With its Mt Isa, Eyre and Ohakuri projects, Larvotto Resources holds significant ground in Tier 1 jurisdictions. We sat down with managing director Ron Heeks to discuss the company’s strategy.
It’s an exciting time to be a Larvotto Resources shareholder, with the company making notable progress at its trio of exploration projects in recent months.
Larvotto’s Eyre project in Western Australia, an early-stage exploration opportunity with the potential for gold, copper, nickel, lithium, rare earths and platinum group elements (PGEs) discoveries, has captured the limelight.
A lithium geochemistry campaign completed at Eyre’s Merivale prospect in early 2022 defined a lithium anomaly across 4km with a high-grade centre over 1km. The maximum grade identified was 126 parts per million (ppm) lithium.
Larvotto said the anomaly bears comparisons to Liontown Resources’ Buldania lithium deposit of 14.9 million tonnes (Mt) at 0.97 per cent lithium oxide and 44ppm tantalum oxide located immediately north of Eyre.
Following the success of the geochemistry program, Larvotto in October announced a $3.4 million cornerstone investment from Canadian institutional fund Lithium Royalty Corp. (LRC) and Waratah Capital through its Electrification and Decarbonisation Fund (E&D Fund).
The three-tiered royalty, equity and offtake (REO) agreement comprises a $700,000 cash payment to be made by LRC for a 1 per cent gross revenue royalty over lithium and all other pegmatite materials from the Eyre project.
LRC will also make a $700,000 cash payment for 20 per cent of Eyre’s life-of-mine offtake for any lithium materials (including lithium ore, concentrates, sulphates and chemicals).
Larvotto managing director Ron Heeks said for LRC and Waratah to approach Larvotto at such an early stage of Eyre’s development reflects not only the project’s potential, but also the strength of the broader lithium market.
“LRC and Waratah approached us, and it was about a four-month process between us first speaking to them (and signing the REO agreement),” Heeks told Australian Resources & Investment. “I found them very easy to work with and any issues that popped up were solved on a phone call.”
Heeks said the investment enables Larvotto to follow up the lithium anomaly, and in early December the company announced the beginning of an aircore (AC) drilling program at the Merivale prospect.
With the AC drill program, Larvotto will be aiming to refine the broad geochemical anomaly to pinpoint discrete targets for follow-up reverse circulation (RC) drilling.
Shortly after signing the REO agreement, Larvotto raised $2 million in an equity placement, which was well supported by existing shareholders. More than 11 million shares were issued at $0.18 per share.
Heeks said the placement was oversubscribed nearly four times.
The funds from the placement will be used to support exploration activities at the company’s Mt Isa copper project in Queensland and the Ohakuri gold project in New Zealand, along with working capital purposes.
The Mt Isa project spans approximately 900 square kilometres and is located in one of Australia’s – if not the world’s – most prospective regions for copper, gold and cobalt.
Given its size, proximity to Glencore’s Mt Isa Mines (MIM) operation – one of Australia’s largest copper producers – and the fact it is still largely unexplored, Mt Isa presents a compelling opportunity for Larvotto and its shareholders.
Larvotto defined a high-priority drill target at the Blue Star copper, gold and cobalt prospect within Mt Isa in May, and commenced a drill campaign aimed at Blue Star and the Gospel and Portal Creek targets in August.
“The Blue Star and Gospel area forms a particularly interesting target as it is identified below the historic workings, which have previously returned numerous significant results,” Heeks said in a statement.
“Our recent geophysics program identified a conductive zone that commences beneath these workings and plunges to the south.
“The zone is slightly offset from the old working and has not been drilled previously and may form the extension to the zones identified near surface.”
Heeks said that while drilling at Mt Isa had been affected by wet weather in 2022, Larvotto has the cash reserves to be patient, with continued exploration planned for the rest of the year and throughout 2023.
Given its proximity to the Mt Isa township, the project also has logistical advantages, which Heeks highlighted at NWR Communications’ Aussie Explorers Conference in September.
“When it (the nearby Barbara copper operation) was in production, the workforce lived in Mt Isa and bused out every day,” he said. “They have no facilities on-site, and they process through the Glencore operation.
“So if you find something out in this part of the world, you don’t have to sit around for a couple of years and raise another two or three hundred million dollars to build a production facility and a camp and everything else, which in the current climate we know is very difficult.”
The Barbara operation has been in care and maintenance since January 2021. The project was acquired by Aeris Resources after the company acquired previous owner Round Oak Minerals in July.
With copper shortages forecast amid the strengthening decarbonisation narrative, Heeks believes smaller copper mines will be critical to plugging the gap.
“The great thing about Mt Isa is that with the copper shortage that we’ve already got, and which will become more evident over the next 18 months or so, if you’re going to supply the amount of copper that’s needed in the short term, it needs to come from the smaller 50–100,000-tonne operations that you can bring online around Mt Isa very quickly,” he said.
Larvotto’s Ohakuri gold project has scale on its side. Heeks has more than 35 years’ experience in the mining industry – much of which has been in the gold and copper sector – but said he has never seen an epithermal system of this size.
There’s been 10,000m of drilling completed by previous holders of the tenure, but much of this has targeted the wrong area.
“There’s a spectacular amount of gold in the system, with very wide lower grade mineralisation over a wide area, but nobody’s been able to identify the feeder zones,” Heeks said.
“There was some geochemical prospecting completed at Ohakuri, which had to be done in creeks because most of the tenement is covered by a 5m layer of very recent ash – only a few hundred years old – from a nearby volcano.”
Heeks said company after company completed drilling to follow up the creek findings, but it was not until geophysical surveys were undertaken that it was determined previous drilling had been orientated in the wrong direction.
Larvotto completed a detailed geophysical program at Ohakuri in late October, giving the company greater direction before undertaking its next drill campaign.
“We know we’ve got a deep source and the geophysics tell us that, but we need to target these high-resistivity areas which should be quartz-rich and hopefully gold-mineralised,” Heeks said. “The Glass Earth survey, which was across a very wide space, told us the source is there but it’s too broad a target to just throw a rig on, so we are undertaking some detailed infill.”
Having recently identified its next drill targets at Ohakuri, Larvotto hopes to have a drill rig turning at the project before the end of 2022.
With three projects in Tier 1 jurisdictions, Larvotto has the assets to make a splash in the coming years. And the recent cornerstone investment and equity placement have further solidified Larvotto’s bottom line.
You can expect to hear plenty more from this emerging junior in 2023 and beyond.
This feature appeared in the December issue of Australian Resources & Investment.