Adding to Hillgrove’s credentials is an economic engine that is already purring under the bonnet.
A definitive feasibility study released in May painted a glowing picture for the project confirming it as a technically strong, high-margin operation with serious financial clout.
The numbers were eye-catching. The study pointed to a post-tax net present value (NPV) of $694 million using an 8 discount rate, annual EBITDA of $251 million and free cash flow of $128 million a year over an 8.2-year mine life. Those figures were based on very conservative prices of US$2850 (A$4301) per ounce for gold and US$41,000 (A$62,000) per tonne for antimony.
However, when the company updated the model to reflect spot prices of US$3500 (A$5300) for gold and US$60,000 (A$92,000) for antimony as at the date of the study in May, the numbers jumped dramatically. NPV surges to a whopping $1.269 billion, EBITDA climbs to $354 million a year and free cash flow hits $198 million a year.
One of Hillgrove’s biggest advantages is its exceptionally low cost base. The study revealed an almost unheard-of negative all-in sustaining cost of $1367 per gold-equivalent ounce, driven by strong antimony credits that more than cover the cost of gold production. At spot prices this gets even better.
That rapid payback — paired with the near-term revenue profile — means Hillgrove is shaping up as a genuine cash-flow engine, not a slow-burn development bet. And while production is within reach, the exploration upside is only just firing up too.
Multiple rigs are now tearing through Hillgrove’s broader district, punching into targets that have never seen a modern drill bit. In particular, results to date have opened up a new growth front at the Blacklode prospect, where thick, high-grade gold and antimony hits near surface could significantly expand life-of-mine metal inventories.
Throw in the Mt Isa copper-gold-cobalt project and a multi-metal and lithium play near Norseman – and Larvotto’s portfolio depth adds yet another layer missing from USAC’s pitch.
For now though, Larvotto has told its shareholders to sit tight and “take no action”.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
