KCCCC, page-7

On reading the South Australian Department For Energy and Mining website it seems the royalty rate is 5 percent.

On the home page of the Hillgrove Resources website under the heading "Kanmantoo Callington Community Consultative Committee", paragraph 5 of the Draft Notes to the Meeting on 15 March 2018 states:

"Underground exploration development - If an underground exploration drive via a portal from the pit wall determines there is an economic resource it would result in a possible 10 year extension to mine life and $200 million revenue to the state".

Presumably, these words would not be said by a representative of Hillgrove Resources at a meeting unless there was a factual and real basis for these words.

Rough calculations:

$200 million in royalty revenue represents around 5 percent of sales equal to $4 billion in sales revenue.

$4 billion in sales revenue over a ten year mine life equals (on average) $400 million in sales revenue per year.

At a 25 percent margin, that equals around $100 million net profit per year.

At a price / earnings multiple of ten that values the company at $1 billion.

If a low ball takeover is made for Hillgrove then the company will have some serious explaining to do.

Further, I would expect that Hillgrove would have an "independent" expert value the company to determine whether such an offer is fair and reasonable and in the best interests of ALL shareholders!

Lastly, it is about time that drill results are reported to the market and not left in the bottom drawer. Hillgrove needs to either report these results immediately or report to the market immediately as to the reason why the drill results have not been reported.