TORONTO – Largo Inc. [LGO-TSX] said operational actions taken in the second quarter of 2023 have resulted in improved vanadium production rates at the company’s Maracas Menchen Mine in Bahia State, Brazil.
The company also said it achieved a key milestone in the second quarter by completing construction of its ilmenite concentration plant, followed by the start of commissioning. “As we look forward to completing commissioning and ramp-up processes in the following quarters, we anticipate having sufficient stocks of produced ilmenite concentrate for sale by the start of 2024,’’ said Largo Interim CEO Daniel Tellechea. Ilmenite is a titanium-iron oxide mineral used in paints, printing inks, plastics, paper and cosmetics.
Meanwhile, Largo reported V205 production of 2,639 tonnes (5.8 million pounds) in the second quarter of 2023, down from 3,084 tonnes in the second quarter of 2022, but 25% above production in the first quarter of 2023.
The company said it achieved normalized production levels in June after completing the following actions in the second quarter of 2023. They include completion of its infill drilling campaign for 2023, resulting in further refinement of the company’s short-term mining model, the completion of upgrades to its crushing process as well as improvement in its mining performance over levels seen in the first quarter of 2023.
During the second quarter of 2023, the average benchmark price per pound of V205 in Europe was $8.46, a 24% decrease from the average of $11.08 seen in the second quarter of 2022, following softer spot market demand during the quarter, primarily due to adverse conditions in the Chinese and European steel sectors.
Largo shares advanced on the news, rising 1.3% or $0.08 to $6.01 in light trading volume. The 52-week range is $10.07 and $4.89.
Largo is a rare pure-play vanadium producer and is currently one of the world’s lowest-cost producers of the metal. The company is focused on the production of vanadium flake, high purity vanadium flake, and high purity vanadium powder at the Maracas Menchen Mine in Bahia State, Brazil.
Vanadium is a ductile and malleable transition metal that is widely used to strengthen steel and titanium. More than 85% of the world’s vanadium is used in steel manufacturing applications. About half of that amount is used to produce steel reinforcement bars (rebar).
In recent years, prices have been driven by a change in steel reinforcement standards in China, which previously drove up demand for vanadium.
Vanadium’s importance to the energy sector has grown rapidly with more than 10% of vanadium production used in energy storage where its substantial cost and performance benefits make it an alternative choice to lithium ion in several areas.bars alternative