A Warning from Management From Q1-24 MD&A:
If the Company does not achieve expected vanadium and ilmenite sales volumes and prices or does not continue to operate at expected levels, the Company may have to implement alternative plans to ensure that it will have sufficient liquidity for the twelve-month period ending March 31, 2025 from continuing operations. These alternatives may impact future operating and financial performance.
In other words Largo desperately needs a strong recovery of V2O5 in the short term. The company simply can not continue to swim in a sea of red ink for ever.
Regarding the recovery of V2O5, here are some sobering data to chew on:
In Q1-24 the average benchmark prices per lb of V2O5 in Europe = US$6.44/lb. And Largo incurred a Net Loss of US$13M in the same period.
(Note: Back in Q1-24 My estimation of the average benchmark prices per lb of V2O5 in Europe based on my own record was ~$6.49/lb vs Largo’s $6.44/lb).
My estimation for April and May 2024 = ~$5.88/lb and ~$5.90/lb respectively. So it is very likely, imho, that the average benchmark prices per lb of V2O5 in Europe will be lower in Q2-24 than in Q1-24.
Let's pray for a Vanadium recovery starting in Q3-24.
DYODD