Tag: Vanadium

Research News and Market Data on LGO

November 8, 2023

Download(opens in new window)

All amounts expressed are in U.S. dollars, denominated by “$”

TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company“) (TSX: LGO) (NASDAQ: LGO) today announces its third quarter 2023 financial results.

Largo Reports Third Quarter 2023 Financial Results; Announces First Commercial Shipment of Ilmenite as By-Product of its Vanadium Operations in Brazil (Photo: Business Wire)

Q3 2023 and Other Highlights

• Revenues of $44.0 million vs. revenues of $54.3 million in Q3 2022; Decline driven by lower vanadium prices and lower vanadium sales volumes; Revenues per lb sold³ of V₂O₅ equivalent of $8.34 vs. $8.80 in Q3 2022
• Operating costs of $42.5 million vs. $45.6 million in Q3 2022; Cash operating costs excluding royalties¹ per pound sold of $5.44 vs. 4.86 per lb sold in Q3 2022
• Net loss of $11.9 million vs. net loss of $2.6 million in Q3 2022; Basic loss per share of $0.19 vs. basic loss per share of $0.04 in Q3 2022
• Cash used before working capital items of $4.4 million vs. cash provided before working capital items of $4.3 million in Q3 2022
• Cash balance of $39.5 million, net working capital surplus of $91.0 million and debt of $65.0 million exiting Q3 2023
• V₂O₅ equivalent sales of 2,385 tonnes (inclusive of 256 tonnes of purchased material) vs. 2,796 tonnes (inclusive of 351 tonnes of purchased material) sold in Q3 2022
• Production of 2,163 tonnes (4.8 million lbs¹) of V₂O₅ vs. 2.906 tonnes in Q3 2022
• Largo Clean Energy’s (“LCE”) 6 megawatt-hour (“MWh”) vanadium redox flow battery (“VRFB”) deployment for Enel Green Power España (“EGPE”) was validated to operate on test conditions according to EGPE specifications and LCE test procedures in October
• The Company successfully commissioned and is in the process of ramping up production of its new ilmenite concentrate plant with initial production of 350 tonnes in August and 700 tonnes in September; The first commercial shipment of ilmenite is in progress and should contribute to the Company’s revenues in Q4 2023 as a by-product of its vanadium operations
• Q3 2023 results conference call: Thursday, November 9th at 1:00 p.m. ET

Vanadium Market Update²

• The average benchmark price per lb of V₂O₅ in Europe was $8.03, a 2.5% decrease from the average of $8.23 seen in Q3 2022
• Vanadium spot demand was soft in Q3 2023, primarily due to adverse conditions in the Chinese and European steel industries. However, strong demand growth from the aerospace and energy storage sectors continued

Daniel Tellechea, Director and Interim CEO of Largo commented: “Q3 2023 was a challenging quarter for Largo, primarily due to the tragic accident that occurred at the Company’s chemical plant in July as well as technical delays in commissioning our new crushing plant. The accident at the chemical plant resulted in a capacity bottleneck in the evaporator section of the plant, which resulted in lower overall production rates of vanadium in July and August. In early September, our operating team recommissioned the evaporator circuit, which is now operating at its original capacity. A delay in ramp up of the new magnetic separation crushing plant also temporarily impacted vanadium production in Q3 2023. The new crushing plant was designed to offset the impact of lower mined vanadium grades, as per the Company’s mine plan. The operating team is in the process of resolving these issues, and we are pleased to report that the crushing plant exceeded 1,000 tonnes of contained V₂O₅ in October, despite additional crushing plant improvements scheduled to be implemented in November and December.”

He continued: “It is our priority to continue to optimize our operations, reduce costs, and achieve production and sales targets safely. In light of this, we maintain our guidance for 2023. Additionally, further measures are being implemented to improve the organization’s performance, including optimizing operational efficiencies through the implementation of the new crushing system, concentrating on increasing production of high purity vanadium, restructuring equipment maintenance processes to further reduce costs, and ramping up ilmenite production starting in the fourth quarter of 2023 to diversify revenues. We are beginning to see a notable reduction in key consumable costs, such as sodium carbonate, as well as ongoing overhead cost reductions through a reduction of the number of contractors at the mine through efficiency improvement programs and further reductions in the headcount at LCE. The Company considers these ongoing initiatives to be a vitally important measures to counter the current decrease in vanadium prices.”

He concluded: “During this past year, we have also made several significant investments that are necessary for the sustainability of our operations in a lower vanadium price environment. Among these investments are an increased waste rock pre-stripping and aggressive infill drilling program to optimize production in the years to come. Our team has successfully built and commissioned an ilmenite plant to diversify future revenues as a by-product of the vanadium mine, built a new magnetic separation crushing plant for the purpose of mining lower-grade material without reducing production levels, and delivered the Company’s first vanadium battery to EGPE, our European energy storage customer. A substantial investment has been made in LCE, which is not yet generating significant revenues, but continues to consume cash. With our current strategic review process in place, Largo expects to optimize the value proposition of LCE and participate in one of the most significant macrotrends, the clean energy transition with vanadium as a critical material. With these investments, we believe that Largo is on the path to a brighter future.”

Financial and Operating Results – Highlights

(thousands of U.S. dollars, except as otherwise stated)	Three months ended		Nine months ended
	Sept. 30, 2023	Sept. 30, 2022	Sept. 30, 2023	Sept. 30, 2022
Revenues	43,983	54,258	154,514	181,750
Operating costs	(42,580)	(45,602)	(131,540)	(125,264)
Net income (loss)	(11,884)	(2,601)	(19,057)	13,410
Basic earnings (loss) per share	(0.19)	(0.04)	(0.30)	0.21
Cash (used) provided before working capital items	(4,360)	4,328	7,631	35,479
Cash operating costs excl. royalties3 ($/lb)	5.44	4.86	5.25	4.37
Cash	39,572	62,713	39,572	62,713
Debt	65,000	15,000	65,000	15,000
Total mined – dry basis (tonnes)	6,406,626	4,178,185	11,373,683	7,780,061
Total ore mined (tonnes)	447,165	351,450	1,279,024	1,033,375
Effective grade4 of ore milled (%)	0.94	1.28	1.04	1.32
V2O5 equivalent produced (tonnes)	2,163	2,906	6,913	8,432

Q3 2023 Notes

• The decrease in operating costs in Q3 2023 is largely attributable to lower overall sales in the period, which includes a reduction in the sale of purchased products and lower royalties due to lower sales.
• V₂O₅ equivalent production of 2,163 tonnes in Q3 2023 decreased from 2,639 tonnes produced in Q2 2023. Production in July 2023 was 644 tonnes, with 775 tonnes produced in August and 744 tonnes produced in September, for a total of 2,163 tonnes of V₂O₅ equivalent produced. July and August production were negatively impacted as a result of the chemical plant operating at limited capacity due to the accident in the evaporation section of the plant in July 2023. In addition, September production was negatively impacted by low availability of the crushing circuit, combined with the planned lower vanadium grade of ore mined. V₂O₅ production in October continued to improve with 866 tonnes produced.
• The Company is actively working to achieve higher levels of operational stability to better manage its costs which have increased due in part to lower grades of ore mined as compared with prior quarters. The lower grade of ore mined in Q3 2023 was according to plan, representing a 27% decrease year-over-year. The Company is actively working towards increasing the availability of its new crushing system to offset lowers grades of ore mined and reach production of 1,000 tonnes of V₂O₅ per month in future months.
• Total mined (dry basis) of 6.4 million tonnes increased by 53% and total ore mined of 447,165 tonnes was 27% higher than Q3 2022, respectively. Increased mining rates and higher mining costs impacted the Company’s financial performance in Q3 2023.
• As part of its ongoing mitigation efforts, the Company is focused on reducing its fixed cost structure through contract renegotiations and an optimization of key operational areas, including mining, maintenance, equipment rental and consumables.
• The commissioning and ramp up of the ilmenite plant commenced in Q3 2023 with production of 350 tonnes in August and 700 tonnes in September. The Company expects the ramp up to conclude in Q2 2024 with revenue expectations in Q4 2023.
• Exploration and evaluation costs of $2.3 million increased by $1.8 million from Q3 2022. This was driven by infill drilling and geological model work at the Maracás Menchen Mine and diamond drilling at Campo Alegre de Lourdes to support the maintenance of the Company’s mineral rights. During Q3 2023, the Company completed approximately 9,100 metres of diamond drilling in the near mine deep drilling and exploration program. In the nine months ended September 30, 2023, approximately 19,100 metres of diamond drillholes have been completed in Campo Alegre de Lourdes and Maracas targets. A re-assay program began in Q2 2023 to perform chemical analysis on previously interpreted results. The focus of this program is to increase measured and indicated resources. Approximately 5,000 samples were prepared and sent to the external laboratory for analysis in Q3 2023.

