Toronto-based Largo Resources produced 5pc less vanadium pentoxide (V2O5) in the first quarter of 2019 because of the kiln closure at its Maracas Menchen mine in Brazil.

The Maracas Menchen mine produced 2,099t of V2O5 in the first quarter, compared with 2,214t in the same quarter last year.

“Lower production during the quarter was largely due to the completion of the kiln refractory replacement which occurred during March 2019 and resulted in 11 days of production downtime,” the company said.

But global V2O5 recovery rates averaged 80pc in the first quarter, an increase of 5pc on a year earlier, a new quarterly record for the company, Largo said. This higher recovery rate reduced the production impact from the kiln refractory replacement shutdown through the production of V2O5 stocks that were processed during this time.

Around 250,109t of ore with an effective V2O5 grade of 1.29pc was mined in the quarter, nearly 6pc up on a year earlier.

Mining, crushing and milling operations increased concentrate stockpiles necessary for the shutdowns required to tie in the expansion with the existing plant, the company said.

Vanadium sales from contracts rose by almost 39pc on the year to $101.4mn, Largo said, primarily because of higher V2O5 prices, although total revenue halved to $44.3mn.

“The decline in the price of vanadium and the significant remeasurement of trade receivables under the company’s offtake agreement greatly impacted profitability this quarter,” Largo chief executive Mark Smith said.

Europe has witnessed a sharp fall in vanadium pentoxide prices since hitting multi-year highs in mid-November, dropping by nearly a quarter in the first quarter. Prices for 98pc fused flake V2O5 declined by 51pc to $9.50/lb on 14 May, down from $19.50/lb at the start of the year in Europe, according to Argus data.

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