- Strong Q4 2019 operational finish: Production of 3,011 tonnes of V2O5 in Q4 2019, a 16% increase over Q4 2018
- Record FY 2019 production, achieving midpoint production guidance: 10,577 tonnes (23.3 million lbs1) of V2O5 produced in 2019, an increase of 8% over FY 2018
- Record monthly V2O5 production of 1,162 tonnes in
December 2019 - Maracás
Menchen Mine expansion project completed inDecember 2019 - New safety record: 238 days (1.5 million man-hours worked) without a Lost Time Injury
- 2020 Guidance: Annual V2O5 production of 11,750 – 12,250 tonnes; Average annual cash operating cost excluding royalties2 of
US$3.30 – 3.50/lbV2O5; Annual sales of 9,500 – 10,000 tonnes5; Sustaining capital expenditures6 ofUS$9 – 11 million; Ferrovanadium conversion plant capital expenditures ofUS$5 – 7 million
Total production from the Maracás
In Q4 2019, 329,792 tonnes of ore with an effective V2O5 grade3 of 1.36% were mined and the crushing unit was fed with 311,148 tonnes with an effective V2O5 grade3 of 1.20%. The Company also produced 100,879 tonnes of concentrate ore with an average V2O5 grade of 3.28% in Q4 2019 compared to 92,190 tonnes produced in Q4 2018 with a grade of 3.27%.
Global V2O5 recovery rates4 averaged 78.5% in FY 2019 which is an improvement over the 77.0% averaged in FY 2018. In Q4 2019, global recoveries4 averaged 77.3% which compares favourably to 75.3% averaged in Q4 2018. Global recoveries4 declined quarter-over-quarter in 2019 primarily due to some process variability during the expansion ramp-up phase.
A summary of Q4 and FY 2019 production results from the Maracás
2019 | 2018 | ||||||
Q4 | Q3 | Q2 | Q1 | Full Year | Q4 | Full Year | |
Total Ore Mined (tonnes) | 329,792 | 267,257 | 308,858 | 250,109 | 1,156,016 | 256,436 | 822,795 |
Ore Grade Mined - Effective Grade | 1.36 | 1.52 | 1.21 | 1.29 | 1.34 | 1.33 | 1.30 |
(%)3 | |||||||
Effective Grade of Ore Milled (%)3 | 1.57 | 1.44 | 1.49 | 1.51 | 1.50 | 1.53 | 1.68 |
Concentrate Produced (tonnes) | 100,879 | 92,629 | 102,320 | 86,673 | 382,501 | 92,190 | 343,126 |
Grade of Concentrate (%) | 3.28 | 3.26 | 3.30 | 3.32 | 3.29 | 3.27 | 3.41 |
Contained V2O5 (tonnes) | 3,310 | 3,016 | 3,380 | 2,874 | 12,580 | 3,016 | 11,718 |
Crushing Recovery (%) | 96.6 | 96.5 | 98.0 | 97.0 | 97.0 | 97.4 | 97.2 |
Milling Recovery (%) | 96.0 | 97.0 | 97.9 | 96.8 | 96.9 | 97.9 | 96.9 |
Kiln Recovery (%) | 89.7 | 88.8 | 88.8 | 89.2 | 89.1 | 84.3 | 86.6 |
Leaching Recovery (%) | 96.7 | 97.2 | 95.7 | 97.7 | 96.8 | 96.5 | 97.2 |
Chemical Plant Recovery (%) | 96.1 | 96.7 | 97.1 | 97.7 | 96.8 | 97.2 | 97.0 |
Global Recovery (%)4 | 77.3 | 78.1 | 79.1 | 80.0 | 78.5 | 75.3 | 77.0 |
V2O5 produced (tonnes) | 3,011 | 2,952 | 2,515 | 2,099 | 10,577 | 2,595 | 9,830 |
V2O5 produced (equivalent pounds1) | 6,638,111 | 6,508,038 | 5,544,619 | 4,627,497 | 23,318,266 | 5,720,989 | 21,671,415 |
He continued: "The Company also achieved a new safety record in 2019 operating 238 days (1.5 million man-hours worked) without a Lost Time Injury (LTI) surpassing its previous LTI safety record of 203 days (1.3 million man-hours worked). Safety remains a top priority at Largo and the Company plans to update the market with all of its responsible mining initiatives following the release of its 2019 environmental, social and governance report which is expected in Q1 2020. We look forward to another solid year in 2020 as we continue our focus on achieving operational targets in addition to advancing our sales and trading business. I remain extremely confident in our team as we continue this momentum in the year ahead."
2020 Production, Cost and Sales Guidance
Building on the success of our increased name plate capacity in FY 2019, the Company expects total V2O5 production for 2020 will be in the range of 11,750 and 12,250 tonnes which is inclusive of high purity vanadium flake and high purity vanadium powder production. Additionally, the Company expects annual average cash operating cost excluding royalties2 will be in the range of
Largo's Board of Directors has approved the construction of a ferrovanadium conversion plant at the Maracás
Largo's current offtake agreement with
A summary of the Company's 2020 guidance is listed in the table below:
2020 Guidance | |
Annual V2O5 Production Guidance | 11,750 – 12,250 tonnes |
Annual Sales Guidance5
| 9,500 – 10,000 tonnes |
Average Annual Cash Operating Cost Guidance Per Pound Excluding
| |
Sustaining Capital Expenditures6
| |
Ferrovanadium Conversion Plant Capital Expenditures
|
About
Largo is a Toronto-based strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás Menchen Mine located in Bahia State, Brazil. The Company's common shares are principally listed on the Toronto Stock Exchange under the symbol "LGO". For more information on Largo, please visit our website at www.largoresources.com.
Neither the
Forward-looking Information
This press release contains forward-looking information under Canadian securities legislation, some of which may be considered "financial outlook" for the purposes of applicable Canadian securities legislation ("forward-looking statements"). Information in this press release includes, but is not limited to, statements with respect the annual cash operating costs; ferrovanadium conversion plant and the costs associated therewith; the timing and amount of estimated future production; ; anticipated total sales of V2O5; cash costs of future activities and operations; and the extent of capital and operating expenditures. Forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Largo to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on SEDAR from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo's annual and interim MD&As.
Future Oriented Financial Information:
Any financial outlook or future oriented financial information contained in this press release, as such term is defined by applicable securities laws, has been approved by management of Largo as of the date hereof and is provided for the purpose of providing information about management's current expectations and plans relating to the Company's 2019 production guidance. Readers are cautioned that any such future oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that the prospective financial information as to the Company's anticipated 2019 production guidance has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.
Non-GAAP Measures
The Company uses certain non-GAAP financial performance measures in its MD&A, which are described in the following section.
Cash Operating Costs
The Company's press release refers to cash operating costs per pound produced, a non-GAAP performance measure, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás
Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs, but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. These costs are then divided by the pounds of production from the Maracás
The measure, along with revenues, is considered to be one of the key indicators of the Company's ability to generate operating earnings and cash flow from its Maracás
____________________________________ | |
1 | Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs. |
2 | The cash operating costs per pound produced and cash operating costs excluding royalties per pound produced reported are on a non-GAAP basis. Refer to the |
3 | Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O5 in the magnetic concentrate. |
4 | Global recovery is the product of crushing recovery, milling recovery, kiln recovery, leaching recovery and chemical plant recovery. |
5 | Inclusive of V2O5, high purity V2O5, and ferrovanadium. |
6 | Excludes capitalized waste stripping costs. |
SOURCE
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