Larvotto lands Glencore offtake deal for NSW gold

Larvotto Resources has added another heavyweight name to its growing list of project partners, locking in global commodities powerhouse Glencore in a gold purchase agreement from its Hillgrove antimony-gold project in New South Wales.

The deal will see the global commodities dealer take all of the company’s gold concentrate produced during the first seven years of mining, with an expected annual offtake of about 15,000 dry metric tonnes of concentrate.

The offtake arrangement represents a serious coup for the aspiring producer, complementing a previously announced offtake deal for its antimony concentrate with UK-based trading house Wogen Resources. With pathways to revenue for its two primary products now secure, Larvotto has significantly de-risked its run into production, which management says remains on time and on budget for commissioning in the next three months.

Under the terms of the agreement, Glencore will be responsible for all logistics from the mine to the final customer. Larvotto will be paid based on the London Bullion Market Association gold price.

The company’s previous deal with Wogen not only locked in a buyer for its antimony but also came with a handy US$4 million prepayment facility, signalling early commercial confidence in the project.

The Hillgrove project is also underpinned by a compelling 2025 definitive feasibility study, which outlined an eight-year mine life based on an ore reserve of 606,000 ounces grading 6 grams per tonne gold equivalent.

Importantly, the development benefits from more than $150 million worth of existing processing infrastructure, including power, water and a partially developed underground network, helping to keep pre-production capital costs to a relatively modest $133 million.

The study forecasts average annual production of 85,710 ounces of gold equivalent, comprising about 40,500 ounces of gold and 4878 tonnes of antimony. Using conservative commodity price assumptions of US$2850 (A$4057) per ounce gold and US$41,000 (A$58,371) per tonne antimony, the project generates a robust post-tax net present value of $694 million and an eye-catching payback period of just 11 months.

And on the ground, Larvotto is already moving dirt. The company recently delivered its first batch of development ore from the Metz underground mine to the surface stockpiles at Hillgrove. Management says the Metz deposit is expected to provide the bulk of the ore feed for the operation over the first 18 months of production.

Larvotto Resources managing director Ron Heeks said: “As we move closer to first production at Hillgrove, securing a globally recognised offtake partner for our gold concentrate is another important milestone in the transition from development to operations.”

Perhaps the most remarkable part of the Larvotto story is the deal that got it all started. The company picked up the high-grade Hillgrove project in December 2023 for just $8 million, comprising $3M in cash and a $5M environmental bond.

At the time of the acquisition, Larvotto’s share price was hovering around just 7c, giving it a market capitalisation of less than $20M.

Fast forward to today, and the company’s share price is hovering at $1.33, pushing its market cap towards an eye-watering $700M, having peaked at $1.67 earlier this year with a market cap just shy of $900M in what has been a spectacular ride for the Perth-based developer.

With offtake agreements for its two key products now signed, sealed and delivered with major global players, Larvotto has cleared a massive commercial hurdle on its path to production. The market will no doubt be watching to see whether the company can now execute its plans to bring one of Australia’s most significant critical mineral and gold projects into production.

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