Interview with Ron Heeks, Managing Director of Larvotto Resources Ltd.
Recording date: 2nd August 2024
Larvotto Resources (ASX:LRV) presents a compelling investment opportunity in the gold and critical minerals sector, centered around its recently acquired Hillgrove gold-antimony project in New South Wales, Australia. The company is rapidly advancing this high-grade asset towards production, targeting first output by early 2026.
Key Investment Highlights include:
Substantial High-Grade Resource: Hillgrove boasts a 1.5 million ounce resource at an impressive grade of 6 g/t gold equivalent. The initial reserve supports a 7-year mine life producing approximately 88,000 ounces of gold equivalent annually.
Existing Infrastructure: The project benefits from extensive existing infrastructure, including a fully operational processing plant, 15 km of underground development, and grid power connection. This significantly reduces capital requirements and accelerates the development timeline.
Strong Commodity Prices: Both gold and antimony are trading at or near record highs, enhancing project economics. Antimony, in particular, is experiencing robust demand growth, especially in the solar panel industry.
Critical Mineral Status: As Australia's largest antimony resource and the world's eighth-largest, Hillgrove holds strategic value in the critical minerals space. This could attract government support and potential off-take partners.
Attractive Economics: The pre-feasibility study demonstrates robust returns with a two-year payback period using conservative price assumptions. At current spot prices, payback could be achieved in just one year.
Experienced Management: Larvotto is led by a team with a strong track record in project development and operations, positioning them well to execute on the Hillgrove opportunity.
Exploration Upside: The company has outlined an exploration target for an additional 1 million ounces, with mineralization open at depth. This presents significant potential to extend the mine life and increase the project's value.
Near-Term Catalysts: Investors can look forward to several potential value drivers in the coming months, including the definitive feasibility study, project financing arrangements, and results from ongoing exploration programs.
Strategic Growth Potential: Larvotto's strategy of generating cash flow from Hillgrove while pursuing further exploration and potential acquisitions mirrors the successful growth path of many mid-tier Australian gold producers.
Since acquiring Hillgrove just 7 months ago, Larvotto has made rapid progress, completing a pre-feasibility study and raising A$6 million to fund ongoing work. The company is now advancing its definitive feasibility study and exploring various funding options, including potential government support for critical minerals projects.
Larvotto estimates that only around A$75 million will be needed to bring Hillgrove into production, a relatively modest sum given the existing infrastructure. This creates multiple potential funding avenues, including conventional debt, strategic partnerships, and equity.
Investors should continue to monitor the potential risks, including execution challenges in bringing the project into production, commodity price volatility (particularly in the less liquid antimony market), and potential funding risks if market conditions deteriorate.
Larvotto Resources offers investors exposure to both gold and the critical mineral antimony through a high-grade project with a clear path to near-term production. With strong commodity price tailwinds, significant exploration upside, and an experienced management team, Larvotto appears well-positioned to create substantial value as it advances Hillgrove towards production. For investors seeking exposure to the gold and critical minerals sectors, Larvotto presents an interesting opportunity to consider as part of a diversified portfolio.
View Larvotto Resources' company profile: https://www.cruxinvestor.com/companies/larvotto-resources-limited
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An insight into junior mining and opportunities to invest.
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