BUILDING A MIDBUILDING A MID--TIER RESOURCES GROUPTIER RESOURCES GROUP

Annual General Meeting Annual General Meeting 23 May 200723 May 2007

2.

HILLGROVEStructure

3.

HILLGROVEIn South Australia

4.

KANMANTOOWhy South Australia?

One of the most prospective terrains in the world – home of the Big One – Olympic Dam

Ideal for application of latest exploration techniques

Neglected historically

Gawler is vastly under explored → major mines

New greenstone domains akin to the Eastern Goldfields of WA

Supportive State Government

Sixth most desirable region in the world to explore (Fraser Institute)

Projects located close to infrastructure

Result → SA will host Australia’s major mineral discoveries

5.

KANMANTOOProject Location

Low operating cost setting

Existing infrastructure

6.

KANMANTOOKanmantoo Copper Gold Mine 2007

7.

KANMANTOOResource Zones

8.

KANMANTOODrilling Results Highlights

Main Zone: 81m @ 1.35% cu

North East: 16m @ 4.34% cu and 0.65 g/t au

O’Neil Zone: 11m @ 2.05% cu and 6.47 g/t au

South East Zone: 22m @ 1.51% cu and 0.78 g/t au

East Zone: 20m @ 1.13% cu and 0.1 g/t au

9.

KANMANTOOMay 2007 Resource

Type Tonnes Cu Au Ag Tonnes Cu Au Ag Tonnes Cu Au Ag Cu Metal Au Cut Ag

T % g/t g/t T % g/t g/t T % g/t g/t Tonnes Ounces Ounces

Oxide 950,200 0.8 0.2 3.3 195,200 0.6 0.2 1.4 1,145,400 0.8 0.2 2.9 8,800 7,100 108,500

Transitional 1,093,000 0.8 0.2 3.1 523,000 0.7 0.2 1.7 1,616,000 0.8 0.2 2.7 12,300 9,800 138,000

Fresh 20,920,000 0.9 0.2 3.1 9,759,000 0.8 0.2 2.3 30,679,000 0.9 0.2 2.8 268,900 200,100 2,802,400

Total 22,963,000 0.9 0.2 3.1 10,477,000 0.8 0.2 2.3 33,440,000 0.9 0.2 2.8 290,000 216,900 3,048,800

Indicated Inferred Total

Kanmantoo Deposit Resource Estimate - April 2007(0.25%Cu Cutoff)

10.

KANMANTOOPotential Open Pit Development

11.

0

10

20

30

40

50

OriginalResource

12/04 Upgrade 10/06 Upgrade 4/07 Upgrade Target

28Mt at .94% cu & 0.2 g/t gold

Reso

urce

Mill

ion

Tonn

es

Inferred Tonnes Indicated Tonnes

33.44Mt at .9% cu & 0.2g/t gold

18.4Mt at 1.1% cu & 0.2 g/t gold

8.5Mt at 1.2% cu & 0.2 g/t gold

KANMANTOOResource Growth

12.

KANMANTOOPre-Feasibility Study Highlights

Mineral resources: - Copper/Gold: 28MT at 0.94% Copper and 0.20g/t Gold Contained metal: - 262,600T Copper and 177,200oz Gold Initial planning inventory: - 12,727,554MT optimized at USD$1.80 per lb copper priceBase case assumptions: - Copper price US$2.65 → US$1.63

- Exchange rate (A$/US$) A$0.70 flatOpen pit: - 1.2km long X 600m wide X 270m deep

- Ore mined 2MT PA with potential to expand to 2.5MT PA- Initial minimum mine life 6.5 years

Processing: - Conventional crushing, grinding and flotation- Mill throughput 2MT PA with potential to expand to 2.5MT PA

Average head grade: - 0.95% Copper, 0.23g/t Gold, 3.55g/t Silver Average recovery: - Copper 80% - 96% depending on ore type

- Gold 15% - 53% depending on ore type Concentrate: - 61,000 - 82,000 dry TPA

- High quality, medium copper content, low impurities Concentrate grade: - >25% Copper, 2.0 - 3.7g/t Gold, 39.3 – 61.4g/t Silver Average metal in cons: - 19,000T PA Copper

- 6,000oz PA Gold - 113,000oz PA Silver

Initial Capex: - A$98.3 Million

13.

