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Largo Inc T.LGO

Alternate Symbol(s):  LGO

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.


TSX:LGO - Post by User

Comment by calmac9shon May 06, 2024 2:41pm
89 Views
Post# 36025481

RE:Calmac9sh

RE:Calmac9shI fully sympathize with your feelings kha, seeing a stock and business you were convinced was set up for long term growth performing so badly is a real bummer. Seems like you are well past the point of bailing though, so, it´s "batten down the hatches" and wait till the storm passes. In my experience, by far the worst emotion as an investor is bailing out at the bottom, only to see the stock reverse direction and head back up again and ultimately play out as you had always envisaged. Of course it´s unsettling just now that the smart money hasn´t shown up, despite the story being so compelling.
History shows however, that the so-called smart money doesn´t show up till a story, and trend are well established. The price performance of coal/gas/oil/lithium/uranium etc. over the last few years is testomony to this. Few markets were as well followed and researched as these, and yet still there were enormous price swings.  Vanadium is surely not on the smart money radar, and even if it were, it wouldn´t be of any interest as the liquidity of the whole market - producers and explorers - is far too  small to be meaningfully investable. This will of course improve as and when the market caps increase, but not enough for larger investors.

Btw your table comparing price momentum and markets caps of selected Uranium names with Largo highlights the huge undevaluation of Largo as most of these are explorers/royalty cos. (WUC excepted) with no current revenue, yet some still command higher market caps.

When the Vanadium story plays out as expected Largo will be one of the few options to invest in it, so one would expect that  it outperforms. This was the case with Uranium, the producers and physical funds, although less risky, outperformed the explorers by a long margin.
As for a buyout by a larger player, Bushveld would probably be a better candidate and they don´t seem to be lining up for that. Of course Arias could do a deal and get Largo on the cheap, but if so that would presumably be at a large premium to the current SP, albeit much less than the potential long-term increase.

Yes, the depressed V price doesn´t fit with the huge VFB build out in China, so there are obviuosly other forces at work here. Whether it´s Russian stockpiles being dumped, the China steel consumtion being lower than reported or other China supplies/stockpiles coming online is anyone´s guess. 

What is now as close to a certainty as can be, ist that VFBs in China will be huge, dwarfing the current V worldwide supply. VFBs also align well with China´s strategy of being self-sufficient in energy. Most of their coal/gas/oil as well as their renewable energy minerals are imported, VFBs however allow them to cover the whole supply chain. The Chinese state has allocated huge amounts of capital to sectors which align with their goals, this is no doubt behind the massive build out of VFB battery factories currently taking place.

Being a current producer of a commodity which is entering a massive growth phase puts Largo in a fantastic position. We saw what happened in 2018 when the Chinese adjusted their rebar specs, the current developments in VFBs will be massively more impactful - and longer lasting - to the V sector.

Till then, all we can do is keep the faith, and for the brave, keep topping up on weakness.

Cheers 

 


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