Wednesday, August 30, 2023
Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE™ and VPURE+™ products, which are sourced from one of the world’s highest-grade vanadium deposits at the Company’s Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo’s VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world’s highest quality vanadium, Largo’s strategic business plan is based on two pillars: 1.) leading vanadium supplier with an outlined growth plan and 2.) U.S.-based energy storage business support a low carbon future.
Michael Heim, Senior Vice President, Equity Research Analyst, Energy & Transportation, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Largo announced that its Board has initiated a review and evaluation of strategic alternatives for Largo Clean Energy. LCE represents Largo’s interest in energy storage investments including the Vanadium Redox Flow Battery (VRFB). VRFBs have the potential to store energy at the utility grid level for longer periods that lithium batteries. LCE was formed in 2020 with the acquisition of assets and patents owned by VionX Energy for $3.862 million. The division has completed a 3 MWH test project in Massachusetts and is near completion of a 6.1 MWH battery for Enel Green Power in Spain. Strategic alternatives for LCE could include the sale, merger, or other financial arrangements with other parties interested in vanadium batteries.
Would Largo consider selling LCE outright? Largo has a unique corporate structure that includes mining (Largo Production), LCE, and its investment in publicly-traded vanadium units (Large Physical Vanadium). Through its involvement in all three units, it hopes to promote the development of VRFBs. Increased adoption of VRFBs would greatly enhance the demand for vanadium. We believe Largo remains committed to promoting VRFBs but would be willing to sell LCE, or a partial interest in LCE, if it were to find a partner sharing an equal commitment.
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