- V2O5 production of 1,986 tonnes (4.4 million lbs1) in Q1
2021 vs. 2,831 tonnes in Q1 2020; Lower production in Q1 2021 was
largely a result of the planned shutdown associated with the
Company’s cost-efficient nameplate capacity increase
- Commissioning and ramp up of cost-efficient nameplate
capacity increase to 1,100 tonnes of V2O5 per month to be completed
by the end of Q2 2021
- Global V2O5 recovery rate2 of 77.4% in Q1 2021, a 3%
decrease over Q1 2020
- Total V2O5 equivalent sales of 2,783 tonnes in Q1 2021, a
12% decrease over Q1 2020 mainly due to lower production during Q1
2021
- Strong vanadium price increases with main indexes in Europe
and U.S. up approximately 30% to 50% in Q1 2021 on the back of
solid demand in all key regions
- 2021 production, sales and cost guidance maintained
Largo Resources Ltd. ("Largo" or the "Company")
(TSX: LGO) (NASDAQ: LGO) announces first quarter 2021
production and sales results from its Maracás Menchen Mine
featuring quarterly production of 1,986 tonnes (4.4 million lbs1)
of vanadium pentoxide (“V2O5”) and sales of 2,783 tonnes of
V2O5 equivalent.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210419005236/en/
Largo Resources Announces First Quarter
2021 Production and Sales Results; Strong Vanadium Market
Fundamentals Continue (Photo: Business Wire)
Paulo Misk, President and Chief Executive Officer for Largo,
stated: "Production was largely impacted during the quarter as a
result of the planned shutdown to complete the upgrades and
improvements associated with the Company’s cost-efficient nameplate
increase to 1,100 tonnes of V2O5 per month. The related work for
this project concluded in January 2021 and we expect to reach the
new nameplate capacity by the end of Q2 2021, following the
required commissioning and ramp up phases." He continued: “Strong
vanadium demand in the Company’s key regions has continued in Q1
2021 with solid volume increases in the steel and chemical sectors.
This was highlighted by a more than 50% increase in Europe’s
average V2O5 price per lb during Q1 2021 as quoted by Fastmarkets
Metal Bulletin. As a result of the severe impacts of COVID-19
pandemic, vanadium demand from the aerospace sector continues to
lag, but we expect a gradual recovery from Q3 2021 onwards. Overall
vanadium demand is expected to remain solid throughout 2021 as
stimulus packages linked to the COVID-19 economic recovery are
implemented. A continuous focus on global carbon emission reduction
will also support the increased use of vanadium in the traditional
steel market as well as in the fast-growing long duration energy
storage sector. Recent sales of large scale VRFB systems around the
world is further confirming the adaptation of this technology and
we remain extremely focused on developing our clean energy division
to service to this market with our VCHARGE± battery.”
A summary of the Company’s Q1 2021 production and sales results
is presented below:
Maracás Menchen Mine
Production and Sales
Q1 2021
Q1 2020
Total Ore Mined (tonnes)
263,966
203,966
Ore Grade Mined - Effective Grade
(%)3
1.22
1.61
Effective Grade of Ore Milled
(%)3
1.26
1.59
Concentrate Produced (tonnes)
100,467
100,072
Grade of Concentrate (%)
3.21
3.36
Contained V2O5 (tonnes)
3,223
3,365
Crushing Recovery (%)
96.8
98.3
Milling Recovery (%)
97.1
98.4
Kiln Recovery (%)
88.9
88.3
Leaching Recovery (%)
97.1
96.6
Chemical Plant Recovery (%)
95.3
96.8
Global Recovery (%)2
77.4
79.9
V2O5 produced (Flake + Powder)
(tonnes)
1,986
2,831
V2O5 produced (equivalent
pounds)1
4,378,375
6,241,279
V2O5 equivalent sold (tonnes)
2,783
3,170
Q1 2021 Production Results
Total production from the Maracás Menchen Mine was 1,986 tonnes
of V2O5, representing a decrease of 30% over Q1 2020. This
reduction is largely a result of the planned shutdown to implement
upgrades to the kiln and improvements in the cooler. During this
shutdown, the Company increased its intermediate stockpiles which
is expected to benefit production in the next quarter. Following
the commissioning and ramp up phase, these upgrades are expected to
increase the Company’s nameplate capacity to 1,100 tonnes of V2O5
per month by the end of Q2 2021. The Company also conducted a
preventative maintenance program downstream of the kiln and cooler
during this downtime.
