Mining Technology

Hillgrove and Heavy Minerals sign garnet tailings processing agreement

Hillgrove will receive GRPs of 15% from the in-specification garnet sale during operations at the mine.

Hillgrove Resources and Heavy Minerals have signed a tailings processing agreement to extract and sell garnet from the Kanmantoo process tailings and tailings storage facility (TSF) in South Australia.

The agreement is designed to generate income for Hillgrove and extend the operational life of the Kanmantoo TSF.

Under the terms of the agreement, Hillgrove will receive gross revenue payments (GRPs) of 15% from the in-specification garnet sale during operations at the mine, which will reduce to 5% after its closure.

Additionally, the company will receive $25/t for out-of-specification garnet that will be used by Heavy Minerals.

A minimum GRP of $500,000 (A$720,088) per annum has been guaranteed by Heavy Minerals once production of garnet begins, increasing to $1m when production reaches 100,000t per annum (tpa).

Hillgrove will also receive an initial payment of $50,000 upon execution of the agreement, followed by $150,000 at the final investment decision.

On completing Hillgrove’s mining operations, Heavy Minerals may use the TSF for further extraction of garnet, and assume the remaining and related site rehabilitation obligations, which is subject to the agreement.

Furthermore, Heavy Minerals will construct as well as operate a garnet processing plant at Hillgrove's Kanmantoo copper mine to recover garnet from the existing process stream.

Hillgrove CEO and managing director Bob Fulker said: “This agreement delivers multiple benefits to Hillgrove shareholders. It provides a new income stream, extends the life of our TSF, and importantly, has the potential to transfer rehabilitation obligations to Heavy Minerals post Kanmantoo closure.”

Garnet, a specialised industrial mineral, is used in water jet cutting and other abrasive applications.

Heavy Minerals is expected to produce up to 50,000tpa for the initial three years, which will increase to 100,000tpa in fourth year.

In October 2024, Hillgrove secured a A$10m standby debt facility with Freepoint Metals and Concentrates to enhance operations at the Kanmantoo copper mine.