Larvotto board rejects low-ball takeover bid

Larvotto Resources has slammed the door shut on what it called a seriously undercooked takeover offer from United States Antimony Corporation (USAC), declaring the pitch fails to reflect the size, scale and rapidly escalating value of its flagship Hillgrove antimony-gold project in NSW.

USAC, which has already picked up 10 per cent of Larvotto’s shares on market, offered an all-scrip deal of six USAC shares for every 100 Larvotto shares. The offer was initially worth almost $1.40 per Larvotto share. However, the share price has since retreated, sliding back to $1.11 as the market digested the bid’s likelihood of success. 

Management’s blunt stance should come as little surprise. In just 18 months, the company has transformed Hillgrove from a dusty brownfields project into a high-grade, western-world antimony supplier-in-waiting - fully funded, fast-tracked and now taxiing down the runway towards first production in 2026.

What makes Hillgrove so valuable is its sizable antimony inventory, which sits at 96,000 tonnes within a larger 1.7 million ounce gold equivalent resource grading 7.4 grams per tonne (g/t). 

Antimony is a critical mineral used in flame retardants, ammunition and emerging grid storage technologies. 

Non-Asian countries make up a tiny part of global production with supply alarmingly limited, particularly after China’s export ban of the silvery-grey metal 12 months ago that left western nations scrambling to shore up supply chains. As governments sharpen their incentives and industry become increasingly desperate for supply diversification, Larvotto suddenly finds itself holding a seat at a very exclusive table.

Once Hillgrove is humming at nameplate capacity, Larvotto expects to deliver roughly seven per cent of global antimony demand - a stake that transforms the company into a strategic cornerstone supplier overnight. That kind of market share is rare, valuable and fiercely coveted by governments and industry alike.

Larvotto Resources non-executive chairman Mark Tomlinson said: “The Board is confident that Larvotto’s intrinsic value and long-term growth potential significantly exceed the indicative value implied by the Offer. Hillgrove also has substantial exploration upside with the potential to extend mine life and generate strong revenues for many years to come. 

Adding to Hillgrove’s credentials is an economic engine that is already purring under the bonnet. 

A definitive feasibility study released in May painted a glowing picture for the project confirming it as a technically strong, high-margin operation with serious financial clout.

The numbers were eye-catching. The study pointed to a post-tax net present value (NPV) of $694 million using an 8 discount rate, annual EBITDA of $251 million and free cash flow of $128 million a year over an 8.2-year mine life. Those figures were based on very conservative prices of US$2850 (A$4301) per ounce for gold and US$41,000 (A$62,000) per tonne for antimony.

However, when the company updated the model to reflect spot prices of US$3500 (A$5300) for gold and US$60,000 (A$92,000) for antimony as at the date of the study in May, the numbers jumped dramatically. NPV surges to a whopping $1.269 billion, EBITDA climbs to $354 million a year and free cash flow hits $198 million a year.

One of Hillgrove’s biggest advantages is its exceptionally low cost base. The study revealed an almost unheard-of negative all-in sustaining cost of $1367 per gold-equivalent ounce, driven by strong antimony credits that more than cover the cost of gold production. At spot prices this gets even better.

That rapid payback — paired with the near-term revenue profile — means Hillgrove is shaping up as a genuine cash-flow engine, not a slow-burn development bet. And while production is within reach, the exploration upside is only just firing up too.

Multiple rigs are now tearing through Hillgrove’s broader district, punching into targets that have never seen a modern drill bit. In particular, results to date have opened up a new growth front at the Blacklode prospect, where thick, high-grade gold and antimony hits near surface could significantly expand life-of-mine metal inventories.

Throw in the Mt Isa copper-gold-cobalt project and a multi-metal and lithium play near Norseman - and Larvotto’s portfolio depth adds yet another layer missing from USAC’s pitch.

For now though, Larvotto has told its shareholders to sit tight and “take no action”.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au