KANMANTOOProcess Flow

14.

KANMANTOOProposed Site Layout

15.

KANMANTOOCommunities and Stakeholders

We act with integrity, transparency and honesty.We recognise, respect and support the right of Kanmantoo’s local communities to be consulted:– Committee/Focus group meetings– Community meetings– Site tours, newsletters and community webpage.

We aim to consult with major local stakeholders– Business/ community/ landowners– Adelaide Hills Regional Development Board– Mount Barker Council.

We aim to meet or exceed the highest environmental standards.We aim to engage and contribute to the life of the Kanmantoo communities– Sport– Education– Employment.

Result to build community’s understanding, mutual respect and support for Hillgrove’s work.

16.

KANMANTOOKey DFS Consultants

17.

KANMANTOOConceptual Flow Chart

2006 2007 2008 2009

Pre-feasibility

Metallurgy

Permitting

Drilling

Definitive Feasibility Study

Construction & Development

Mining

18.

KANMANTOONear-mine Exploration

Exploration and resource definition drilling is ongoing and will be particularly concentrated during the Definitive Feasibility Study (DFS) which commenced in December 2006

Recent drilling intersected high-grade zones of copper mineralisationand highlighted new zones not incorporated in the latest resource or the PFS economic model

The programme confirmed the prospectivity of the area and potential for a mineralised system of considerable size

Both the resource tonnage and the confidence level have increased

Given the substantial gaps and possible strike extensions targeted for drilling, there is excellent potential for further significant copper resource growth in and around the old open cut

19.

KANMANTOOMine CorridorIP with Drillingand Ore Blocks

20.

KANMANTOORegional Magnetics

Regional exploration has recommenced, reconnaissance of all new magnetic targets underway

12 major magnetic targets outside Mine Corridor

21.

KANMANTOOWheal Ellen Area – Magnetics

Angas Deposit on same stratigraphic contact about 10km to the south and is a discrete magnetic high

Series of magnetic targets have been identified along these targets

These targets are largely unexplored with a number of targets with historic workings

Rock chips up to 24g/t gold, 147g/t silver, 18% lead and 21% zinc

22.

ALFORD PROJECTSummary – Similarities to Tennant Creek and Rum Jungle

Past drilling has identified significant widths of copper mineralisation associated with haematite alteration including 76m at 0.95% Copper including 12m at 2.18% Copper in ALDDH001

Key similarities to Iron-Oxide-Copper-Gold (IOCG) deposits such as Olympic Dam, Prominent Hill and Carrapateena – similar granites/age, copper/uranium mineralisation present, on same linement/rim fault system, presence of basement highs

Copper mineralisation associated with a number of discrete gravity features, a key association for IOCG deposits

Uranium potential with past drilling returning excellent first pass with assay results up to 290ppm Uranium

Past exploration has defined a series of copper anomalies along the Alford Shear Zone for over 7km in strike

2007 exploration program underway which will include calcrete sampling, aircore drilling, diamond drilling and assaying of past work for uranium

23.

ALFORD PROJECTInterpreted Geology

Highlights

75m @ 0.95% copper and4m @ 290ppm uranium

ALFORD PROJECTMay Drilling

Pyrite with lesser

Chalcopyrite

Pyrite with lesser

Chalcopyrite

Brecciated and haematite altered siltstones with common pyrite and lesser chalcopyrite ALDDH008 138.6 – 143m

Strongly brecciatedand haematite altered siltstones ALDDH008 27.9 –32.5m

25.

INTERMET RESOURCESInvestment Summary

Issued capital – 40m shares and 31m @ 20c (10m expiry 30/11/07, 21m expiry 24/5/10)

Cash 31 December 2006 of $3 million

Tightly held structure – major shareholders Hillgrove 31% and Sempra Metals & Concentrates 8%

Specialist Gawler Craton explorer with over 8,500km² under title

World class team of exploration professionals – Managing Director, Gary Ferris, and Director, Dr Neville Alley

Very active 2007 programme targeting company makers

26.

