Largo Inc. Q4 FY2023 earnings call

• Focus on enhancing Maracás Menchen mine efficiency; Q4 2023 saw 38% increase in V2O5 equivalent production.
• Milestones: Successful construction of new ilmenite concentration plant; exploration around Maracás Menchen mine identified significant PGM grades in tailing ponds; Clean Energy's 6-MW VRFB deployment in Spain.
• Financials: Q4 2023 net loss $13.3M vs $15.6M in Q4 2022; full year 2023 net loss $32.4M vs $2.2M in 2022. Adjusted EBITDA Q4 2023 $1.4M (+138% y-o-y); full year $12.1M

Vanadium

• Q4 2023: V2O5 equivalent production up 38% vs Q4 2022; record high-purity vanadium production (1,670 tonnes of high-purity V2O5 equivalent, 60% of quarterly output). Annual V2O5 production slightly dipped but within guidance. Q4 2023 revenues $44.2M (down 7% y-o-y); full year 2023 revenues $198.7M (down 13% y-o-y).
• Ilmenite: 2024 production expected at 88,000 tonnes; first 500 tonnes sold in Jan 2024, anticipating 18,000-22,000 tonnes sold in H1 2024 at healthy profit.
• Clean Energy: 6-MW redox flow battery deployed in Spain (largest in Europe); proposed joint venture with Stryten Energy for vanadium flow battery market

• Vanadium: Annual production within guidance range despite slight dip.
• Ilmenite: Expect to produce 88,000 tonnes in 2024; 18,000-22,000 tonnes sold in H1 2024.
• Clean Energy: Joint venture with Stryten Energy to advance vanadium flow battery commercialization

• Operational Hurdles: Delays in infield drilling, traffic accident, mine facility accident, equipment commissioning issues.
• Market Pressures: Declining vanadium prices; ilmenite in ramp-up phase with variability

Q: Talk about ilmenite production variability and quarterly trends.

A: Still in ramp-up phase, vetting product with customers; expect more regular sales by Q3 2024.

Q: Hedging ilmenite pricing and prices.

A: No electronic hedging, prices more stable than vanadium, in price discovery phase with higher premiums for higher quality.

Q: Marginal cost and production decisions near cost structure.

A: Current prices below cost guidance, hard to forecast; need a couple months of full production to assess cost.

Q: Joint venture with Stryten Energy.

A: Stryten brings large-scale manufacturing and domestic presence; LCE brings stack tech, purification, and vanadium access to advance VRFB commercialization