News release
Largo Reduces Operating Costs by 31% in Q3 2024
Financial Results; Maintains Leading Cost Position
in Global Vanadium Sector
All amounts expressed are in U.S. dollars, denominated by “$”.
Q3 2024 and Other Highlights
Revenues of $29.9 million in Q3 2024 ($27.2 million from vanadium sales and $2.7 million from
ilmenite sales) vs. revenues of $44.0 million from vanadium sales in Q3 2023
Revenues per Ib sold! of V,O5 equivalent of $6.28 in Q3 2024 vs. $8.34 in Q3 2023; Decline in
revenues was largely driven by a lower vanadium price environment and lower vanadium sales
volumes
Operating costs were $29.5 million in Q3 2024, a 31% reduction compared to $42.6 million in Q3
2023; Cash operating costs excluding royalties! per pound sold of $3.12 in Q3 2024, a 43% reduction
compared to the $5.44 per Ib sold in Q3 2023
Mining operations adjusted EBITDA! of $2.4 million in Q3 2024 vs. mining operations adjusted
EBITDA! of $2.7 million in Q3 2023
Net loss of $10.1 million (including $3.3 million in non-recurring items) in Q3 2024, a 15%
improvement over the net loss of $11.9 million (including $2.5 million in non-recurring items) in Q3
2023; Basic loss per share of $0.16 in Q3 2024 vs. basic loss per share of $0.19 in Q3 2023
Cash balance of $30.5 million, net working capital surplus” of $46.7 million and debt of $93.7 million
exiting Q3 2024
Production of 3,072 tonnes (6.8 million Ibs?) of V,Oz5 in Q3 2024, a 42% increase over 2,163 tonnes
produced in Q3 2023; The Company’s highest quarterly V,O; production in seven quarters
V,Os5 equivalent sales of 1,961 tonnes (inclusive of 124 tonnes of purchased material) in Q3 2024 vs.
2,385 tonnes (inclusive of 256 tonnes of purchased material) sold in Q3 2023
On October 21, 2024, the Company announced it signed binding documentation for a vanadium
supply agreement to unlock approximately $23.5 million through the supply of 2,100 tonnes of the
Company’s standard grade V,Os, subject to repurchase option; Reducing vanadium inventories
without impacting current, future or long-term contract vanadium sales commitments
Ilmenite concentrate production of 16,383 tonnes in Q3 2024, a 90% increase over the 8,625 tonnes
produced in Q2 2024; Ilmenite concentrate sales of 19,572 tonnes in Q3 2024, a 60% increase over
the 12,261 tonnes sold in Q2 2024
The Company continues its negotiations regarding the previously announced signing of a non-
binding letter of intent by Largo Clean Energy Corp. (“LCE”) with Stryten Energy LLC to
establish a 50:50 joint venture in the United States remain ongoing
Q3 2024 results conference call: Thursday, November 14 at 10:00 a.m. ET
Vanadium Market Update*
The average benchmark price per lb of V,O5 in Europe was $5.71 in Q3 2024, a 29% decrease from
the average of $8.03 seen in Q3 2023; The average benchmark price per kg of ferrovanadium in
Europe was $25.95 in Q3 2024, an 8% decrease over the average of $28.23 in Q3 2023
The vanadium market remains impacted by oversupply in Asia and Europe; however, recent data
from Vanitec indicates that the oversupply gap is gradually narrowing, suggesting early signs of
improvement in market dynamics
TORONTO--(BUSINESS WIRE)--November 12, 2024--Largo Inc. ("Largo" or the "Company") (TSX: LGO)
(NASDAQ: LGO) today released financial results for the three and nine months ended September 30, 2024. The
Company reported quarterly vanadium pentoxide (“VO”) equivalent sales of 1,961 tonnes at a cash operating
cost excluding royalties! of $3.12 per pound, a 43% reduction from the prior year. Operating costs were reduced
by 31% compared to Q3 2023, reflecting the Company’s continued focus on cost efficiency and operational
improvements.