Detailed understanding of the tectonic history and mineral systems on the Gawler Craton

Technical expertise – Exploration team has extensive experience on the Gawler Craton and gold systems

Uranium expertise – strategic JV’s with proven uranium explorers – UEQ, Mega Uranium

Association with Hillgrove Resources – keeps costs down and provides access to drill rigs

Concurrent multiple exploration programmes – constant stream of results due in 2007

JV’s and cash leverage ITT’s probability of success

INTERMET RESOURCESCompetitive Advantage

27.

INTERMET RESOURCESITT Project Matrix

Project Tenement No. Participants JV Commitment ($) Exploration Model

EL3466 ITT 100% • IOCG • Base metals related to Hiltaba Suite magmatic event • Orogenic gold

EL3467 ITT and Hindmarsh Resources

$600,00 over 4 years to get 80% interest in Unconformity-related uranium only

• Unconformity-related uranium • Epithermal gold and base metals

Lake Gilles

ELA 537/06 ITT 100% • Base metals related to Hiltaba Suite magmatic even • Orogenic gold

EL3314, ELA 230/06 ITT and WCP Uranium

$1.5M over 4 years to get 80% interest in uranium • Palaeochannel hosted uranium

EL3314 ITT 100% • Archaean greenstone hosted base metals, nickel and gold mineralisation

Coulta

ELA 230/06 ITT 100% • Proterozoic “Broken Hill” style base metals EL3462, EL3463 ITT and Uranium

Equities Ltd $2M over 5 years to earn 80% interest in Palaeochannel and unconformity related uranium

• Palaeochannel hosted and unconformity related uranium

EL3462, EL3463 ITT and Silver Swan Group

$500,000 over 4 years to get 80% interest in all minerals excluding palaeochannel hosted and unconformity related uranium

• IOCG • Orogenic gold • Archaean greenstone hosted base metals and gold

Cocata

ELA 690/06 ITT 100% • Unconformity related uranium • Archaean greenstone hosted base metals and gold

EL3313, EL3323, ELA 379/06

ITT and Uranium Equities Ltd

$1M over 5 years to earn 80% interest in uranium • Palaeochannel hosted uranium Watson

EL3313, EL3323 ITT and Silver Swan Group

$500,000 over 4 years to get 80% interest in all minerals excluding uranium

• Archaean hosted gold and base metals • Proterozoic intrusive hosted nickel

Southern Gawler Ranges

EL3461, EL3598, EL3612

ITT 100% • IOCG • Orogenic gold

Garford North ELA 683/06 ITT 100% • Archaean gold (similar to Challenger Gold Mine) • Archaean nickel and base metals • ?IOCG

28.

INTERMET RESOURCESLake Gilles Project – IOCG Ingredients

Important “ingredients for IOCG style deposits”

Temporal association of Cu-Au mineralisation with magmatism of the Hiltaba Suite and Gawler Range Volcanics – Lake Gilles, Southern GRV, Cocata Projects

Importance of breccias in localising mineralisation – Lake Gilles

A high crustal level of Fe-oxide and Cu-Au-U formation – Lake Gilles, S GRV Projects

A strong brittle structural control on the location of breccias and ore –LG, Cocata, SGRV

Importance of hematite accompanying higher grade Cu-Au-U mineralisation – LG, SGRV

The roles of two fluids of contrasting physico-chemical properties, one of which is meteroic in origin – LG, S GRV

29.

EASTERN STAR GAS LTDCompany Overview

Principal Activities

Eastern Star Gas Ltd (ESG) is focused on gas exploration and production from both coal seam gas (CSG) and conventional natural reservoirs in eastern Australia. ESG also owns and operates a gas fired power station.

The Company holds interests in several licences in Victoria and New South Wales and will utilise farm-outs to conduct exploration drilling.

Share price:

Market cap:

Shares on issue:

Major Shareholders:

$0.31-47

$240 million

416m ordinary shares118m restricted shares

Hillgrove Resources 19.9%Directors 18%Ingalls and Snyder 8%

Financial Snapshot

PEL 238 CSG (65%):

PEL 238 Conventional (100%):

Wilga Power Station:

Exploration Upside:

Victoria:

Key Assets

17 TCF gas resource

1.4 TCF unrisked gas in place

11 MW expandable to 40MW

PELs 6, 8, 422, 424 (Oil & Gas)

Coal Seam Gas (Brown Coal)

Key Milestone Summary

An integrated natural gas and electricity company with very large gas resource potentialAn integrated natural gas and electricity company with very large gas resource potential

Q1 - 2007:

Q3 - 2007:

Q4 - 2007:

2009:

MacGen MOU to supply 500PJ

50-100 PJ of 2P reserves certification

Expand to 200 PJ of 2P gas reserves

Expand to 600 PJ of 2Pgas reserves

30.

