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Toronto-based Largo, is a strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás Menchen mine located in Bahia State, Brazil.
Largo Resources (TSX:LGO,OTCQX:LGORF) has provided guidance on its expected revenue for the three month period ending June 30, 2018 anticipating revenue of between C$99 million and C$107 million, a new quarterly revenue record for the company.
Toronto-based Largo, is a strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás Menchen mine located in Bahia State, Brazil.
As quoted from the press release:
Our anticipated Q2 2018 revenue would represent an increase of between approximately 176.6 percent and 198.9 percent over Q2 2017, if realized. The increase to revenue is expected to be driven largely by the upward movement in vanadium pentoxide (“V2O5”) pricing and increased production when compared to Q2 2017. The price range of V2O5 for the last week of Q2 2018, as reported by the European Metal Bulletin, was US$17.00/lb V2O5 to US$17.50/lb V2O5 as compared to US$5.35/lb V2O5 to US$6.00/lb V2O5 for the last week of Q2 2017.
Management anticipates that the overall benefit of the increased revenues will be tempered by increases in corresponding royalty expenses and certain largely non-cash foreign exchange adjustments anticipated to be required as a result of the weakening of the Brazilian Real against the USD given that certain of the company’s debts in Brazil are denominated in USD. The company expects the foreign exchange loss in Q2 2018 to exceed the loss recorded in Q2 2017.
“We are pleased that we now have the BNDES approval in-hand and we look forward to repaying in full amounts owing to both the BNDES and our syndicate of commercial banks in Brazil. The repayment will allow us to realize the anticipated benefits of our recently completed note offering through the improvement in our capital structure, reduction in interest costs and the simplification of our reporting obligations. The restructuring of our debts along with the most recent posted price range of V2O5 for the week ended July 13, 2018 of US$18.90/lb V2O5 to US$19.85/lb V2O5 (as reported by the European Metal Bulletin) presents an exciting opportunity for our company,” said Mark Smith, Largo’s president and CEO.