Hillgrove Resources Limited

ACN 004 297 116 Level 41 Australia Square Tower, 264 George Street, Sydney NSW 2000

Tel: 02 8221 0404 Fax: 02 8221 0407 www.hillgroveresources.com.au

Tuesday, 22 June 2010

HILLGROVE ACQUIRES OPTIONS ON INDONESIAN BAUXITE PROJECTS

Highlights

• Options secured over 70% of companies controlling 1,400km² of granted bauxite exploration licenses in West Kalimantan in Indonesia.

• Licences adjacent to large, established bauxite resources and active bauxite mining operations.

• Bauxite occurrences confirmed over widespread areas within the licences, with values in augur drilling to 55% Al2O3.

• Bauxite confirmed as gibbsitic and typified by low reactive silica levels.

• Site and laboratory test work confirmed amenability of bauxite to upgrading to high grade product via simple wet screening.

• Licenses adjacent to established transport networks.

• Targeting alumina production quality bauxite resources to supply nearby Chinese demand.

• Benefit of options to be transferred to Hillgrove subsidiary InterMet Resources Limited at cost.

Hillgrove Resources Limited (ASX:HGO) (‘Hillgrove’ or ‘Company’) advises that it has secured options to acquire a 70% shareholding in five companies that own nine exploration licenses (IUPs) over the Landak and Tayan South Bauxite Projects, covering 1,400km² in West Kalimantan, Indonesia. Hillgrove has, in turn, agreed to transfer these options to its 85% owned subsidiary, InterMet Resources Limited subject to InterMet shareholder approval. InterMet will refocus its activities around the bulk commodities – bauxite, coal and iron ore both in Australia and Indonesia. The region is a recognised bauxite province with the Indonesian major, PT Antam, owning the Tayan bauxite deposit, located between the Landak and South Tayan Projects. David Archer, Managing Director of Hillgrove said today “Our work on the Landak bauxite deposit shows that high grade, alumina production quality, bauxite can be produced with favourable recoveries from the deposits so far identified. Hillgrove’s strategy is to identify and secure quality projects with clear potential to host substantial resources capable of supporting

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long-life mining operations. The Company believes the projects in Kalimantan meet all these criteria in terms of scope and size and will provide an ideal nucleus for InterMet to participate in the buoyant bulk commodities space”. “We are confident in the long-term global aluminium consumption trends and see Indonesia as a key provider of raw and refined products, particularly to the nearby Chinese market.” “The Company will start a rigorous exploration programme over the IUPs, with the aim of defining a bauxite resource base capable of justifying the establishment of an alumina refinery”. Hillgrove has already completed several months of due diligence involving recognised mineral industry consultants Snowden Group, Independent Metallurgical Operations, METS and Aluminpro Aluminium Industry Professionals, and has conducted site surveys, test pitting and detailed metallurgical evaluations. Typical bauxite exposure, South Tayan

The total acquisition price of the options is US$540,000 cash and the issue of a total of US$300,000 worth of Hillgrove shares. The option agreements also allow Hillgrove (and its nominee) to undertake exploration activities on the Landak and Tayan South Projects ahead of an election to exercise the options. The options are exercisable by 12 March 2011 and if exercised, will require the payment of US$3,000,000 in cash plus the equivalent of US$2,000,000 in fully paid ordinary shares of the Company. Additional payments on reaching resource benchmarks are as follows:

• US$1,000,000 cash on definition of first JORC compliant resource of 50 million dry metric tonnes; and

• US$2,000,000 cash on definition of expanding global JORC compliant resources to 100 million dry metric tonnes. A royalty of US$0.30 / dry metric tonne of bauxite ore is payable on sales of bauxite ore.

Hillgrove is entitled to assign its interests in these options to a related entity, if it so elects. Hillgrove has elected to assign the benefit of the options to it 85% owned subsidiary, InterMet Resources Limited, subject to the approval of InterMet’s shareholders.

