Largo Reports Q2 2026 Financial Results Reflecting 68% Revenue Growth and Positive Adjusted EBITDA, Despite Raw Material Input Cost Pressures; and Provides Guidance for New Copper-Platinum Group Metals Production All amounts expressed are in U.S. dollars, denoted by "$".
Largo Reports Q2 2026 Financial Results
Reflecting 68% Revenue Growth and Positive
Adjusted EBITDA, Despite Raw Material Input
Cost Pressures; and Provides Guidance for
New Copper-Platinum Group Metals
Production
All amounts expressed are in U.S. dollars, denoted by "$".
Toronto, Ontario--(Newsfile Corp. - August 14, 2026) - Largo Inc.
(TSX: LGO) (NASDAQ:
LGO)
("
Largo
" or the "
Company
"), the world's largest primary vanadium producer, today announced
financial and operating results for the three months ended June 30, 2026.
Mr. Alberto Arias, Executive Chairman and Co-Chief Executive Officer of Largo, stated:
"Our second-
quarter performance reflects the continued improvement of operations at the Maracás Menchen Mine
and higher vanadium prices, which were partly offset by a rise in raw material input costs caused by
war related disruptions in the Middle East. Higher ore availability at the mine resulted in a 29%
increase in vanadium production while our commercial team increased sales by 53%. We are
considering areas for further cost reductions to offset high sulfuric acid and fuel oil prices and
anticipate generating revenues from our copper and Platinum Group Metals ("PGM") by-product
production starting this month."
Mr. Jim Bannantine, Co-Chief Executive Officer of Largo, added:
"The significant increase in revenue,
together with positive Adjusted EBITDA and improved Mining Operations Adjusted EBITDA despite
temporary cost pressures, demonstrates the value of pairing stronger production with improved
commercial execution. We are preparing shipments for our first $60 million order from the U.S.
Defense and Logistics Agency and have already started the production of copper-PGM concentrates
as by-products from Maracás Menchen. We forecast copper-PGM concentrate production in the 300-
380 ton per month range, with an average grade of approximately 15% copper and 41 grams per
tonne of PGM. This copper-PGM concentrate production is being produced using existing
infrastructure, diversifies our revenue base, and recovers greater value from material already being
mined. Together with our expanded access to the U.S. market and the U.S. Defense Logistics Agency
delivery order, these initiatives strengthen Largo's position as a supplier of critical minerals while
supporting our focus on liquidity and long-term value creation."
Q2 2026 Highlights
Operation Highlights
Vanadium pentoxide ("
V
₂
O
₅
") production in Q2 2026 increased 28.5% to 2,900 tonnes vs. 2,256
tonnes in Q2 2025 and was near the upper end of the Company's quarterly guidance range of
2,500 to 3,000 tonnes. Production was supported by better ore availability and operational stability
in the industrial plant. Year-to-date, V
₂
O
₅
production increased 55.2% to 5,516 tonnes vs. 3,553
tonnes in the first half of 2025.
Largo continues to expect full-year 2026 V
₂
O
₅
equivalent production of 10,500 to 12,000 tonnes.
Total ore mined in Q2 2026 increased 46.6% to 712,198 tonnes vs. 485,687 tonnes mined in Q2
2025. The effective ore grade¹ was 0.50% V
₂
O
₅
in Q2 2026 vs. 0.51% in Q2 2025.
Global recovery² in Q2 2026 was 82.5% compared with 84.9% in Q2 2025.
Ilmenite concentrate production in Q2 2026 decreased 11.6% to 7,205 tonnes vs. 8,149 tonnes in
Q2 2025. Ilmenite production was temporarily suspended in June as the Company conducted
further testing and prepared to transition flotation capacity toward copper-PGM concentrate
production.
Initial copper-PGM production guidance at 300 to 380 tonnes per month, at an expected average
copper grade of approximately 15% Cu, 41 grams per ton of PGMs.
Commercial Highlights
Sales in Q2 2026 totaled 2,773 tonnes of V
₂
O
₅
equivalent, including 61 tonnes of purchased
material, up 53.5% from the 1,807 tonnes sold in Q2 2025, reflecting stronger commercial
execution and improved market access. Separately, the Company delivered an additional 300
tonnes under its inventory supply agreement. These tonnes are subject to refund and were not
recognized as sales.
Sales of ilmenite concentrate, a by-product of the vanadium operation, increased 67.0% to 10,059
tonnes in Q2 2026 vs. 6,024 tonnes in Q2 2025.