Daniel Tellechea, Director and Interim CEO of Largo, commented: “Our focus on operational productivity and
cost management is driving significant improvements at Largo, with the benefits now materializing in our
financial and production results. In Q3 2024, we successfully reduced operating costs by 31% and increased
vanadium production by 42%, achieving our highest quarterly output in seven quarters. These efforts are critical
as we navigate a weaker vanadium price environment and continue to prudently manage our capital.’’ He
continued: “The recently announced vanadium supply agreement will unlock approximately $23.5 million,
providing important liquidity while monetizing excess inventory without affecting our current sales efforts.
Combined with our ongoing cost reduction measures, these steps are anticipated to enhance Largo's financial
position and support its ability to navigate current market conditions. Additionally, our recent resource update
further strengthens our position as a secure and reliable supplier of vanadium and ilmenite to global markets.
Moving forward, we remain committed to maintaining our cost discipline and optimizing production to deliver
value for our shareholders, even in the current challenging price environment.”
Financial and Operating Results — Highlights
(thousands of U.S. dollars, except as otherwise stated) Three months ended Nine months ended
Sept. 30, 2024 Sept. 30, 2023 | Sept. 30,2024 Sept. 30, 2023
Revenues 29,906 43,983 100,652 154,514
Operating costs (29,538) (42,580) (115,624) (131,540)
Net income (loss) (10,086) (11,884) (37,575) (19,057)
Basic earnings (loss) per share (0.16) (0.19) (0.59) (0.30)
Adjusted EBITDA! (1,155) (1,578) (4,413) 12,482
Mining operations adjusted EBITDA! 2,360 2,674 3,510 27,816
Cash (used) provided before working capital items (2,924) (4,360) (15,372) 7,631
Cash operating costs excl. royalties! ($/Ib) 3.12 5.44 5.18 5.25
Adjusted cash operating costs excl. royalties! ($/Ib) 3.08 5.44 4.34 5.25
Cash 30,450 39,572 30,450 39,572
Debt 93,704 65,000 93,704 65,000
Total mined — dry basis (tonnes) 3,815,827 4,178,185 10,276,249 11,373,683
Total ore mined (tonnes) 600,198 447,165 1,773,017 1,279,024
Effective grade of ore mined (%) 0.76 0.74 0.66 0.81
V0, equivalent produced (tonnes) 3,072 2,163 7,490 6,913
Ilmenite concentrate produced (tonnes) 16,383 - 34,571 -
Q3 2024 Notes
e The Company reported a net loss of $10.1 million for Q3 2024, 15% below the net loss of $11.9 million
for Q3 2023, which is primarily attributable to a 31% decrease in operating costs but partially offset by a
32% decrease in revenues.
¢ Operating costs decreased 31% to $29.5 million in Q3 2024 from $42.6 million in Q3 2023, which was
primarily driven by a 52% reduction in direct mine and production costs, reflecting an 18% decrease in
vanadium sold, as well as the impact of the Company's previously announced cost reduction initiatives,
productivity improvements and the impact of vanadium inventory write-downs of $11.4 million realized to
date. Further, shared mining and production costs up to the milling process are allocated between
vanadium and ilmenite, which reduces the amount recognized in direct mine and production costs.
¢ Cash operating costs excluding royalties! of $3.12 per Ib sold in Q3 2024 representing a 43%
improvement compared to Q3 2023 ($5.44 per Ib) primarily due to the impact of the Company's
previously announced initiatives to reduce production costs and improve productivity, including reducing
haulage distances, reducing the number of contractors and a comprehensive review of all contracts. The
Company expects to see the positive impact of these savings, and others, continue in its financial results
going forward.
e Adjusted cash operating costs excluding royalties! per pound, which excludes the impact of inventory
write-downs for produced products of $0.2 million for Q3 2024 (Q3 2023 — $nil), was $3.08 per Ib,
compared with $5.44 for Q3 2023.
e Other general and administrative expenses in Q3 2024 ($2.0 million) decreased from Q3 2023 ($3.1
million) by 36%, which is primarily attributable to a focus on reducing costs as well as the reduced
activity at LCE.
