Larvotto board rejects low-ball takeover bid
Adding to Hillgrove’s reputation is an economical engine already humming under the hood.
A definitive feasibility study published in May painted a bright picture, confirming that the project was a technically sound, high-margin operation with significant financial strength.
The numbers were striking. The study cited an after-tax net present value (NPV) of $694 million, annual EBITDA of $251 million, and free cash flow of $128 million annually using a discount rate of 8 over the mine life of 8.2 years. These figures were based on fairly conservative prices of US$2850 ($4301) per ounce for gold and US$41,000 ($62,000) per tonne for antimony.
But when the company updated the model to reflect spot prices of US$3,500 ($5,300) for gold and US$60,000 ($92,000) for antimony in May, when the study was conducted, the numbers rose dramatically. Net Asset reached $1.269 billion, EBITDA reached $354 million per year, and free cash flow reached $198 million.
One of Hillgrove’s biggest advantages is its extremely low cost base. The study revealed an almost unheard of negative sustainment cost of $1367 per ounce of gold equivalent, driven by strong antimony credits that more than covered the cost of gold production. This situation gets even better with spot prices.
This rapid payback (combined with its short-term revenue profile) means Hillgrove is shaping up to be a real cash flow engine, not a slow-burning development bet. And while production remains within reach, the exploration advantage is just beginning to grow.
Scores of drill rigs now pass through the vast area of Hillgrove, hitting targets that have never seen a modern drill bit before. In particular, the results to date have opened a new growth front at the Blacklode prospect, where thick, high-quality gold and antimony strikes near the surface could significantly increase metal stocks over the life of the mine.
When you factor in the Mt Isa copper-gold-cobalt project and the multi-metal and lithium play near Norseman, Larvotto’s portfolio depth adds another layer missing from USAC’s turf.
For now, Larvotto told its shareholders to sit tight and “take no action.”
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