The information provided within this release should be read in conjunction with Largo’s unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 and its management’s discussion and analysis (“MD&A”) for the three and nine months ended September 30, 2023 which are available on our website at www.largoinc.com or on the Company’s respective profiles at www.sedarplus.com and www.sec.gov.

About Largo

Largo is a globally recognized vanadium company known for its high-quality VPURE™ and VPURE+™ products, sourced from its Maracás Menchen Mine in Brazil. The Company is currently focused on implementing an ilmenite concentrate plant and is undertaking a strategic evaluation of its U.S.-based clean energy business, including its advanced VCHARGE vanadium battery technology to maximize the value of the organization. Largo’s strategic business plan centers on maintaining its position as a leading vanadium supplier with a growth strategy to support a low-carbon future.

Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.

Cautionary Statement Regarding Forward-looking Information:

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and United States securities legislation. Forward-looking information in this press release includes, but is not limited to, statements with respect to the timing and amount of estimated future production and sales; the future price of commodities; costs of future activities and operations, including, without limitation, achieving operational stability and managing unit costs; and the expected completion of the ilmenite plan ramp up in Q4 2023.

The following are some of the assumptions upon which forward-looking information is based: that general business and economic conditions will not change in a material adverse manner; demand for, and stable or improving price of V₂O₅, other vanadium products, ilmenite and titanium dioxide pigment; receipt of regulatory and governmental approvals, permits and renewals in a timely manner; that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company’s operations at the Maracás Menchen Mine or relating to Largo Clean Energy; the availability of financing for operations and development; the availability of funding for future capital expenditures; the ability to replace current funding on terms satisfactory to the Company; the ability to mitigate the impact of heavy rainfall; the reliability of production, including, without limitation, access to massive ore, the Company’s ability to procure equipment, services and operating supplies in sufficient quantities and on a timely basis; that the estimates of the resources and reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based); the accuracy of the Company’s mine plan at the Maracás Menchen Mine, the competitiveness of the Company’s vanadium redox flow battery (“VRFB“) technology; the ability to obtain funding through government grants and awards for the Green Energy sector, the accuracy of cost estimates and assumptions on future variations of VCHARGE battery system design, that the Company’s current plans for ilmenite and VRFBs can be achieved; the Company’s “two-pillar” business strategy will be successful; the Company’s sales and trading arrangements will not be affected by the evolving sanctions against Russia; and the Company’s ability to attract and retain skilled personnel and directors; the ability of management to execute strategic goals.

Forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedarplus.ca and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo’s annual and interim MD&A which also apply.

Trademarks are owned by Largo Inc.

Non-GAAP⁵ Measures

The Company uses certain non-GAAP measures in this press release, which are described in the following section. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company’s GAAP, and might not be comparable to similar financial measures disclosed by other issuers. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Revenues Per Pound

This press release refers to revenues per pound sold, a non-GAAP performance measure that is used to provide investors with information about a key measure used by management to monitor performance of the Company.

This measure, along with cash operating costs and total cash costs, is considered to be one of the key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine and sales activities. This revenues per pound measure does not have any standardized meaning prescribed by IFRS and differs from measures determined in accordance with IFRS. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. This measure is not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of this measure per pound sold to revenues as per the Q3 2022 unaudited condensed interim consolidated financial statements.

		Three months ended						Nine months ended
		September 30, 2023			September 30, 2022			September 30, 2023			September 30, 2022
Revenues – V2O5 produced1		$	25,268		$	30,831		$	90,352		$	98,621
V2O5 sold – produced (000s lb)			3,017			3,745			9,898			10,824
V2O5 revenues per pound of V2O5 sold – produced ($/lb)		$	8.38		$	8.23		$	9.13		$	9.11
Revenues – V2O5 purchased1		$	2,066		$	1,655		$	7,531		$	3,184
V2O5 sold – purchased (000s lb)			309			207			1,014			339
V2O5 revenues per pound of V2O5 sold – purchased ($/lb)		$	6.69		$	8.00		$	7,43		$	9.39
Revenues – V2O51		$	27,334		$	32,486		$	97,883		$	101,805
V2O5 sold (000s lb)			3,326			3,952			10,912			11,163
V2O5 revenues per pound of V2O5 sold ($/lb)		$	8.22		$	8.22		$	8.97		$	9.12
Revenues – V2O3 produced1		$	3,734		$	3,798		$	7,575		$	3,798
V2O3 sold – produced (000s lb)			308			308			619			308
V2O3 revenues per pound of V2O3 sold – produced ($/lb)		$	12.12		$	12.33		$	12.24		$	12.33
Revenues – V2O3 purchased1		$	—		$	482		$	1,155		$	482
V2O3 sold – purchased (000s lb)			—			43			88			43
V2O3 revenues per pound of V2O3 sold – purchased ($/lb)		$	—		$	11.21		$	13.13		$	11.21
Revenues – V2O31		$	3,734		$	4,280		$	8,730		$	4,280
V2O3 sold (000s lb)			308			350			707			350
V2O3 revenues per pound of V2O3 sold ($/lb)		$	12.12		$	12.23		$	12.35		$	12.23
Revenues – FeV produced1		$	11,750		$	12,756		$	46,408		$	54,667
FeV sold – produced (000s kg)			444			394			1,591			1,576
FeV revenues per kg of FeV sold – produced ($/kg)		$	26.46		$	32.38		$	29.17		$	34.69
Revenues – FeV purchased1		$	1,058		$	4,736		$	1,386		$	20,998
FeV sold – purchased (000s kg)			39			159			50			516
FeV revenues per kg of FeV sold – purchased ($/kg)		$	27.13		$	29.79		$	27.72		$	40.69
Revenues – FeV1		$	12,808		$	17,492		$	47,794		$	75,665
FeV sold (000s kg)			483			553			1,641			2,092
FeV revenues per kg of FeV sold ($/kg)		$	26.52		$	31.63		$	29,12		$	36.17
Revenues1		$	43,876		$	54,258		$	154,407		$	181,750
V2O5 equivalent sold (000s lb)			5,259			6,164			17,177			18,340
Revenues per pound sold ($/lb)		$	8.34		$	8.80		$	8.99		$	9.91
1. As per note 18 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements.

Cash Operating Costs Per Pound

The Company’s MD&A refers to cash operating costs per pound and cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs and cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to plan and prior periods, and also to assess its overall effectiveness and efficiency.

Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.

Cash operating costs excluding royalties is calculated as cash operating costs less royalties. Cash operating costs per pound and cash operating costs excluding royalties per pound are obtained by dividing cash operating costs and cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine. Cash operating costs, cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of cash operating costs and cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound for the Maracás Menchen Mine to operating costs as per the Q3 2023 unaudited condensed interim consolidated financial statements.

