ASX mining stock Larvotto Resources Ltd (ASX: LRV) has made its shareholders very happy over the past year.
How happy?
Well, 12 months ago, you could have picked up Larvotto shares for 7 cents apiece. Today, those same shares are changing hands for 68 cents each, up a blistering 864.3% in a year. That would have turned a $5,000 investment in February 2024 into $48,215 today.
The ASX mining stock is focused on developing its dual-commodity Hillgrove gold and antimony project, located in New South Wales. According to Larvotto, Hillgrove contains Australia's largest antimony deposit and the eighth largest in the world.
Here's why that's important.
ASX mining stock riding antimony to the moon
According to a 3 February Fawkes Capital Management special report on the metal, antimony is a critical metal in various military applications and in solar panels.
And with Larvotto's Hillgrove project, the soaring ASX mining stock appears to be in a sweet spot.
According to Fawkes Capital:
We believe that this metal is currently at the centre of one of the largest supply-demand imbalances in recent history – a shift that rivals some of the most dramatic commodity price movements we've ever seen
On the supply side, China banned the export of antimony to the United States in December. The Middle Kingdom is responsible for around half the global production of antimony ore and about 80% of the world's refined antimony.
Russia counts as the second largest producer of antimony, and amid its war with Ukraine, Russia has stopped exporting antimony to Western nations.
On the demand side, Fawkes Capital said demand for antimony from solar panels is surging. The metal is also seeing more demand from increased military spending, and greater demand from its use in battery storage technology.
"Prices have already begun to react, surging to around US$36,000 per ton," Fawkes Capital said.
But that could be just the beginning of the good news for the surging ASX mining stock.
"We believe there is strong historical precedent to suggest that antimony prices could reach at least US$100,000 per ton," the fund manager said.
Enter Larvotto Resources
Pointing to the strong growth potential of the ASX mining stock, Fawkes Capital Management said, "Larvotto Resources, with its recently acquired Hillgrove project near Armidale, Australia, offers a unique opportunity to invest in a pure-play antimony producer."
According to the fund manager:
The area near Armidale has been mined for more than a century and the major mining areas have been drilled extensively. Historically, sustainable antimony mining was uneconomical due to oversupply from China.
However, when the mine was previously in operation, the grades of antimony ore were very high, around 2.5% per ton of Sb (for comparison, many economic antimony deposits average below 1% Sb).
And Fawkes Capital believes the ASX mining stock could produce up to 10% of world's antimony supply for the next four years. Which could see the Larvotto share price continue to race ahead.
Fawkes Capital concluded:
With prices projected to remain strong during this period, we expect the project to generate significant free cash flow, far exceeding the company's current market capitalisation.
Importantly, Larvotto does not need to refine the ore into ingots; it can export the concentrate directly to refineries in Mexico and the US, streamlining operations and reducing costs.
