RE:LPV: Vanadium monthly News - April-2024Thanks kha for all you do here on our cozy little LGO chat. Your devotion/commitment, or whatever it is that motivates you, is truly amazing. Particularly your in-depth analysis of Largo´s financial stats, CCs etc. is extremely helpful. You´ll get my vote for Largo CFO/Chairman any time, if anyone ever asks me!
I was heavily invested in Largo years ago during the V run-up after the mine came online and managed to exit with a good profit. I foolishly put some of it into Cellcube in Europe, thinking/hoping that VFBs were the future. That of course wasn´t to be and Cellcube were subsequently de-listed. I then moved on to Uranium and managed to make, and book, big profits, and still have a large holding in physical and stocks.
Interestingly, the similarities between the two metals are striking: a small, unloved and unresearched sector with extremely opaque supply/demand characteristics. Uranium is famed for it´s opaqueness, however having become more involved in V again, I think V even trumps Uranium, particularly the fact that most supply comes from co-production/recycling/coal, and little from primary producers. With the main supply coming from China/Russia the situation is made even more opaque. And therein lies the opportunity. If it was blatantly obvious to everyone the underlying fundamentals would be adequately priced in and we could all move on and get on with our lives.
The VFB developments coming out of China on an almost daily basis are truly mind-boggling, the long-awaited ramp-up of the VFB technology finally seems to be coming to fruition. Bases on various sources, there seems to be over 6GWh capacity build in the pipeline, and new announcements this year amount to 4,0 GWh, 1,6GWh in April alone, giving a run-rate of 12 GWh pa. Even more impressive are the investments in giga battery-building factories, which are already at over 60GWh annual capacity. With the usage factor of 4% annual V-supply for 1 GWh battery capacity it´s clear that the demand for Vanadium will rocket and completely dwarf existing supply, for the time being at least.
In line with the IMF graphic above, Vanadium is rapidly becoming an energy metal, and presumably the pricing will ultimately reflect this. The predicted 8-fold increase amounts to a cagr of 8% continuously for 27 years, amazing and probably almost unrivalled in commodity investing.
The only question is how quickly this plays out, and for us Largo fans, what condition will Largo be in financially when the story plays out.