Larvotto Resources has pulled the trigger by exercising an option over the historic Blockade copper mine near Mount Isa in Queensland after due diligence drilling confirmed broad copper mineralisation beneath the old open pit.
The company initially secured the exclusive option from private company Kilo Copper in December last year. Under the terms of the agreement, Larvotto now has the exclusive right to explore for, develop and mine copper on the granted mining lease. In return, it will issue Kilo Copper with $400,000 worth of Larvotto shares, calculated using the 12-day volume-weighted average price (VWAP) prior to the option notice.
Larvotto also has the option to buy 100 per cent of the mining lease at any time for $1 million in cash, shares, or a mix of both. If ore is produced from the lease, a deferred consideration would also be payable, capped at $10 million.
The company says its eight-hole, 1330-metre reverse circulation program has validated historical results and shown that mineralisation remains open down-dip and down-plunge.
Best results from the due diligence drilling included one hole under the historic open pit, which intersected a convincing run of 31m assaying 1.16 per cent copper from 63m, featuring 8m going 1.86 per cent from 78m and a shallower 5-metre hit grading 1.3 per cent copper from 53m.
A second hole, 150m southeast and along strike from the first drillhole, also beneath the old pit, bored through 4m at 1.65 per cent copper from 85m.
Larvotto says high-grade copper of up to 4.08 per cent, with associated cobalt values up to 0.14 per cent, was also intersected in the drilling, confirming higher-grade zones within the broader mineralised system.
Blockade's 152.7-hectare mining lease slots neatly into Larvotto's growing Mt Isa copper portfolio, 41 kilometres east-northeast of Australia's most famous copper mining centre.
The company laid the foundations of its regional landholding in 2020 with the acquisition of Minotaur Resources' Mt Isa project before expanding the footprint in 2021 through a bargain $1 million deal with Rio Tinto.
The old operation has a long history of small-scale production, first supplying high-silica flux material to the Mount Isa smelter before later churning out high-grade copper ore in its own right.
Larvotto Resources managing director Ron Heeks said: "Blockade is a cornerstone development for our wider Mount Isa copper strategy; a granted mining lease with a history of production, high-grade mineralisation confirmed to be open along strike and down dip, sitting squarely within our existing tenure. Larvotto now has a proven record to advance projects quickly towards development as we have done with Hillgrove, and we hope to replicate this at Blockade.”
The option exercise brings another copper pathway into play as part of Larvotto’s fast-growing Queensland strategy, which was given a major lift last month when the company struck a binding deal to acquire Hammer Metals and its Mount Isa project portfolio.
Straight off the bat, the planned Hammer acquisition would bring in a resource base of more than 530,000 tonnes of copper equivalent metal across Hammer’s assets. These include the Kalman, Jubilee, Overlander, Elaine and Lakeview projects, with the first three carrying a combined endowment of at least 448,000 tonnes of copper equivalent.
Hammer’s ground, including those projects, is either surrounded by Larvotto’s principal block of ground or sits within a 23km to 109km radius of it, mostly to the south and southeast.
The Queensland copper strategy has been backed by a $15 million strategic placement to Glencore. It will run in parallel with Larvotto’s planned start of antimony-gold production at Hillgrove in New South Wales next month, giving the company a potential funding leg-up as it pushes its Mount Isa copper ambitions forward.
Glencore acquired Mount Isa Mines in 2013 and while it ceased underground operations at Mount Isa in July last year, it continues to operate the Mount Isa copper smelter and Townsville copper refinery. In October, the federal and Queensland governments agreed to provide up to $600 million over three years to support the continued operation of both facilities.
Larvotto’s immediate plans for the Blockade ground include resource definition and step-out drilling in the current quarter, followed by a maiden mineral resource estimate, a scoping study, permitting work and processing and haulage pathway assessments tied to existing Mount Isa infrastructure.
If the company can turn the old Blockade mine into a modern restart story, the operation could become an early building block in its planned broader Mount Isa copper hub-and-spoke model at a time when the critical red metal is still carrying plenty of market heat.
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By Doug Bright
