Morning everyone, and thanks James. It's always interesting, being the first presenter up on the second day at noon. Just wondering how many people are going to turn up. I do thank you all for getting up early, and I do thank you for coming and listening because I do believe that we have a compelling story and a compelling message for people to listen to. We are a copper producer in South Australia. We operate in the Tier 1 jurisdiction, and our vision is actually simple: to build Australia's next mid-tier multi-asset copper producer. One that generates cash today, one that has multiple organic pathways to growth, and multiple catalysts to have near-term shareholder returns. Copper is the cornerstone of the world decarbonization, electrification, and infrastructure build. Hillgrove is one of the few ASX listed companies producing into this thematic today.
We're not just a drill hole, we're not just a promise, we're actually producing copper, we're producing copper concentrate to the world. I'll leave that one for you to read at your leisure. Let's start with a quick snapshot. We own 100% of the Kanmantoo Copper-Gold Mine, which is at the Kanmantoo location, about 55 kilometers just outside the city of Adelaide. Previously operated as an open pit, in 2024 we restarted production underground and are now shipping copper concentrate into the world market. We have $18 million of franking credits and $280 million of income tax losses that are available for us into the future. A market capitalization that we believe does not reflect the true value or potential of the business today or with the growth opportunities that we have in front of us.
An EV/EBITDA ratio of only 4x our 2024 cash flow, which was a year of commissioning and growth. I believe that we have a compelling story. This slide is a good summary, I believe, on our vision and where we want to get to. The first building block is well known to everybody, the global copper thematic, which I'll touch on on the next slide. Secondly, we're already generating cash. We're not just pitching an idea here. We are not three years away from production. We are producing copper, we're producing revenues, and we've got copper concentrate in trucks going to the port and going out into the world. We also have a 1.4 million tonne per annum processing facility. Thirdly, we expect the market to rerate us in the near term. This will be on the back of us delivering our plan.
With this, our comparative matrix should adjust accordingly, closer to being in line with our peers, especially considering we are a copper producer with potential upside and future conversion of resource. Finally, leveraging the existing assets we have and using the platform of Kanmantoo, we can actually grow the company into the future. With respect to the world copper thematic, copper is central, as I mentioned, to our global push to decarbonization, with the demand across both renewable energies, EV, and power. According to Wood Mackenzie, by 2040, we need an extra 1 million tonnes of copper just to meet the solar and wind. According to Wood Mackenzie as well, if EVs take up a 45% uptake, we need an extra 3.3 million tonnes of copper by 2040. That's a 17% increase in world production from today.
To put this challenge into perspective, we're going to need to produce as much copper in the next 30 years as we have over the last 5,000 years to deliver the growth of what we need to grow. When you put that from a drill hole to a producing mine, it takes around 15 to 20 years, t here is a structural undersupply coming into the world from copper, and the bullish price will rise. That's why I believe it's an exceptional time to grow an Australian copper business, and Hillgrove is ideally positioned to capitalize into this copper era. Just as an example, you see what's happening in Australia. We've had OZ, we've had Rex with acquisitions. We've got acquisitions in progress. We've got MACH, we've got Xanadu, we've got New World. You've got to ask yourself, why is this occurring?
Australian copper companies are in high demand, and there's a reason. All the fundamental copper macroeconomics in the world are sound, and there's a reducing number of Australian listed copper companies. At Kanmantoo, we've laid the foundation. We're producing copper, generating cash flow, but we're not just stopping there. We're constantly looking for ways of how we can improve. First off the rank was the Newgen Acceleration Project, which brings another deposit online. You'll see through 2026 that our production increases by 25%, and our cost from milling and processing will reduce by 15%- 20% because of the scale. We've broken ground at Newgen Decline. We're expecting early production in the next six months. We're nearly there. Now we've turned our mind to the next deposit we can bring online. Resource drilling is underway at Ballantyne, Critchlea, and Cavanagh, and into Emily Star.
This is actually to bring the next deposit online after we've got Newgen up and running. We've started drilling the first hole into Ballantyne, and we're planning to drill the next hole into Emily Star this quarter. Look out for the results. All this builds on our existing infrastructure, a 3.6 million tonne per annum plant that we're only utilizing for 40% of the time. We don't have to spend one cent of capital to actually put any additional tonnes that we find and bring into the Kanmantoo plant. We have the capacity to actually process it. 2025 was always going to be a year of two halves for us to reach guidance. We are still growing the footprint of the mine at Kanmantoo. As this increases, our consistency and financial metrics will all improve.
In the first half of the year, the operation has delivered an operating cash flow of $19.1 million, and we've also invested $17.7 million in capital to grow the development footprint. As of the 1st of June, we had 11.5 kilometers of development underground, and we had 470,000 tonnes of developed stope stocks. Pretty impressive when you think that we've only been going for just on 18 months. I can't actually stress from an operational perspective the magnitude of what Newgen does for us. Opening up Newgen, and when the decline breaks through, will not only bring another ore body online, it will deconstrain the mine. It's a pivotal moment to actually improving our efficiencies and our effectiveness from a production perspective. It's a big turn for us from now to the future.
In addition, our costs will actually start to reduce in the next two to three months as we demobilize the development contractor, and we start to bring into effect the renegotiated contracts we have from long-term suppliers. They're all in progress. As our business matures, you'll see our costs start to decrease and our production start to increase. Now onto the fourth building block, that being growth, organic and beyond. To start with, we are fortunate to have a number of opportunities on the mining list, as well as within 10 kilometers of the processing plant. We believe that we're on the cusp at Kanmantoo to get the Kanmantoo operation humming. We're about to complete the execution of step one in the organic growth, which is increasing our production rate and utilizing some of that installed capacity in the processing plant.
Due to this, organic growth is actually the easiest path for us. We are quite fortunate that we have the geology that will allow us and the opportunity for that organic growth. We know the geology. We have a sound Mineral Resource and Ore Reserve, which will be updated next quarter for our next annual update of our Ore Reserves and resources. We do think this is just the beginning. We have an Exploration target, which is on the right-hand side of that picture, 25 million- 40 million tonnes at 0.7%- 1.4% copper and w e're drilling 20,000 meters of exploration drilling this year to convert that into a possible resource. The organic growth is actually quite simple.
Drill targets within trucking distance of our plant, a plant that has capacity because it's underutilized, a rail corridor to transport further afield potentials, and a growth and a platform to grow without greenfield financial or operational risk. In conclusion, Hillgrove Resources offers a rare, near-term leveraged investment opportunity in the copper sector. With production underway, significant exploration upside, and high-quality infrastructure in place, available processing capacity combined with the company's strategic vision focused on operational excellence, disciplined growth, and capital efficiency, Hillgrove is one of the few ASX-listed companies positioned to benefit immediately from the rising demand for copper, driven from the global electrification push. With a current EV/EBITDA ratio reflecting 2024 cash flow, a year of low production due to mine commissioning, I believe we're a bargain.
As we continue to deliver on our key milestones, including the resource reserve, growth, and production scale upscale, Hillgrove is due for a rerate in line with our intrinsic value and the organic growth potential. All this with an asset located in a Tier 1 jurisdiction and with the world copper market entering a booming supply-demand deficit, we are ready to deliver into that marketplace. I'd like to thank you for listening. Thank you for turning up first up on Thursday morning, and please come and say ciao and besoe in the booth through the day if you want to ask any more questions. Thanks a lot.