KEY POINTS
- Larvotto Resources (ASX: LRV) fell about 15% to A$1.13, even after signing a major gold deal and nearing first production.
- The good news: a seven-year deal for Glencore to take all of Hillgrove’s gold concentrate (about 15,000 tonnes a year), with first production due in August. Its antimony is sold separately to Wogen.
- The catch: on the same day, Larvotto launched an all-scrip bid to acquire copper explorer Hammer Metals (ASX: HMX), issuing new shares, which made investors nervous.
- The takeaway: a strong miner close to production, but the surprise deal landed at an awkward time.
Larvotto Resources (ASX: LRV) fell about 15% this week, to A$1.13 from a A$1.33 close, even though it had just locked in a major gold deal and moved closer to first production. The short answer: the market wasn’t reacting to the good news. It was reacting to a surprise acquisition announced the same day. Here’s what happened and what it means for investors.
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Glencore Offtake De-Risks Hillgrove’s Path to Production
Larvotto signed a binding seven-year offtake agreement with commodities giant Glencore to buy all the gold concentrate from its 100%-owned Hillgrove gold-antimony project in New South Wales. That covers roughly 15,000 dry tonnes a year, priced off the London gold benchmark, with Glencore handling logistics from the mine gate.
Why does this matter? An offtake is simply a pre-agreed buyer. Locking one in with a name like Glencore removes a key question mark over how Larvotto will actually sell its product. Paired with its existing antimony offtake with Wogen Resources, which came with a US$4 million prepayment, Larvotto now has buyers secured for both of its main products. With commissioning on track for August and the first ore already hauled from the Metz underground mine, this is a genuine de-risking milestone for a company weeks from production.
Why Antimony Makes Hillgrove More Than a Gold Story
Hillgrove isn’t only a gold play. It is one of the few Western sources of antimony, a critical mineral used in defence, batteries and flame retardants. With China tightening exports and global supply running thin, management describes the market as a “perfect storm” of falling production and surging demand. In our view, that dual gold-antimony exposure, plus potential tungsten as a by-product, is what sets Larvotto apart from a plain gold developer and underpins the bull case.
So, Why Did Larvotto Shares Fall?
Here’s the catch. On the same day as the Glencore news, Larvotto paused trading for a “material acquisition”, which turned out to be an all-scrip acquisition of copper explorer Hammer Metals (ASX: HMX) in Queensland’s Mt Isa region. Alongside it, Larvotto raised A$15 million from Glencore to fast-track drilling at its Kalman and Jubilee copper targets. The concern is timing. Investors want management focused on bringing Hillgrove online, not buying a new project and issuing shares weeks before the main event. A broad gold sell-off added to the pressure, but the scale of LRV’s fall points, in our view, to company-specific nerves rather than the macro alone.
The Investor’s Takeaway for Larvotto
The bull case is intact: revenue is de-risked, production is imminent, and antimony offers a powerful tailwind. The bear case is execution. A beaten-down price reflects genuine fears that the Hammer deal will distract or dilute at the worst moment.
For investors, the pullback could be an opportunity, not a warning, but only if Larvotto delivers a clean August start-up and sensible terms on the Hammer deal. Until then, this looks like a high-conviction story carrying fresh, self-inflicted uncertainty.
The bottom line: Larvotto’s slide isn’t about the Glencore win. It’s the market questioning a surprise acquisition right before first production.
