Post by
NewfNewf on Mar 21, 2022 4:25pm
New Andrew Wong report
Price Target CAD 23.00
Largo Clean Energy (LCE) adds considerable value: We value LCE at $872M, with significant value from retaining ownership of the vanadium in battery installations while receiving high-quality recurring payments over time. Our base case with LCE arrives at a valuation that is ~45% higher than valuing Largo based on only the traditional mining business. We estimate vanadium prices would need to be $11/lb for the traditional mining business to provide equivalent value to Largo's LCE model. We assume Largo ramps up to 1,400MWh/yr of battery sales by 2027, which would likely require increased vanadium production to also accommodate high-purity vanadium sales.
Maracas Menchen a top-tier vanadium asset: Largo's Maracas Menchen project, located in Brazil, is one of the lowest-cost vanadium assets globally due to high ore grades and strong operations. The project produces a high-purity, premium-priced product. Following improvements at the kiln in early-2021, monthly nameplate capacity increased to 1,100 tonnes.
Strong financial position: Largo has minimal debt and is generating positive operational cash flow, positioning Largo for significant free cash flow potential. We estimate $21M and $52M of FCF in 2022 and 2023.
Several upcoming potential catalysts: 1) Signing of VRFB sales contracts; 2) VCHARGE± certification in Q4/21 and H1/22 3) commissioning of battery manufacturing facility in Q1/22 and 4) construction and commissioning of ilmenite concentrate plan
Comment by
MetalsMan on Mar 21, 2022 4:30pm
I'm a bit confused about the 872M / $23 price target.
Comment by
MetalsMan on Mar 21, 2022 4:32pm
In any case, I assume this wasn't the re-rate Arias was hoping for - that's two analyst coming in at $23-$26 for twelve months out? I had hoped for higher, even though that would be a nice gain from where we are now.
Comment by
kha341 on Mar 21, 2022 5:02pm
When was the report dated?
Comment by
NewfNewf on Mar 21, 2022 5:31pm
No problem Kha. It was date dated March 20th
Comment by
kha341 on Mar 21, 2022 5:51pm
Thanks. The importance is that it was wriitten after the Q4 CC. So AW keeps the price target unchanged at C$23. And the same outperform rating as well?
Comment by
island9999 on Mar 21, 2022 6:37pm
Re;Andrew Wong Methinks that is just a rollover from the previous Foundation Report,looking at it gives 2021 YE Revenue as estimated not actual,same with Q4 Revenue as estimated not actual,also estimated Q4 EPS at .21,no Actual EPS given