Mining Operating Costs and the Q3-23 disasterThe following table demonstrates that Q3-23 was the biggest “disaster” in the first 9 months of 2023, with not only the lowest revenue y-t-d but also the highest mining operation costs as a % of revenue (a head-spinning 97% representing a jump of 16% over the previous Qs). With its operating costs at 97% of revenue Largo’s mining pillar can hardly support itself, never mind trying to carry the LCE burden. What would happen if management did not have a laser focus on cost reduction as they have claimed?
Will Q4-23 be any better? Let’s forget about Q4-23; let’s get down on our knees and pray very very hard for a more efficient cost control in 2024.
US$
| Period | Revenue | Mining Operating Costs | Margin | Mining Op Costs as a % of Revenue |
| FY 2021 | $198.3M | $133.0M | $65.3M | 67% |
| FY 2022 | $229.3M | $169.7M | $59.6M | 74% |
| Q1-23 | $57.4M | $45.9M | $11.5M | 80% |
| Q2-23 | $53.1M | $43.0M | $10.1M | 81% |
| Q3-23 | $44.0M | $42.6M | $1.4M | 97% |
| 9 mths-23 | $154.5M | $131.5M | $23.0M | 85% |
DYODD