		Three months ended								Nine months ended
		September 30, 2023				September 30, 2022				September 30, 2023				September 30, 2022
Operating costsi		$	42,580			$	45,602			$	131,540			$	125,264
Professional, consulting and management feesii			747				1,181				2,215				3,784
Other general and administrative expensesiii			408				383				1,032				859
Less: iron ore costsi			(145	)			(200	)			(638	)			(637	)
Less: conversion costsi			(1,413	)			(1,655	)			(5,551	)			(5,839	)
Less: product acquisition costsi			(5,449	)			(7,248	)			(13,380	)			(20,651	)
Less: distribution costsi			(2,202	)			(2,581	)			(6,174	)			(6,887	)
Less: inventory write-downiv			(978	)			(1,655	)			(1,661	)			(1,655	)
Less: depreciation and amortization expensei			(6,003	)			(5,111	)			(19,456	)			(14,923	)
Cash operating costs			27,545				28,716				87,927				79,315
Less: royalties1			(2,024	)			(2,497	)			(6,919	)			(8,264	)
Cash operating costs excluding royalties			25,521				26,219				81,008				71,050
Produced V2O5 sold (000s lb)			4,693				5,390				15,434				16,272
Cash operating costs per pound ($/lb)		$	5.87			$	5.33			$	5.70			$	4.87
Cash operating costs excluding royalties per pound ($/lb)		$	5.44			$	4.86			$	5.25			$	4.37
i. As per note 19 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements.
ii. As per the Mine properties segment in note 15 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements.
iii. As per the Mine properties segment in note 15 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements less the increase in legal provisions of $0.4 million (Q3 2023) and $0.8 million (nine months ended September 30, 2023) as noted in the “other general and administrative expenses” section on page 6 of the Company’s Q3 2023 management discussion and analysis.
iv. As per notes 5 and 19 of the Company’s Q3 2023 unaudited condensed interim consolidated financial statements for purchased finished products.

____________________________
¹ Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.
² Fastmarkets Metal Bulletin.
³ The cash operating costs excluding royalties and revenues per pound per pound sold are reported on a non-GAAP basis. Refer to the “Non-GAAP Measures” section of this press release. Revenues per pound sold are calculated based on the quantity of V2O5 sold during the stated period.
⁴ Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O5 in the magnetic concentrate
⁵ GAAP – Generally Accepted Accounting Principles

Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778
aguthrie@largoinc.com

Source: Largo Inc.

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.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Research News and Market Data on LGO

Download(opens in new window)

TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company”) (TSX: LGO) (NASDAQ: LGO) today announces that its Board of Directors (the “Board”) has initiated a review and evaluation of strategic alternatives with the intent to unlock and fully maximize the value of Largo Clean Energy Corp. (“LCE”).

The comprehensive review and evaluation process will include consideration of a full range of strategic, business, and financial alternatives, including, but not limited to, evaluating and completing financing transactions at the LCE subsidiary level, mergers and acquisitions of LCE with other battery companies and partnership opportunities with well-established energy system producers who are interested in entering the vanadium battery sector with the unique elements that Largo offers to this industry.

Daniel Tellechea, Interim CEO and Director of Largo commented: “Largo is commencing a comprehensive and thorough review of strategic alternatives to accelerate and enhance the distinctive value proposition LCE presents for vanadium batteries and the long duration energy storage sector. We believe several strategic opportunities exist in the market today that would benefit from LCE’s unique characteristics, and a formal process for comparing these alternatives is expected to deliver maximum value for all shareholders in a timely manner. These characteristics include: i) LCE’s access to the innovative Largo Physical Vanadium Corp. (“LPV”) (TSXV:VAND, OTCQX:VANAF) structure, which is expected to significantly reduce vanadium battery costs for customers, ii) LCE’s U.S.-based manufacturing capabilities, which may be eligible for significant fiscal incentives, grants and benefits, and iii) LCE’s patented vanadium flow battery stack technology and electrolyte purification technology.”

He continued: “We believe the strategic review process announced today could also accelerate the prospects for deployment of vanadium units owned by LPV in batteries, which we consider provides a major improvement in the cost-competitiveness of LCE against other battery technologies and other vanadium flow battery competitors. With the start of this process underway, the Company also remains committed to delivering on its set targets for the year in a safe and responsible manner.”

There can be no assurance that this process will result in any specific strategic plan or financial transaction and the Company does not plan to provide updates on the status of the review unless there are material developments to report.

Gallatin Capital LLC (“Gallatin”) is advising on securities transactions and Castle Grove Capital, LLC (“Castle Grove Capital”) is providing consulting services in support of the strategic review and evaluation process. Inquiries regarding the process may be directed to Myron Manternach, a registered representative of Gallatin and the President of Castle Grove Capital.

About Largo

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 an ilmenite concentrate 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 to support a low carbon future.

Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.

Cautionary Statement on Forward-looking Information:

This press release contains forward-looking information under applicable securities legislation, (“forward-looking information”). Forward‐looking information in this press release includes, but is not limited to, statements with respect to LCE’s strategic review, the expectation that the strategic review will deliver maximum value for all shareholders, the timeliness of the strategic review, access to LPV’s structure, the ability to reduce vanadium battery costs for customers, eligibility for fiscal incentives, grants and benefits, the deployment of vanadium units and other benefits that may arise from the strategic review and/or LPV. Forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All information contained in this news release, other than statements of current and historical fact, is forward looking information.

Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedarplus.ca and www.sec.gov from time to time. Such risks and uncertainties include, without limitation: the ability to obtain, in a timely manner, all necessary regulatory, stock exchange, shareholder and other third-party approvals to consummate any transactions contemplated by the strategic review; the risk of any disruptions to the Company’s business and operations; competition; conflict in eastern Europe; changes in interest rates, inflation, foreign exchange rates, and the other risks involved in the mining and long-term battery storage industries and capital markets. Forward-looking information are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-looking information. Largo does not undertake to update any forward-looking information, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo’s annual and interim MD&A which also apply.

Trademarks are owned by Largo Inc.

For further information, please contact:

Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778
aguthrie@largoinc.com

Advisor
Myron Manternach
Registered Representative of Gallatin Capital LLC
mmanternach@castlegrovecapital.com

Source: Largo Inc.

Friday, August 11, 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.

Quarterly results were below expectations as a decline in vanadium prices and lower sales led to decreased revenues. The company is working hard to return mining activity to normal levels while at the same time reducing costs. Largo had been making strides toward achieving both goals, even if the financial numbers do not demonstrate the improvement due to the decline in vanadium prices. Largo sold less than it produced reversing a trend in the first quarter, as expected.

Vanadium prices declined 19% to $8.46/lb. Largo received a premium to benchmark prices during the quarter that it did not receive in the first quarter. We believe improving premiums reflect additional drilling in the first half of the year that allowed the company to blend vanadium concentrations and achieve a higher-premium product. Vanadium prices continued to sink during the quarter and were $7.98/lb. on June 30, 2023. Management indicates that vanadium prices have stabilized since the end of June and showed some signs of improving.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Research News and Market Data on LGO

Download(opens in new window)

All dollar amounts expressed are in thousands of U.S. dollars unless otherwise indicated. 

