The Ilmenite project Paul Vollant: “We completed our first 500 tonnes ilmenite sale in January, and anticipate selling between 18,000 and 22,000 tonnes at a healthy profit in the first half of this year”.
Paul Vollant: “But again, I mean, this price is much more stable than what you've been used to in vanadium. In terms of price level, it's still, somewhat, we're still in a price discovery phase ... Actually, you've got a massive premium for higher quality products, which - is where we're getting to now. So the prices that we achieved in our initial sales for the material that we produced during the ramp up at lower quality, should be very different in a few quarters, when we have stable production at higher grades. So, we can probably give you more color on that in the next - either next quarter or the following month”.
Daniel Tellechea
Yes, I think you'll see like a normal run rate by Q3, in terms of sales and probably Q2, in terms of production.
According to Vollant we produced low quality ilmenite during the ramp up.
The ramp up the production of ilmenite was 814 tonnes in October, 2,546 tonnes in November and 5,610 tonnes in December-23, for a total of 8,670T. Out of those low quality Ilmenite the first sale of 500T was recorded in Jan 2024.
Let’s assume generously that the selling price for low quality ilmenite = $250/T
Revenue from the sale = $250 x 500 = US$125,000
Vollant anticipates selling between 18,000T and 22,000T in the first half of 2024 for an average of 20,000T which, at a generous selling rate of US$250/T, can bring in $5M in revenue.
If we assumed a healthy profit margin of 75%, we would be talking about $3.75M in profit for the first half of 2024.
O.K, a profit of $3.5M is very much welcome in this desperate time but it really is nothing to write home about considering the fact that we were promised a plant with a production capacity of 150,000T of ilmenite concentrate but after spending ~US$47M in 2022-2023, we end up with an annual production guidance of between 73,000T and 85,000T for 2024, and consequently a sale guidance of between 60,000T and 67,000T for the same period. In summary, the ilmenite project cost us almost double the US$25.2M original budget to deliver a production capacity of about half of the planned 150,000T after one year behind schedule. Nothing to write home about, to say the least.
Mr. Daniel Tellechea reports:
TORONTO / Mar 18, 2021 / Business Wire / Largo Resources Ltd. ("Largo" or the "Company") (TSX: LGO) (OTCQX: LGORD) is pleased to announce that the Company’s Board of Directors (the “Board”) has approved the construction of a new ilmenite concentration plant.
Commercial production from the new plant is expected early in 2023 and the plant's capacity will be approximately 150,000 tonnes of ilmenite concentrate per annum. The Company started an ilmenite pilot plant in October 2019. Based on the promising results, the Board approved construction of a full-scale plant. The advanced engineering and construction of the ilmenite concentration plant is expected to cost approximately US$25.2 million with the majority of these costs being incurred in 2022.