Larvotto Resources (ASX: LRV) is set to fast-track the development of its Hillgrove gold-antimony mine in New South Wales after appointing a manager to crunch the numbers for a definitive feasibility study (DFS) by early next year, in a bid to start production in late 2025.
West Perth-based MACA Interquip Mintrex (MIQM) has been charged with looking after the metallurgical testing and necessary plant design modifications at Hillgrove to optimise the operation’s 500,000 tonnes per annum processing plant.
The significant infrastructure already in place at Hillgrove – with an estimated replacement value of more than $150 million – is expected to assist the accelerated timeline for delivery of the DFS in next year’s first quarter.
The project is then expected to begin production late next year, with a forecast output of 5400 tonnes of antimony – equal to 7 per cent of the metal’s global production. In addition to antimony, the project will also produce 41,000 ounces of gold as high-grade concentrate and doré gold bars.
And with the price of both metals trading at near-record prices – gold is at US$2639 (AU$3917) per ounce and antimony at US$25,000 (AU$36,500) per tonne – Larvotto’s luck seems to be running hot.
The company’s recent prefeasibility study (PFS) estimated that at current spot prices, the project would deliver a negative AU$82 per ounce all-in sustaining cost (AISC) of production to spit out an estimated EBITDA of $93 million annually and pay back the $73 million capital expenditure bill in less than a year. The numbers are made even more remarkable given that management only bought the Hillgrove gold and antimony project from administrators 10 months ago for $8 million, inclusive of a $5 million environmental bond – making it clearly one of the best deals of the year.
MIQM personnel have already been to site and are well underway in the task of providing the DFS that will allow Larvotto to commence project finance discussions and commence plant modification and mining at Hillgrove. As the majority of infrastructure required to commence production is already onsite, the DFS will take a considerably shorter time than is typical to complete.
Larvotto Resources Managing Director Ron Heeks
While the case for a rising gold price has long been established on the back of higher inflation rates, rising geopolitical risks and rising global government debt, the surge in antimony prices is somewhat more recent and exacerbated by a Chinese government decision to slap an export ban on the metal. China currently represents more than 48 per cent of global production and 63 per cent of imports into the United States, which produces none.
So, with global markets experiencing an ongoing supply shortage of antimony, Hillgrove has been perfectly positioned to fill a critical gap, while capitalising on the strong pricing environment for both key commodities.
In addition to working on the DFS, the company has also set its sights on expanding its 600,000-ounce gold equivalent resource grading 6 grams per tonne.
A drilling program, which kicked off last month following government permitting delays, has been designed to test the extent of Larvotto’s high-grade Clark Gulley deposit. Hosting 266,000 tonnes going 10.6g/t, the deposit is open in all directions, particularly at depth.
Other drilling targets include a big, untested geochemical anomaly directly south of the deposit, while the company also then intends to do more diamond drilling at Bakers Creek to zero in on the high-grade gold zone that threw out some exceptional intersections when first reported in May.
As the project progresses, Larvotto will soon start financing discussions and plant modifications. Using an experienced in-house team and MIQM’s expertise, the company now has the bit firmly between its teeth as it brings Hillgrove down the home straight to hit the finishing post as one of the biggest antimony suppliers in the world within the next 12 months.
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