Largo Announces Third Quarter 2022 Production and Sales Results Highlighted by Record High Purity Vanadium Production; Completes Battery Stack Manufacturing for its 6.1 MWh VCHARGE VRFB Deployment in Spain Q3 2022 and Other Highlights
Largo Announces Third Quarter 2022 Production and Sales Results
Highlighted by Record High Purity Vanadium Production;
Completes Battery Stack Manufacturing for its 6.1 MWh
VCHARGE VRFB Deployment in Spain
Q3 2022 and Other Highlights
V2O5 production of 2,906 tonnes (6.4 million lbs1) vs. 3,260 tonnes produced in Q3
2021; Lower quarterly production due to a planned kiln and cooler refractory
refurbishment and a change of mining contractor, but was in line with the
Company’s revised production guidance
Record high purity V2O5 equivalent production of 962 tonnes, representing 33% of
the Company’s Q3 2022 production
V2O5 equivalent sales of 2,796 tonnes (inclusive of 351 tonnes of purchased material)
vs. 2,685 tonnes sold in Q3 2021; Completed first high purity V2O3 sale in Europe in
Q3 2022
Average benchmark price per lb of V2O5 in Europe of $8.23, a 12% decrease from
the average of $9.40 in Q3 2021; High purity vanadium demand has increased
following ongoing recovery from 2020 COVID-19 impacts, which was partially
offset by a softening of steel demand in Q3 2022
The Company advanced construction of its ilmenite concentration plant, including
receiving all required metallic flotation structures and building of desliming,
flotation, filtration, warehouse and pipe rack structures; Expects commissioning
completed in Q2 2023
Largo Clean Energy (“LCE”) progressed with the delivery of its Enel Green Power
España (“EGPE”) VCHARGE vanadium redox flow battery (“VRFB”), including
the manufacturing of all high-power battery stacks required for the system; The
Company has begun shipping battery stacks and electrolyte to the deployment site
in Mallorca, Spain
Largo Physical Vanadium Corp. (“LPV”) commenced trading on the TSX Venture
Exchange on September 27, 2022 under the symbol “VAND” and launched a new
website www.lpvanadium.com
Published inaugural Climate Report aligned with the Taskforce on Climate-Related
Financial Disclosures (TCFD), providing additional transparency on the Company’s
approach to climate change
TORONTO--(BUSINESS WIRE)--October 17, 2022--Largo Inc. ("Largo" or the "Company")
(TSX: LGO) (NASDAQ: LGO) today announces production of 2,906 tonnes (6.4 million lbs1)
of vanadium pentoxide (“V2O5”) equivalent and sales of 2,796 tonnes of V2O5 equivalent from
its MaracásMenchen Mine in Q3 2022.
Paulo Misk, President and CEO of Largo, stated: “Production of V2O5 in Q3 2022 was impacted
by a refractory refurbishment and a mining contractor transition, while V2O5 equivalent sales
were affected by shipping delays and lower spot demand. However, despite experiencing
production impacts, the Company produced 962 tonnes of high purity material in the quarter to
meet increased demand from this sector. The Company remains on track to meet its 2022
production and sales guidance range of 11,000 to 12,000 tonnes.” He continued: “The
construction of our ilmenite concentration plant continues to progress, with substantial portions
of its foundation and framing structures delivered and erected. We also made considerable
progress on the delivery of our EGPE VRFB deployment following the manufacturing of all
required high-power battery stacks for the system. We look forward to providing additional
updates as these projects continue to advance.”
He concluded: “In October, we published our inaugural Climate Report aligned with the
Taskforce for Climate-Related Financial Disclosures (TCFD). We believe being transparent
about our approach to climate change is part of our vision to enable the planet’s transition to a
low carbon future and remain committed to delivering positive and sustainable benefits to all
Largo stakeholders.”