Vanadium market conditions strengthened during Q2 2026. In Europe, the average benchmark
price for V
₂
O
₅
was $6.03/lb in Q2 2026 vs. $5.13/lb in Q2 2025, while the average benchmark
price for FeV was $28.17/kg vs. $24.37/kg. The average U.S. FeV benchmark price increased
45.8% to $21.65/lb from $14.85/lb, supported by tighter supply and demand from the aerospace
and infrastructure sectors.
Financial Highlights
Revenues increased 68.5% to $44.0 million in Q2 2026 from $26.1 million in Q2 2025. Vanadium
sales revenue increased 67.3% to $42.6 million, while ilmenite sales revenue increased 114.4% to
$1.4 million, reflecting higher sales volumes and stronger realized vanadium pricing.
Revenues per pound sold of V
₂
O
₅
equivalent increased 8.9% to $6.96 in Q2 2026 from $6.39 in
Q2 2025, and 20.0% from $5.80 in Q1 2026.
Cash operating costs excluding royalties were $5.10/lb sold in Q2 2026 compared with $4.63/lb in
Q2 2025. Adjusted cash operating costs excluding royalties were $4.12/lb compared with $3.18/lb.
The increases primarily reflected higher input costs, including diesel fuel, explosives and sulfur-
derived reagents, together with higher operating activity supporting increased sales volumes.
Cash provided before working capital items increased 206.2% to $6.6 million in Q2 2026 from
$2.2 million in Q2 2025.
Adjusted EBITDA increased to $2.7 million in Q2 2026 from $34 thousand in Q2 2025. Mining
Operations Adjusted EBITDA increased 64.8% to $4.4 million from $2.7 million in Q2 2025.
Largo recorded a net loss of $22.7 million in Q2 2026 compared with a net loss of $5.8 million in
Q2 2025. The change primarily reflected large non-cash items such as a write-down of vanadium
assets and a deferred income tax expense, as well as higher materials, supplies and other
production costs, professional, consulting and management compensation, finance costs, partially
offset by higher revenues.
Basic loss per share was $0.21 in Q2 2026 compared with $0.09 in Q2 2025.
The Company ended Q2 2026 with a cash balance of $5.1 million and debt of $114.2 million.
Financial and Operational Results - Highlights
thousands of U.S. dollars, except as otherwise stated
Q2 2026
Q2 2025
Change
Revenues
43,999
26,117
+68.5%
Operating costs
(48,031)
(30,057)
+59.8%
Net loss
(22,735)
(5,752)
+295.3%
Basic loss per share
(0.21)
(0.09)
+133.3%
Adjusted EBITDA
1
2,695
34
+7,826%
Mining operations adjusted EBITDA
1
4,376
2,656
+64.8%
Cash provided (used) before working capital items
6,587
2,151
+206.2%
Cash operating costs excl. royalties
1
($/lb)
5.10
4.63
+10.2%
Adjusted cash operating costs excl. royalties
1
($/lb)
4.12
3.18
+29.6%
Cash
5,103*
9,716**
-47.5%
Debt
114,249*
107,066**
+6.7%
Total mined - dry basis (tonnes)
3,914,026
4,261,626
-8.2%
Total ore mined (tonnes)
712,198
485,687
+46.6%
Effective grade
2
of ore mined (%)
0.50
0.51
-2.4%
V
2
O
5
equivalent produced (tonnes)
2,900
2,256
+28.5%
V
2
O
5
equivalent sales (tonnes)
2,773
1,807
+53.5%
Ilmenite concentrate produced (tonnes)
7,205
8,149
-11.6%
Ilmenite concentrate sold (tonnes)
10,059
6,024
+67.0%
* As of June 30, 2026.
** As of December 31, 2025
1 The cash operating costs excluding royalties, adjusted cash operating costs excluding royalties, Adjusted EBITDA, Mining operations adjusted
EBITDA, revenues 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 V
2
O
5
sold during the stated period.
2 Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V
2
O
5
in the magnetic concentrate
Subsequent Events
U.S. Defense Logistics Agency Delivery Order
On July 7, 2026, Largo secured a $60.1 million delivery order from the U.S. Defense Logistics Agency
Strategic Materials under a five-year contract. The order supports the supply of high-purity vanadium
products and reinforces the Company's strategic role in U.S. critical-mineral supply chains.
U.S. Tariff Developments
On July 15, 2026, the Office of the United States Trade Representative published its final action
imposing an additional 25% tariff on certain products of Brazil, effective for covered goods entered for
consumption, or withdrawn from warehouse for consumption, on or after 12:01 a.m. Eastern Time on July
22, 2026.
