Largo Resources Extremely Encouraged by Performance at Maracas Menchen

Largo Resources (TSXV:LGO) provided an update on progress at its Maracas Menchen mine or Brazil. The company reported reaching its highest level of production since August 2014, coming in at roughly 487 tonnes.

As quoted in the press release:

During the month of May the Company also achieved a record to date for single day production of 23 tonnes, representing approximately 87% of the Plant’s design capacity.

In general, production rates, recoveries and availability of operations are improving and greater stability has been achieved. For example, for about half of the past three month period, the Plant has operated at or above 18 tonnes per day, or approximately 68% capacity, with over one-third of those days at or above 19 tonnes, or approximately 72% capacity. Additionally, the operations regularly realize production in a single shift of 8 and 9 tonnes, which management expects will result in the capability to eventually produce at or above its full Phase 1 capacity level (or approximately, 26 tonnes per day based on 3 shifts per day).

Largo also provided an operational update:

Overall the Company is extremely encouraged by these recent records and results and believes that they are strong signals of the Plant’s capability to produce at its intended design capacity, as well as the effectiveness of its ongoing optimization efforts. Additionally, and importantly, the Plant’s end-product vanadium (V2O5) is of extremely high quality, having met standard specifications since first production was achieved in August, 2014.

As is expected during the ramp-up of operations of this kind, various interruptions with respect to equipment are experienced which temporarily impact daily tonnage rates – some of which are minor, normal-course occurrences related to a particular piece of equipment, and some of which are more systemic and require longer term solutions to address on an ongoing basis.

As the Plant’s overall production capabilities are highly dependent on continuous and stable operations being maintained, Largo had previously identified and disclosed several critical optimization projects which will address ongoing variances in daily production rates (see press release dated March 9, 2015).  A few of these optimization projects have already been implemented and positive results are currently being realized. For instance, the Company installed a dry-magnetic separation unit to compliment the milling and beneficiation system. Since its commissioning, the milling and beneficiation system has demonstrated its ability to achieve design capacity targets.

Since completing its previously disclosed private placement financing of approximately CDN$75.2 million (see press release dated May 28, 2015), the Company has taken action to aggressively address remaining optimization projects and expects that these will be completed and commissioned over the next few months.

Some of these projects include:

• A more robust and dependable replacement for its current pan-conveyor at the leaching system which has been a consistent limitation on the leaching system’s heat retention and has a significant impact on recoveries as well as requires extensive maintenance down-time.
• An additional leach tank which will increase the leaching residence time and improve the system’s recovery and availability.
• A back-up belt filter for the leaching system which will be utilized to increase the system’s capacity and overall availability.

With these projects, coupled with the other optimization efforts which have already been completed or are presently underway, the Company expects to achieve its full Phase 1 design capacity in or about the third Quarter of 2015.

In the meantime, the Company anticipates that it will continue to achieve new single day production records, as well as weekly and monthly records, which will result in modest month over month increases in production. As each optimization project is completed and benefits are realized, the Company expects continued growth in availability and overall Plant stability.

Largo COO, Michael Mutchler, said:

We are extremely pleased with our recent progress. With our recent records and overall growth in production we have really begun to see the Plant’s ability to operate at its intended capacity. The key systems at the Plant all work very well and the quality of the material we have been producing since day one attest to that. However some modifications will greatly improve these systems and we are excited to see how much production improves as we bring each of these projects online.

Click here to read the Largo Resources (TSXV:LGO) press release