MaracásMenchen Mine Operational and Sales Results
Q3 2022 Q2 2022 Q1 2022 Q3 2021
Total Ore Mined (tonnes) 351,450 378,273 303,652 366,484
Ore Grade Mined - Effective Grade (%)2 1.02 1.18 1.27 1.10
Concentrate Produced (tonnes) 99,513 124,317 92,324 113,879
Grade of Concentrate (%) 3.26 3.28 3.21 3.32
Global Recovery (%)3 80.7 81.8 77.5 83.7
V2O5 produced (Flake + Powder) (tonnes) 2,906 3,084 2,442 3,260
V2O5 produced (equivalent pounds) 1 6,406,6266,799,0485,383,682 7,187,061
Total V2O5 equivalent sold (tonnes) 2,796 3,291 2,232 2,685
Produced V2O5 equivalent sold (tonnes) 2,445 2,783 2,153 2,549
Purchased V2O5 equivalent sold (tonnes) 351 508 79 136
Q3 2022 Overview
Q3 2022 Production Includes Increased Production of High Purity Material: V2O5
equivalent production from the MaracásMenchen Mine was 811 tonnes in July, 1,140
tonnes in August and 955 tonnes in September for a total of 2,906 tonnes produced in Q3
2022. Production in July was impacted by a refractory refurbishment in the kiln and
cooler with production in September being largely impacted by a lower amount of mined
material due to the transition of mining contractors, which was completed in September.
The transition to a new mining contractor was required to ensure compliance with the
Company’s mining plan after a reduced quantity of material was removed in previous
quarters due, in part, to performance issues with the former service provider. In Q3 2022,
962 tonnes of high purity V2O5 equivalent was produced, representing 33% of Q3 2022
production and the highest quarterly amount of high purity material produced by the
Company to date. In Q3 2022, global recoveries3 averaged 80.7%, representing a 4%
decrease over the average in Q3 2021, mainly due to the reasons noted above. In Q3
2022, 351,450 tonnes of ore were mined with an effective grade2 of 1.02% of V2O5. The
lower ore mined and effective grade2 during the quarter was due to the mining contractor
transition. The Company produced 99,513 tonnes of concentrate with a V2O5 grade of
3.26%.
Commercial and Vanadium Market Update: In Q3 2022, the Company sold 2,796
tonnes of V2O5 equivalent (Q3 2021 – 2,685 tonnes), including 351 tonnes of purchased
products (Q3 2021 – 136 tonnes). Lower sales in Q3 2022 are largely attributable to
weaker spot demand during the quarter as well as ongoing shipment delays. The
Company delivered both standard grade and high purity V2O5, as well as ferrovanadium
(“FeV”) to customers and completed its first high purity V2O3 sale in Europe in Q3 2022.
Demand in the steel market softened in Q3 2022 due to geopolitical uncertainties and
concerns over energy prices and availability—most notably in Europe. However, high
purity vanadium demand remains steady and is continuing to recover from the lows of
2020, supported by renewed optimism in the travel and aerospace industries.
EGPE 6.1 MWh VCHARGE Deployment: The Company’s EGPE VCHARGE VRFB
continues to be the primary focus of LCE. All high-power battery stacks have been
manufactured and the Company has proceeded with factory acceptance testing. The
required battery stack containers are fully assembled, and final validation and factory
acceptance testing remains ongoing. Additionally, the required electrolyte storage
containers are progressing through the final painting, lining and integration process. A
majority of the required alternating current ("AC") components have been manufactured
and factory-accepted, and shipment to the deployment site has begun. The battery
deployment site is under construction and LCE expects to begin equipment installation in
November 2022. LCE continues to experience a number of shipping and logistical delays
related to certain components for its EGPE VRFB deployment. However, management of
LCE are monitoring the situation closely and expect the commissioning of the EGPE
VRFB to be completed by the end of Q1 2023.
Interconnection of a 3 MWh Demonstration VRFB in Shirley, Massachusetts: In Q3
2022, LCE and National Grid completed grid interconnection of a 3 megawatt-hour
demonstration VRFB in Shirley, Massachusetts (previously installed by VionX Energy
and commissioned by LCE). National Grid completed the final witness test in August and
approved LCE's interconnection to the grid in mid-September. Since then, LCE has
successfully operated the Shirley VRFB on the grid and the battery will be used to further
optimize performance of the solar shifting application going forward.
About Largo
Largo has a long and successful history as one of the world’s preferred vanadium companies
through the supply of its VPURETM 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 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 effect of unforeseen equipment maintenance or repairs on production;
timing and cost related to the build-out of the ilmenite plant; the extent of capital and operating
expenditures; the impact of global delays and related price 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 successfully 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 successfully deploy our VCHARGE batteries in foreign jurisdictions; the receipt of
necessary governmental permits and approvals on a timely basis, our ability to secure the
required production resources to build and deploy our VCHARGE batteries, 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.
Contacts
For further information:
Investor Relations
Alex Guthrie
Senior Manager, External Relations
+1.416.861.9778