Larvotto Resources - Fast-Tracking High-Grade Gold-Antimony Project Towards 2026 production

• Larvotto Resources acquired the Hillgrove Gold-Antimony project 7 months ago, with a 1.4 million-ounce resource at 6 g/t gold equivalent.
• The project has a maiden ore reserve of 606,000 tons at 6 g/t gold equivalent, giving a 7-year mine life producing an average of 80,400 oz gold equivalent per year.
• Hillgrove has a fully operational processing plant, 15 km of underground development already in place, and is targeting production by early 2026.
• The company has released a pre-feasibility study and is starting its definitive feasibility study and project financing in early 2025.
• Antimony prices have doubled recently, and gold hit record highs, creating favourable economics for the project. At conservative prices, the project has a 2-year payback period.

Larvotto Resources (ASX:LRV) is an Australian mining company focused on advancing the Hillgrove Gold-Antimony project in New South Wales towards production. The company acquired this advanced-stage asset 7-months ago and has rapidly progressed through key development milestones. With a sizable high-grade resource, existing infrastructure, and strong commodity price tailwinds, Larvotto Resources aims to bring Hillgrove into production by early 2026.

Advancing a High-Grade Gold-Antimony Project in Australia

The Hillgrove project is located 23 km from Armidale, a major regional centre in New South Wales with a population of 30,000. It has a long history of past production, having operated successfully as an antimony-only operation for 30 years until 2005. At that time, low antimony prices of around $5,000 per tonne led to the mine being placed on care and maintenance.

Larvotto's Managing Director Ron Heeks explained the project's recent history:

"Their predecessors were working that project through. The project cost $150 million. It has a fully operational operating plant and 15 km of underground development decline, with mains power already in place. It is very advanced."

The previous owners had been advancing Hillgrove towards production again when they encountered severe financial difficulties due to issues at another operation. Hillgrove was placed into administration, allowing Larvotto to acquire the asset.

Interview with Managing Director, Ron Heeks

Resource & Reserve

Hillgrove hosts a substantial high-grade resource, with a 1.4 million-ounce resource at 6 g/t gold equivalent. The initial reserve stands at over 600,000 tonnes at 6 g/t gold equivalent, supporting a 7-year mine life producing approximately 88,000 ounces of gold equivalent per year.

Importantly, there appears to be significant exploration upside potential. The company has outlined an additional 1 million ounces exploration target, with mineralization open at depth. Heeks highlighted:

"We've just released an exploration target of a million ounces: mineralization sitting directly below the current ore zones."

Existing Infrastructure Advantage

A key advantage of the Hillgrove project is the extensive existing infrastructure. This includes a fully operational processing plant, 15 km of underground development, grid power connection, and proximity to a major town. Heeks emphasised how this accelerates their development timeline:

"This is a unique opportunity. We've got an existing plant. We're on mains power. We're on a bitumen road from the site. The project has run, so it's permitted, and we've got underground development already in place."

This infrastructure significantly reduces the capital requirements and development timeline compared to a greenfield project. Larvotto estimates only around A$73 million will be needed to bring Hillgrove into production.

Recent Milestones & Near-Term Catalysts

Larvotto has made rapid progress since acquiring Hillgrove just 7-months ago. Key recent milestones include:

• Completing and releasing a pre-feasibility study
• Commencing a definitive feasibility study
• Advancing off-take discussions for both antimony and gold production
• Raising A$6 million to fund ongoing work

Near-term catalysts investors can look forward to include:

• Commencement of an aggressive drilling program to expand resources
• Completion of the definitive feasibility study
• Project financing arrangements
• Final permitting approvals
• Construction decision and commencement

Favorable Commodity Price Environment

Strong prices for gold and antimony support the economics of the Hillgrove project.

"Since we've had the project, the antimony price has doubled, and you know, gold hit an all-time record Aussie high a couple of days ago. We've got a record antimony price, and record gold price."

Antimony Market Dynamics

While less widely known than gold, antimony is experiencing robust demand growth, particularly in the solar panel industry.

"The growth that's been driven at the moment is predominantly due to the increase in the use of solar panels. It has become a critical ingredient within solar panels as a hardener for the glass."

Global antimony supply is also tightening, with Heeks noting:

"China's stopped exporting antimony now to the rest of the world. They're using it all internally. So there's a very strong growth market. It's about 20% year-on-year in the antimony side."

This supply-demand dynamic has significantly increased antimony prices, improving Hillgrove's economics. Importantly, Hillgrove represents a strategically valuable asset, with Heeks stating: "This is Australia's largest antimony resource, and it's the eighth largest in the world."

Project Economics & Funding

The recently completed pre-feasibility study outlined attractive project economics for Hillgrove.

"The life of mine (LOM) on our conservative numbers, and the modelling has been very conservative, is a 30% discount to the current spot, and the payback is two years. If you run everything at spot price, it puts it's a one-year payback with a spectacular IRR."

