Largo Resources Provides Operational Update; Reports Strong V2O5 Production of 3,260 Tonnes in Q3 2021
October 20 2021 - 6:00AM
Business Wire
All amounts expressed are in U.S. dollars,
denominated by “$”.
- V2O5 production of 3,260 tonnes (7.2 million pounds1) in Q3
2021, a 5% increase over Q3 2020 and 6% above Q2 2021
- Total V2O5 equivalent sales of 2,685 tonnes in Q3 2021, a
16% increase over Q3 2020 and 11% below Q2 2021 due to logistical
challenges
- Largo Clean Energy (“LCE”) selected to receive $4.2 million
in funding from the Department of Energy (“DOE”) to scale up
U.S.-based manufacturing of flow battery and long duration storage
systems; Receipt of funding is subject to the completion of the
award negotiation with the DOE
- On July 30, 2021, LCE received a notice to proceed (“NTP”)
on its previously announced sales contract with Enel Green Power
España (“Enel”) for the delivery of a 5 hour 6.1 MWh VCHARGE±
system located in Spain
- Revised 2021 production and sales guidance: Production
guidance lowered to 11,400 to 11,800 tonnes of V2O5 equivalent from
12,000 to 12,500 tonnes; Sales guidance lowered to 11,200 to 11,800
tonnes of V2O5 equivalent from 12,250 to 12,750 tonnes
- Demand in all of the Company’s key vanadium markets remained
strong in Q3 2021: Average Fastmarkets European V2O5 price of
approximately $9.40 per lb in Q3 2021, a 76% increase over the
average in Q3 2020
Largo Resources Ltd. ("Largo" or the "Company")
(TSX:LGO) (NASDAQ:LGO) announces quarterly production
of 3,260 tonnes (7.1 million lbs1) of vanadium pentoxide
(“V2O5”) and sales of 2,685 tonnes of V2O5 equivalent from
its Maracás Menchen Mine in Q3 2021.
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Largo Resources Provides Operational
Update; Reports Strong V2O5 Production of 3,260 Tonnes in Q3 2021
(Photo: Business Wire)
Paulo Misk, President and Chief Executive Officer of Largo,
stated: “The Company remains well positioned to continue making
headway on the suite of value-add projects in our pipeline. This
quarter we received a NTP on our first battery sales contract with
Enel and are progressing on schedule with the build out of LCE’s
product development and stack manufacturing facility in
Massachusetts with an expected annual capacity of 1.4 GWh. We look
forward to a strong finish to the year and remain fully committed
to driving the world’s transition to a low-carbon future through
innovative energy storage solutions powered by our responsibly
produced vanadium.” He continued: “On the operational front, our
performance improved in Q3 2021 as highlighted by a 5% increase in
production over Q3 2020 and a 6% increase over Q2 2021. The strong
production performance during the quarter was largely driven by
increased throughput and improved recoveries following the
completion of the Company’s expansion project in Q2 2021. Despite
improved production results and steady vanadium demand in all
regions, the Company experienced logistical challenges which
resulted in lower sales for the quarter.”
A summary of the Company’s Q3 2021 production and sales results
is presented below:
Maracás Menchen Mine
Production and Sales
Q3 2021
Q2 2021
Q1 2021
Q3 2020
Total Ore Mined (tonnes)
366,484
340,734
263,966
287,969
Ore Grade Mined - Effective Grade
(%)2
1.10
1.15
1.22
1.28
Concentrate Produced (tonnes)
113,879
98,372
100,467
104,921
Grade of Concentrate (%)
3.32
3.23
3.21
3.32
Global Recovery (%)3
83.7
79.9
77.4
84.2
V2O5 produced (Flake + Powder)
(tonnes)
3,260
3,070
1,986
3,092
V2O5 produced (equivalent
pounds)1
7,187,061
6,768,183
4,378,375
6,816,685
Total V2O5 equivalent sold
(tonnes)
2,685
3,027
2,783
2,320
Produced V2O5 equivalent sold
(tonnes)
2,549
2,819
2,654
Purchased V2O5 equivalent sold
(tonnes)
136
208
129
Corporate Highlights
- DOE Selects LCE for Energy Storage Development Funding:
On September 23, 2021, the United States DOE announced funding for
research and development projects to scale up American
manufacturing of flow battery and long duration storage systems.
LCE is expected to receive $4.2 million of this funding to develop
and demonstrate highly efficient manufacturing processes for
affordable, grid-scale flow batteries. The receipt of funds is
subject to the completion of the award negotiation of with the DOE
and the negotiation is scheduled to be completed within 60 days of
the date of announcement. The DOE’s funding will help provide the
materials needed to expand the grid with new, clean energy sources,
deliver affordable electricity to disadvantaged communities, and
help reach the Biden Administration’s goal of net-zero carbon
emissions by 2050.
- Manufacturing Strategy and VCHARGE± Certification
Progressing on Schedule: The buildout of LCE’s product
development and stack manufacturing facility in Massachusetts is
proceeding on schedule with substantial completion expected in Q1
2022. The Underwriters Laboratories (“UL”) certification of the
VCHARGE± system is on schedule for completion in Q4 2021 and LCE
expects to proceed and obtain Conformité Européenne (“CE”)
certification by Q2 2022. CE certification is the European parallel
to UL certification.
