On May 13 in the Q1-21 Earnings CC, Paulo Misk said this about the first iron ore sale: “We are pleased to report that the company completed its first sale of iron ore in April from the Maracs Menchen Mine. We would like to highlight that our first sale of iron ore was a key step in validating the commercial viability of this material and also highlight the added benefit of our new established internal sales divisions, while capitalizing the higher iron ore price environment. We continue our active discussions with end users for this material and expect to complete additional sales of our material in 2021”
In the same non-interactive CC Andrew Wong asked: “Iron ore is sitting around $230 per tonne in China. With iron ore at record levels, what are your options from monetizing the stockpiled ore at Maracs Menchen Mine? Have you been able to sell any more? And what kind of profit do you expect to realize at these prices? Paul, let me hand this one over to you”
Paul Vollant replied: “Yes. Thanks, Andrew. As I mentioned before, since the first iron ore sales in March, we have concluded a couple more with local customers in Brazil. And today, we're in advanced discussions with several domestic and international buyers. From a commercial point of view, we see the current price levels as a real opportunity for Largo to maximize sales and profits from its iron ore product. And really, our goal is to try and seize this window of opportunity as much as possible. So we're working very hard at it"
“Completed its first sale of iron ore in April” meant delivered and paid. It meant that the “sodium” problem was discovered and communicated by the Chinese before they paid any amount in April. It also meant that Management knew about the margin of US$0.007/kg in April. And yet they continue to present to the public a rosy iron ore picture until finally admitting the shaky future of this “solid waste” (non-saleable due to the presence of sodium) after pressing questions from analysts in the Q2-21 CC on August 11.
How can we take what is said by Management at its face value from now on? For Management to build credibility and earn our trust, the BoD must, to say the least, establish / impose a corporate culture based on transparency.