ASX-listed Larvotto Resources on Friday announced the “transformational” acquisition of the Hillgrove gold and antimony project, in New South Wales.
The company entered into a binding term sheet with the administrators of former ASX-listed minerals explorer Red River Resources to acquire the mine.
MD Ron Heeks said the unique nature of the strategic acquisition of the Hillgrove project had moved Larvotto into a new league.
“After an intense few months of due diligence and negotiations with the administrators of Red River, we have achieved what no exploration program could ever have done – in one swoop, we have added 1.4-million ounces of high-grade JORC gold-equivalent ounces for the purchase price of under $6/oz (after NSW government environmental bonds).
“This is exceptional value for shareholders plus we have joined the exclusive club of high-grade one-million-ounce-plus explorers with growing exposure to critical minerals.
“Not many junior companies get the chance to move up the resource curve so rapidly and cost-effectively,” said Heeks.
Hillgrove is the biggest antimony resource in Australia and is ranked in the top ten in the world, making it a strategically significant deposit. Antimony is a critical mineral in multiple countries, including the US and Australia.
Hillgrove has not operated continuously at full capacity since 2016 when the antimony price collapsed, besides from a brief run by Red River in 2021.
Consideration for the acquisition comprises a A$3-million purchase price and about A$5-million for the replacement of environment bonds.
Larvotto will fund the deal by issuing A$7.6-million in shares, including a A$4.9-million placement and further issues of shares to Trafigura to the value of A$2.5-million. It also plans a fully underwritten nonrenounceble rights issue to eligible shareholders of A$2.7-million on an one-for-two basis at A$0.07 a share.