EASTERN STAR GAS LTDKey Assets

ESG Permit Locations – NSW and VictoriaESG Permit Locations – NSW and Victoria

NSW is a net importer of gasESG has a large resource of both coal seam (CSG) and conventionally reservoired gas in Eastern AustraliaGrowing demand for gas-fired electricity due to greenhouse concernsVery well positioned to capture a significant portion of this new gas market opportunity

Key AssetsKey Assets

PEL 238 CSG (65%) 17 TCF gas resource

PEL 238 Conventional (100%)

1.4 TCF* unrisked gas in place

Wilga Power Station 11 MW expandable to 40MW

Exploration Upside PELs 6, 8, 422, 424 (Oil & Conventional Gas)

Victoria (brown coal) Coal Seam Gas* Internal Estimate.

31.

EASTERN STAR GAS LTDMarket OpportunitiesA phased approach has provided ESG with the enviable position of being able to match field development

with market growth, and market development initiatives are in parallel with reserves certification

Immediate Opportunity Short – Medium Term

Electricity Generation

Regional Opportunities

Ultimate Objective

Existing infrastructure facilitates progressive market development with the ultimate aim of gas to Newcastle and Sydney

Ability to supply 11MW WilgaPark Power Station

BayswaterPower Station

MOU signed with MacGenfor 500PJ to BayswaterPower StationLocal base and peak period electricity generation

Regional power generation at Gunnedah, Tamworth, Dubbo etc.Narrabri, Gunnedah, Tamworth & Dubbo industrial sales and gas distribution

125km connect to existing pipelines250km to connect to MacGen

Gas requirement is 2.75 Tj/dExpansion of Wilga Park power station to 40 MWProduction test gas used to avoid flaring100+ MW peak load potential

32.

EASTERN STAR GAS LTDMacquarie Generation MOU

Macquarie Generation is Australia’s largest electricity generator producing the equivalent of 40% of NSW’selectricity requirementsMOU agreement provides ESG with a potential supply deal for:

500PJ gas for Bayswater Power Station (2,640MW capacity)Potential for an additional supply to Liddell Power Station (2,000MW capacity)

Initial gas sales target 2009/2010250km high pressure gas transmission pipeline linking Narrabri to the Bayswater power stationNSW’s first major indigenous supply of natural gas providing a 25% increase in NSW’s gas consumption120km from Newcastle providing opportunity for further gas sales (Newcastle/Sydney/Wollongong)Environmental benefits will also be significant

MOU implies significant confidence in ESG achieving 2P reserves certificationMOU implies significant confidence in ESG achieving 2P reserves certification

33.

EASTERN STAR GAS LTDGas Reserves Program

Focus on PEL 238 CSG drilling program to achieve commercial gas flow rates and reserves certification targets:

– Q3 2007: 50-100PJ– Q4 2007: 200PJ– 2009: 600PJ

Gas pipeline from Bohena project to the Wilga Park power stationFarm out exploration drilling in conventional oil and gas licenses

Bohena Seam – Gas Reserves Certification ProgramBohena Seam – Gas Reserves Certification Program Work Program in PlanWork Program in Plan

Achievement of initial 2P gas reserve certification will de-risk the PEL 238 project

Achievement of initial 2P gas reserve certification will de-risk the PEL 238 project

BibblewindiProduction Pilot

• 9 well pilot• Well interference - strong• Gas flow rates increasing• Continue dewatering• 3rd Quarter, 2007 2P gas

reserve certification target

Bohena Production Pilot• 3 wells in production• Aggregate gas flow rate –

237 mcfd and increasing• Continued dewatering

Bohena Project area covers 265kms2 within PEL 238 (9,100kms2) and contains up to 3,700PJ GIP

Core Hole Drilling Program4 core holes drilled to increase 2P gas reserve to 200 PJ by confirming:

• Coal thickness• Coal permeability• Gas content• Gas composition

34.

