HILLGROVE RESOURCES LIMITED — AGM Information 2017

May 24, 2017

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ANNUAL GENERAL MEETING COMPANY UPDATE STEVEN MCCLARE IIIII CEO & MANAGING DIRECTOR 25 MAY 2017

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BUILDING ON FOUNDATION OF KANMANTOO

• KANMANTOO IS THE FOUNDATION

• Updated Geological Model performing

• Cashflow challenge being managed

• Progressive Rehabilitation

• Investment phase near complete

• Cash generation will commence

• Organic Growth

• Post Closure opportunities

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– KANMANTOO GIANT PIT

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KANMANTOO INFRASTRUCTURE

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KANMANTOO PROGRESSIVE REHABILITATION OF TAILINGS

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PROGRESSIVE REHAB AND OFFSET PLANTING

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UPDATED GEOLOGICAL MODEL PERFORMING

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CASH SHORTFALL MANAGED

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• Cash Shortfall - managed through Initiatives

• SA Government - loan & bond

• Salary reductions and deferrals

• Asset sales

• Hedge Book

• Geological Model updated

• Capital raising

• Electranet bond

• PetroBond

• Emeco transaction

• • Supplier negotiations

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CUTBACK PROGRESS

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ACTUAL May 2017 LOM PLAN
1064
834
1004
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REDUCING STRIP RATIO

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January 2017
Giant Pit LOM average Strip
Ratio 5.5:1
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CASH GENERATION

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 Tough second quarter

• Rebuilt primary excavators

• Rock slip on east wall requiring interim ramp

 Multiple floor levels

 Improving third quarter

 Neutral cash projected

 Fourth quarter step up

Guidance remains unchanged for 2017

 Increasing revenue

 Creditor repayments

 2018 Cash generation

 Loan repayment

 Creditor repayments

• Cash accumulation

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MINING INEFFICIENCY IN THE SECOND QUARTER

Multiple Levels reducing efficiency

East wall rock slip

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ORGANIC GROWTH

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 Organic Growth

 Existing infrastructure

 Significant exploration potential

 Kanmantoo Underground

 Kanappa

 Mt Rhine

 Targeting minimal capital requirement

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ORGANIC GROWTH PETER ROLLEY IIIII CHIEF GEOLOGIST 25 MAY 2017

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COPPER GOLD ORGANIC GROWTH OPPORTUNITIES

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HGO has several coppergold projects that have the potential to provide significant organic growth  Underground at Kanmantoo Copper Mine  Kanappa Exploration  Mt Rhine Exploration

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THE EXTENSION OF HIGH GRADE COPPER GOLD AT KANMANTOO

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HGO has demonstrated the extension of several high grade copper-gold zones beyond the final pit design Resulting in an Exploration Target[1] of  5-10Mt @ 1.7-2.2% Cu, 0.4-1.0g/t Au Refer to ASX Release 25 May 2017 for further information

1 The Exploration Target is conceptual in nature as there has been insufficient exploration to define a Mineral 16 Resource. It is uncertain if further exploration will result in the determination of a Mineral Resource.

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UG HIGH GRADE CU AU TO LEVERAGE PRESENT INFRASTRUCTURE

In summary the Exploration Target;

• suggests the potential for significant underground resource opportunity at Kanmantoo beneath and in the wall of the existing final pit

• suggests that an increase in mine life may be possible at Kanmantoo

• is based on utilising the existing processing plant and the final in-pit haul road that will extend to 350m depth

• is based on several higher grade copper-gold ore zones that have already been mined in the open pit, and projecting these to depth

• zones are all within 250m of the haul road and therefore if these zones are confirmed by drilling, will require minimal capital

• will benefit from the existing copper-gold processing plant at Kanmantoo that operates at a very efficient $7.30/tonne milled

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KANAPPA COPPER GOLD EXPLORATION PROJECT

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HGO has completed a soil sampling and rock chip sampling program at Kanappa;

 3.7km long by 0.6km wide coppergold zone

• Peak rock chips at surface of  34% Cu

• 4g/t Au

 Over 100 sites with outcropping Cu

• Similar to Kanmantoo

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Refer to ASX Release 25 May 2017 for further information

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MT RHINE COPPER GOLD EXPLORATION PROJECT

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HGO has completed a rock chip sampling program at Mt Rhine resulting in;

• Peak rock chips at surface of  7.1% Cu

• 49.8g/t Au

• Channel trenches of

• 6m @ 15.9g/t Au

• 6m @ 15.4g/t Au

• 6m @ 13.1g/t Au

• 8m @ 5.4g/t Au

 Strong similarities to Kanmantoo

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Refer to ASX Release 14 December 2006 for further information

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PLANNED ACTIVITIES TO PROGRESS THESE ORGANIC GROWTH OPPORTUNITIES

HGO plans to progress these three growth opportunities through low cost exploration activities, utilising the significant resources within HGO;

• Kanmantoo UG Exploration Target

• Finalise structural studies and drill hole planning

• Diamond drilling to test the concept

• Kanappa Copper Gold Project  Complete soil sampling and mapping

• Undertake geophysical work

• RC drilling of key targets

• Mt Rhine

• Undertake soil sampling and mapping

• Undertake geophysical work

• RC drilling of key targets

UG Mining at Kanmantoo in 1975

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MD Presentation (Continued)

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POST CLOSURE OPTIONS

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 Post Closure Options

 Utilisation of existing assets/resources

 Pumped Hydro

 Solar

• Industrial Hub

• Agriculture

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SUMMARY

Kanmantoo is the Foundation – Resource Model performing – Cashflow challenge managed – Investment phase near complete – Cash generation to commence – Organic Growth opportunities – Post Closure options

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Q&A

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STATEMENT

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No representation or warranty is or will be made by any person (including Hillgrove Resources Limited ACN 004 297 116 (“Hillgrove”, “HGO”, or the “Company”) and its officers, directors, employees, advisers and agents) in relation to the accuracy or completeness of all or part of this document (the “Document”), or the accuracy, likelihood of achievement or reasonableness of any forecasts, prospects or returns contained in, or implied by, this Document or any part of it. This Document includes information derived from third party sources that has not been independently verified.

