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| Largo Inc |
Largo Inc. posted a strong 42% increase in vanadium pentoxide (V2O5) production in Q3 2024, driven by operational improvements at its Maracás Menchen mine in Brazil. However, sales volumes slipped by 18% amid weak demand from key steel markets in China and Europe.
Vanadium Pentoxide Production and Operational Gains
In Q3 2024, Largo produced 3,072 metric tonnes (t) of V2O5, its highest quarterly output in nearly two years, up from 2,163t during the same period in 2023. The growth was attributed to:
- Enhanced operational efficiencies.
- Higher vanadium recovery rates from processed ore.
- Completion of kiln refractory replacement and new equipment installations earlier this year.
Quarterly concentrate production also surged by 42%, reaching 124,408t.
Lagging Sales and Spot Market Challenges
Despite the production gains, Largo's V2O5 sales volumes fell to 1,961t in Q3, down from 2,385t in the prior-year quarter. The decline stemmed from lower spot market demand, which the company linked to adverse conditions in the Chinese and European steel industries.
Liquidity Boost Through Asset Manager Deal
To enhance capital liquidity and reduce inventories, Largo signed a deal to supply 2,100t of standard-grade V2O5 to an unnamed New York-based asset manager for $23.5 million. Key terms include:
- Staggered shipments between 17 October 2024 and 31 March 2025.
- Payment upon delivery.
- A repurchase option allowing Largo to buy back up to 2,100t at a fixed price (≤ $7/lb), with the final volume determined by September 2027.
By-Product Growth: Ilmenite
Largo also reported strong growth in ilmenite production, a by-product of its vanadium operations. Key figures include:
- A 90% sequential increase in production to 16,383t.
- A 60% rise in sales volumes to 19,572t.
Ilmenite figures were first reported in Q4 2023, making year-over-year comparisons unavailable.
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