Overburden

Bauxite Zone

Saprock

2m

4m

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Metallurgical test work has been undertaken on bauxite sourced from eight test pits excavated by Hillgrove across the project area at Landak. Test work included particle size analysis of a master composite of test pit material, which showed clear beneficiation of Al2O3 grade and a significant reduction in total and reactive silica levels (Figure 1). XRD analysis of the -1.18mm split of the master composite has confirmed that bauxite is gibbsitic in nature. At the 3.3mm screen size Landak bauxite upgraded from a head grade of 41.22% Al2O3, 15.13% total silica and 11.35% reactive silica to 48.8% Al2O3, 46.62% available Al2O3, 7.1% total silica and 2.7% reactive silica, recovering 49.9% of total alumina. By screening to 0.5mm, grades decreased slightly to 48.2% Al2O3 with little change to silica levels, but recovery increased to 64.1% of total alumina. Figure 1. Grade vs. particle size of master composite

The washed grades for Landak bauxite compare favourably with bauxite grades from operating bauxite mines in the region (Figure 2) and published bauxite resources globally (Table 1).

0

10

20

30

40

50

60

0.0 0.1 1.0 10.0 100.0

Grade (%)

Particle Size (mm)

Al2O3 SiO2 Reactive Silica Available Alumina

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Table 1. Selected Published Bauxite Resource Grades Deposit Owner Country Al2O3

% Reactive Si %

Available Al2O3 %

Upgraded

1North Darling Range

Bauxite Resources Australia 43.1 3.2 31.6

2Worsley BHP Billiton Australia NS 2.1 31.1 2MRN BHP Billiton Brazil NS 4.1 50.2 (washed) 2GAC BHP Billiton Guinea NS 1.2 37.7 3Gove Rio Tinto Australia 49.7 NS NS 3Porto Trombetas Rio Tinto Brazil 50 NS NS 3Sangaredi Rio Tinto Guinea 48.4 NS NS 3Weipa Rio Tinto Australia 50.6 NS NS 4Wandoo Iron Mountain Australia 38.25 31.61 6.64 5Pisolite Hills Cape Alumina Australia 53.1 7.5 41.5 (washed) 6Tayan ANTAM Indonesia 47 3.5 NS (washed) 7Landak Hillgrove Resources Indonesia 48.8 2.7 46.2 (washed)

NS = Not Specified 1 ASX Release 16 January 2010 2 BHP Billiton Annual Report 2009 3 Rio Tinto Annual Report 2008 4 ASX Release 16 March 2010 5 ASX Release 2 July 2009 6 ANTAM Statement of Resources and Reserves 31 December 2007 7 IMO Landak Bauxite Project Report (Cumulative Grade at 3.3mm Screen Size) About Hillgrove Hillgrove is an Australian mining company listed on the Australian Securities Exchange (ASX: HGO) focused on developing its Indonesian, South Australian and Queensland base and precious metals projects. The Company is targeting the discovery of world class epithermal gold and porphyry copper/gold deposits in Eastern Indonesia. Hillgrove’s flagship development is the Kanmantoo Copper Gold Project, located less than 60km from Adelaide in South Australia. Kanmantoo currently hosts a Mineral Resource of 32.2Mt (2.3Mt Measured, 22.5Mt Indicated and 7.4Mt Inferred) grading 0.9% copper and 0.20g/t gold, containing 292,200 tonnes of copper, 191,100 ounces of gold and 3,313,600 ounces of silver. With completion of construction targeted for the first quarter of 2011, Kanmantoo will be a 2.4Mt p.a. open-cut mine producing approximately 20,000 tonnes of copper in concentrate and 10,000 ounces of gold per annum. The information in this report that relates to Exploration Results is based on information compiled by Mr. James Kerr, who is a Member of The Australasian Institute of Geoscientists. Mr. Kerr is Project Evaluation Manager for Hillgrove Resources and has sufficient relevant experience to qualify as a Competent Person as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Kerr consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. For more information please contact: Mr David Archer Managing Director Hillgrove Resources Limited Telephone: +61 2 8211 0404 Mobile: 0414 737 767

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Figure 2. Project and Bauxite Resource Locations * ANEKA TAMBANG Statement of Mineral Resources and Ore Reserves as at 31 December 2007

Munggu Pasir (ANTAM)* 40mt @ 46.6% Al2O3  (washed Probable Reserve) 

Tayan (ANTAM)* 30.9mt @ 47.5% Al2O3  (washed P & P Reserves) 

Bauxite Resource 

LANDAK 48.8%  Al2O3 (washed) 

TAYAN SOUTH

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Figure 3. Landak Project Tenure and Reconnaissance Sampling Al2O3 Grade Map