RE: Q1 completed3 Apr 2024 12:20
from last week - largo sells roughly a third of its output to europe and a third to the us
'nearly every speaker at largo’s fourth quarter and full year 2023 financial results conference call talked about the challenges the company faces because of low vanadium prices.
in response to a question about how close largo is to marginal costs given that v2o5 prices are $5-6 per lb, ernest cleave, largo’s chief financial officer said that largo’s 2024 v2o5 cash cost guidance of $4.50-5.50 per lb means “at current prices we’re seeing of $5.90 on the market, we will not be making cash at those levels. but it’s very hard for us to forecast where things go.”
primary production represents about 20% of global supply, according to paul vollant, largo’s chief commercial officer. primary producers are losing money at current prices, vollant said.
“the other type of production, either from steel **** or what we call secondary sources from, oil and gas manufacturing, it is indirect cost, which is very difficult to have clarity on. but yes, we’re seeing the oil industry struggling at the moment,” vollant commented.
declining vanadium prices had a significant impact on largo, resulting in a 7% drop in fourth-quarter revenues to $44.2-million compared to q4 2022 and a 13% dip in 2023 revenues to $198.7-million compared to 2022. revenues per pound sold in 2023 fell to $8.66 compared to $9.38 in 2022.
the european v2o5 price fell 22% in the fourth quarter and 31% year-over-year, with the most recent price hitting $5.90 per lb, cleave said.
largo’s cash operating costs excluding royalties were $5.30 per lb for 2023 compared to $4.57 in 2022. several production problems and an accident resulting in a death plagued the company last year.'
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