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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 is also focused on the advancement of renewable energy storage solutions through Largo Clean Energy and its vanadium redox flow battery technology (VRFB). The Company is also engaged in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations, in addition to advancing its United States-based clean energy division with its VCHARGE vanadium batteries. VPURE+ Flakes are used in the production of master alloys, where it provides high strength-to-weight ratios for the titanium alloy and aerospace industries.


TSX:LGO - Post by User

Bullboard Posts
Comment by cult_of_frankon Oct 01, 2011 11:08am
230 Views
Post# 19107356

RE: $2 Billion Company in the making

RE: $2 Billion Company in the makingAgreed. Once upon a time, several of us on this board worked on a discounted (8%) NPV analysis that put Largo somewhere in the 70-80 cent range and ignored the value of Northern Dancer and Campo Allegre since there was insufficient information. That range was based on significantly discounted vanadium pricing as well as lower tungsten values for Currais Novos (which, as I recall, added only 1-2 cents to the NPV although it's worth more to have a junior that can generate some cash).
 
Nothing has changed today to impact that assessment in my opinion. People are afraid, certainly, and the only effect is to bring down the stock markets and provide bargain basement pricing to those savvy enough to spot the good investments from the ones that have always been speculative. The BRIC are still building, nobody (at least not yet) has gone bankrupt, it's only fear of those things stopping that has driven the last few weeks. Of course, if fear stops projects and planned expansions, etc, then it can have a very real effect on the economy, but I don't know of any examples of this.
 
Anyway, since we don't have any need to raise capital now, the stock price is irrelevant to company operations and if extended might mean that some of those warrants don't get issued. I don't believe they were necessary for completion of the mine, anyway, and were offered as a bonus to get the main offer to be a still-cheap 35 cents. 
 
Yes, this company financing was done by several large investors at a price that is almost 50% above the current share price. As much as I feel I've done my due diligence, they will have done more and are invested in a very big way in the future of Largo. On the one hand, they may sell us up the river for a quick but lowball gain in a sale, but even in these terrible markets I doubt that they would do so below 75 cents which would still be triple the current price (and double what they paid) although very upsetting given that we know the possibilities here. However, I believe that they wouldn't be invested so heavily if they didn't see what we all see and barring some emergency for all three of the big investing companies, I too see no barriers to reaching Mark's goal.  
 
The one thing affected by our current share price is our negotiating power when trying to arrange a JV for Currais Novos so perhaps I spoke too soon, but since I don't count that in my current estimates, it's merely a bonus property waiting for the right time. It would add a lot to have that project on the go simultaneously, but it doesn't affect the fact that we're below 1/3 the discounted NPV. When we get the construction license (which itself might not have a big impact on share price except that the rest of financing is contingent on it) and a better idea of what is at Campo Allegre (provided it's good news) we won't remain at these levels and then we can start looking at a JV there. Provided that all the miners of the world aren't huddled in the fetal position in fear.
Bullboard Posts