Larvotto Resources (ASX:LRV) has signed a non-binding term sheet with physical commodity trading house Wogen Resources and investment manager Xcelsior Capital for a combination of a US$8 million funding package to finance the development of its Hillgrove Mine.
Xcelsior CEO Liam Farley says the Hillgrove Mine represents an opportunity to finance the development and is looking forward to working with Larvotto to progress the project’s financing.
Subject to several conditions precedent, the $16.77 million market capitalisation company will receive a US$4 million prepayment loan linked to life of mine antimony offtake and gold concentrate marketing rights granted over its Hillgrove operation.
A further US$4 million senior secured working capital loan will be provided by Xcelsior. Larvotto says this will allow it to finalise its initial ore reserve statement and complete a Bankable Feasibility Study (BFS).
Upon completing a BFS, the company will be able to proceed towards project financing and starting mining operations at Hillgrove.
Managing Director Ron Heeks says Larvotto and both Wogen and Xcelsior will move quickly to conduct due diligence and complete full-form documentation for the financing arrangement.
“For them to consider funding the development of the company is a massive endorsement of the project and leaves the company fully funded to move to project financing for Hillgrove while maintaining exploration on its other projects.”
The company recently completed its first diamond drilling program at Hillgrove, in which it reports abundant grains of visible native gold were uncovered in quartz-carbonate breccias and quartz-carbonate veins.
Larvotto completed 2,036m of drilling, which was designed to extend ‘high-grade’ mineralisation at Bakers Creek.
Heeks says diamond drilling was a priority and aimed to build on the ‘significant high-grade’ intercepts from drilling in 2022.
“Identifying visible gold in the deeper part of the Hillgrove system helps confirm that it may be geologically similar to the high-grade gold and antimony systems identified at the Costerfield Mine.
Drill core is currently being cut for assay, with initial results expected in early April and we look forward to moving closer to releasing an initial resource for Bakers Creek mineralisation.”
The company is planning to begin a drilling program at the Clarkes Gully area. Drill results from Bakers Creek and Clarkes Gully will be incorporated into an updated Mineral Resource Estimate (MRE).
It is also conducting an ore reserve estimate study, which will be used in a Preliminary Feasibility Study that is underway with metallurgical testwork, mining studies, and plant upgrade studies underway.
Hillgrove covers a 254km-square area and contains a 1.4 million ounce resource at 6.1 grams per tonne gold.
Larvotto Resources is a diversified mineral explorer focused on discoveries across Australia and its portfolio of projects that are considered prospective for copper, gold, and cobalt.
Write to Aaliyah Rogan at Mining.com.au
Images: Larvotto Resources