- Strong Vanadium Production from Maracás: Production from
the Maracás Menchen Mine was 3,260 tonnes of V2O5 in Q3 2021,
representing a 5% increase over Q3 2020 and the second-best quarter
of production since commencement of operations. V2O5 production was
1,068 tonnes in July, with 1,101 tonnes being produced in August
and 1,091 tonnes in September. Increased quarter-over-quarter
production was largely due to higher throughput and increased
global recoveries3 following the completion of the Company’s
expansion project in Q2 2021. The Company achieved an excellent
global recovery3 of 83.7% in Q3 2021, being 1% lower than Q3 2020
but 5% higher than the 79.9% achieved in Q2 2021. The Company also
produced 113,879 tonnes of concentrate ore with an average V2O5
grade of 3.32% in Q3 2021 compared to 104,921 tonnes in Q3 2020
with an average V2O5 grade of 3.32%.
- Lower Vanadium Sales Driven by Logistical Delays: The
Company continues to actively manage its operations to provide
premium products and service to its customers. Increased delays and
global logistical challenges have impacted all aspects of the
Company’s supply chain resulting in lower V2O5 equivalent sales of
2,685 tonnes in Q3 2021. Diligent planning and a comprehensive
sales strategy have allowed the Company to deliver on all its
commercial commitments up to this point. The Company does not
expect the global logistics situation to improve until mid-2022
following increased port equipment availability, at which point the
Company expects to reduce its in-transit inventory.
- Vanadium Market Demand Remains Steady: Demand in all of
the Company’s key markets remained strong in Q3 2021 highlighted by
a quarterly increase of 76% in the European FMB V2O5 price.
However, lower activity in the steel related spot market and a
general worsening of sentiment in the steel industrial complex
following the significant drop in the iron ore price has recently
led to some negative pressure on global vanadium prices. Aerospace
industry demand continues to recover slowly but remains
significantly below pre-COVID demand levels. The Company expects a
gradual recovery in vanadium demand from this market over the next
two to four years. Largo maintains a strong focus on developing new
markets for its high purity vanadium products supported by the
addition of vanadium trioxide (“V2O3”) to its product range. The
Company continues with the commissioning of its V2O3 plant and
expects to conclude this work in Q4 2021.
Revised 2021 Production and Sales Guidance
The Company’s full-year V2O5 equivalent production and sales
guidance has been lowered to the range of 11,400 and 11,800 tonnes
and 11,200 and 11,800 tonnes, respectively. These adjustments have
been made to reflect the Company’s operational performance to date
and account for the global logistical challenges expected for the
remainder of the year. The Company expects to exit the year with a
solid quarter of production and sales results in Q4 2021.
2021 Guidance
Revised 2021 Guidance
Annual V2O5 equivalent
production
tonnes
12,000 – 12,500
11,400 – 11,800
Annual V2O5 equivalent sales
tonnes
12,250 – 12,750
11,200 – 11,800
About Largo Resources
Largo is a Canadian domiciled company that has historically been
solely committed to the production and supply of high-quality
vanadium products. The Company believes that the development and
sale of vanadium-based electrical energy storage systems to support
the planet's on-going transition to renewable energy presents both
an attractive economic opportunity for the use of the Company's
vanadium products and an opportunity to enhance the Company's
sustainability. Consequently, the Company is in the process of
vertically integrating its highly efficient vanadium production
operations with its vanadium-based energy storage technology to
create a unique competitive advantage in the rapidly growing long
duration energy storage market. The Company is confident that using
its VPURE™ and VPURE+™ products, which are sourced from one of the
world's highest-grade vanadium deposits at the Company's Maracás
Menchen Mine in Brazil, in its VCHARGE± vanadium redox flow battery
technology results in a competitive and practical long duration
energy storage product.
For more information on Largo please visit
www.largoresources.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 applicable 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 impact of global delays and related price increases on the
Company’s global supply chain and future V2O5 equivalent sales; the
timing of the conclusion of the commissioning of the V2O3 plant;
the increasing demand for vanadium in the aerospace industry in
coming years, the ability to successfully conclude award
negotiations with the DOE; the timing of completion of the product
development and stack manufacturing facility in Massachusetts and
the completion of the UL and CE certifications. 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 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, and the adoption of
VRFB 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 www.sedar.com
and 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&As which also apply.
Trademarks are owned by Largo Resources Ltd.
__________________ 1 Conversion of tonnes to pounds, 1 tonne =
2,204.62 pounds or lbs. 2 Effective grade represents the percentage
of magnetic material mined multiplied by the percentage of V2O5 in
the magnetic concentrate. 3Global recovery is the product of
crushing recovery, milling recovery, kiln recovery, leaching
recovery and chemical plant recovery.
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version on businesswire.com: https://www.businesswire.com/news/home/20211020005353/en/
Investor Relations: Alex Guthrie Senior Manager, External
Relations aguthrie@largoresources.com +1 416-861-9797
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