Q2 2023 and Other Highlights

• Revenues of $53.1 million vs. revenues of $84.8 million Q2 2022; Revenues per pound of V₂O₅ sold¹ of $9.42 vs. $11.69 per pound sold in Q2 2022, mainly driven by a sharp decrease in V₂O₅ prices during the quarter, which was partially offset by an increase in the Company’s high purity vanadium sales
• Operating costs of $43.0 million vs. $50.7 million in Q2 2022; Cash operating costs excluding royalties per pound¹ of V₂O₅ equivalent sold of $5.18 vs. $4.23 in Q2 2022
• Net loss of $6.0 million vs. net income of $18.0 million in Q2 2022; Basic loss per share of $0.09
• Cash provided before working capital items of $3.8 million vs. $25.4 million in Q2 2022; Cash provided by operating activities of $18.1 million vs. $2.9 million in Q2 2022
• Cash balance of $64.0 million, net working capital² surplus of $103.1 million and debt of $65.0 million exiting Q2 2023
• V₂O₅ production 2,639 tonnes (5.8 million lbs³) vs. 3,084 tonnes in Q2 2022 and 2,111 tonnes in Q1 2023; V₂O₅ equivalent sales of 2,557 tonnes vs. 3,291 tonnes in Q2 2022
• Commissioning of the Company’s ilmenite concentration plant has commenced and is expected to be completed in Q3 2023, at which point a gradual ramp-up of ilmenite production in Q4 2023; Ilmenite concentrate will become a by-product of the Company’s vanadium operations in Brazil
• Hot commissioning of Largo Clean Energy’s (“LCE”) 6.1 megawatt-hour (“MWh”) Enel Green Power España (“EGPE”) vanadium redox flow battery (“VRFB”) deployment remains ongoing, with provisional acceptance by EGPE expected in Q3 2023
• The Company published its 2022 Sustainability Report entitled: “Building a low-carbon future together” highlighting the development and improvement of its ongoing sustainability programs
• Q2 2023 results conference call: Thursday, August 10th at 1:00 p.m. ET 

Vanadium Market Update⁴

• The average benchmark price per lb of V₂O₅ in Europe was $8.46 in Q2 2023, a 19% decrease from the average of $10.39 seen in Q1 2023 and a 24% decrease from the average of $11.08 seen in Q2 2022; The average benchmark price per kg of ferrovanadium in Europe was $33.47 in Q2 2023, a 15% decrease from the average of $39.46 seen in Q1 2023 and a 24% decrease from the average of $43.83 seen in Q2 2022
• Lower vanadium prices can be attributed to weaker demand in the Chinese construction market; however, these prices been partially offset by higher VRFB deployments in China and increased aerospace demand
• The average European benchmark V₂O₅ price at June 30, 2023 was approximately $7.98 per lb, compared with approximately $10.13 per lb at March 31, 2023 and $9.15 per lb at June 30, 2022
• According to Vanitec, demand in energy storage applications has increased by 141% from Q1 2022 to Q1 2023

TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company“) (TSX: LGO) (NASDAQ: LGO) today released financial and operating results for the three and six months ended June 30, 2023. The Company reported revenues of $53.1 million from vanadium pentoxide (“V₂O₅”) equivalent sales of 2,557 tonnes.

Daniel Tellechea, Interim CEO and Director of Largo, stated: “A sharp decrease in V₂O₅ prices combined with lower sales in Q2 2023 impacted the Company’s financial performance for the quarter. Higher production at the end of the second quarter is positively impacting in-transit inventory and should support higher availability and sales in the coming months. Our primary focus continues to be on delivering production and sales targets safely, optimizing our mine plan, as well as implementing additional cost reduction measures at both the mine site and at LCE to support profit margins going forward. The Company is beginning to see a reduction in key consumable costs at its mine site and has implemented a cost reduction plan at LCE.”

He continued: “Chinese and European steel sector spot demand for vanadium was weaker in Q2 2023, however, strong demand from the aerospace industry offset this during the quarter. Importantly, recent estimates indicate that energy storage demand is expected to increase significantly in the future, driven primarily by new VRFB deployments to 2030, with a CAGR of 14%⁸.”

Financial Results

(thousands of U.S. dollars, except for basic earnings (loss) per share and diluted earnings (loss) per share)	Three months ended		Six months ended
	June 30, 2023	June 30, 2022	June 30, 2023		June 30, 2022
Revenues	53,110	84,804	110,531		127,492
Operating costs	(43,029)	(50,704)	(88,960)		(79,662)
Direct mine and production costs	(24,976)	(23,905)	(53,395)		(41,465)
Net income (loss) before tax	(4,647)	22,409	(3,932)		23,223
Income tax recovery (expense)	295	(7,115)	(38)		(7,717)
Deferred income tax (expense) recovery	(1,614)	2,671	(3,203)		505
Net income (loss)	(5,966)	17,965	(7,173)		16,011
Basic earnings (loss) per share	(0.09)	0.28	(0.11)		0.25
Diluted earnings (loss) per share	(0.09)	0.28	(0.11)		0.25
Cash provided before non-cash working capital items	3,841	25,400	11,991		31,151
Net cash provided by (used in) operating activities	18,057	2,902	23,010		(1,148)
Net cash (used in) provided by financing activities	(1,756)	(15,679)	23,549		(15,294)
Net cash used in investing activities	(14,283)	(11,383)	(37,689)		(15,651)
Net change in cash	2,405	(25,516)	9,509		(30,912)
	As at
	June 30, 2023			December 31, 2022
Cash	63,980			54,471
Debt	65,000			40,000
Working capital2	103,147			115,171

Maracás Menchen Mine Operational and Sales Results

	Q2 2023	Q2 2022
Total Ore Mined (tonnes)	489,892	378,273
Ore Grade Mined – Effective Grade5 (%)	0.86	1.18
Total Mined – Dry Basis (tonnes)	3,671,842	2,503,696
Concentrate Produced (tonnes)	99,083	124,317
Grade of Concentrate (%)	3.34	3.28
Global Recovery6 (%)	81.0	81.8
V2O5 Produced (Flake + Powder) (tonnes)	2,639	3,084
High purity V2O5 equivalent produced (tonnes)	983	587
V2O5 produced (equivalent pounds 3 )	5,817,992	6,799,048
V2O5 Equivalent Sold (tonnes)	2,557	3,291
Produced V2O5 equivalent sold (tonnes)	2,268	2,783
Purchased V2O5 equivalent sold (tonnes)	289	508
Cash Operating Costs Excluding Royalties per pound ($/lb)1	5.18	4.23
Revenues per pound sold ($/lb)1	9.42	11.69

Q2 2023 Financial Highlights

• The Company recognized revenues of $53.1 million from sales of 2,557 tonnes of V₂O₅ equivalent (Q2 2022 – 2,849 tonnes) in Q2 2023. This represents a 37% decrease in revenues over Q2 2022 ($84.8 million) mainly due to lower sales and vanadium prices for the quarter. Reconciliation of the Company’s revenues per pound sold¹ and total quantities sold of each product are provided in the “Non-GAAP⁷ Measures” section of this press release.
• Operating costs of $43.0 million (Q2 2022 – $50.7 million) include direct mine and production costs of $25.0 million (Q2 2022 – $23.9 million), conversion costs of $2.2 million (Q2 2022 – $2.3 million), product acquisition costs of $3.8 million (Q2 2022 – $9.6 million), royalties of $2.5 million (Q2 2022 – $3.7 million), distribution costs of $2.5 million (Q2 2022 – $2.9 million), inventory write-down of $0.7 million (Q2 2022 – $2.3 million), depreciation and amortization of $6.2 million (Q2 2022 – $5.5 million) and iron ore costs of $0.2 million (Q2 2022 – $0.2 million). The increase in direct mine and production costs is attributable to an increase in total ore mined and the move to a new mining contractor in Q3 2022. Higher mining costs, the change in production levels across the period and the ramp up following the challenges experienced in the prior quarter negatively impacted costs. In addition, as compared with Q2 2022, the Company continued to experience elevated costs in critical consumables. The Company is actively working to manage its usage of these consumables and is also starting to see a softening in consumable prices.
• Cash operating costs excluding royalties¹ per pound sold were $5.18 per lb, compared with $4.23 for Q2 2022. The increase seen in Q2 2023 compared with Q2 2022 is largely due to the reasons noted above.
• Professional, consulting and management fees of $5.8 million decreased from Q2 2022 by 9%. The decrease was mainly due to lower expenses incurred in the mine properties segment in Q2 2023 over Q2 2022, which is primarily attributable to additional compensation costs incurred in Q2 2022.
• Other general and administrative expenses of $3.3 million decreased from Q2 2022 by 35% (or $1.8 million), which is primarily attributable to the increase in legal provisions recognized in Q2 2022 in the mine properties segment.
• Finance costs of $2.0 million in Q2 2023 increased by $1.7 million from Q2 2022, which is primarily attributable to interest on the increased debt level in Q2 2023 as compared with Q2 2022, as well as a write-down of vanadium assets of $0.2 million.
• Exploration and evaluation costs of $1.3 million in Q2 2023 increased by $1.1 million from Q2 2022. This was driven by infill drilling and geological model work at the Maracás Menchen Mine and diamond drilling at Campo Alegre de Lourdes.
• Following the completion of its short-term infill drilling program in the Campbell Pit, the resulting geological model update and the decision to prioritize operating flexibility in the near-term mine planning, the Company has decided to accelerate its pre-stripping mining rates. Accordingly, it has revised its guidance for capitalized waste stripping costs for 2023. Expenditures of $11.7 million were capitalized during the six months ended June 30, 2023, and the Company now plans to incur approximately $15.0 million in the remainder of 2023. The Company believes that increased operating flexibility at its open pit mine will, amongst other things, assist in preventing weather related disruptions at the mine.
• Cash provided by operating activities continues to be impacted by expenditures at LCE, with a net loss of $5.3 million recognized in Q2 2023 (Q2 2022 – $5.4 million).

