Largo Inc T.LGO

Vanadium prices anticipated by Management

[kha341]

 

From the 2023 Annual Consolidated Financial Statements:

"Management estimated vanadium prices based on current pricing data and anticipated market supply and demand dynamics, and used an estimated vanadium price of $6.68 per pound for 2024, increasing to $8.50 per pound for 2027 onwards.

Sadly, the data from the last 8 quarters show that Vanadium prices need to be a lot more than $8.50/lb for Largo to make a profit. The sales of Ilmenite would somewhat ease the pain but it would not be  enough for the company to turn things around without the successful delivery of drastic cost cutting measures (which management has promised with big fanfare but failed to do to date). 

US$

Period	Average Quarterly Benchmark Euro V2O5 Price	Earnings  (Loss) Per Share
Q4-23	$6.46/lb	($0.21)
Q3-23	$8.03/lb	($0.19)
Q2-23	$8.46/lb	($0.09)
Q1-23	$10.39/lb	($0.02)
Q4-22	$8.25/lb	($0.24)
Q3-22	$8.23/lb	($0.04)
Q2-22	$11.08/lb	$0.28
Q1-22	$10.72/lb	($0.03)

By estimating a Loss per share of (US$0.06) and by slashing the PT by half down to “book value”territory, Heiko Ihle of Wainwright (the most pro-Largo analyst to date) does not anticipate 2024 to be a comeback year for V nor Largo either. 

DYODD

[ThaLuvDocta]

Largo made those assumptions in order to calculate impairment costs; they likely used conservative figures intentionally. Largo stated before that V prices are unpredictable, which is why they don't put out V price guidance. I think you are taking Largo out of context.