Where are margins going? This is the chart showing the EU V2O5 price and LGO's
cash operating costs.
The area between the two lines represents the margin. Looking at the chart you have to keep in mind:
1) LGO's average V2O5 selling price is lower than the EU price.
2) Total cash costs are higher than
operating cash costs. (LGO reported total cash costs till Q4-2021 and usually they were ~$1 higher than cash operating costs).
3) Total costs are higher than total cash costs.
The company reported a loss in Q1 already. The pressure on margins intensified since then: The Vanadium price fell while costs increased. It's pretty obvious: Largo can not make any money in this kind of environment.
Put Largo management's dismal execution on top of it and what you get is a thorough explanation for LGO's share price.