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Bullboard - Stock Discussion Forum Largo Inc T.LGO

Alternate Symbol(s):  LGO

Largo Inc. is a Canada-based producer and supplier of vanadium products. The Company’s segments include sales & trading, mine properties, corporate, exploration and evaluation properties (E&E properties), Largo Clean Energy and Largo Physical Vanadium. Its VPURE and VPURE+ products, which are sourced from one of the vanadium deposits at the Company's Maracas Menchen Mine in Brazil. The Company... see more

TSX:LGO - Post Discussion

Largo Inc > Largo vs Bushveld VRFB business models
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Post by kha341 on Feb 05, 2022 11:57am

Largo vs Bushveld VRFB business models

1) Largo's business concept is to “lease” VRFB via Largo Physical Vanadium (CPC/LPV). CPC/LPV will be a publicly traded company located in B.C Canada. CPC/LPV will begin to offer shares to the public via an Initial Public Offering process (IPO). 

2) The business model of Bushveld and its partner Invinity Energy System is to “rent” VRFB via Vanadium Electrolyte Rental Limited (VERL). VERL is a private limited company located in London, UK. A private company is a firm held under private ownership. Private companies may issue stock and have shareholders, but their shares do not trade on public exchanges and are not issued through an IPO.

Understanding that the success of both CPC/LPV and VERL will depend on their respective ability to penetrate the VRFB market, which business model is better? Note: While it takes time / money to undertake an IPO, selling shares publicly provides a company an important source of capital to fund growth.
Am I wrong to assume that with regard to long-duration energy storage / VRFB there is not much difference between a lease and a rental agreement?

 


1) Alberto Arias, Co-Chair of the Board of Directors stated: "LPV, together with the completion of the proposed qualifying transaction, represents an important strategic move for Largo, as it combines two widely accepted concepts in the commodity markets in an innovative way: i) the concept of a publicly traded instrument holding a physical commodity and ii) the concept of "metal leasing" for industrial applications to reduce the input costs of commodities that do not degrade during its use. While the success of this strategy will also be contingent, amongst other things, on sufficient investor interest and Largo’s ability to market and sell its VRFBs, we believe that both concepts combined and applied for the first time to VRFBs would help solve the historical challenge of how to secure vanadium supply at an affordable and stable basis.

2) Invinity Energy Systems, manufacturer of vanadium flow batteries for the large-scale energy storage requirements of businesses, industry and electricity networks, is pleased to announce that it has formed a special purpose company, Vanadium Electrolyte Rental Limited (“VERL”), in partnership with Bushveld Minerals for the purpose of providing an electrolyte rental option for the Company’s customers.

The formation of VERL provides Invinity customers with the additional option to rent the electrolyte used in the Vanadium Flow Battery (VFB) system over a set term. This approach allows customers to reduce the upfront capital outlay of a flow battery system by renting the electrolyte over the life of a project, rather than purchasing it at the outset.

 

 

 

 


Comment by ninja123 on Feb 05, 2022 1:01pm
this is clearly a financial manoveur so that Arias can make a distribution to his PE investors. i hope it works.. nothing else does.  i have not owned LGO for months .. just started nibbling again this week.  i have very little patience for this mangement team and their endless underperformance. 
Comment by kha341 on Feb 05, 2022 1:39pm
Definitely an Arias brainchild.  Endless underperformance? Well said! From endless exaggerated promises come endless underperformance. Sadly, nobody seems to be held accountable. Not the right way to earn the public's trust.
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