Larvotto Resources has delivered a game-changing definitive feasibility study for its Hillgrove gold-antimony project, with a $694M post-tax net present value, $251M annual EBITDA and $128M in yearly free cash flow over 8.2 years. With a modest $133M capex and rapid 11-month payback, the numbers are already impressive. However, at current spot prices, NPV soars to $1.269B, the EBITDA hits $354M and free cash flow is $198M per year.
In a standout move set to transform Larvotto Resources into a major player in the global critical minerals game, the company has unveiled a stunning definitive feasibility study (DFS) for its Hillgrove antimony-gold project in New South Wales.
To paraphrase much-loved Michael Caine, the study has literally “blown the doors off” by touting an eye-popping post-tax net present value of $694 million using an 8 per cent discount rate. It also forecasts an annual EBITDA of $251M and a free cashflow of $128M after tax every year for 8.2 years.
The up-front spend net of pre-production revenue is forecast to be a modest $133M, thanks to significant existing infrastructure, including power, water and a partially developed underground network. When an assumed metal price is taken into account, the investment should be paid back in an ultra-quick 11 months.
The study assumed conservative respective gold and antimony prices of US$2850 (A$4415) per ounce and US$41,000 (A$63,514) per tonne. However, if spot prices are employed, the net present value balloons to a massive $1.269 billion with an annual EBITDA of $354M and free cashflow of $198M.
The DFS’s most startling discovery may be its all-in sustaining costs, which are forecast to come in at a jaw-dropping negative rate of $1367 per gold equivalent ounce after credits from antimony production are factored in.
Hillgrove hosts an ore reserve of 606,000 ounces grading at 6 grams per tonne (g/t) gold equivalent, with more than $150M worth of processing infrastructure already in place.
Larvotto is targeting a yearly output of 40,566 ounces of gold and 4878 tonnes of antimony from the mine. Construction of the upgraded 525,000 tonnes per annum processing plant - up from 250,000tpa - is slated to begin in the next couple of months. Larvotto expects to commission the plant and pour its first gold within 12 months.
The project is poised to be Australia’s biggest antimony producer, accounting for up to 7 per cent of global supply. It would turn Larvotto into a major supplier as Western nations scramble to secure supply chains for critical minerals after Chinese export bans last year.
Larvotto Resources managing director Ron Heeks said: “The completion of the definitive feasibility study (DFS) for the Hillgrove antimony-gold project within 18 months since Larvotto acquired the project marks a major milestone. The project has a long way to go to reach its full potential. This DFS is stage one in that process. Larvotto is focused on unlocking additional value while progressing permitting and project financing, and we look forward to bringing a critical minerals project into production at a time of exceptional market opportunity.”
As the timeline for first production nears, Larvotto is shifting gears fast at Hillgrove and pushing hard on all fronts by ramping up a surface drilling program, advancing operational readiness and progressing talks with state, federal and international governments.
Plans for the financing of pre-production capital expenditure is well in hand. The company has already locked in a seven-year offtake agreement and $6M prepayment facility with trading giant Wogen Resources. Larvotto also recently completed a $30M capital raising and is sitting pretty on $35M in the bank at the end of the March quarter.
Financing talks for the balance of the company’s funding requirements are heating up. Larvotto has so far received seven indicative term sheets covering most of the development capital and expects to finalise an agreement in the coming months, given it now has a DFS in hand.
High-grade stibnite, the principal ore mineral of antimony, retrieved from Larvotto Resources’ Hillgrove mine in New South Wales. Credit: File
Meanwhile, Larvotto is zeroing in on some serious exploration upside at Hillgrove with fresh targets and fiery assays lighting the way. The untested Garibaldi–Brackins Spur corridor is firmly in the company’s sights as a potential game-changer. It offers a wide-open shot at boosting resources beyond the current mine plan.
At the company’s Bakers Creek prospect, a recent drilling program has come in with rich grades near existing underground workings. A standout hit delivered 0.6 metres at a jaw-dropping 183g/t gold equivalent from 493m, alongside 8.3m at 10.39g/t from 408.7m.
These results follow a previous monster intercept of 31m grading 65.8g/t, confirming Bakers Creek as a prime candidate to feed high-grade, low-cost ore into early production.
Over at its Eleanora–Garibaldi project, meanwhile, Larvotto’s rigs hit more paydirt, extending known mineralisation by 120m down-dip. The best hits include 2.9m at 20.13g/t gold equivalent and 5m at 8.38g/t within a broader 20.7m zone at 3.49g/t. Garibaldi’s resource already sits at 2.35Mt at 6.6g/t gold equivalent.
In a nutshell, a substantial chunk of the Hillgrove resource remains unconverted to reserves, offering a clear opportunity for mine life expansion.
Backed by strong early financial support and a fast-moving strategy, Larvotto looks to be setting the pace for a swift transition from explorer to producer - while still leaving plenty of room for a bigger prize in the ground.
Larvotto bought Hillgrove for a mere $8m just 18 months ago. In a world hungry for gold and desperate for non-Chinese antimony, the project appears locked and loaded to deliver a huge $694M payback for Larvotto and its shareholders.
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