Largo Inc. (LGO) Earnings

Management highlights

### Operational Production Improvements - Total ore mined increased 46.6% year-over-year to 712,198 tons, driven by improved mine access and better execution - Improved ore availability and plant stability lifted vanadium production to near the upper end of the quarterly guidance range - First half 2026 total vanadium production reached 5,516 tons, a 55.2% increase year-over-year ### Financial and Balance Sheet Progress - Returned to positive adjusted EBITDA after years of weak market conditions - Cash provided before working capital items tripled year-over-year to $6.6 million - Completed a binding agreement to restructure approximately $82.2 million in outstanding commercial debt with major Brazilian banks, extending final maturity from September 2026 to March 2030 and adding a 6-month principal grace period, eliminating near-term refinancing risk and improving liquidity - Reported a net loss of $22.7 million for the quarter, driven primarily by non-cash asset write-downs and deferred tax expenses, not underlying operating performance ### Commercial Developments - Secured a $60.1 million delivery order from the U.S. Defense Logistics Agency (DLA) under an existing 5-year contract, endorsing Largo's product quality and securing its role in U.S. critical mineral supply chains - Received confirmation that Brazilian-origin vanadium oxides and hydroxides (classified under HTSUS 2825.30) are exempt from the new 25% tariff on Brazilian imports; tariff exposure for ferrovanadium is limited as most U.S. ferrovanadium sales are not sourced directly from Brazil ### New Growth Initiative: Copper PGM Byproduct Production - Brazil's national mining agency approved production and sale of copper, PGMs, nickel, and cobalt as byproducts from the existing Maracas Menken mine operation - Full-scale copper PGM concentrate production launched on August 7, 2026, using existing flotation infrastructure with no material additional capital expenditure; costs are mostly shared with existing vanadium operations, creating a high-margin new revenue stream - Ilmenite production is temporarily paused during the copper PGM ramp-up to prioritize throughput; the company is evaluating additional equipment to capture both product streams long-term - Commercial discussions with smelters and traders for the first shipment are ongoing ### Leadership Updates - Added Jim Valentine as co-CEO to strengthen the leadership team and support the next phase of execution

Guidance

- Full-year 2026 vanadium production guidance is maintained at 10,500 to 12,000 tons of vanadium pentoxide equivalent, with sales guidance held at 7,500 to 9,500 tons - Adjusted cash operating cost guidance for vanadium is maintained at $3.50 to $4.50 per pound (corrected from the transcript typo of $350 to $450) - Initial guidance for copper PGM concentrate production is 300 to 380 tons per month, with average expected grades of approximately 15% copper, 41 grams per ton of PGMs/gold, and 53 grams per ton of silver; output is expected to stabilize within this range as operations are optimized

Segment performance

Total company revenue for Q2 2026 increased 68.5% year-over-year to $44 million. The Vanadium segment generated $42 million in revenue, accounting for 95.5% of total revenue. Vanadium production rose 28.5% year-over-year to 2,900 tons, while vanadium sales increased 53% to 2,773 tons of vanadium pentoxide equivalent. The Illuminate segment generated $1.4 million in revenue, accounting for 3.2% of total revenue. Ilmenite concentrate sales grew 67% year-over-year to 10,059 tons. On an adjusted basis, mining operations adjusted EBITDA increased 64.8% year-over-year to $4.4 million, and consolidated adjusted EBITDA returned to positive territory at $2.7 million, up from $34,000 in the prior year quarter.

Risks & headwinds

- Near-term debt refinancing risk was materially reduced but not eliminated, as final documentation for the debt restructuring is still pending completion (expected mid-September 2026) - Vanadium market pricing remains pressured by historical oversupply, with Largo still reporting a statutory net loss in the quarter and needing to improve cash generation and unit costs - Ferrovanadium exported directly from Brazil to the U.S. remains subject to the new 25% tariff, though Largo's exposure is limited - Global vanadium demand has historically been dependent on Chinese construction activity, which previously drove oversupply conditions

Analyst Q&A

• Q: How does the completed debt restructuring change Largo's priorities over the next 12 months? /

  A: The restructuring removes significant near-term refinancing pressure by extending $82.2 million in debt maturity from September 2026 to March 2030, with a 6-month principal grace period. It does not change Largo's core priorities, which remain improving cash flow generation, fulfilling the DLA supply contract, and ramping up copper PGM production. The company still intends to reduce debt and strengthen its balance sheet as operating performance improves.

• Q: Will the debt restructuring require Largo to issue new equity or impose punitive terms on existing shareholders? /

  A: The banks have not requested equity issuance or punitive terms for this restructuring. The binding terms already announced reflect the core agreement, and final documentation is expected to be completed in mid-September. The Brazilian banks have been very supportive and commercial through the process.

• Q: Is the global vanadium market still oversupplied by Chinese and Russian production, and when will it rebalance? /

  A: The market has been oversupplied in recent years, driven primarily by a slowdown in Chinese construction, the largest end market for vanadium. Positive signs are emerging, including higher U.S. prices driven by trade policy, growing demand from the vanadium flow battery sector in China, and increasing interest in vanadium as a critical mineral across Western jurisdictions. Largo expects growing flow battery demand will spread to Western markets and help rebalance the market over time.

• Q: What are the expected margins for the new copper PGM byproduct program? /

  A: Copper PGM is produced as a byproduct of existing vanadium operations, so it incurs very little additional cost, as most capital and operating costs are already covered by vanadium production. This makes the copper PGM segment very high margin. Production volumes and concentrate grades have already been disclosed in public guidance and press releases.