Barry FitzGerald: From $10m to $280m, there could be more step changes in 2025 for antimony darling Larvotto

After a run that has seen its market cap surge almost 30x in 13 months, antimony darling Larvotto Resources still has more catalysts to come.

Antimony darling Larvotto may have yet more aces up its sleeves. Pic: Supplied/Stockhead

“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

What a ride Larvotto Resources (ASX:LRV) has had in the last 13 months. What was a $10 million company is now valued by the market at $280m.

It was back in December 2023, after nine months of back and forth, that Larvotto snared ownership of the high-grade Hillgrove project near Armidale in northern NSW for the knockdown price of $8m.

It came with a 1.72 million ounce gold equivalent resource and $200m in previous investment in mine and operating infrastructure.

The previous owner, Red River Resources, was forced in to administration in 2022, not because of issues at Hillgrove with its restart plans for the historic operation, but because of  problems at its main undertaking, the troubled Thalanga zinc mine in Queensland.

Talk about Larvotto getting the timing right. As 2024 unfolded the gold price would do its thing by flirting with record levels while the antimony price would do extraordinary things thanks to the metal becoming part of China’s retaliatory measures in its tit for tat trade war with the US.

Antimony is one of those speciality metals in which China dominates supply. Long known for its fire retardant and metal hardening properties, supply/demand has become tight in recent years due to rising applications in electronics, military systems and glass for solar panels.

China announced export controls in August last year and banned exports to the US in December. What was a $US9,000/t metal at the time of Larvotto’s acquisition of Hillgrove is now a $US40,000/t-plus metal.

Needless to say that with the help of the strong gold price the project economics of a planned restart of Hillgrove in 2026 has been transformed by the China-induced price surge for antimony.

READ: Antimony’s a new market darling and its future looks bright

Step changes

So, there have been three step changes for Larvotto in its march from $10m to $260m at its mid-week share price of 64c (a 7% gain on Friday pulled its market cap higher still). They were the December 2023 project acquisition, China’s export controls on antimony in September last year, and its ban on exports to the US announced in December.

No one is quite sure of where antimony prices will pull up. What is more certain is the US and the rest of the western world are intent on creating a non-China supply chain for the increasingly critical, critical metal, and that a restarted Hillgrove, a top 10 global antimony deposit, is part of the solution.

A definitive feasibility study into an $80m restart producing an average of 80,400oz of gold equivalent (41,000oz of gold and 5,400t of antimony) in the initial seven years is due this quarter.

The DFS will be interesting reading because even at much more sedate metal price assumptions it is already clear that Hillgrove will be joining that rare breed of less than zero cost gold (equivalent) producers.

The run up in Larvotto’s market cap since it acquired Hillgrove has captured some but not all of that potential, leaving Garimpeiro to wonder if the company can achieve another step change in 2025.

Drill, baby, drill

It could well do that through the exploration drill bit. Resource growth to a hard to ignore three million ounces of gold equivalent seems possible with a concerted exploration effort in tandem with the march towards first production from the current reserve/resource base.

As it is, the company is doing just that following the recent $30m equity raising which followed on from a $6.2m antimony prepayment facility and the $8m pulled in from the conversion of options.

While some of the cash is earmarked for completion of the DFS and procuring long-lead time processing items, the bulk will be spent on expanded exploration from both surface and underground locations.

Hillgrove has a history dating back to the 1850s. But confidence is high that it has a lot more to give. That could well lead to mine life extensions and more of the super high-grade mineralisation it is known for.

It is no joke to suggest the western world will be watching, the US in particular.

The views, information, or opinions expressed in  this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.