EASTERN STAR GAS LTDGrowth Potential Aligned to Development Strategy

2006 2007 2008 2009 2010PEL 238 Coal Seam Gas ProgramPEL 238 Coal Seam Gas Program

Confined production pilot

Confined production pilot

Unconfined production pilot

Unconfined production pilot

Gas for power stations in Tamworth, Dubbo and

Gunnedah

Gas for power stations in Tamworth, Dubbo and

Gunnedah

Sales to Newcastle /

Sydney / Wollongong

Core hole drilling program

Core hole drilling program

Dril

ling

Dril

ling

Cer

tific

atio

nC

ertif

icat

ion

Infr

astr

uctu

reIn

fras

truc

ture

Mar

ketin

gM

arke

ting

Reserves Certification (2P)Reserves Certification (2P)

100PJ 200PJ 600PJ 1200PJ

Gas pipeline to Wilga Park power station Gas pipeline to Wilga Park power station

Gas supply to Narrabri RegionGas supply to

Narrabri RegionMOU with MacGen for potential Gas Supply

MOU with MacGen for potential Gas Supply

Regional Opportunities for further gas sales

Regional Opportunities for further gas sales

250km gas pipeline to MacGen power station 250km gas pipeline to MacGen power station

Pipeline to Newcastle /

Sydney / Wollongong

Production Pilots & Core HolesProduction Pilots & Core Holes

Commence Gas sales to MacGen

Commence Gas sales to MacGen

Gas pipeline to MacGen

Gas pipeline to MacGen

Expand Wilga Park power station to 40MW capacity

Expand Wilga Park power station to 40MW capacity

35.

HGO holds a 25% fully diluted strategic stake in ESG

ESG poised to be the key player in NSW gas production

Context of lowered green house gas emissions from gas generated electricity sets scene for use in electricity generation

Improving gas prices with demise of PNG gas pipeline

Majors seeking to secure Australian onshore gas resources

ESG has 65% of Gunnedah Gas Project and unassailable operatorship

Clear value adding route: gas production → reserves → contracts →cashflows

Value to Hillgrove of ESG shares/ notes/ options– @ 45cps = $68 million– @ 50cps = $76 million– @ 70cps = $108 million

EASTERN STAR GAS LTDSummary

36.

DirectorsDean Brown, Chairman

– Former Premier of South AustraliaDavid Archer, Managing Director

– Founded Savage Resources and PowerTel LtdJohn Quirke, Non-executive Director

– Former Senator, SA Member of ParliamentRon Belz, Non-executive Director

– Certified practicing Accountant

Senior StaffIan Kirkham, Company Secretary and CFO

– Previously CFO of a number of Australian mining companiesDale Ferguson, General Manager – Exploration & Operations

– Involved in discovery of a number of Australian depositsMarty Adams, Project Manager – Kanmantoo

– Mining Engineer with 20 years’ experience including Newmont (Woodcutters) and as General Manager at Tennant Creek for Normandy

Richard Bradey, Mine Geologist – Kanmantoo– 20 years base metal mine experience – Mt. Isa, Mt. Gordon, Benambra and Woodcutters

HILLGROVE Key People

37.

ASX : HGO

Ordinary Shares HGO 242.1 million

Options – 30 cents 2009 Unlisted 12.5 million

Options – other expiry - ESOP Unlisted 7.9 million

Options – other expiry - Sempra Unlisted 18.0 million

Market Cap (@ 38 cents per share) $91.0 million

Cash (March 2007) plus Sempra cash ~$10.0 million

NPAT year ended 31 January 2007 $10.8 million

Liquidity $3.7 million per month

HILLGROVE Investment Metrics

38.

SHAREHOLDERSTop 35%

SegaInterSettle 8.5% Swiss Nominee

Archer Group 7.6% Managing Director

Sempra Metals 7.0% Fortune 500, American energy & Concentrates and metals trading group

Anglo Pacific 3.5% London based investment fund

Colonial Global 3.5% Large Australian pensions institution

Macquarie Bank 3.1% Australia’s largest investment bank

Merrill Lynch 2.2% London based investment fund

DISCLAIMERThis presentation may contain forward looking statements that are subject to risk factors associated with copper, gold and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates. Investors should undertake their own analysis and obtain independent advice before investing in HGO shares.All references to dollars, cents or $ in this presentation refer to Australian currency, unless otherwise stated.