A total failure! How much more red ink can Largo take? “The Company’s continuance as a going concern is dependent on its ability to maintain profitable levels of operations”. So if Largo can survive 2024 (a serious “if “) then let’s hope that 2025 will be our comeback year.
Q4-23 Operating Costs = US$43.2M
Management then declared war on Costs and vowed to double their effort to implement costs reduction measures. Consequently Q1-24 Operating Costs skyrocketed 15% to $49.7M. WTF!
The Q1-24 Cash Operating Costs excluding royalties per pound jumped to $6.12 representing around 13% increase over $5.44 of Q4-23. Note that at $6.12/lb our variable costs alone already = 89% of our revenue per pound. No company can stay afloat for too long with such a dismal performance.
Thank God, management assured us that Cost Reduction Measures are underway. I don’t really know what “underway”means but if we are talking about the same cost reduction performance as in Q1 then 2024 will be a very very very challenging year, to say the least.