RE:Calmac9shAppreciate your "outing" kha. That would explain your passion for Largo, having been around from it´s very birth and also made a boatload of money off it. I guess it´s frustation to see the SP hit these values, a pale image of theis once lofty valuation. But that´s commodities it seems, when the the underlying commodoty is doing well, management can do no wrong, when it´s floundering, they can do no right. You have done enough research on Largo to judge their performance, so I´ll take your word for it, that they have underperformed.
Nonetheless, it looks like they´ll find themselves in the "do no wrong" camp again. If the V story plays out it won´t matter much if Largo costs per lb are $5.0 or $6.0, or even higher, the margins will still be significant.
Taking Largos´s recent own (and no doubt optimistic!) NPV valuation of $2bn at a V2O5 price of $8.40 as a base case, and using say $11 realized price gives a scale of the potential upside to Largos valuation from the current MC of around $110m. Considering that the downside is surely limited at the current MC, this makes for a massively assymetric trade.
When the VFB demand really works through to the supply side, one could imagine a new and longer price range of $10 to $15 per lb. High enough to incentivize new supply, without overly dampening the VFB economics. Being assured a higher and secured long-term sales price alone would allow for a higher valuation of the producers.
I´ve also been in this game for decades, my real success has come from taking outsized positions in assymetric trades, the more compelling the situation, the larger the position. Vanadium, at least from my viewpoint, seems to be shaping up to be one of these. Unfortunately there are not many good and safe ways to play it, so I´ll have to exercise some restraint this time and make do with moderate positions in Largo and LPV that still let me sleep well at night!
Cheers