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Bullboard - Stock Discussion Forum 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... see more

TSX:LGO - Post Discussion

Largo Inc > My take on the impact of the iron ore fiasco
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Post by kha341 on Aug 15, 2021 2:15pm

My take on the impact of the iron ore fiasco

The iron ore fiasco is a lot more than just a failure by Management to monetize a tailing. 

1) Selling a new product without proper testwork to determine its saleability is an indication that the inexperienced sales team is not yet ready for venturing outside of the familiar Vanadium field. Can Largo be anything more than just a one-trick-pony? 

2) Selling a “lemon” product risks damaging the company’s credibility vis--vis the current / potential clientele. In a competitive field such as the metal markets it is difficult to gain customer trust without an untarnished reputation and without customer trust it is very hard to compete. 

3) Trying to hide the problem from existing / potential investors risks causing mistrust thus creating an atmosphere of skepticism / uncertainty. The market doesn’t like uncertainty. 

Consequently I would not be surprised if the iron ore fiasco was one of reasons causing the sp to drop deep into the bargain basement. Sure, the sp will eventually recover if V2O5 continues to be strong, but how fast and how long?

Unless some positive events / NR will come along my expectation of LGO reaching the C$30 range by the end of 2021 is fading away….even if we meet Q3 expectations.  

Just my 2-ct

DYODD


Comment by Clipper2 on Aug 15, 2021 3:26pm
I wonder which side was responsible for the shipping costs. Very rough estimate. avg weight of 1 cu ft of iron-ore in lbs 130-180 avg. Shipping costs per container $2000 to $3000         sold mt 14,000 lbs/mt 2,204 # of lbs ...more  
Comment by jcw604 on Aug 15, 2021 4:12pm
I don't think that the client is as dissatisfied as you thought, and I believe the product was not sold at a fixed price, but rather some cooperative work in between the client and Largo, and therefore the financial impact is not disclosed until this quarter. Both of the client and Largo determined that it is not worthwhile to further pursue further transactions for the poor quality iron core ...more  
Comment by kha341 on Aug 15, 2021 4:40pm
We will never know as the details of the sales are still hidden from us. The only thing that is public is a profit margin of US$86,000. Why was that information public? because by law Cleave must recorded it in the company books. Now US$84,000 margin on a sale of 14,000T is equivalent to US$0.006/ kg.  Nobody knows how they come up with such a nano amount.
Comment by MetalsMan on Aug 16, 2021 6:12am
$30 is definitely gone. maybe, if they stop the bullshit, maybe $20