Largo Releases Q3 Production Results – High Purity Supply at an All-Time High

Largo Inc. (TSX: LGO) (NASDAQ: LGO) announced solid Q3 production results and reiterated it will meet its revised 2022 guidance, despite slowed production due to a planned kiln and cooler refurbishment and a change in mining contractors.

A bright spot for Largo this quarter was 962 tonnes of high purity V2O5 equivalent produced, representing 33% of Q3 2022 production – the highest quarterly amount of high purity material Largo has ever produced.

Demand for high-purity vanadium is growing strongly and Largo is one of, if not the largest primary producers of the product, which commands price premiums.

Operational Summary

Production at the Maracás Menchen Mine totaled 2,906 tonnes with sales of 2,796 tonnes (inclusive of 351 tonnes of purchased material) vs 2,685 tonnes sold in Q3 2021. Lower sales in the quarter were mainly due to weaker spot demand from economic uncertainty and shipping delays.

Largo did call out steady demand for high-purity supply which demonstrates the company’s continued advantage from being able to supply a consistent and significant stream of high purity vanadium to the global market.

Largo completed its first high purity V2O3 sale in Europe this quarter and will continue to benefit from strong demand growth in industries like aerospace, that require only high purity supply.

Largo Physical Vanadium Now Trading on the TSX Venture Exchange

Largo celebrated another milestone with the public launch of Largo Physical Vanadium Corp (LPV) on the TSX Venture exchange under the ticker VAND.V.

The company, which is the first vehicle to give investor’s direct exposure to physical vanadium, began trading September 27th and currently owns around 418,000 kg of vanadium.

Largo Physical Vanadium is majority owned by Largo Inc. (around 65%) and will help dampen price and supply volatility of the electrolyte used in the VRFBs sold by Largo’s clean energy business, Largo Clean Energy.

With the help of LPV, Largo can provide a cheaper battery product and more reliable supply of electrolytes for future customers. LPV has the potential to revolutionize how vanadium is stored, consumed and sold.


Prices for vanadium pentoxide (V2O5) in Europe came in at $8.23/lb in the quarter, down a relatively benign 12% over Q3 2021.

Vanadium prices are still well above the lows of 2020 and the average of the past decade. Current fears about slowing economic growth are taking a toll on the price of all commodities, however the significant supply deficit for vanadium longer term is expected to support higher prices.

Energy/Geopolitical Uncertainty

Demand in the steel market softened in Q3 2022 due to geopolitical and economic uncertainties (Ukraine/Russian conflict). Concern over energy prices from Europe’s steel making industry led to a slowdown in spot demand for vanadium in the quarter.

However, high purity vanadium demand remains steady and is recovering from its 2020 lows, supported by renewed optimism in the travel and aerospace industries.
In Q3 2022, global recoveries averaged 80.7%, representing a 4% decrease over the average in Q3 2021, due to maintenance and the turnover of the company’s mining contractor.

In Q3 2022, 351,450 tonnes of ore were mined with an effective grade of 1.02% of V2O5.  The lower ore mined and effective grade 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%.

VCHARGE Battery Deployment Is in Process

The Company’s VCHARGE vanadium redox flow battery (VRFB) deployment for Enel Green Power in Spain continues to be the primary focus of Largo Clean Energy (LCE).
All high-power battery stacks have been manufactured for this deployment 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 AC components have been manufactured and factory-accepted, and shipment to the deployment site has begun. The battery deployment site is under construction and Largo Clean Energy 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.

Paulo Misk, CEO of Largo commented on the quarter’s results:

“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,

“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.”

Vanadium Continues to be a Key Electric Metal for the Renewable Boom to Come

Capital10x continues to believe vanadium will be one of the key metals driving the ongoing green energy transition.

There are 3 key applications for vanadium which make it an essential part of manufacturing for other industrial verticals:

1. Vanadium increases the tensile strength and production efficiency of steel
2. Vanadium improves the fuel efficiency of aircraft and other vehicles
3. Vanadium is essential in the manufacture of vanadium redox flow batteries (institutional and electrical grid efficiency)

Largo looks to still be executing on a future that looks especially bright, driven by the company’s two-pillar business model.

Vanadium demand is at an inflection point, looming global recession or not, and Largo remains relatively leveraged to any additional increasing in vanadium prices going forward.


Largo Inc. is a market awareness client of Capital 10X.


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