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Largo Inc (symbol: LGO) is a mid-tier mining development company, primarily focused on the production of vanadium at its flagship Maracás Menchen Mine in Brazil. Largo has achieved a notable accomplishment in the mining sector by successfully financing, constructing, and bringing a unique commodity project to production, even in challenging market conditions.
The Maracás Menchen Mine boasts the highest-grade vanadium deposit ever discovered, positioning Largo as a low-cost producer. With a strategic off-take agreement with commodities giant Glencore, Largo is well-poised to become a leading global producer of vanadium, expected to generate substantial cash flows.
Vanadium is an essential alloy used to strengthen steel while reducing its weight. Vanadium-enhanced steels are integral to a wide range of products, including rebar, automobiles, and transportation infrastructure, reflecting a compound annual growth rate of over 6% for the past several years.
Apart from its mining operations, Largo Inc is committed to advancing renewable energy storage solutions. Through Largo Clean Energy, the company is developing vanadium redox flow battery technology, which promises innovative energy storage solutions. The company produces and supplies high-quality vanadium products such as VPURE Flake, VPURE+ Flake, and VPURE+ Powder.
Largo Inc operates through six segments: Sales & Trading, Mine Properties, Corporate, Exploration and Evaluation Properties, Largo Clean Energy, and Largo Physical Vanadium. The Sales & Trading segment is a significant revenue generator for the company, driving its financial performance.
With its extensive operations and strategic initiatives, Largo Inc continues to make significant strides in both the mining and renewable energy sectors, solidifying its position as a noteworthy player in the global market.
Largo Inc. (LGO) reported its Q1 2023 operational results, producing 2,111 tonnes of vanadium pentoxide (V2O5), a decrease from 2,442 tonnes in Q1 2022. Despite heavy rains impacting high-grade ore availability, sales rose 28% to 2,849 tonnes compared to 2,232 tonnes in Q1 2022. The company is on track with production guidance and is set to complete its ilmenite concentration plant by Q2 2023. Largo Clean Energy is advancing its 6.1 MWh vanadium redox flow battery installation for Enel Green Power in Spain. Furthermore, Largo has joined the Long Duration Energy Storage Council to support global decarbonization efforts. Production challenges stem from adverse weather, but demand for vanadium, especially in the aerospace sector, remains strong.
Argus Research has initiated equity research coverage on Largo Inc. (LGO), a leading vanadium producer. The firm anticipates increasing vanadium demand, benefiting Largo's profitability. The Maracás Menchen Mine is expected to improve yield post-2022 operational challenges. Largo's production of ilmenite, expected to commence in mid-2023, adds revenue potential. With $54.5 million in cash and $115.2 million in working capital, Largo is positioned to fund projects. Despite a 42% stock decline in 2022, Argus estimates a fair value of $9, significantly higher than the current price of $5.
Largo reported Q4 2022 revenues of $47.5 million, a 6% decrease from Q4 2021, with an annual total of $229.3 million, marking a 16% increase year-over-year. The company faced a net loss of $15.6 million in Q4 2022, compared to a net income of $1.0 million in Q4 2021. Operating costs surged to $44.5 million in Q4 2022, up from $37.7 million in Q4 2021, primarily due to inflation and mining disruption from heavy rains. Production of V2O5 was stable at 2,004 tonnes for Q4 2022. Despite challenges, Largo anticipates a 10% production increase in 2023, driven by growing demand in the energy storage sector.
Largo Inc. (LGO) is set to announce its fourth quarter and annual 2022 financial results on March 9, 2023, after market closure. A conference call to discuss these results will take place on March 10, 2023, at 1:00 p.m. ET. The call can be accessed via local dial-in numbers or through a registration link for an automated callback. Largo, which specializes in vanadium supply, is advancing its operations with the implementation of a titanium dioxide pigment plant and enhancing its clean energy division with innovative VCHARGE vanadium batteries. The company's focus remains on supporting a low carbon future while producing high-quality vanadium.
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