Events / News that may propel the SP dramatically up in 2023 1) Commissioning of Largo’s first sale in Q2-2023: This will be a litmus test to be used by potential clean energy customers to make a judgment about whether Largo’s VRFB is worth buying/leasing or not. Management must deliver a quality product successfully.
2) Joint venture with Ansaldo Green Tech for the manufacturing and commercialization of VRFB: Since the departure of Ian Robertson, Stephen Prince and the entire clean-energy professional staff many months ago, LCE has been run by the same executives who are busy operating the mining pillar. Besides seemingly being very busy making the mining operations profitable these mining people have no experience / expertise / connectivity in the energy storage industry. This situation is surely not the right way to gain a foothold (even a tiny one) in the long-duration energy storage market. An MOU with Ansaldo is currently in place since Aug 2022 and the negotiation is on-going. A news release announcing the joint venture will be a positive catalyst. Management must successfully complete the negotiation no later than Q1-23 for any hope to ink a new VRFB deal in 2023.
3) More High Purity Vanadium to be sold with a premium: The demand for High Purity V2O5 in the aerospace and chemical sectors continues to recover in 2022 and is expected to increase more next year. This should provide more demand for Largo’s Largo’s VPURE™+ Flakes and VPURE™+ Powder in 2023. Largo started commercial production of VPURE™+ V2O3 in 2022. The company’s first sales of V2O3 were delivered in Q3-22 and more sales are expected in Q4. As per Paul Vollant there is a very good demand for V2O3 in the global market and our products are very well received. The negotiation for 2023 sales contracts has been on-going actively since Q3-22 and Largo forecasts a jump in V2O3 sales next year. Increase in V2O3 sales in Q1-23 / Q2-23 will be a positive catalyst.
4) New Revenue Streams: Largo started an ilmenite (Titanium-iron oxide) pilot plant in October 2019. Based on the promising results, the BoD approved construction of a full-scale plant. The full-scale ilmenite concentration plant is scheduled to be commissioned in Q2-23. The ramp-up period is expected to be about 5 months before reaching the production capacity of 145,000-150,000 tonnes of ilmenite in Phase 1. The ilmenite concentration plant is part of Largo's titanium business. From the production of ilmenite (which is the main source of titanium dioxide) the company plans to produce 30,000 tonnes of Titanium Dioxide (TiO2) pigment with any surplus of ilmenite being sold on the open market. Phase 1 of the titanium projects aims to produce annually ~145,000 tonnes of ilmenite and 30,000 tonnes of TiO2 pigment in 2024 and 2025. In 2023 Largo will sell the ramp-up production of ilmenite on the open market. As per Paulo Misk the current Ilmenite processing costs = US$7/T and current selling price = US$400T. A news release relating to an on-schedule completion of the full-scale ilmenite concentration plant will be a positive catalyst.
Economics as per Technical Report:
2024 and 2025
Ilmenite Estimated Sale Volume = ~55,000T
Ilmenite Estimated Processing Costs = ~US$28/T
Ilmenite Estimated Selling Price = ~US$210/T
TiO2 Pigment Estimated Sales Volume = 30,000T
TiO2 Pigment Estimated Processing Costs = US$1,300/T
TiO2 Pigment Estimated Selling Price = ~US$3,100/T (note: Roskill long-run price = US$3,800
To quote Paulo Misk ( Q1-22 CC): “The titanium profitability from the metals is we produced the feedstock (?) in a very low cost $7 per ton, and there's getting the current price of the feedstock (?) is $400, we consider $210 in our tech report. And when you look at the cost that you are expecting to produce demand, around $1,500 per ton. That the price that we consider in the long run in our tech report is in a range of $3,800 per ton. So it give us the how good margin we will generate in this business. And we are very, very optimistic this has been very profitable”