Vanadium oxides and hydroxides classified under HTSUS 2825.30 are expressly included on the
published exemption list. Accordingly, Brazilian-origin V
₂
O
₅
imported under this tariff classification is not
subject to the new 25% Brazil-specific Section 301 tariff.
The exemption is product-specific and does not extend to ferrovanadium ("
FeV
") exported directly from
Brazil. Largo's exposure to the Brazil-specific tariff on ferrovanadium is limited, as the majority of the
Company's ferrovanadium sales to the U.S. are not supplied directly from Brazil. The Company is also
evaluating recently announced additional U.S. tariffs on certain Canadian products and their potential
application to ferrovanadium supplied from Canada to the U.S.
At-The-Market Equity Offering Program
In January 2026, the Company launched an at-the-market equity offering program (the "
ATM Program
").
The ATM Program allows the Company to issue and sell common shares periodically on the Nasdaq
Stock Market, with total gross proceeds of up to $60 million. Since the beginning of the year, Largo has
raised approximately $24.8 million in net proceeds.
Start of Copper-PGM By-Product Production
Subsequent to Q2 2026, Brazil's National Mining Agency ("
ANM
") approved Largo's request to produce
and sell copper, PGMs, nickel and cobalt as by-products from its existing mining operations at the
Maracás Menchen Mine.
Following successful industrial-scale flotation tests, the Company commenced full-scale production of a
copper-PGM concentrate on August 7, 2026, using its existing ilmenite flotation infrastructure.
Largo believes the initiative can diversify its revenue base, improve overall resource utilization and
generate higher profit margins than ilmenite production without requiring material capital expenditures.
The Company temporarily suspended ilmenite concentrate production to maximize copper-PGM
concentrate output and is evaluating the additional equipment required to produce ilmenite concentrate
from the copper flotation tailings. Largo is also discussing commercial terms for its first copper-PGM
concentrate shipment with potential smelters and traders.
Vanadium Market Update
Vanadium market conditions strengthened during Q2 2026. In Europe, the average benchmark price for
V
₂
O
₅
increased 17.5% to $6.03/lb from $5.13/lb in Q2 2025, while the average benchmark price for
FeV increased 15.6% to $28.17/kg from $24.37/kg. In the U.S., the average FeV benchmark price
increased 45.8% to $21.65/lb from $14.85/lb, supported primarily by tighter global supply and demand
from the domestic aerospace and infrastructure sectors.
Stronger market pricing was reflected in the Company's realized revenue per pound sold, which
increased approximately 20.0% to $6.96 in Q2 2026 from $5.80 in Q1 2026 and increased 8.9% from
$6.39 in Q2 2025.
The Company continues to monitor market volatility, geopolitical developments and trade-policy changes
that may affect pricing and commercial activity during the remainder of 2026.
Vanadium Guidance for 2026
Largo is reiterating its 2026 vanadium guidance. The Company continues to expect annual V
₂
O
₅
equivalent production of 10,500 to 12,000 tonnes, annual V
₂
O
₅
equivalent sales of 7,500 to 9,500
tonnes and adjusted cash operating costs excluding royalties of $3.50/lb to $4.50/lb sold.
2026 Guidance
Annual V
2
O
5
equivalent production
tonnes
10,500 - 12,000
Annual V
2
O
5
equivalent sales
1
tonnes
7,500 - 9,500
Adjusted cash operating costs excluding royalties per pound
2
$/lb
3.50 - 4.50
Vanadium
Q1
Q2
Q3
Q4
2026
Actual
Actual
Low
High
Low
High
Low
High
Production (tonnes V
2
O
5
)
2,616
2,900
2,600
3,100
3,000
3,200
10,500
12,000
Sales
1
(tonnes V
2
O
5
)
2,141
2,773
2,000
2,500
2,000
2,500
7,500
9,500
1
.
Sales guidance does not include purchased products or any sold material related to the Company's vanadium inventory supply agreement.
2
.
Adjusted cash operating costs excluding royalties per pound is a non-GAAP ratio 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.
The Company's 2026 guidance is presented on a business-as-usual basis and reflects management's
current expectations for improved mine access, higher ore availability, and the continued impact of
operational enhancements implemented during 2025.
The Company continues to monitor geopolitical and trade-related uncertainties, operating conditions
and input costs and may revise its guidance if operating assumptions or market conditions materially
change.