This Document contains certain forward-looking statements with respect to the financial condition, results of operations and business of Hillgrove and certain plans and objectives of the management of Hillgrove. Forward-looking statements can generally be identified by the use of words such as ‘project’, ‘foresee’, ‘plan’, ‘expect’, ‘aim’, ‘intend’, ‘anticipate’, ‘believe’, ‘estimate’, ‘may’, ‘should’, ‘will’ or similar expressions. Indications of, and guidance on, production targets, targeted output, mine development or timelines, exploration or expansion timelines, infrastructure alternatives and financial position and performance are also forwardlooking statements. Any forecast or other forward-looking statement contained in this Document involves known and unknown risks and uncertainties and may involve significant elements of subjective judgment and assumptions as to future events which may or may not be correct. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors, many of which are beyond the control of Hillgrove, and may cause actual results to differ materially from those expressed or implied in such statements. There can be no assurance that actual outcomes will not differ materially from these statements.

Various factors may cause actual results or performance to differ materially. These include without limitation the following: risks specific to Hillgrove’s operations; credit risk; levels of supply and demand and market prices; legislation or regulations throughout the world that affect Hillgrove's business; insurance expenses; the risk of an adverse decision or other outcome relating to governmental investigations; class actions or other claims; growth in costs and expenses; and risk of adverse or unanticipated market, financial or political developments (including without limitation in relation to commodity markets).

You are cautioned not to place undue reliance on forward-looking statements. These forward-looking statements are based on information available to us as of the date of this Document. Except as required by law or regulation (including the ASX Listing Rules) we undertake no obligation to update these forward-looking statements.

This Document is provided for informational purposes only and is subject to change without notice. Subject to any obligations under applicable laws, regulations or securities exchange listing rules, Hillgrove disclaims any obligation or undertaking to release any updates or revisions to this Document to reflect any change in expectations or assumptions. Nothing in this Document should be interpreted to mean that future earnings per share of Hillgrove will necessarily match or exceed its historical published earnings per share, or that there has been no change in the affairs of Hillgrove since the date of this Document.

Nothing contained in this Document constitutes investment, legal, tax or other advice. The information in this Document does not take into account the investment objectives, financial situation or particular needs of any recipient. Before making an investment decision, each recipient of this Document should make its own assessment and take independent professional advice in relation to this Document and any action taken on the basis of this Document.

All currency referred to is Australian dollars ($) unless otherwise indicated (e.g. US$).

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COMPETENT PERSON STATEMENTS

ABOUT HILLGROVE

Hillgrove is an Australian mining company listed on the Australian Securities Exchange (ASX: HGO) focused on the operation of the Kanmantoo Copper Mine in South Australia, and with exploration projects on its Indonesian tenements. The Kanmantoo Copper Mine is located less than 55km from Adelaide in South Australia.

Competent Person's Statement

Kanmantoo Global Mineral Resource Estimate at End February 2016

	JORC 2012	**Tonnage **	Cu	Au	Ag
	Classification	(Mt)	(%)	(g/t)	(g/t)
	Measured	10.6	0.6	0.1	1.4
In Situ Resource	Indicated	10.9	0.7	0.1	1.2
	Inferred	13.7	0.5	0.1	1.0
	Total	35.2	0.6	0.1	1.2

Note: In Situ Resource >0.20% Cu

Kanmantoo Global Ore Reserve Estimate at End February 2013

	JORC 2012	**Tonnage **	Cu	Au	Ag
	Classification	(Mt)	(%)	(g/t)	(g/t)
	Proven	2.5	0.77	0.08	1.7
In Situ Reserve	Probable	18.2	0.72	0.20	2.0
		20.7	0.73	0.18	1.9
LongTerm Stockpiles	Proven	1.4	0.46	N/A	N/A
		1.4	0.46	-	-
	Total	22.1	0.71	0.18	1.9

Note: In Situ Reserve >0.20% Cu. Long Term Stockpiles >0.15% Cu.

The information in this release that relates to the 2016 Mineral Resource for Giant is based upon information compiled by Mr Peter Rolley, who is a Member of The Australian Institute of Geoscientists. Mr Rolley is a full-time employee of Hillgrove Resources Limited and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code)’. Mr Rolley has consented to the inclusion in the release of the matters based on their information in the form and context in which it appears.

The information in this release that relates to the 2013 Mineral Resource not including Giant is based upon information compiled by Ms Michaela Wright, who is a Member of The Australasian Institute of Mining and Metallurgy. Ms Wright is a full-time employee of Hillgrove Resources Limited and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code)’. Ms Wright has consented to the inclusion in the release of the matters based on their information in the form and context in which it appears.

The information in this release that relates to Ore Reserves is based upon information compiled by Mr Steven McClare, who is a Member of The Australasian Institute of Mining and Metallurgy. Mr McClare is a full-time employee of Hillgrove Resources Limited and has sufficient experience relevant to the styles of mineralisation and type of deposit under consideration to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code)’. Mr McClare has consented to the inclusion in the release of the matters based on their information in the form and context in which it appears.

The information in this release that relates to Exploration Results is based on information compiled by Dr David Rawlings, who is a Member of The Australasian Institute of Mining and Metallurgy. Dr Rawlings consults independently as the Kanmantoo Project Exploration Manager for Hillgrove Resources Limited and has sufficient relevant experience to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code)’. Dr Rawlings consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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