Larvotto Resources has received US$4 million (A$6.2m) as pre-payment from Wogan Resources’ sister and financing company Xcelsior Capital under an exclusive antimony off-take agreement with Wogan.
The agreement, signed on December 2, will see Wogen provide exclusive global off-take sales for Larvotto’s antimony concentrate produced at its Hillgrove project.
Wogen is a well-established presence in the global antimony market and a leading physical commodity trading house, via the London Metal Exchange, with operations dating back more than 50 years.
As part of what is an incredibly lucrative off-take transaction for Larvotto, Xcelsior will be issued with about 900,000 shares in Larvotto valued at about US$600,000 (A$964,188), which represents a 75 per cent premium to Larvotto’s 15-day trading volume-weighted average price.
Underscoring the significance of the deal, the combined pre-payment funding in addition to the recent tranche one placement and option exercise funds, totals some $21.3m contributing to Larvotto’s swelling bank account which now sits at about $27.5m in available cash.
Funds from tranche two of the recent placement, which will fall due following an expected extraordinary general meeting of the company to be held in January 2025, will add about another $16.7m to Larvotto’s cash position.
The company’s new partnership with Wogan represents a remarkable achievement for Larvotto as it continues to develop towards production its recently acquired Hillgrove antimony-gold project near Armidale, in New South Wales.
The additional funds from the pre-payment will be used to accelerate and increase Larvotto’s exploration in addition to finalising its definitive feasibility study and drive Hillgrove towards production.
Hillgrove contains Australia’s largest known antimony resource which is also the eighth-biggest antimony deposit globally.
The project’s current – and maiden - ore reserve is 606,000 gold equivalent (AuEq) ounces grading 6.0g/t AuEq, while the total mineral resource amounts to 1.7 million AuEq ounces at a grade of 7.4g/t AuEq.
Given Larvotto’s ongoing exploration program across multiple fronts, the current resource appears to have considerable upside, particularly in light of ongoing high antimony and gold prices, which are currently trading at $US2570 (A$4172) per ounce of gold. Antimony changing is hands at about US$38,500 ($A61,859) per tonne.
Additionally, the project’s current conceptual exploration target sits between a handy 670,000 and 1.08m AuEq ounces in a grade range between 7.4-8.46g/t AuEq.
In August this year, Larvotto delivered a compelling prefeasibility study highlighting the financial and near-term gold and antimony development potential of the project and conceived an annual production target of more than 80,000 AuEq ounces.
Wogan and Xcelsior senior staff have undertaken extensive due diligence over the project, including site visits by senior staff and other independent experts, which resulted in a strong endorsement of both the project’s quality and its potential.
Larvotto will initially produce three products from Hillgrove and will be producing gold doré bars for refining, antimony concentrate and gold concentrate.
The antimony concentrate will be sold to Wogen.
It is proposed the bars will be sold directly to a gold refinery to produce high quality 99.999 gold bars.
The gold concentrate from Hillgrove will also be sold to a separate specialist off-take company which will either sell the concentrate or, in some cases, refine the gold in-house, depending upon the selected off-take partner.
Larvotto has had a standout 2024 striking one of the most significant discoveries by an ASX-listed company this year. The company’s share price has boomed accordingly, peaking above 76c from 7c in January and this latest deal, which adds serious cash to the company’s bank balance, suggests there could be more to come in 2025.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Doug Bright
