate at Nugent by approximately 25% from 1.4 million tonnes per annum to as much as 1.8Mtpa and for general working capital purposes.

Production boost

The proposed acceleration will allow the company to lift profitability at the Kanmantoo underground mine through increased production in copper units and a consequential material decrease in unit costs.

“Nugent ore is expected to be delivered to our processing plant in the first half of calendar 2026, when Kanmantoo will be drawing from three production areas—the currently operating Kavanagh and Spitfire deposits, as well as from the opening up of Nugent,” Mr Fulker said.

“Having three active mining areas will increase the efficiency and flexibility of underground mining operations at Kanmantoo as well as providing a more diversified base of feed to our plant.”