Largo Inc T.LGO

Alternate Symbol(s): LGO

Metals & Mining Industrial Metals & Minerals

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.

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Largo Inc > FY-23 Revenue estimated to be higher than expectation

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Comment by EnglishTickleron Jan 23, 2024 9:49am

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Post# 35840595

RE:FY-23 Revenue estimated to be higher than expectation

He continued: “In Q4 2023, we continued to ramp up our ilmenite concentrate plant and are pleased to provide the first annual guidance for this material in 2024. With a substantial investment in this new plant in 2022/2023, we look forward to reaping the benefits of diversifying Largo's product offering and revenues in 2024 from expected ilmenite sales as by-product of our traditional vanadium operations. We completed our first 500 tonne ilmenite sale in January 2024 and expect to sell between 8,500 – 10,500 tonnes in Q1 2024. For the coming year, it is our priority to remain focused on optimizing our operations, reducing costs, and achieving our production and sales targets as we continue to navigate a lower vanadium price environment. Lastly, Largo remains dedicated to advancing its exploration program surrounding the Maracs Menchen Mine as we strive to plan for future growth.”

kha341 wrote:

My Estimation

1) V2O5 Equivalent

Q4-23 Sales = 2,605T = 5,743,042lbs

Q4-23 Average Benchmark V2O5 price = US$6.46/lb

Assuming Price per pound of V2O5 equivalent sold = US$7.00/lb

Q4-23 V ERevenue = US$7.00 x 5,743,042lbs = ~US$40.5M

Q1+Q2+Q3 Actual V Revenue = US$154.5M

FY-23 Vanadium ERevenue = 154.5 + 40.5 = US$195.0M

2) Ilmenite

Q4-23 Ilmenite Estimated Sales = 8,970T

Assuming Ilmenite Price = US$280/T

Q4-23 Ilmenite ERevenue = US$280 x 8,970T = ~US$2.5M

3) Total FY-23 E Revenue

US$195 (V2O5) + US$2.5M (Ilmenite) = ~US$197.5M vs Analyst Consensus ERevenue of US$180.5M

4) FY-23 EPS = ???

Q1+Q2+Q3 Actual EPS = (US.30)

FY-23 Analyst Consensus Earnings per Share = (US.35).

Imho, Largo was unlikely to meet the analyst expectation for FY-23 EPS.

5) Cash Position = ???

Cash as at June 30 2023 = US$64M

Cash as at Sept 30 2023 = US$39.6M (or a burn rate of US$24.4M in Q3-23)

What was the Q4-23 Cash burn rate?

What was Largo’s cash position at the end of 2023?

Imho, Largo will need to raise funds (either by equity, debt or a combination of both financing methods) soon.

DYODD