Larvotto Resources (ASX:LRV) has shaken its head at a takeover approach from minor shareholder USAC, suggesting the mooted acquisition “undervalues Larvotto” as well as the assets the company boasts in its portfolio.
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The offer was tabled on October 20 and would have seen USAC, which already carries 10% of Larvotto’s capital, pick up the rest of the company stock.
Company investors weren’t too pleased about the move when it first popped up – especially those on the HotCopper forums – and have reacted in kind now it’s been shot down: LRV shares are up +6.4% in the 30 minutes since open.
“The board is confident Larvotto’s intrinsic value and long-term potential significantly exceed the value implied by the offer,” said chairman Mark Tomlinson.
When the bid was submitted, USAC’s five-day volume-weighted average price had valued Larvotto at $1.40/share. Four days later, the explorer’s implied value had slipped slightly, to $1.11. The stock’s now sitting at $1.24 today.
Mr Tomlinson pointed to the flagship Hillgrove project in New South Wales as one of the biggest arguments for why Larvotto carries a lot more long-term value. The 254 square kilometre dig already boasts a high-grade resource, as well as near-term production potential and exploration upside in spades.
“Antimony is a critical mineral vital to energy storage, advanced technologies, and defence applications,” Mr Tomlinson added. “With Hillgrove set to become the next major Western supplier, the project holds significant strategic value as governments and industries seek to secure diversified supply chains.”
With gold and antimony prices hovering around strong highs, Larvotto expects its capital payback to be achieved within first months of production, “positioning Larvotto to deliver sustained profitability and long-term value.”
Helping matters, too, is that Larvotto hit fresh antimony and gold at the Blacklode Prospect at Hillgrove one day after the USAC approach was tabled.
Beyond today’s +6.4% pop, LRV has already been +150% higher YTD.
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