Larvotto study signals huge $694M earn for NSW gold-antimony mine
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 project has a long way to go to reach its full potential. This DFS is stage one in that process.'
Larvotto Resources managing director Ron Heeks
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.
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