Even using conservative price assumptions well below current spot prices, the project demonstrates robust returns with a two-year payback period. This strong economic profile opens up multiple potential funding avenues for Larvotto.

Heeks outlined the options they are exploring:

"Antimony is a critical metal, so it falls into various state and federal agreements. Numerous funding mechanisms are available there because the New South Wales government and the federal government both have a very strong critical minerals and metals production push."

He added: "Because it's in Australia, you've got conventional banking debt, which you don't have, and I've been offshore for many years, so I've never had access to that sort of money. Then you've got the usual bigger players."

The relatively modest capital requirements of around A$73 million also create the potential for equity funding if market conditions are favourable.

Management Experience & Strategy

Larvotto is led by an experienced team with a track record of successfully developing mining projects. Managing Director Ron Heeks has extensive experience in the industry, including familiarity with the Hillgrove project from earlier in his career.

The company's strategy focuses on rapidly advancing Hillgrove into production to generate cash flow while maintaining an aggressive exploration program to expand the resource base. Heeks explained their approach: "History, the senior people in the company, in my history, is a project developer operator. I'm more than comfortable running a project, and if it's making good money, why not?" Heeks added:

"Exploration is a very tough game at the moment, and there's very little funding available. That will provide incredible opportunities for those of us in production and have cash flow."

This strategy of generating cash flow from a producing asset while continuing to explore and potentially make acquisitions mirrors the successful growth path of many mid-tier Australian gold producers.

Exploration Upside Potential

While bringing Hillgrove into production is the near-term focus, Larvotto sees significant exploration upside at the project. Heeks highlighted: "We see this as a 10-plus year operation. Where we sit now, we're looking at 3 million ounces easily within the field."

The company plans to maintain an aggressive drilling program to test the depth extensions of the known mineralization. Heeks noted some encouraging early results:

"We hit intersections of 200 grams and 30 meters at 2 ounces and such. Our share price doubled in a day, and we traded 40 million shares."

Drawing a comparison to another successful Australian gold-antimony project, Heeks added: "If we found another Fosterville. Would I be unhappy with that? Probably not. And we replicated some of their best results, so it's not impossible."

Larvotto Resources presents an interesting opportunity for investors seeking exposure to gold and the critical mineral antimony. The Hillgrove project offers a rare combination of high grades, existing infrastructure, and strong commodity price tailwinds. With an experienced management team rapidly advancing the asset towards production, Larvotto could be well-positioned to create significant shareholder value if it successfully executes its strategy.

The Investment Thesis for Larvotto Resources

• High-grade gold-antimony resource (6 g/t gold equivalent) with 1.4 million ounces
• Existing infrastructure significantly reduces capital requirements and development timeline
• Strong commodity price environment for both gold and antimony
• Experienced management team with a track record of project development
• Significant exploration upside potential to expand the resource base
• Strategic value as one of the world's largest antimony resources outside China
• Near-term production potential by early 2026
• Multiple potential funding avenues, including government support for critical minerals
• Attractive project economics with a 2-year payback period at conservative prices

Larvotto Resources' Hillgrove project represents a compelling opportunity in the gold and antimony space. The combination of high grades, existing infrastructure, and strong commodity prices creates the potential for robust economics and a rapid path to production. While risks remain, particularly around execution and funding, the experienced management team and strategic value of the asset provide reasons for optimism. Investors seeking exposure to precious metals and critical minerals may find Larvotto an attractive option to consider as part of a diversified portfolio. As the company advances Hillgrove towards a production decision, key catalysts like the definitive feasibility study and project financing arrangements will provide important insights into the project's ultimate potential.

Macro Thematic Analysis

The Larvotto Resources story intersects with several important macro themes in the mining and metals sector:

• Critical Minerals: Antimony's classification as a critical mineral by many governments, including the US and Australia, highlights its strategic importance. As geopolitical tensions rise and countries seek to secure supply chains for vital materials, projects like Hillgrove gain additional strategic value.
• Clean Energy Transition: The growing use of antimony in solar panels aligns with the global push towards renewable energy. As solar installations expand rapidly, demand for antimony will likely remain robust.
• Gold as a Safe Haven: With ongoing economic uncertainties and inflationary pressures, gold continues to attract investor interest as a safe-haven asset. This supports the gold component of Larvotto's production profile.
• ESG Considerations: As a potential domestic source of critical minerals, Hillgrove aligns with the increasing focus on responsible and secure supply chains. This could attract support from both governments and ESG-conscious investors.
• Mid-Tier Producer Consolidation: The strategy of generating cash flow from a producing asset to fund further growth mirrors the successful path of many Australian mid-tier gold producers. This could position Larvotto as an attractive acquisition target in the future.
• Exploration Funding Squeeze: The current challenging environment for pure exploration companies creates opportunities for producers with cash flow to acquire attractive assets at favourable valuations.