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Largo Reports Q4 and Full Year 2024 Operational and Sales Results; Provides 2025 Outlook and Guidance

1. Largo produced 9,264 tonnes of V₂O₅ in 2024, slightly below 2023 levels. 2. Q4 2024 V₂O₅ production dropped 36% vs Q4 2023 due to maintenance. 3. Average V₂O₅ price fell 21% year-over-year, impacting revenue expectations. 4. Mineral reserves increased by 67%, extending mine life to 31 years. 5. Production challenges expected to continue into early 2025, affecting guidance.

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FAQ

Why Neutral?

While production is below expectations, improved reserves balance concerns. Past occurrences show production dips haven’t severely affected stock prices.

How important is it?

The article provides key insights into Largo's operational performance and outlook. Performance will affect investor confidence and stock price movements.

Why Short Term?

Immediate production challenges may affect Q1 2025 results briefly. Longer-term outlook seems stable due to improved reserves.

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Largo Reports Q4 and Full Year 2024 Operational and Sales Results; Provides 2025 Outlook and Guidance

All amounts expressed are in U.S. dollars, denominated by “$”.

Q4 and FY 2024 Highlights

  • Quarterly V2O5 equivalent production of 1,775 tonnes (3.9 million lbs1) in Q4 2024 vs. 2,768 tonnes produced in Q4 2023; Decrease due to scheduled kiln and cooler maintenance
  • Annual V2O5 production of 9,264 tonnes (20.4 million lbs1) in 2024 vs. 9,681 tonnes in 2023; Within the Company’s 2024 annual production guidance range of 9,000 – 11,000 tonnes
  • Quarterly global V2O5 recovery of 77.9% in Q4 2024 vs. 79.4% achieved in Q4 2023; Annual global V2O5 recovery of 76.4% in 2024 vs. 80.0% in 2023
  • Quarterly sales of 3,033 tonnes of V2O5 equivalent (inclusive of 8 tonnes of purchased material and 1,200 tonnes related to the Company’s vanadium inventory supply agreement) in Q4 2024, a 16% increase over the 2,605 tonnes in sold Q4 2023
  • Annual V2O5 equivalent sales of 9,600 (inclusive of 416 tonnes of purchased material and 1,200 tonnes related to its vanadium inventory supply agreement) tonnes in 2024 vs. 10,396 tonnes in 2023; Within the Company’s annual 2024 sales guidance of 8,700 – 10,700 tonnes
  • Ramp up of the Company’s ilmenite concentrate production remains ongoing with 10,292 tonnes produced in Q4 2024 and 44,863 tonnes produced in 2024; Quarterly ilmenite concentrate sold of 10,570 tonnes in Q4 2024 and 42,916 tonnes sold in 2024
  • In 2024, Largo increased mineral reserves by 67% and mineral resources by 64%, extending the Maracás Menchen Mine’s life to 31 years (the “Technical Report”), as detailed in its October 2024 Technical Report (see press release dated October 28, 2024)

Vanadium Market Update2

  • The average benchmark price per lb of V2O5 in Europe was $5.34 in Q4 2024, a 21% decrease from the average of $6.46 seen in Q4 2023; The average benchmark price at December 31, 2024 was $5.37, a 22% decrease from the average of $6.53 at December 31, 2023
  • The average benchmark price per kg of ferrovanadium in Europe was $26.10 in Q4 2024, a 2% decrease from the average of $26.62 seen in Q4 2023; The average benchmark price at December 31, 2024 was $25.38, a 13% decrease from the average of $28.70 at December 31, 2023
  • Vanadium spot demand softened in Q4 2024, primarily due to weaker demand in the Chinese and European steel industries, while the U.S. steel market remained stable; Aerospace sector demand remained strong, and China’s energy storage sector is expected to drive additional consumption in upcoming quarters
  • In 2025, U.S. steel demand is expected to remain stable, while European and Asian steel markets face continued softness; The aerospace sector is projected to see increased demand, particularly in the second half of 2025 and China’s energy storage market is expected to be a key driver of vanadium consumption as the sector continues to accelerate

Largo Reports Q4 and Full Year 2024 Operational and Sales Results; Provides 2025 Outlook and Guidance (Photo: Business Wire)

TORONTO--()--Largo Inc. ("Largo" or the "Company") (TSX: LGO) (NASDAQ: LGO) today announces annual production of 9,264 tonnes (20.4 million lbs¹) of vanadium pentoxide (“V₂O₅”) equivalent from its Maracás Menchen Mine and sales of 9,600 tonnes of V₂O₅ equivalent in 2024, alongside ongoing efforts to enhance operational efficiencies, expand mineral resources and reserves, and reinforce its position as a reliable supplier of high purity vanadium.