Additional Corporate Updates

• Production: V₂O₅ production in April, May and June 2023 was 676 tonnes, 945 tonnes and 1,018 tonnes, respectively, for a total of 2,639 tonnes of V₂O₅ produced in Q2 2023.
  • The Company completed its 2023 infill drilling campaign, which resulted in a further refinement of the Company’s short-term mining model. The Company achieved a normalized production level in June following the completion of upgrades to the crushing circuit and an improvement in mining performance as compared with Q1 2023. These upgrades are expected to reduce operational maintenance costs and provide more flexibility in the blending of ores to stabilize V₂O₅ production.
  • In Q2 2023, the Company produced 983 V₂O₅ equivalent tonnes of high purity products, including 706 tonnes of high purity V₂O₅ and 277 tonnes of high purity vanadium trioxide (“V₂O₃“). This represented 37% of the Company’s total quarterly production.
  • The global recovery⁶ achieved in Q2 2023 was 81.0%, a decrease of 1.0% from the 81.8% achieved in Q2 2022 and 2.4% lower than the 83.0% achieved in Q1 2023. The global recovery⁶ in April, May and June 2023 was 81.3%, 80.4%, 81.3%, respectively.
  • The total material moved in the mine in June was a record 1,349,405 tonnes of waste and 108,104 tonnes of ore (dry basis). In Q2 2023, 489,892 tonnes of ore were mined with an effective grade⁵ of 0.86% of V₂O₅. The ore mined in Q2 2023 was 30% higher than in Q2 2022. The Company produced 99,083 tonnes of concentrate with an effective grade⁵ of 3.34%.
  • Subsequent to Q2 2023, production in July 2023 was 644 tonnes of V₂O₅ equivalent as a result of process restrictions following the accident in July at its chemical plant. However, the Company accumulated intermediate stocks of vanadium material that is expected to be processed in August, offsetting a portion of weaker July V₂O₅ output.
• Sales: In Q2 2023, the Company sold 2,557 tonnes of V₂O₅ equivalent (Q2 2022 – 3,291 tonnes), including 289 tonnes of purchased products (Q2 2022 – 508 tonnes). Produced V₂O₅ equivalent sold decreased, with 2,268 tonnes sold in Q2 2023, as compared with 2,783 tonnes in Q2 2022. The Company delivered both standard grade and high purity V₂O₅, as well as vanadium trioxide (“V2O3”) and ferrovanadium (“FeV”) to customers globally. Subsequent to Q2 2023, sales in July 2023 were 860 tonnes of V₂O₅ equivalent.
• Largo Clean Energy: During Q2 2023, LCE continued to make progress on the delivery of the EGPE contract, which remains a priority focus. LCE finalized the pumping of electrolyte for EGPE’s VCHARGE VRFB deployment and completed cold commissioning of the system in June. The battery system was also successfully interconnected with the grid and the system inverter was successfully utilized to form the chemistry. The battery is currently performing charge-discharge cycles as part of the ongoing hot commissioning phase, which is anticipated to be completed in Q3 2023, along with provisional acceptance of the system by EGPE.
  • During Q2 2023, Mr. Francesco D’Alessio was appointed as President of LCE. The Company continues to evaluate all strategic options for LCE in order to fully maximize its unique value proposition in the energy storage sector. This includes but is not limited to the potential strengthening and formalization of existing industry and commercial relationships, developing additional collaborative partnerships, evaluating alternative deployment strategies, and performing a comprehensive review of cost reduction measures.
  • In accordance with this strategic evaluation, LCE has implemented a cost reduction plan and expects to realize savings of approximately 50% in its expenditures at LCE going forward.
• Ilmenite Plant: Construction of the ilmenite concentration plant was completed in Q2 2023. Commissioning of this new facility has commenced and is expected to be completed in Q3 2023. A gradual ramp-up of ilmenite concentrate production will occur in Q4 2023.
• Exploration: During Q2 2023, the Company completed approximately 5,000 metres of reverse circulation (“RC”) infill drilling in the Campbell Pit and 3,500 metres of diamond drilling in the near mine deep drilling program. The Campbell Pit geological model was updated in Q2 2023 and delivered to the mine planning team. This model will continue to be updated quarterly and will assist with mine planning activities going forward.
• Largo Physical Vanadium Corp. (“LPV”): LPV continued its acquisition of vanadium assets, with $1.5 million spent during Q2 2023. LPV has deployed over 90% of its capital and is focussed on marketing and strategic initiatives to establish its business model.

Q2 2023 Webcast and Conference Call Information

The Company will host a webcast and conference call on Thursday, August 10th at 1:00 p.m. ET, to discuss its second quarter 2023 results and progress.

Webcast and Conference Call Details:

Details of the webcast and conference call are listed below:

Conference Call Details
Date:	Thursday, August 10, 2023
Time:	1:00 p.m. ET
Dial-in Number:	Local: +1 (416) 764-8650
	North American Toll Free: +1 (888) 664-6383
Conference ID:	72903885
Webcast Registration Link:	https://app.webinar.net/YkB4eW6Ey1v
RapidConnect Link	https://emportal.ink/3rk2Eqz
Replay Number:	Local / International: + 1 (416) 764-8677
	North American Toll Free: +1 (888) 390-0541
	Replay Passcode: 903885#
Website:	To view press releases or any additional financial information, please visit the Investor Resources section of the Company’s website at: www.largoinc.com/English/investor-resources

A playback recording will be available on the Company’s website for a period of 60-days following the conference call.

The information provided within this release should be read in conjunction with Largo’s unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2023 and 2022, and its management’s discussion and analysis for the three and six months ended June 30, 2023, which are available on our website at www.largoinc.com or on the Company’s respective profiles at www.sedar.com and www.sec.gov.

About Largo

Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE^TM and VPURE+^TM 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.) vanadium production from its operations in Brazil and 2.) energy storage business in the U.S. to support a low carbon future through its clean energy division.

Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information, please visit www.largoinc.com.

