The construction of Hillgrove Resources' Kanmantoo copper mine in the Adelaide Hills is complete. The mine is expected to produce its first concentrate product within seven to 10 days with the first exports expected next month.

The mine, which is expected to cost USD 135 million to build once final calculations are made, is expected to run for at least 10 years. It will produce 80,000 tonnes of concentrate containing about 20,000 tonnes of copper and 10,000 ounces of gold per year.

Hillgrove is also looking to expand this, and is exploring for more resources in the area. The company said this morning the mine construction was pretty much on schedule, although the cost was 10% higher than expected due to a late claim from a contractor.

Hillgrove is in discussions with the contractor with respect to this claim, which has only recently been received within weeks of previously scheduled practical completion of the plant. Importantly, the parties are working towards a mutually acceptable outcome and scheduled commissioning activities on the site remain unaffected.

Due to the estimated timeframe for first concentrate production in mid November 2011 now being two to 4 weeks later than anticipated; Hillgrove expects that the associated working capital requirements in connection with the project ramp-up will increase by approximately USD 10 million."

About 250,000 tonnes of high grade ore has already been crushed and is waiting to be processed and the mining rate has been increased in anticipation of the completion of commissioning of the processing plant.

The company said that first ore through the mill and concentrate production is now expected to occur in the next 7 to 10 days. The Kanmantoo project is now essentially complete and in final testing and commissioning.

(Sourced from www.adelaidenow.com.au)