Larvotto Resources (ASX-LRV): Unlocking the Gold and Antimony Opportunity at Hillgrove
ASX Custom Insights
Sep 13, 2024
"Gold has an intrinsic value that cannot be inflated away. It remains a store of value in turbulent times."
— Alan Greenspan
POLL
What Asset Within Larvotto Interests You The Most?
Gold
Antimony
When it comes to strategic mineral plays, Larvotto Resources Ltd (ASX: LRV) is rapidly positioning itself as a key player in both gold and antimony production. The company’s flagship Hillgrove Gold-Antimony Project, located in New South Wales, is not only Australia’s largest antimony deposit but is also sitting on a considerable gold resource.
Antimony, a critical mineral essential in solar panels, ammunition, and semiconductors, has seen its price double to over US$23,000 per tonne due to rising demand and supply constraints, most notably from China. Larvotto is tapping into this market at the right moment. With China’s recent announcement to limit exports of processed antimony, global markets are scrambling for alternative sources—a gap that Hillgrove is well-positioned to fill.
A Quick Look at the Numbers
Larvotto’s Pre-Feasibility Study, (PFS) paints an optimistic picture. The project’s Maiden Ore Reserve of 606,000 ounces of gold equivalent (AuEq) at 6.0g/t is a strong starting point. The Hillgrove project has been derisked significantly, thanks to its existing infrastructure—mining operations have already been underway at the site for over 100 years. With a CAPEX of AUD 73 million, Larvotto is targeting 80,000 ounces of gold equivalent per annum, with a project payback period of less than two years.
Even more exciting? The potential upside. At current spot prices for gold and antimony, the post-tax NPV skyrockets from AUD 157 million to AUD 383 million, and the IRR jumps from 50% to 114%. These figures highlight the project’s robust financial outlook, making it one of the more attractive investments in the ASX mineral sector.
Hillgrove: An Exploration Giant
Hillgrove’s story isn’t just about its current resources—exploration upside remains a key part of the narrative. The recent Bakers Creek drilling results are impressive. Intersections such as 31 meters at 65.8g/t Au from 244 meters depth, including 5.3 meters at 220g/t Au, highlight the untapped potential of this deposit. Furthermore, Larvotto’s exploration target of an additional 670,000 to 1,080,000 ounces of gold equivalent reinforces the growth story.
With the Clarks Gully drilling program underway, Larvotto is working on converting Inferred Mineral Resources into Ore Reserves, aiming for near-term resource upgrades that will further enhance Hillgrove’s valuation.
Why Antimony Matters
While gold is always an investor favorite, antimony is Larvotto’s secret weapon. The metal is in increasing demand due to its critical role in clean energy (particularly in enhancing solar panel efficiency) and military applications. Hillgrove’s large antimony reserves provide Larvotto with the chance to diversify its revenue streams while riding the wave of rising antimony prices.
With global supply constrained, Larvotto’s Hillgrove project offers a unique proposition: it will become Australia’s largest antimony producer and one of the world’s top 10 antimony mines, capitalizing on the current supply-demand imbalance.
Financial Backing and Path to Production
Larvotto’s recent AUD 5 million equity raise is a testament to the confidence investors have in the company’s growth trajectory. These funds will be directed toward completing the Definitive Feasibility Study (DFS) and further developing the Hillgrove project, particularly in areas like Bakers Creek and Clarks Gully.
The company is also actively seeking offtake partners for both gold and antimony concentrates, which could unlock additional funding options. With strong financials, existing infrastructure, and a compelling commodity mix, Larvotto is well on its way to bringing Hillgrove into production by early 2026.
The Risks
While Larvotto Resources Ltd has presented a promising outlook for its Hillgrove Gold-Antimony Project, several challenges could impact its progress. First, the reliance on favorable commodity prices—particularly for gold and antimony—introduces risk, as both markets are subject to volatility. Additionally, the dual focus on gold and antimony adds complexity to the project’s execution, requiring effective management of both resource extraction and market demand for antimony, which remains a niche market compared to gold. Furthermore, while the project benefits from existing infrastructure, operational challenges, cost overruns, or delays in securing offtake agreements could affect profitability and timelines. Investors should weigh these factors carefully when considering the overall potential of the project.
The Opportunity. . .
Larvotto Resources is a company with a clear path forward. Its Hillgrove project not only provides exposure to high-grade gold but also a critical mineral antimony, making it a unique dual-commodity play. The market dynamics for both are highly favorable, and with its exploration upside, Hillgrove’s story is far from fully written.
Investors looking for a near-term production asset with a solid financial foundation, combined with exposure to key strategic minerals, should keep a close eye on Larvotto Resources.
Looking for deeper insights into companies like Larvotto or a comprehensive analysis of your favourite stock, commodity, or sector?
By subscribing, you’ll gain the ability to request one custom, in-depth public article every month.
Whether it's a detailed report on a specific stock such as Larvotto, an emerging commodity, or market trends, you'll have exclusive access to professional-grade analysis which is shared publicly with other investors.
In addition, you'll gain full access to all premium features, including expert commentary, exclusive forums for discussion, and insightful reports on key ASX companies and sectors—empowering you to make well-informed investment decisions and stay ahead of the market. Elevate your investing strategy and join a community of serious and sophisticated investors today.
Type your email...
Subscribe
Leave a comment
Message ASX Custom Insights
TradingView chart
Created with TradingView
Get the full experience
Get app
Expand
(20min delay)