A positive article written a year ago
https://www.streetwisereports.com/article/2023/03/31/canadian-vanadium-company-building-bridges-over-the-atlantic.html
3/31/2023
In an interview with Streetwise Reports, Largo announced a number of changes and new initiatives at the company.
A year has passed so let’s review a few interesting points/data:
1. The first is that Largo is considering bringing on a new CEO. Daniel Tellechea is currently the Interim Chief Executive Officer and steered Largo with two principals in mind: fixed operations, and lower costs. However, Largo has not announced the name of its top candidate yet.
Still waiting! A reputable name would be a positive catalyst.
2. The company is also taking steps to expand its foothold overseas in Europe. The company is currently in joint venture negotiations with Salado, a major power generation and gas turbine company owned by the Italian government.
No agreement reached with Salado.
Largo is now in a new JV negotiation with Stryten to bring innovation / scale to the North American VFB market. A win if they can pull it off.
3. Largo is almost finished with a project in partnership with Enel Green Power in Spain, where it is looking to integrate a solar farm with vanadium batteries. It reports that it estimates this project to be 90% complete.
The project is 100% complete. A strong relationship with Enel can open the door for future opportunities in Europe.
4. It reports that it is also ideally positioned relative to the United States Inflation Reduction Act. While they are a Canadian company, many of its operations are located in the United States. Due to their position in the U.S. economy, they anticipate benefiting from government funding.
Clean energy was earmarked for funding of approximately $90 billion in the US Government’s
Inflation Reduction Act (enacted in September 2022).
Apart from the $4M received from the US D.O.E $4.2M for R&D in 2021 there is yet to be any funding from the Inflation Reduction Act. Any funding here would be a windfall.
5. While it cautiously avoided giving early details, Largo also said that it was in contact with blue chip companies looking for storage alternatives for energy-intensive warehouses and data centers.
Crickets! An announcement of a sale negotiation with a blue chip company would give the sp a push upward.
6. Largo expects to have its Ilmenite plant online by Q3 2023, and for it to generate revenue in 2024.
The production of ilmenite concentrate was 8,970T in Q4-23. Largo also produced 5,000T and 2,000T in Jan-24 and Feb-24 respectively. The 2024 guidance expects an annual production between 73,000T - 85,000T and an annual sale between 60,000T - 67,000T. Largo has estimated the price of its ilmenite to be $200/T in 2024.
Paul Vollant: “We completed our first 500 tonnes ilmenite sale in January, and anticipate selling between 18,000 and 22,000 tonnes at a healthy profit in the first half of this year”.
Paul Vollant: “But again, I mean, this price is much more stable than what you've been used to in vanadium. In terms of price level, it's still, somewhat, we're still in a price discovery phase ... Actually, you've got a massive premium for higher quality products, which - is where we're getting to now. So the prices that we achieved in our initial sales for the material that we produced during the ramp up at lower quality, should be very different in a few quarters, when we have stable production at higher grades. So, we can probably give you more color on that in the next - either next quarter or the following month.
7. It expects to implement its titanium production strategy over the course of six years, in three phases. Largo expects to begin the project in 2025, and for this endeavor to bring in more revenue than vanadium production.
Ilmenite concentrate is the main ingredient to produce Titanium pigment (TiO2 project). The ilmenite concentrate production is expected to supply all necessary feedstock for the TiO2 Pigment Plant with any surplus being sold in the open market.
In its original plan the TiO2 Project comprises 3 phases:
Phase 1 will see the construction of a plant to produce 30T of TiO2 pigment out of ~85T of Ilmenite concentrate. The duration of Phase 1 = 2 years.
Phase 2 will double the production capacity of the TiO2 pigment processing plant to 60T from a feedstock of ~160T of Ilmenite concentrate. The duration of Phase 2 = 2 years.
Phase 3 will consider to further increase the TiO2 pigment production capacity to 120K out of ~330T of Ilmenite concentrate. The duration of Phase 2 = 2 years.
Concurrently the Company will also perform the required expansion of its Ilmenite Plant to support the TiO2 pigment production in those 3 phases.
The total CAPEX requirement over 6 years = ~US$325M, as follows: Phase 1 = ~$96M; Phase 2 = ~$60M; and Phase 3 = ~$169M.
Note that in Jan 2023, management announced: “Management has made the decision to postpone the company's existing plans to further develop its titanium dioxide (TiO2) pigment plant until additional funds are made available, either internally or externally. At this time, the company is exploring alternative debt financing or strategic association options with advisers and will provide an update as things progress”
8. Subsequent to the article: PGM
Daniel Tellechea, Director and Interim CEO of Largo, stated: “Preliminary analysis of the Company’s non-magnetic tailings pond and ilmenite stockpile has returned significant PGM grades, prompting our team to plan for an additional drill program to enhance our knowledge of grade distribution within the non-magnetic tailings ponds. Simultaneously, our team is performing a database review, relogging, and re-assay program of past exploration work related to PGMs, alongside a focused drilling initiative to gain a deeper understanding of PGM grade distribution in deposits north and south of the Campbell Pit, where past exploration efforts have demonstrated various grades of PGMs. In 2014, Largo contracted Socit Gnrale de Surveillance SA. (SGS) to conduct metallurgical and PGM flotation tests on the massive vanadium ore at the Maracs Menchen Mine with encouraging results. The major significance of today's announcement is that higher grades of PGMs could be associated with the Company’s non-magnetic material rather than massive vanadium ore, as previously thought….”
Nothing more can be added in terms of economic estimation until “further studies to evaluate the potential to recover PGMs as an additional by-product of Largo’s vanadium and ilmenite operations following the completion of our ilmenite concentrate plant”.
Obviously the associated mineral reserves / resources must first be determined based on a professional evaluation.Then further assessment by independent certified professionals must be done with geological studies / economic data and the reliance on a number of assumptions before anything concrete can be given to the economic viability of the PGM subject.
DYODD