Daniel Tellechea, Interim CEO of Largo, stated: “In 2024, our team remained focused on implementing operational efficiencies, cost reduction measures, and strengthening Largo’s position as a reliable, western vanadium supplier. The results of our updated Technical Report marked a significant milestone for Largo, increasing our mineral reserves by 67% and mineral resources by 64%, extending the Maracás Menchen Mine’s life to 31 years. While production in 2024 was impacted by lower ore grades derived from our open pit mine sequencing plans and maintenance efforts, we continue to take decisive steps to reduce costs and enhance operational efficiencies at the mine. These initiatives are designed to support future operational stability, though near-term production challenges remain as we continue to optimize operations by accelerating waste rock pre-stripping at the Maracás Menchen Mine.”

He continued: “Our recent announcement regarding the formation of Storion Energy with Stryten Energy strengthens our strategic investment in vanadium-based energy storage and positions us to capitalize on the growing demand for long duration energy storage solutions. Looking ahead, our focus remains on reducing costs further, optimizing operational efficiencies, and ensuring disciplined execution of our mining plan. As we continue to implement these improvements, we expect to drive greater reliability in our operations going forward.”

Maracás Menchen Mine Operational and Sales Results

Q4 2024 Q4 2023 2024 2023
Total Mined – Dry Basis (tonnes) 3,673,416 13,949,665 14,864,394
Total Ore Mined (tonnes) 476,742 2,249,759 1,752,982
Ore Grade Mined - Effective Grade (%) 0.49 0.63 0.81
Concentrate Produced (tonnes) 75,051 389,520 377,736
Grade of Concentrate (%) 2.73 2.90 3.08
Global Recovery (%) 77.9 76.4 80.0
V2O5 produced (Flake + Powder) (tonnes) 1,775 9,264 9,681
Total V2O5 equivalent sold (tonnes) 3,033 9,600 10,396

Q4 2024 and Other Updates

  • V₂O₅ equivalent production in Q4 2024 was 1,775 tonnes, representing a 36% decrease from Q4 2023 (2,768 tonnes) and a 42% decrease from Q3 2024 (3,072 tonnes). Production was impacted by the scheduled shutdown in November and December for the kiln and cooler refractory maintenance, as well as a reduction in ore grade, which was expected. While the maintenance process was completed, unforeseen challenges in the refractory replacement extended the timeline, further affecting production levels in Q4 2024. The Company took corrective measures to address these issues and remains focused on optimizing the overall efficiency of the kiln moving forward.
  • Total ore mined in Q4 2024 was 476,742 tonnes, aligning with the 473,958 tonnes mined in Q4 2023. The effective ore grade3 was 0.49% V₂O₅ in Q4 2024, lower than the 0.76% in Q3 2024 and 0.82% in Q4 2023. Global recoveries4 in Q4 2024 were 77.9%, down 1.9% from Q4 2023 (79.4%). Monthly global recoveries4 were 78.2% in October, 76.7% in November, and 78.1% in December.
  • High purity vanadium products represented 26% of total production in Q4 2024 vs. 60% in Q4 2023.
  • Ilmenite production continued its ramp-up in Q4 2024, reaching 10,292 tonnes, with 3,742 tonnes produced in October, 3,187 tonnes in November, and 3,364 tonnes in December. The Company continues to refine its processes to improve efficiency and throughput, with further optimization efforts underway as operations stabilize and quality enhancements take effect.

2025 Guidance

Largo remains focused on improving operational efficiencies and mitigating production challenges at the Maracás Menchen Mine. To support this, the Company continues to advance its productivity improvement initiatives, including a greater focus on mining efficiency aimed at enhancing mine fleet availability, strengthening contractor oversight, improving maintenance programs, and optimizing drilling and blasting techniques. These actions are designed to stabilize and enhance throughput in 2025 while supporting operational improvements at the Maracás Menchen Mine. However, lower ore grades and ongoing mine sequencing adjustments are expected to continue impacting production in H1 2025.

V2O5 Equivalent Production, Sales and Cash Operating Costs Excluding Royalties Guidance

Production (tonnes) Q1 Q2 Q3 Q4 2025
Lower Guidance 1,600 2,500 2,700 2,700 9,500
Upper Guidance 2,100 3,000 3,200 3,200 11,500

Contacts

For further information, please contact:

Investor Relations
Alex Guthrie
Director, Investor Relations
+1.416.861.9778
aguthrie@largoinc.com

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