In Q1 2021, 263,966 tonnes of ore with an effective V2O5 grade3
of 1.22% were mined compared to 203,966 tonnes in Q1 2020 with an
effective V2O5 grade3 of 1.61%. The Company also produced 100,467
tonnes of concentrate ore with an average V2O5 grade of 3.21% in Q1
2021 compared to 100,072 tonnes in Q1 2020 with an average V2O5
grade of 3.36%.
The Company achieved a global V2O5 recovery rate2 of 77.4% in Q1
2021 representing a decrease of 3.0% over Q1 2020 (79.9%). This is
primarily due to the planned shutdown in January 2021 and the
subsequent commissioning and ramp up activities in February and
March 2021. These activities are expected to conclude by the end of
Q2 2021 at which point the Company expects the global recoveries2
will return to levels achieved in 2020.
COVID-19 Preventative Measures
The Company continues to monitor the evolving COVID-19 pandemic
and has taken preventative measures at its mine site and corporate
offices to mitigate potential risks. Although there have been some
challenges with logistics, there continues to be no significant
impact on the Company’s production or on the shipment of products
out of Maracás. To date, there continues to be no significant
disruption to the Company's supply chain for its operations and the
level of critical consumables continues to be at normal levels. In
addition, the restrictions imposed by the government in Brazil have
not significantly impacted operations. The Company continues to
follow the recommendations provided by health authorities and all
corporate office personnel have been instructed to work from home
where possible. The Company continues to staff critical functions
at the Maracás Menchen Mine and has encouraged those in
non-essential roles to work from home.
The Company's 2021 guidance is presented on a "business as
usual" basis. The Company continues to monitor measures being
imposed by governments globally to reduce the spread of COVID-19
and the impact that this may have on the Company’s operations,
sales and guidance for 2021. Although these restrictions have not,
to date, had a material impact on the Company’s operations and
sales, the potential future impact of COVID-19 both in Brazil and
globally could have a significant impact on the Company’s
operations, sales efforts and logistics. The Company is continuing
to monitor the rapidly developing impacts of the COVID-19 pandemic
and will take all possible actions to help minimize the impact on
the Company and its people. However, these actions may
significantly change the guidance and forecasts presented and will,
if and when necessary, update its guidance accordingly.
About Largo Resources
Largo Resources is an industry preferred, vertically integrated
vanadium company. It services multiple vanadium market applications
through the supply of its unrivaled VPURE™ and VPURE+™ products,
from one of the world’s highest-grade vanadium deposits at the
Company’s Maracás Menchen Mine located in Brazil. Largo is also
focused on the advancement of renewable energy storage solutions
through its world-class VCHARGE± vanadium redox flow battery
technology. The Company's common shares are listed on the Toronto
Stock Exchange under the symbol "LGO".
For more information on Largo and VPURE™, please visit
www.largoresources.com and www.largoVPURE.com.
For additional information on Largo Clean Energy, please visit
www.largocleanenergy.com.
Forward-looking Information:
This press release contains forward-looking information under
Canadian securities legislation, some of which may be considered
"financial outlook" for the purposes of application Canadian
securities legislation ("forward-looking statements").
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; costs of future activities
and operations; the extent of capital and operating expenditures;
the iron ore price environment, the timing and cost related to the
build out of the ilmenite plan, eventual production from the
ilmenite plant, the ability to sell ilmenite on a profitable basis
and the extent and overall impact of the COVID-19 pandemic in
Brazil and globally. Forward-looking information in this press
release also includes, but is not limited to, statements with
respect to our ability to build, finance and operate a VRFB
business, our ability to complete a listing on the Nasdaq, our
ability to protect and develop our technology, our ability to
maintain our IP, our ability to market and sell our VCHARGE±
battery system on specification and at a competitive price, our
ability to secure the required production resources to build our
VCHARGE± battery system, our ability to produce iron ore and the
adoption of VFRB 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 SEDAR 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.
1 Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or
lbs. 2 Global recovery is the product of crushing recovery, milling
recovery, kiln recovery, leaching recovery and chemical plant
recovery. 3 Effective grade represents the percentage of magnetic
material mined multiplied by the percentage of V2O5 in the magnetic
concentrate.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210419005236/en/
Investor Relations: Alex Guthrie Senior Manager, External
Relations aguthrie@largoresources.com Tel: +1 416-861-9797
Media Enquiries: Crystal Quast Bullseye Corporate
Quast@bullseyecorporate.com Tel: +1 647-529-6364
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