ASX-listed Larvotto Resources has announced the execution of a binding offtake agreement for the sale of gold concentrate produced during the first seven years of mining at the Hillgrove project, in New South Wales, Australia, to diversified miner Glencore.

Together with the previously announced antimony concentrate offtake with Wogen Resources, the agreement completes the company's key concentrate marketing strategy for Hillgrove’s primary concentrate products, providing established pathways for the project's key revenue streams as it progresses towards first production.

“As we move closer to first production at Hillgrove, securing a globally recognised offtake partner for our gold concentrate is another important milestone in the transition from development to operations,” says Larvotto MD Ron Heeks

Given the strength in the gold price, he says, there was a high level of interest for the offtake during the tender process from all major commodity houses.

“Glencore’s global presence and established customers stood out as an ideal partner and we are looking forward to working together,” he says.

Having already partnered with Wogen for the antimony offtake from Hillgrove, Heeks says Larvotto has now established the key offtake arrangements for the project’s concentrate products which creates certainty around revenue.

Metallurgical testwork continues for the potential production of a tungsten concentrate by-product from Hillgrove, with offtake discussions expected to progress as development activities advance.

The offtake agreement executed with Glencore covers the sale of gold concentrate produced from the Hillgrove gold/antimony project during the first seven years of production, with expected yearly offtake of about 15 000 dry metric tons (dmt) of concentrate.

Gold concentrate is expected to form a significant component of Hillgrove's revenue profile alongside antimony concentrate production, with both products benefiting from strong underlying commodity market fundamentals.

Following a competitive tender process involving multiple international trading houses, Larvotto says Glencore was selected as the preferred offtake partner.

Glencore is one of the world’s leading commodity trading houses and is listed on the LSE and the JSE, with a market capitalisation of about £70-billion.

Larvotto says Glencore's extensive experience in concentrate marketing, logistics management and downstream customer relationships provides Larvotto with access to established global precious metals markets.

The agreement is structured on a mine-gate basis, with Glencore responsible for all logistics from the mine to the final customer destination. Larvotto explains that the offtake is on normal commercial terms for an agreement of this nature and is subject to execution of final agreements.

Larvotto will receive payment based on London Bullion Market Association gold prices, adjusted for contained gold content.

With both antimony and gold concentrate marketing arrangements now established, the company says it will continue advancing activity on site towards commissioning and first production, which is expected in August.