Alvo Faces Due Diligence Hurdles in Lavra Velha Acquisition While Raising $4.4M
Alvo Minerals has signed a non-binding LOI to acquire the Lavra Velha Gold-Copper Project with a 520koz gold resource, while progressing exploration at its Palma Copper-Zinc Project and launching a $4.4 million capital raise.
- Non-binding LOI to acquire 100% of Lavra Velha Gold-Copper Project in Bahia, Brazil
- Lavra Velha hosts a foreign NI 43-101 resource estimate of 9.2Mt at 1.76g/t Au for 520koz gold
- Palma Copper-Zinc VMS Project resource increased to 7.6Mt at 2.02% CuEq under JORC 2012
- Pro-rata non-renounceable entitlement offer to raise up to A$2.9 million plus $1.5 million placement
- Due diligence underway with exploration and drilling continuing at Palma
Strategic Acquisition Proposal
Alvo Minerals Limited (ASX: ALV) has taken a significant step forward in its growth strategy by signing a non-binding Letter of Intent (LOI) to acquire 100% of the Lavra Velha Gold-Copper Project located in Bahia State, Brazil. This advanced IOCG-hosted project boasts a foreign NI 43-101 Mineral Resource Estimate (MRE) of 9.2 million tonnes grading 1.76 grams per tonne gold, equating to approximately 520,000 ounces of contained gold. The resource includes an Indicated category of 282,000 ounces and an Inferred category of 238,000 ounces.
The Lavra Velha project sits within the prolific Sao Francisco craton, a region known for its rich gold and copper deposits. The mineralisation is characterized by multiple sub-horizontal hematite-rich breccia layers, with significant gold and silver preserved near surface due to supergene oxidation processes that have leached copper. Historical drilling exceeding 50,000 meters and extensive geophysical surveys underpin the resource estimate, although it remains a foreign estimate not yet compliant with the JORC Code, introducing some uncertainty pending further evaluation.
Ongoing Exploration at Palma
While progressing the Lavra Velha acquisition, Alvo continues to advance its flagship Palma Copper-Zinc Volcanogenic Massive Sulphide (VMS) Project in Tocantins State, Brazil. The Palma project now holds a JORC-compliant Mineral Resource Estimate of 7.6 million tonnes at 2.02% copper equivalent, highlighting its potential as a significant base metals district. Exploration activities during the quarter included auger drilling, soil sampling, geophysical surveys, and geological mapping across over 1,000 square kilometers of tenure.
With four known deposits and more than 30 emerging prospects, Alvo’s in-house exploration team is integrating geological, geochemical, and geophysical data to refine targets ahead of definitive drilling. The company emphasizes its cost-effective, technology-driven approach to exploration, which positions Palma for potential resource expansion and upgrade.
Capital Raising to Support Growth
To fund the Lavra Velha acquisition and ongoing exploration programs, Alvo announced a pro-rata non-renounceable entitlement offer aiming to raise approximately A$2.9 million at an issue price of $0.05 per share. This is complemented by a top-up placement to raise an additional $1.5 million on the same terms. The capital raising is supported by the board and is critical to maintaining operational momentum and completing due diligence on Lavra Velha within the stipulated 45-day period.
As of 31 March 2025, Alvo held cash and equivalents of A$434,000, with no debt facilities drawn. The company’s financial position underscores the importance of the entitlement offer to sustain exploration and corporate activities.
Outlook and Market Positioning
Managing Director Rob Smakman highlighted the exceptional upside potential of Lavra Velha, especially given the current gold price environment. The combination of a substantial gold-copper resource and a robust copper-zinc portfolio at Palma positions Alvo as a diversified explorer with exposure to both precious and base metals in a highly prospective region.
However, the foreign nature of the Lavra Velha resource estimate and the need for further evaluation to achieve JORC compliance remain key considerations. The company’s ability to complete due diligence successfully and integrate Lavra Velha into its portfolio will be pivotal in defining its next growth phase.
Bottom Line?
Alvo’s dual focus on acquiring Lavra Velha and expanding Palma’s resource base, backed by a strategic capital raise, sets the stage for a transformative year ahead.
Questions in the middle?
- Will Alvo complete due diligence and finalize the Lavra Velha acquisition within 45 days?
- How will the Lavra Velha resource convert to JORC compliance after further evaluation?
- What impact will the entitlement offer and placement have on Alvo’s share structure and investor appetite?
