Hillgrove Resources and Heavy Minerals have recently inked a groundbreaking tailings processing agreement to extract and sell garnet from the Kanmantoo process tailings and tailings storage facility (TSF) located in South Australia. This partnership is not only aimed at generating income for Hillgrove but also at extending the operational life of the Kanmantoo TSF.
According to the terms of the agreement, Hillgrove will receive gross revenue payments (GRPs) of 15% from the sale of in-specification garnet during the mine’s operations, with the percentage decreasing to 5% after the mine is closed. In addition, the company will also receive $25 per ton for out-of-specification garnet, which will be utilized by Heavy Minerals.
To ensure a steady income flow, Heavy Minerals has guaranteed a minimum GRP of $500,000 (A$720,088) per annum once garnet production commences, with the amount increasing to $1 million when production reaches 100,000 tons per annum. As part of the agreement, Hillgrove will receive an initial payment of $50,000 upon the execution of the agreement, followed by a further $150,000 at the final investment decision stage.
Once Hillgrove completes its mining operations, Heavy Minerals will have the option to utilize the TSF for further garnet extraction and will assume any remaining site rehabilitation obligations as outlined in the agreement. Additionally, Heavy Minerals will be responsible for constructing and operating a garnet processing plant at Hillgrove’s Kanmantoo copper mine to recover garnet from the existing process stream.
Bob Fulker, the CEO and managing director of Hillgrove, expressed his enthusiasm for the agreement, stating, “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 specialized industrial mineral, is widely used in water jet cutting and other abrasive applications. Heavy Minerals is expected to produce up to 50,000 tons per annum for the initial three years, with production set to increase to 100,000 tons per annum in the fourth year.
In a related development, Hillgrove secured a A$10 million standby debt facility with Freepoint Metals and Concentrates in October 2024 to enhance operations at the Kanmantoo copper mine.
The original article, “Hillgrove and Heavy Minerals sign garnet tailings processing agreement,” was first published by Mining Technology, a brand owned by GlobalData.
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