Largo Resources Announces Solid Third Quarter 2020 Results Highlighted By Its Successful Sales Strategy Implementation And Continued Low-cost Operations
Q3 2020 Highlights
Solid financial position: Cash at September 30, 2020 totaled $74.9 million
Revenues of $27.5 million, an increase of 14% over Q3 2019
Revenues per pound sold7 of $5.37, a 34% increase over Q3 2019
Net income of $2.6 million vs. a net loss of $6.0 million in Q3 2019
Total sales exceeded production levels in August and September 2020 for the first time since commercial independence, highlighting successful implementation of the Company’s strategy
Cash provided (used) before working capital items of $4.8 million vs. cash used in Q3 2019 of $3.8 million
Record production of 3,092 tonnes (6.8 million pounds1) of V2O5, an increase of 5.0% over Q3 2019
Record global V2O5 recovery rate2 of 84.2% in Q3 2020, an increase of 8.0% over Q3 2019
Continued low-cost operations: Cash operating costs excluding royalties3 of $3.14 per lb of V2O5, compared with $3.02 per lb in Q3 2019; Total cash costs3 were $3.69 per lb in Q3 2020
Other Significant Highlights
2020 cash cost guidance reduced: Cash operating cost excluding royalties3 guidance lowered to $2.60 – $2.80 / lb V2O5 from $3.05 – $3.25 / lb; Total cash cost3 guidance lowered to $3.20 to $3.40 / lb V2O5 from 3.45 – $3.65/ lb
Postponing cost-efficient nameplate capacity increase to Q1 2021: Planned kiln upgrades and cooler maintenance that will increase Largo’s production capacity by 10% with a CAPEX of only $1.3 million are postponed to Q1 2021 due to COVID-19 restrictions
Focus on safe business continuity: On track to meet lower end of 2020 production guidance with strong production results expected in Q4 2020; 2020 sales guidance maintained
2020 drilling program update: Drilling was ramped up in Q3 2020 with 14,007 metres (80 holes) completed
TORONTO, Nov. 12, 2020 /CNW/ – Largo Resources Ltd. (“Largo” or the “Company”) (TSX: LGO) (OTCQX: LGORF) is pleased to announce its third quarter 2020 financial and operating results highlighted by net income of $2.6 million and revenues of $27.5 million from vanadium pentoxide (“V2O5”) equivalent sales of 2,320 tonnes. The Company achieved a new quarterly V2O5 production record of 3,092 tonnes (6.8 million lbs1) at the Maracás Menchen Mine in Q3 2020 and a new record global recovery rate2 of 84.2%.
Paulo Misk, President and Chief Executive Officer for Largo, stated: “Our positive results in Q3 2020 reflect the notable dedication of the entire Largo team as we continue to advance our independent commercial sales strategy and deliver on our operational and sales targets. We are very pleased to report a profitable quarter in Q3 2020 with continued low cash operating costs excluding royalties3 of $3.14 per lb and year-to-date cash operating costs excluding royalties3 of $2.70 per lb. Additionally, our independent sales strategy has proven beneficial for the Company in Q3 2020 highlighted by an increase of 34% in revenues per lb7 sold to $5.37 from $4.02 per lb sold in Q3 2019.” He continued: “Our liquidity position remains solid heading into the final stretch of 2020 and I am pleased to report that we expect to finish the year on a positive note both operationally and financially. 2020 has presented some challenges for Largo but I am very proud of the entire team who have been resilient during unprecedented times. Our integrated supply of vanadium from mine to customer remains one of the lowest costs and highest quality in the world. The future looks very bright for Largo as we expect an increase in vanadium consumption from rebar and steel applications due to new infrastructure spending and through the development of clean energy applications—both of which are aligned with our goal of contributing to a lower carbon future through the use of vanadium.”
More details, please visit: https://www.largoresources.com/
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