¢ In Q3 2024, the Company repaid its $7.8 million working capital debt facility and received R$50.0 million
($9.2 million) from a new facility. The Company signed an additional inventory financing agreement in
Q3 2024 for up to $10.0 million. Under the terms of this facility, which has an ultimate term to June 30,
2026, the Company will use its vanadium finished products inventory to secure draw downs of up to $10.0
million for a maximum period of 90 days. The Company drew down $7.7 million across both of its
inventory financing facilities in Q3 2024.
e Subsequent to Q3 2024, production and sales were 902 tonnes and 658 tonnes of V,O5 equivalent,
respectively, in October 2024, with 3,620 tonnes of ilmenite concentrate being produced during this period
and 2,058 dry tonnes of ilmenite being sold.
e The Company will perform its annual kiln shutdown for maintenance activities in Q4 2024, ahead of the
initial plan of Q1 2025. The Company will replace the kiln refractory before the start of the rainy season in
order to optimize annual output and operational efficiency. The shutdown is planned to occur in late
November and early December for between 19 to 22 days. days.
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, 2024 and 2023 and
its management's discussion and analysis (“MD&A”’) for the three and nine months ended September 30, 2024
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 Maracas Menchen Mine in Brazil. The Company is currently focused on ramping up
its 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, the effect of inflation and exchange rates; the effect of unforeseen equipment maintenance or
repairs on production; timing of ilmenite production; the ability to produce high purity V2O5 and V2O03
according to customer specifications; the extent of capital and operating expenditures, the ability of the
Company to make improvements on its current short-term mine plan; the impact of global delays and related
price increases on the Company’s global supply chain and future sales of vanadium products; and the timing of
annual kiln maintenance and its impact on production and inventories.
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 and 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 8 operations at the Maracas 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 8 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 Maracas 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 Maracas 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 Companys “two-pillar” business strategy will be successful; 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; the Companys ability to market, sell and deliver VCHARGE batteries on specification and at a
competitive price; the Company's ability to successfully deploy VCHARGE batteries in foreign jurisdictions; the
Company’; ability to secure the required resources to build and deploy VCHARGE batteries, and the adoption of
VRFB technology generally in the market; 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, and 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-GAAP® 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. 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
This press release refers to revenues per pound sold, V,05 revenues per pound of V,O5 sold, V7O3 revenues per
pound of V703 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 Maracas 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>O5 revenues per pound of V,05
sold, V>O3 revenues per pound of V»O3 sold and FeV revenues per kg of FeV sold to revenues and the revenue
information presented in note 19 as per the Q3 2024 unaudited condensed interim consolidated financial
Statements.
Three months ended
Nine months ended
September 30, September 30, September 30, September 30,
2024 2023 2024 2023
Revenues - V,05 produced! 12,884 § 25,268 $ 47,175 90,352
V 0s sold - produced (000s Ib) 2,142 3,017 7,279 9,898
VOs5 revenues per pound of VOs sold - produced ($/lb) 6.01 $ 8.38 §$ 6.48 9.13
Revenues - V,05 purchased! — $ 2,066 $ 988 7,531
V05 sold - purchased (000s Ib) — 309 176 1,014
V0; revenues per pound of V20s sold - purchased ($/Ib) — $ 6.69 §$ 5.61 7.43
Revenues - V,0,;! 12,884 $ 27,334 $ 48,163 97,883
V05 sold (000s Ib) 2,142 3,326 7,455 10,912
V05 revenues per pound of V,0s sold ($/Ib) 6.01 § 8.22 $ 6.46 8.97
Revenues - V,03 produced! 958 $ 3,734 $ 7,896 7,575
V0; sold - produced (000s Ib) 89 308 839 619
VO; revenues per pound of VO3 sold - produced ($/lb) 10.76 $ 12.12 $ 9.41 12.24
Revenues - V,03 purchased! — $ — §$ — 1,155
V0; sold - purchased (000s Ib) — — — 88
V0; revenues per pound of V,03 sold - purchased ($/Ib) — $ — $ — 13.13
Revenues - V,0;! 958 $ 3,734 $ 7,896 8,730
V0; sold (000s Ib) 89 308 839 707
V 03 revenues per pound of V03 sold ($/Ib) 10.76 $ 12.12 $ 9.41 12.35