Initial Copper-PGM Concentrate Production Guidance for 2026
Based on the industrial test results, Largo is providing initial copper-PGM concentrate production
guidance of approximately 300 to 380 tonnes per month at an expected average copper grade of
approximately 15% Cu and 41 grams per ton of PGMs (13 grams per ton gold, 16 grams per ton
platinum, 12 grams per ton palladium), and 53 grams per ton silver.
The Company expects production to progressively stabilize within this range as operations are
optimized. Largo believes that copper-PGM concentrate production will provide an additional revenue
stream, further strengthening the overall economics of its Maracás Menchen operations and lowering the
effective cost of vanadium production through by-product credits.
The information provided within this release should be read in conjunction with Largo's unaudited
condensed interim consolidated financial statements for the quarter ended June 30, 2026 and June 30,
2025 and its management's discussion and analysis ("
MD&A
") for the quarter ended June 30, 2026,
which are available on the Company's website and on its profiles on SEDAR+ and EDGAR at
www.sec.gov
.
About Largo
Largo is the world's largest primary vanadium producer and a globally recognized supplier of high-quality
vanadium products, sourced from its world-class Maracás Menchen Mine in Brazil. As one of the world's
largest primary vanadium producers, Largo produces critical materials that empower global industries,
including steel, aerospace, defense, chemical, and energy storage sectors. The Company is committed
to operational excellence and sustainability, leveraging its vertical integration to ensure reliable supply
and quality for its customers.
Largo is also strategically invested in the clean energy storage sector through its 37.4% ownership of
Storion Energy, a joint venture with Stryten Energy focused on scalable domestic electrolyte production
for utility-scale vanadium flow battery long-duration energy storage solutions in the U.S.
The Company also holds a 100% interest in the Northern Dancer Tungsten-Molybdenum property
located in the Yukon Territory, Canada, and a 100% interest in the Currais Novos Tungsten Tailing
Project near Natal, Brazil. Preliminary economic assessments were completed for each asset in 2011.
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
.
###
For further information, please contact:
Investor Relations
Vera Abdo
Investor Relations Consultant
+1.640.223.6956
Cautionary Statement Regarding Forward-looking Information:
This press release contains "forward-looking information" and "forward-looking statements" within the
meaning of applicable securities legislation. Forward-looking information in this press release may
include, but is not limited to, the ability of the Company to continue as a going concern, the ability of
the Company to keep the Maracás Menchen Mine operating, the statements, the timing and amount
regarding estimated future production and sales; statements regarding estimated future production
and sales; customer demand and sales volumes; 2026 guidance; the Company's future strategy; the
timing and quantity of deliveries under the U.S. Defense Logistics Agency delivery order; the
Company's ability to fulfill contractual requirements and meet applicable technical and quality
specifications; the Company's ability to source, install, and commission additional processing
equipment on expected timelines and budgets; the impact of U.S. tariffs, exemptions and other trade
measures; the impact of potential future changes in U.S. tariffs; the future price of commodities; the
future of FeV prices and the Company's ability to benefit from the strengthening of those prices; the
Company's ability to secure financing, refinance debt and maintain sufficient liquidity; the expected
development and commercialization of electrolyte production through the Storion Energy joint
venture; the Company's ability to execute its production, inventory, commercial and by-product-
development plans; the Company's ability to explore and commercialize copper and PGMs
concentrates; expected metallurgical recoveries and product specifications; the use of existing
processing and flotation infrastructure; the potential diversification of the Company's product and
revenue mix; the capital requirements and potential economic benefits of the copper-PGM initiative;
the Company's expectations and plans in respect of the at-the-market offering;
and management's
expectations for improved mine access, higher ore availability and the impact of operational
enhancements implemented during 2025.
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 V
2
O
5
and other vanadium products, ilmenite and titanium dioxide
pigment; that the current U.S. tariff rate on Brazilian imports will remain at or near current levels and
the tariff classification of the Company's vanadium products will remain unchanged; receipt of
regulatory and governmental approvals, permits and renewals in a timely manner; the continued
validity and effectiveness of the ANM approval and satisfaction of any conditions attached to it; receipt
of any additional regulatory and governmental approvals; the suitability of existing mineral feed and
processing infrastructure for copper-PGM concentrate production; achievement of expected
recoveries and product specifications; 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; the availability of financing for operations and
development; the Company's ability to fund operations and meet its financial obligations as they
come due; 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 ability to obtain funding through government grants and awards for the
Green Energy sector; that the Company's current plans for vanadium and ilmenite can be achieved;
the Company's ability to protect and develop its technology; the Company's ability to maintain its IP;
the competitiveness of the Company's product in an evolving market; that the Company will enter into
agreements for the sales of vanadium and ilmenite on favourable terms and for the sale of
substantially all of its annual production capacity; the Company's ability to attract and retain skilled
personnel and directors; the ability of management to execute strategic goals; uncertainty regarding
future sales volumes and customer demand; changes in global trade policies, including the
imposition of tariffs or other trade restrictions by the United States or other jurisdictions.
