Largo Inc T.LGO

Can Largo deliver?

[kha341]

island9999 wrote: ....speaking of batteries,let's hear of another LCE battery contract awarded,...to prove the first one was not an accident.

Largo expects that by 2022 it will have made 40 megawatt-hours of electric energy deployments, before increasing its production to about 1400 megawatt-hours yearly by 2025 in an attempt to meet the market share target. Considering the fact that our first sales contract with Enel Green Power Espaa was only for the delivery of a 5 hour 6.1 MWh VCHARGE± system located in Spain, an expectation for 40 MWh deployments by next year is extremely ambitious.  

40 MWh by 2022 = ~6.6 x our first contract = one 6.1 MWh contract in about every 2 months from now to Dec 2022.

1,400 MWh yearly by 2025 = ~230 x our first contract = About 20 “6.1 MWh contracts” every month in 2025.

If we assume that ~9.89 tonnes of V are used per MWh of storage, then 1,400 Mwh would require 13,846 tonnes of V. 

Note that Largo’s production guidance for 2021 = 12,000 - 12,500 tonnes

Question: Can Largo deliver? 

https://www.miningnewswire.com/largo-declares-that-vanadium-for-energy-storage-pays-better-than-for-steel-production/

[Clipper2]

I don't recall any recent mention of the electrolyte plant.  This is from the Q1-21 Financial Report. "from Q1-21 Subsequent to Q1 2021, Largo Clean Energy secured a location for its global headquarters, including its product development and stack manufacturing centre, in Massachusetts, U.S. with an expected manufacturing capacity of up to 1.4 gigawatt hours per year. Work

[Drhoho]

Clipper, somewhere along the way LGO/LCE disclosed that the electrolyte production facility is,or is to be, located in Plaistow, New Hampshire, just across the state line from LCE announced headquarters in Wilmington, Massachusetts. 

[Clipper2]

Thanks doc. With the info. you supplied I was able to find it.  https://stockhouse.com/news/press-releases/2021/05/05/largo-secures-1-4-gwh-nameplate-capacity-stack-manufacturing-facility-and VCHARGE± Manufacturing Strategy Developed   During Q1 2021, the Company finalized the manufacturing strategy for its clean energy division and began to establish the supply chain

[kha341]

Even if (a very big IF) USV can turn the low grade Vanadium from India into "the world's highest-purity vanadium oxides" the costs of such transformation would be sky-high to say the least. The world's highest-purity"? Sound like a fairy tale to me.

[Clipper2]

kha I totally agree. US Vanadium should be renamed KIng Midas Vanadium. Mark Smith and Terry Perles must be smoking something. So the question remains. Which company will be supplying the electrolyte for the batteries?. Both Bushveld and Largo are in the driver's seat. BTW "Paludina" is a frequent poster on the Bushveld BB and he keeps track of all the Vanadium

[Clipper2]

For those of you who don't recall the story. "The most famous King Midas is popularly remembered in Greek mythology for his ability to turn everything he touched into gold. This came to be called the golden touch, or the Midas touch. In other words US Vanadium  have stated that they will be using India's by-product from slag to produce electrolyte.

[kha341]

Not just any electrolyte. The exact words: "USV recovers vanadium from this feed material, sourced from India, and process it into the world's highest-purity vanadium oxides and downstream vanadium chemicals, including ultra-high-purity VRFB electrolyte." Key words: Highest-Purity and Ultra High-Purity.

[Clipper2]

Also. On Sep 21st "Paludina" posted the following: "Not on the books yet but already cleared US customs. 80,000 Kg of V2O5 from Vanchem heading for Montreal after transshipment in Bahamas next weekend".  

[island9999]

  Without a doubt the elephant in the room is China,...their entry into the battery space was/is inevitable,and LCE should be prepared and not be surprised by that move.The big question will be if China decides to squeeze the battery market margins on electrolyte,the leasing(if they go that route)and of course the overall installed cost of the battery,LCE may have the best raw material to

[kha341]

Never mind the long term and never mind China's potential domination of the VRFB market  in the future, can Largo achieve its short term objective of 40 MWh deployments by 2022?  If it is true that smart-money / institutional investors determine whether to invest or not invest in the stock of a company based on their expectation of future returns of the company then the current

[MetalsMan]

I don't think they can produce on the battery.   However, VRFB does take off in China, we will be just fine as a miner.

[island9999]

  Making the battery business a success is vital to our (shareholders)investment in Largo,RBC's Andrew Wong states "Our base case with LCE arrives at a valuation that is 46% higher than valuing Largo based on only the traditional mining business.We estimate vanadium prices would need to be $11.00/lb for the traditional mining business to provide equivalent value to Largo'sLCE

[MetalsMan]

I agree,and that's why I believe we are down to the $15 range and still falling.  We have one battery sale, one customer and new players entering the field everyday. Vanadium continuously dropping isn't helping either...Storm cloud ahead, indeed. I fear it could be a rough 12 months

[kha341]

Island9999, Good point! The Q3 average price for standard Euro V2O5   is in the low US$9.00/lb range and the sp is currently deep in the bargain basement. Imho, it's unlikely that the revenue stream from our traditional V mining operations (our one-trick pony) alone can push the sp above C$20 unless the sales prices for our V2O5 equivalent  = + US$10/lb. We need some battery