My Take The mining pillar? Production is down while costs are running amok. And it is supposed to support the energy storage strategy?
The energy storage pillar? It’s still in its infancy. While it is a heavy burden on the company’s coffer there is no indication that management can deliver its promises. LCE has yet to prove that its VRFB is a viable product.
No wonder Largo could not even turn a profit with a revenue per pound sold of US$9.14 in Q1-23.
We always assume that the mining operation at Maracas is a well oiled machine. Even that assumption is now called into question in light of the fatal explosion due, apparently, to faulty equipment. Any more faulty equipment out there? If you were a worker at Maracas, how would you feel about your safety/well being right now? Shaken?
Don’t kid yourself, this is a major crisis and how management deals with it can significantly affect Largo’s ability to carry out its mining operations and damage the company’s reputation in the eyes of investors / stakeholders.
There must be an investigation by the proper governmental authorities on top of a complete / exhaustive internal review of the entire mining operation/equipment. So, at the minimum do expect production to slow down and operating costs to increase. At worst there could be labour unrest/strike.
Btw, imho, the Production Update will have to talk about the impact of the fatal accident on production. Therefore a delay in the related NR would not be a surprise to me.
My 2cts
DYODD