Hillgrove Resources Limited provided the following updated Mineral Resource Estimate for the Nugent Cu-Au deposit located on ML6345 at Kanmantoo 55kms southeast of Adelaide in South Australia. The resource has been estimated only for the Nugent mineralised zone and is reported in accordance with The JORC Code 2012 Edition. This resource estimate update includes the results of the 2021-2022 diamond drilling programme at Nugent to 31 March 2022, the results of which were reported on 6 May 2022. Overall, as with all HGO's previous drill programs at Nugent and Kavanagh, the 2021-22 Nugent drilling program has resulted in an increase in total resources and a conversion of Inferred Resources to lower risk classification categories. July 2022 Nugent Mineral Resource Estimate ("MRE"): The Nugent deposit is located at the southern end of the Mine Lease and is able to be accessed from the Giant Pit haul road approximately 180m north of the Nugent deposit. The 2021-22 Nugent drill results (reported on 6 May 2022) have been merged with Hillgrove's previously drilled diamond and RC drill hole database and used to build this updated Mineral Resource Estimate. The July 2022 Nugent MRE has been estimated using a Multiple Indicator Kriging (MIK) process to estimate the Cu grades of a 3D grid of panels through the Nugent mineralised zone below the Nugent open pit from the diamond and RC drill hole data. There is no reconciliation of this MIK panel model, as the deposit has not been mined by underground mining methods by Hillgrove. However, an MIK estimate of the open pit resource has been used by Hillgrove since 2016 to model the mineralisation with great success and gives the Company reasonable assurance that the MIK method is the correct choice for modelling this style of mineralisation. The MIK modelling method has been successfully used for modelling underground copper deposits as early as 1991, for example at the Cobar
underground copper mine1. All diamond drill holes drilled by HGO to 31 March 2022 have been used to estimate the block grades in this MRE.
Grade control data have not been used in the estimation of the spatial continuity or grade estimates. The open
pit grade control data have been used to assist the interpretation of the general trends of the mineralised zone.
Core recovery is excellent with 98% of all mineralised core intervals recording >98% core recovery.
Unsampled intervals have been assigned zero Cu, Au, Bi, Ag values and then the drill hole samples composited to
1 metre downhole lengths from drill hole collar for all data analysis and estimation.
The drill hole data and geology therefrom have been used to interpret a wireframe of the Nugent Lode system.
The Nugent lode system is a single lode system within which two Cu zones occur. There are additional Cu, Cu-Au
and Au only vein sets in both the Hangingwall and Footwall of the wireframed Nugent lode (for example, KTDD230
14.5m @ 1.6% Cu, 0.34 g/t Au from 252.2m downhole), but these have not been wireframed due to a lack of
drilling data and geological understanding of their continuity.
Variography of the Cu mineralisation has been modelled and a Multiple Indicator Kriging algorithm applied to the
composited data using the wireframe of the Nugent Lode as a hard boundary for the kriging search algorithm.
The search strategy is a weighted ellipse oriented at -72 deg to 130 deg (dip/dip-direction). Panels are 2m (east)
by 15m (north) by 20m (elevation) and are oriented along the strike of the mineralisation at 040deg. In each panel
the proportion of the panel above the 0.7% Cu cut-off grade is estimated, and the Ag, Bi, Au grade above the
relevant Cu COG is also estimated. Indicated Resource panels are only located within the wireframed main Nugent Lode and have been estimated
from 20 composites within four quadrants within an ellipse of 7m (across-strike) by 60m along-strike and 85m
down-dip. Inferred panels are estimated where the same search strategy only locates 10 composites within two
quadrants. Gold, silver and bismuth have been estimated assuming a reasonably strong correlation with copper.
All the mineralisation is in fresh rock and an average bulk density has been estimated from 341 drill samples. The
average bulk density of the Nugent Lode samples of 3.0 t/m3 has been assigned to all blocks (which is consistent
with the bulk density when open pit mining of higher-grade material). Figure 2 is a longitudinal section and Figure 3 is a set of three cross-sections through the Nugent mineral system showing the MIK panels coloured by classification against the HGO diamond and RC drilling used in the estimate.
The sections indicate that the MIK method has appropriately modelled the copper mineralisation and its geologic
uncertainty. Figure 4 shows the tonnes per 20 metre elevation through the entire Nugent mineral system and shows that
further drilling below 980 RL is required to continue to grow the resource. Summary: In summary, the July 2022 Mineral Resource Estimate for Nugent has demonstrated that the infill and extensional diamond drilling undertaken from 2020 to 2022 has significantly increased the size of the total resource and effectively reduced the uncertainty in the resource. The updated Nugent resource will now be able to be incorporated into an updated assessment of the economic viability of an underground mining operation at Kanmantoo.