Cautionary Statement Regarding Forward-looking Information:

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and United States securities legislation. Forward‐looking information in this press release includes, but is not limited to, statements with respect to the timing and amount of estimated future production and sales; the future price of commodities; costs of future activities and operations, including, without limitation, the effect of inflation and exchange rates; the effect of unforeseen equipment maintenance or repairs on production; timing and cost related to the commissioning and ramp-up of the ilmenite plan, ilmenite production; the ability to sell ilmenite, V2O5 or other vanadium commodities on a profitable basis, the ability to produce high purity V2O5 and V2O3 according to customer specifications; the extent of capital and operating expenditures; the improvements to mine planning based on the results of drilling campaigns; the affect of the re-assay program results on measured and indicated resource estimates. Forward‐looking information in this press release also includes, but is not limited to, statements with respect to our ability to build, finance and successfully operate a VRFB business, the projected timing and cost of the completion of the EGPE project; our ability to protect and develop our technology, our ability to maintain our IP, the competitiveness of our product in an evolving market, our ability to market, sell and deliver our VCHARGE batteries on specification and at a competitive price, our ability to successfully deploy our VCHARGE batteries in foreign jurisdictions, the affect of the workforce reduction on operating costs, our ability to secure the required resources to build and deploy our VCHARGE batteries, and the adoption of VRFB technology generally in the market.

The following are some of the assumptions upon which forward-looking information is based: that general business and economic conditions will not change in a material adverse manner; demand for, and stable or improving price of V2O5, other vanadium products, ilmenite and titanium dioxide pigment; receipt of regulatory and governmental approvals, permits and renewals in a timely manner; that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company’s operations at the Maracás Menchen Mine or relating to Largo Clean Energy, specially in respect of the installation and commissioning of the EGPE project; the availability of financing for operations and development; the availability of funding for future capital expenditures; the ability to replace current funding on terms satisfactory to the Company; the ability to mitigate the impact of heavy rainfall; the reliability of production, including, without limitation, access to massive ore, the Company’s ability to procure equipment, services and operating supplies in sufficient quantities and on a timely basis; that the estimates of the resources and reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based); the accuracy of the Company’s mine plan at the Maracás Menchen Mine, the competitiveness of the Company’s VRFB technology; the ability to obtain funding through government grants and awards for the Green Energy sector, the accuracy of cost estimates and assumptions on future variations of VCHARGE battery system design, that the Company’s current plans for ilmenite and VRFBs can be achieved; the Company’s “two-pillar” business strategy will be successful; the Company’s sales and trading arrangements will not be affected by the evolving sanctions against Russia; and the Company’s ability to attract and retain skilled personnel and directors; the ability of management to execute strategic goals.

Forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo or Largo Clean Energy to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedar.com and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo’s annual and interim MD&As which also apply.

Trademarks are owned by Largo Inc.

Q2 2023 Net Income Reconciliation

				Q2 2023
Total V2O5 equivalent sold			000s lbs		5,637	A
			Tonnesi		2,557
Produced V2O5 equivalent sold			000s lbs		5,000	B
			Tonnesi		2,268
Revenues per pound sold			$/lb	$	9.42	C
Cash operating costs per pound			$/lb	$	5.67	D
Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.
		Q2 2023
Revenues		$	53,110	A x C 2,557 tonnes of V2O5 equivalent sold (Q2 2022 – 3,291 tonnes), with revenues per pound sold of $9.42 (Q2 2022 – $11.69)
Cash operating costs			(28,365)	B x D Global recovery of 81.0% (Q2 2022 – 81.8%), impact of increased mining costs and cost increases for critical consumables
Other operating costs
Conversion costs (costs incurred in converting V2O5 to FeV that are recognized on the sale of FeV)	(2,220)			Note 19 579 tonnes of FeV sold
Product acquisition costs (costs incurred in purchasing products from 3rd parties that are recognized on the sale of those products)	(3,753)			Note 19 289 tonnes of V2O5 equivalent of purchased products sold, compared with 508 tonnes in Q2 2022 with a cost of $9,568
Distribution costs	(2,525)			Note 19
Depreciation	(6,202)			Note 19
Inventory write-down	(683)			Note 19 Attributable to purchased FeV and V2O5 inventory
Increase in legal provisions	(230)			See “other general and administrative expenses” section on page 5
Iron ore costs	(220)			Note 19
			(15,833)
Commercial & Corporate costs
Professional, consulting and management fees	(2,453)			Note 15 (Sales & trading plus Corporate)
Other general and administrative expenses	(1,332)
Share-based payments	(413)
			(4,198)
Largo Clean Energy			(5,236)	Note 15 (excluding finance costs and foreign exchange) 2023 guidance between $13,500 and $14,500
Largo Physical Vanadium			(332)	Note 15 (excluding finance costs and foreign exchange)
Titanium project			(174)	Note 15 – “other”
Foreign exchange loss			(817)
Finance costs			(1,981)
Interest income			480
Exploration and evaluation costs			(1,301)
Net income before tax			(4,647)
Income tax expense			295
Deferred income tax expense			(1,614)
Net income (loss)		$	(5,966)

Note references in the table above refer to the note disclosures contained in the Q2 2023 unaudited condensed interim consolidated financial statements.

Non-GAAP Measures

The Company uses certain non-GAAP measures in its press release, which are described in the following section. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company’s GAAP, and might not be comparable to similar financial measures disclosed by other issuers. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Revenues Per Pound

The Company’s press release refers to revenues per pound sold, V₂O₅ revenues per pound of V₂O₅ sold and FeV revenues per kg of FeV sold, which are non-GAAP financial measures that are used to provide investors with information about a key measure used by management to monitor performance of the Company.

These measures, along with cash operating costs, are considered to be key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine and sales activities. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of revenues per pound sold, V2O5 revenues per pound of V2O5 sold and FeV revenues per kg of FeV sold to revenues and the revenue information presented in note 18 as per the Q2 2022 unaudited condensed interim consolidated financial statements.

	Three months ended				Six months ended
	June 30, 2023		June 30, 2022		June 30, 2023			June 30, 2022
Revenues – V2O5 producedi	$	30,558	$	45,976	$		65,084	$	67,790
V2O5 sold – produced (000s lb)		3,083		4,385			6,881		7,079
V2O5 revenues per pound of V2O5 sold – produced ($/lb)	$	9.91	$	10.48	$		9.46	$	9.58
Revenues – V2O5 purchasedi	$	2,937	$	1,143	$		5,465	$	1,529
V2O5 sold – purchased (000s lb)		396		88			705		132
V2O5 revenues per pound of V2O5 sold – purchased ($/lb)	$	7.42	$	12.99	$		7.75	$	11.58
Revenues – V2O5i	$	33,495	$	47,119	$		70,549	$	69,319
V2O5 sold (000s lb)		3,479		4,473			7,586		7,211
V2O5 revenues per pound of V2O5 sold ($/lb)	$	9.63	$	10.53	$		9.30	$	9.61
Revenues – V2O3i	$	2,358	$	47,119	$		3,841	$	69,319
V2O3 sold (000s lb)		177		–			311		–
V2O3 revenues per pound of V2O3 sold ($/lb)	$	13.32	$	–	$		12.35	$	–
Revenues – FeV producedi	$	17,230	$	22,883	$		34,658	$	41,911
FeV sold – produced (000s kg)		579		550			1,147		1,182
FeV revenues per kg of FeV sold – produced ($/kg)	$	29.76	$	41.61	$		30.22	$	35.46
Revenues – FeV purchasedi	$	27	$	14,802	$		328	$	16,262
FeV sold – purchased (000s kg)		1		317			11		357
FeV revenues per kg of FeV sold – purchased ($/kg)	$	27.00	$	46.69	$		29.82	$	45.55
Revenues – FeVi	$	17,256	$	37,685	$		34,986	$	58,173
FeV sold (000s kg)		580		867			1,158		1,539
FeV revenues per kg of FeV sold ($/kg)	$	29.75	$	43.47	$		30.21	$	37.80
Revenuesi	$	53,110	$	84,804	$		110,531	$	127,492
V2O5 equivalent sold (000s lb)		5,637		7,255			11,918		12,176
Revenues per pound sold ($/lb)	$	9.42	$	11.69	$		9.27	$	10.47

1. As per note 18 in the Company’s Q2 2023 unaudited condensed interim consolidated financial statements. 

Cash Operating Costs and Cash Operating Costs Excluding Royalties

The Company’s press release refers to cash operating costs per pound and cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs and cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to plan and prior periods, and also to assess its overall effectiveness and efficiency.

Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.

Cash operating costs excluding royalties is calculated as cash operating costs less royalties.

Cash operating costs per pound and cash operating costs excluding royalties per pound are obtained by dividing cash operating costs and cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine.

Cash operating costs, cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company’s ability to generate operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of cash operating costs and cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound for the Maracás Menchen Mine to operating costs as per the Q2 2022 unaudited condensed interim consolidated financial statements.

	Three months ended				Six months ended
	June 30, 2023		June 30, 2022		June 30, 2023		June 30, 2022
Operating costsi	$	43,029	$	50,704	$	88,960	$	79,662
Professional, consulting and management feesii		624		1,567		1,468		2,603
Other general and administrative expensesiii		315		209		624		476
Less: iron ore costsi		(220)		(222)		(493)		(437)
Less: conversion costsi		(2,220)		(2,337)		(4,138)		(4,184)
Less: product acquisition costsi		(3,753)		(9,568)		(7,931)		(11,118)
Less: distribution costsi		(2,525)		(2,851)		(3,972)		(4,306)
Less: inventory write-down		(683)		(2,285)		(683)		(2,285)
Less: depreciation and amortization expense1		(6,202)		(5,507)		(13,453)		(9,812)
Cash operating costs		28,365		29,710		60,382		50,599
Less: royaltiesi		(2,450)		(3,742)		(4,895)		(5,768)
Cash operating costs excluding royalties		25,915		25,968		55,487		44,831
Produced V2O5 sold (000s lb)		5,000		6,135		10,741		10,882
Cash operating costs per pound ($/lb)	$	5.67	$	4.84	$	5.62	$	4.65
Cash operating costs excluding royalties per pound ($/lb)	$	5.18	$	4.23	$	5.17	$	4.12

1. As per note 19 in the Company’s Q2 2023 unaudited condensed interim consolidated financial statements.
2. As per the Mine properties segment in note 15 in the Company’s Q2 2023 unaudited condensed interim consolidated financial statements.
3. As per the Mine properties segment in note 15, less the increase in legal provisions of $0.2 million (Q2 2023) and $0.3 million (for the six months ended June 30, 2023) as noted in the “other general and administrative expenses” section on page 6 of the Company’s Q2 2023 Management Discussion and Analysis.

^{______________________________________
1} Revenues per pound sold and cash operating costs are non-GAAP financial measures, and cash operating costs per pound and cash operating costs excluding royalties per pound are non-GAAP ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the “Non-GAAP Measures” section of this press release.
² Defined as current assets less current liabilities per the consolidated statements of financial position.
³ Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.
⁴ Fastmarkets Metal Bulletin.
⁵ Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V₂O₅ in the magnetic concentrate.
⁶ Global recovery is the product of crushing recovery, milling recovery, kiln recovery, leaching recovery and chemical plant recovery.
⁷ GAAP – Generally Accepted Accounting Principles
⁸ RBC Capital Markets Vanadium Outlook (2023)

For further information, please contact:
Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778
aguthrie@largoinc.com

Source: Largo Inc.

Research News and Market Data on LGO

July 19, 2023

Q2 2023 and Other Highlights

• V₂O₅ production of 2,639 tonnes (5.8 million lbs¹) in Q2 2023 vs. 3,084 tonnes produced in Q2 2022 and 25% above production in Q1 2023
• V₂O₅ production of 676 tonnes in April, 945 tonnes in May and 1,018 tonnes in June
• The Company achieved normalized production levels in June after completing the following actions in Q2 2023: the completion of its infill drilling campaign for 2023 resulting in a further refinement of the Company’s short-term mining model, the completion of upgrades to its crushing process as well as an improvement in its mining performance over levels seen in Q1 2023
• The Company completed all planned upgrades to its crushing process in Q2 2023, including the installation of a new dry magnetic separator and updates to its crushing circuit, which is expected to reduce operational maintenance costs and provide more flexibility in the blending of different ores to stabilize V₂O₅ production going forward
• Global V₂O₅ recovery rate³ of 81.0% in Q2 2023 vs. 81.8% in Q2 2022
• The Company completed construction of its ilmenite concentration plant in June and subsequently began commissioning of the facility shortly thereafter; The Company expects to complete the commissioning phase in Q3 2023 and start a gradual ramp-up of ilmenite production in Q4 2023
• V₂O₅ equivalent sales of 2,557 tonnes in Q2 2023 vs. 3,291 tonnes sold in Q2 2022 due to lower available inventory
• During Q2 2023, the average benchmark price per lb of V₂O₅ in Europe was $8.46, a 24% decrease from the average of $11.08 seen in Q2 2022 following softer spot market demand during the quarter, primarily due to adverse conditions in the Chinese and European steel sectors
• Francesco D’Alessio was appointed as President of Largo Clean Energy (“LCE”)
• Cold commissioning of LCE’s Enel Green Power España (“EGPE”) vanadium redox flow battery (“VRFB”) was completed in Q2 2023; Hot commissioning and provisional acceptance by EGPE is expected in Q3 2023
• 2023 production, sales, cost and capital expenditures guidance remain unchanged

TORONTO–(BUSINESS WIRE)– Largo Inc. (“Largo” or the “Company“) (TSX: LGO) (NASDAQ: LGO) today announces quarterly production of 2,639 tonnes (5.8 million lbs¹) and sales of 2,557 tonnes of vanadium pentoxide (“V₂O₅”) equivalent, respectively, in Q2 2023.

Daniel Tellechea, Interim CEO and Director of Largo, stated: “We are pleased to report that key operational actions taken in Q2 2023 have resulted in improved production rates exiting the quarter, particularly in June with over 1,000 tonnes of V₂O₅ produced. He continued: “In Q2 2023, construction of the Company’s ilmenite concentration plant was completed, followed by the start of commissioning, marking a significant milestone for the Company. As we look forward to completing commissioning and ramp-up processes in the following quarters, we anticipate having sufficient stocks of produced ilmenite concentrate for sale by the start of 2024.”

Francesco D‘Alessio, President of LCE commented: “With this new role, I am fully committed to leading LCE with the immediate objective of evaluating all strategic options for this business in order to fully maximize its unique value proposition in the energy storage sector. This includes but is not limited to the potential strengthening and formalization of existing industry relationships, developing additional collaborative partnerships, evaluating alternative deployment strategies, and performing a comprehensive review of cost reduction measures. Going forward, I anticipate providing updates as this process continues to evolve.”

Maracás Menchen Mine Operational and Sales Results

	Q2 2023	Q1 2023	Q2 2022
Total Ore Mined (tonnes)	489,892	341,967	378,273
Ore Grade Mined – Effective Grade (%) 2	0.86	0.81	1.18
Total Mined – Dry Basis (tonnes)	3,671,842	3,523,656	2,503,696
Concentrate Produced (tonnes)	99,083	78,695	124,317
Grade of Concentrate (%)	3.34	2.99	3.28
Global Recovery (%) 3	81.0	83.0	81.8
V2O5 produced (Flake + Powder) (tonnes)	2,639	2,111	3,084
High purity V2O5 equivalent produced (%)	35.8	47.8	18.7
V2O5 produced (equivalent pounds) 1	5,817,992	4,653,953	6,799,048
Total V2O5 equivalent sold (tonnes)	2,557	2,849	3,291
Produced V2O5 equivalent sold (tonnes)	2,268	2,604	2,783
Purchased V2O5 equivalent sold (tonnes)	289	245	508

Q2 2023 Additional Highlights

• Normalized Production Levels in June: V₂O₅ production from the Maracás Menchen Mine was 676 tonnes in April, 945 tonnes in May and 1,018 tonnes in June for a total of 2,639 tonnes produced in Q2 2023. In addition to certain mining performance and crushing process improvements made during the quarter, the Company also completed its 2023 infill drilling campaign in Q2 2023, resulting in a further refinement of the Company’s short-term mining model. In Q2 2023, global recoveries³ averaged 81.0%, largely in line with 81.8% averaged in Q2 2022. The Company mined 489,892 tonnes of ore with an effective V₂O₅ grade² of 0.86% in Q2 2023 compared to 378,273 tonnes with an effective V₂O₅ grade² of 1.18% in Q2 2022 and 341,967 tonnes with an effective V₂O₅ grade² of 0.81% in Q1 2023, demonstrating a significant improvement in total ore mined over the prior quarter and prior comparative quarter. The increase in total ore mined as well as increased crushed and milled ore is a direct result of the Company’s strategy to successfully recover delays caused by the previously announced mine contractor transition in September 2022 and heavy rains experienced in December 2022.
  