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", although not all forward-looking statements include those words or phrases.
In addition, any statements that refer to expectations, intentions, projections, guidance, potential, or
other characterizations of future events or circumstances contain forward-looking information. Forward-
looking statements are not historical facts nor assurances of future performance but instead represent
management's expectations, estimates, and projections regarding future events or circumstances.
Forward-looking statements are based on our opinions, estimates and assumptions that we
considered appropriate and reasonable as of the date such information is stated, 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-GAAP Measures
The Company uses certain non-GAAP measures, 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.
Management believes that non-IFRS financial measures, when supplementing measures determined in
accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance
of the Company.
Revenues Per Pound
The Company refers to revenues per pound sold, V
2
O
5
revenues per pound of V
2
O
5
sold, V
2
O
3
revenues per pound of V
2
O
3
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, V
2
O
5
revenues per pound of
V
2
O
5
sold, V
2
O
3
revenues per pound of V
2
O
3
sold and FeV revenues per kg of FeV sold to revenues
and the revenue information presented in note 19 to the Q2 2026 unaudited condensed interim
consolidated financial statements.
Three months ended
Six months ended
Jun 30,
2026
Jun 30,
2025
Jun 30,
2026
Jun 30,
2025
Revenues - V
2
O
5
produced
1
$
17,424
$
8,151
$
29,039
$
20,284
V
2
O
5
sold - produced (000s lb)
2,950
1,310
5,242
3,429
V
2
O
5
revenues per pound of V
2
O
5
sold - produced ($/lb)
5.91
6.22
5.54
5.92
Revenues - V
2
O
5
1
$
17,424
$
8,151
$
29,039
$
20,284
V
2
O
5
sold - produced (000s lb)
2,950
1,310
5,242
3,429
V
2
O
5
revenues per pound of V
2
O
5
sold - produced ($/lb)
5.91
6.22
5.54
5.92
Revenues - V
2
O
3
produced
1
$
1,861
$
1,435
$
1,861
$
2,731
V
2
O
3
sold (000s lb)
229
173
229
338
V
2
O
3
revenues per pound of V
2
O
3
sold ($/lb)
8.13
8.29
8.13
8.08
Revenues - FeV produced
1
- Europe
$
9,040
$
4,046
$
15,604
$
6,652
FeV sold - produced (000s kg) - Europe
411
242
758
403
FeV revenues per kg of FeV sold - produced ($/kg) - Europe
22.00
16.71
20.59
16.51
Revenues - FeV produced
1
- USA
$
13,338
$
9,834
$
21,008
$
18,940
FeV sold - produced (000s kg) - USA
424
425
733
838
FeV revenues per kg of FeV sold - produced ($/kg) - USA
31.46
23.15
28.66
22.60
Revenues - FeV purchased
1
$
893
$
1,978
$
893
$
4,334
FeV sold - purchased (000s kg)
40
81
40
186
FeV revenues per kg of FeV sold - purchased ($/kg)
22.33
24.42
22.33
23.30
Revenues - FeV
1
$
23,271
$
15,858
$
37,505
$
29,926
FeV sold (000s kg)
875
748
1,531
1,427
FeV revenues per kg of FeV sold ($/kg)
26.60
21.20
24.50
20.97
Revenues
1
$
42,556
$
25,444
$
68,405
$
52,941
V
2
O
5
equivalent sold (000s lb)
6,115
3,984
10,571
8,539
Revenues per pound sold ($/lb)
6.96
6.39
6.47
6.20
1
.
Quarter ended June 30 as per note 19 of the Q2 2026 unaudited condensed interim consolidated financial statements.
Cash Operating Costs, Cash Operating Costs Excluding Royalties and Adjusted Cash
Operating Costs Excluding Royalties
The Company refers to cash operating costs per pound, cash operating costs excluding royalties per
pound and adjusted cash operating costs excluding royalties per pound, which are non-GAAP ratios
based on cash operating costs, cash operating costs excluding royalties and adjusted 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 its plan and prior periods,
and to also 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.
Adjusted cash operating costs excluding royalties is calculated as cash operating costs excluding
royalties less write-downs of produced products.
Cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash