Date: Mar 28, 2019
Vanadium is now gaining traction for its use in battery production
Largo Resources Ltd (TSE:LGO) (OTCMKTS:LGORF) shares powered higher on Wednesday as the company reported its strongest year of earnings and production since it began operations in 2014.
Shares were up nearly 14% to C$2.53 on Wednesday before easing slightly to $2.30 by early afternoon in Canada, and rose nearly 5% to US$1.72 in the US.
The vanadium miner reported full-year 2018 profits of $316 million, or $0.61 per share, compared with $168 million and a loss of $0.02 in 2017. Revenue for the year more than tripled from 2017 levels to $521 million.
For the fourth quarter, the company had earnings of $0.21 per share on net income of $108 million and revenues of $148 million.
Fourth quarter earnings beat analyst expecations of $0.18 per share.
“Largo continues to remain one of the lowest-cost producers of vanadium in the world which allows the Company to generate significant amounts of cash in the current vanadium pricing environment,” said Mark Smith, Largo’s CEO. “We look forward to continuing the successes of 2018 and it is our goal to maximize organic value creation at the Company in 2019.”
Production growth
The Toronto-based company’s Maracás Menchen mine in Brazil achieved its strongest year of production to date, producing 9,830 tons of vanadium during 2018, a 6% increase over 2017 levels.
Maracás produced 2,595 tons in 4Q 2018, up 1% from the previous quarter and the fourth consecutive quarter of growth.
An expansion project is in place at the mine to hit 1,000 tons of vanadium production per month, with a targeted completion date by mid-2019. The company said it anticipates the project will cost about US$21 million.
The company ended 4Q 2018 with C$134 million in working capital.