  
• Mine Site Cost Reduction Measures: The Company continues to focus on identifying and implementing various cost reduction measures at its Maracás Menchen Mine during the current period of sustained inflationary pressures. In addition to upgrading its crushing process to reduce operational maintenance costs, the Company has identified several other areas for cost reduction and is in the process of implementing the following initiatives: a reduction in sodium carbonate and other raw materials expenditures, a reduction of mining costs, with a primary focus on reducing rehandling activities and implementing an optimization of haulage distance and a reduction of equipment rental expenditures. The Company expects to begin realizing the benefits of these cost reduction measures in Q3 2023.
  
  
• 2023 and 2024 Infill Drilling Campaigns: The Company has completed its 2023 infill drilling campaign and has completed approximately 90% of its 2024 infill drilling campaign. Data generated from infill drilling is expected to create greater accuracy and reliability of the short-and mid-term mining plan for the Maracás Menchen Mine. Going forward, the Company plans to conduct infill drilling on a bi-annual basis to create greater certainty and efficiency in its planning process. Largo expects that a consistent infill drilling campaign should assist the Company in improving the reliability and accuracy of its production guidance on a go forward basis.
  
  
• Q2 2023 Sales In Line with Quarterly Target – Focus on High Purity Vanadium Demand: In Q2 2023, V₂O₅ equivalent sales of 2,557 tonnes (which includes 289 tonnes of purchase material sold) were in line with expectations for the quarter but represented a 22% decrease in tonnes sold over Q2 2022. In Q2 2023, the Company continued to experience strong aerospace demand for its products and focused on selling its high purity vanadium units to this market. The Company produced approximately 36% of its quarterly production as high purity in Q2 2023.
  
  
• Cold Commissioning of Enel Green Power España VRFB Completed: During Q2 2023, LCE finalized the pumping of electrolyte for EGPE’s VCHARGE VRFB deployment and completed cold commissioning of the system in June. The battery system was also successfully interconnected with the grid and the system inverter was successfully utilized to form the chemistry in Q2 2023. The battery is currently performing charge-discharge cycles as part of the ongoing hot commissioning phase, which is anticipated to be completed in Q3 2023, along with provisional acceptance of the system by EGPE.
  
  
• Appointment of Francesco D’Alessio as President of LCE: Mr. D’Alessio has over 15 years of experience in metals sales and trading, including overseeing sales and shipment of vanadium, as well as more recent experience in clean energy storage sales. Over the last three years, he has been actively involved in the overall sales strategy at Largo, contributing to the Company’s ongoing initiatives in the energy storage sector. Mr. D’Alessio began his tenure at Largo in 2019 as Head of Sales, Americas, and was subsequently promoted to the position of Commercial Director in 2022.

About Largo

Largo has a long and successful history as one of the world’s preferred vanadium companies through the supply of its VPURE^TM and VPURE+^TM 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 ilmenite concentrate 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 to support a low carbon future.

Largo’s common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol “LGO”. For more information on the Company, please visit www.largoinc.com.

Cautionary Statement Regarding Forward-looking Information:

This press release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable Canadian and United States securities legislation. Forward‐looking information in this press release includes, but is not limited to, statements with respect to the timing and amount of estimated future production and sales; the future price of commodities, ; costs of future activities and operations, including, without limitation, the effect of inflation and exchange rates; the timing and success of the commissioning and ramp up of the ilmenite plant,; the ability to sell ilmenite on a profitable basis, the successful vertical integration of the Company; the effect of unforeseen equipment maintenance or repairs on production; the ability to sufficiently reduce the cost of production through cost reduction measures;; the extent to which infill drilling data will create greater accuracy and reliability in the short-term mining plan and production guidance, the extent of capital and operating expenditures; the impact of globalprice increases on the Company’s global supply chain and future sales of vanadium products. Forward‐looking information in this press release also includes, but is not limited to, statements with respect to our ability to build, finance and operate a VRFB business, our ability to protect and develop our technology, our ability to maintain our IP, the competitiveness of our product in an evolving market, our ability to market, sell and deliver our VCHARGE batteries on specification and at a competitive price, our ability to secure the required production resources to build and deploy our VCHARGE batteries, our ability to attract partners, collaborators and/or investors to build the VRFB business on terms attractive to the Company, and the adoption of VRFB technology generally in the market. Forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo or Largo Clean Energy to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedar.com and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo’s annual and interim MD&As which also apply.

Trademarks are owned by Largo Inc.

1 Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.

2 Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O5 in the magnetic concentrate.

3 Global recovery is the product of crushing recovery, milling recovery, kiln recovery, leaching recovery and chemical plant recovery.

For further information:
Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778
aguthrie@largoinc.com

Source: Largo Inc.

Thursday, July 20, 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 reported 2023-2Q V2O5 production of 2,639 tonnes, ahead of guidance. At the end of 2023-1Q, management gave production guidance for the second quarter of 2,200-2,400 tonnes. Improved production comes after low production in the December quarter due to wet conditions and in the first quarter due to blending issues requiring infill drilling. Improved production comes after completing drilling and upgrading the crushing process and gives credence to claims that decreased production was due to temporary events.

Not only is production up, sales are up. Largo reports equivalent V2O5 sales of 2,557 tonnes in 2023-2Q ahead of guidance of 1,900-2,300 tonnes. Sales are well above the amount assumed in our models which was the 2,100 tonne midpoint of guidance. Unfortunately, the average benchmark price per lb. of V2O5 in Europe was $8.46, below the price received last year and the $10.00 price assumed in our models. Annual production and sales remain unchanged at 9,000-10,000 tonnes and 8.700-10,700 tonnes, respectively. We now have increased confidence the Largo will meet its annual projections.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision. 

Thursday, July 20, 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 reported 2023-2Q V2O5 production of 2,639 tonnes, ahead of guidance. At the end of 2023-1Q, management gave production guidance for the second quarter of 2,200-2,400 tonnes. Improved production comes after low production in the December quarter due to wet conditions and in the first quarter due to blending issues requiring infill drilling. Improved production comes after completing drilling and upgrading the crushing process and gives credence to claims that decreased production was due to temporary events.

Not only is production up, sales are up. Largo reports equivalent V2O5 sales of 2,557 tonnes in 2023-2Q ahead of guidance of 1,900-2,300 tonnes. Sales are well above the amount assumed in our models which was the 2,100 tonne midpoint of guidance. Unfortunately, the average benchmark price per lb. of V2O5 in Europe was $8.46, below the price received last year and the $10.00 price assumed in our models. Annual production and sales remain unchanged at 9,000-10,000 tonnes and 8.700-10,700 tonnes, respectively. We now have increased confidence the Largo will meet its annual projections.

Get the Full Report

Equity Research is available at no cost to Registered users of Channelchek. Not a Member? Click ‘Join’ to join the Channelchek Community. There is no cost to register, and we never collect credit card information.

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.