Larvotto Resources has gained membership of the US Defense Industrial Base Consortium (DIBC) that provides a gateway to seek funding from and supply products to organizations associated with the US Defence Department. Larvotto says its Hillgrove project in NSW is capable of supplying 7 per cent of the world’s antimony needs, a highly sought after metal that is used in the manufacturing of ammunition amongst other things.
Larvotto has now submitted a white paper to the Department of Defence seeking funding the assist with the building of its Hillgrove mine and acceptance into the DIBC is a pre-requisite for dealing with the Department.
The US Defence department has funding mechanisms in place to help fund projects that produce strategically important materials for the US military. Whilst it does not typically buy those products directly it has a vested interest in guaranteeing their supply to either existing suppliers or friendly countries.
The DIBC was originally devised to provide a collaborative approach to strengthening and expanding the links between industrial companies and the United States Department of Defence and its Allies. By bringing together industry, academics, producers and non-traditional contractors, the purpose of the consortium is to help with fast-tracking research, development and commercialisation of technologies critical to national security.
Importantly, the group also addresses defence supply chain challenges for critical metals, particularly those whose markets are dominated by non-western countries.
To become a member, Australian entities need to obtain a NATO Commercial and Government Entity (NCAGE) code and register with the U.S. System for Award Management (SAM) to receive a Unique Entity Identifier (UEI). These steps are necessary to participate in DIBC activities and access related opportunities.
By becoming a member of the DIBC, Larvotto has significantly improved its chances of leveraging its position to secure long term supply contracts and potential funding for expansion down the road.
The game changer for the company came earlier in the year, after the Pentagon decided to expand DIBC membership for the first time to include organisations based in Australia, Canada, and the United Kingdom.
Larvotto Resources managing director Ron Heeks said: "We are delighted to be accepted into the DIBC, which reflects the global significance of our Hillgrove Antimony-Gold Project as it moves towards production. With an anticipated production of 7% of the world’s antimony supply, Hillgrove is poised to play a strategic role in addressing the critical minerals needs of the global market.”
As a future annual producer of potentially 5400 tonnes of antimony, Larvotto is now a significant piece of the puzzle in delivering the critical metal to market, particularly after China announced in August it would ban its export.
As it is with many critical metals, China holds the whip hand when it comes to the silvery-grey metal. By producing 40,000 tonnes a year, or 48 per cent of global production, it eclipses the next biggest producer – Tajikistan with 21,000 tonnes.
Since the Chinese export ban, the price of antimony has continued to climb, hitting a new all-time high a week ago of US$30,500 (AU$46,200) making Larvotto’s timing look close to perfect.
In order to fast-track development, the company recently appointed West Perth-based MACA Interquip Mintrex to complete a definitive feasibility study (DFS) by early next year and manage the plant design modifications to optimise the 500,000-tonne facility.
When Larvotto purchased the mothballed Hillgrove mine, the deal came with significant infrastructure in place that would cost more than $150 million to replace. Notably the company picked up the entire project for around $8m from administrators.
In addition to antimony the mine is also expected to produce 41,000 ounces of gold per year. A recent prefeasibility study on the project concluded it could make $93 million a year for the company in pre-tax profits against a modest capital expenditure of $73 million.
Gold is currently trading at $3960, just seven per cent shy of its all-time high and antimony hit an all-time high a week ago at AU$46,200 a tonne.
At those levels Larvotto says it can turn out a tonne of antimony for zero cost after selling the gold – in fact remarkably, it says the cost of antimony would be a negative one given the sheer value of the gold sales associated with it.
Good work if you can get it.
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By James Pearson
