A RECORD BREAKING YEAR
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SUSTAINABILITY, EFFICIENCY AND TECHNOLOGY: LARGO RESOURCES’ RECORD BREAKING YEAR WRITTEN BY
HARRY MENEAR PRODUCED BY
RICHARD DEANE
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LARGO RESOURCES
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PAULO MISK, COO AND PRESIDENT OF LARGO RESOURCES, DISCUSSES SUSTAINABILITY, EFFICIENCY AND THE COMPANY’S RECORD BREAKING 2018
W
hen a winning strategy is executed by talented, passionate professionals in favorable conditions,
the results can be spectacular. Last year, Largo Resources experienced just that. With headquarters in Toronto, Largo Resources is a strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás
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LARGO RESOURCES
“WE’VE HAD GREAT RESULTS FROM A GREAT PERFORMANCE IN 2018. IT’S DOWN TO HAVING A GREAT DEPOSIT, EFFECTIVE TECHNOLOGY, AND AN EXCELLENT TEAM” — Paulo Misk, COO and President, Largo Resources
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Menche Mine in Bahia State, Brazil. In 2018, the company reported revenues of CA$521.4mn – a 211% increase year on year – and four consecutive quarters of production growth. Starting in 2014, Largo has successfully ramped up its vanadium operations, building a strong team and incorporating state of the art technologies into its operations. “We’ve had great results from a great performance in 2018. It’s down to having a great deposit, effective technology and an excellent team,”
CLICK TO WATCH : ‘LARGO RESOURCES LTD – CORPORATE VIDEO’ 07
says Paulo Misk, Chief Operating
make the car lighter, which saves fuel,
Officer (COO) and Corporate
shipping costs, etc... Vanadium means
President of Largo Resources. Misk
there’s less environmental impact
discusses Largo’s record breaking
along the whole steel chain. The whole
best year to date, and why vanadium
world should use vanadium to have a
promises a bright future for Largo
better environmental situation in the
Resources and the planet.
future.” The added strength that
“Vanadium is a ‘green metal’. When
vanadium provides to manufactured
you use approximately one kilo of
steel had significant benefits for Largo
vanadium in a tonne of steel, it
Resources in 2018 when, in November,
increases its tensile strength up to
China introduced new quality stand-
80%, which means you don’t need to
ards for rebar production. “There was
use as much steel when making a car,
higher demand, low supply and a
for example,” explains Misk. “You can
very low global inventory,” Misk says. w w w.l a rgo re so urc es . com
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“That’s the perfect situation for increased
company entering 2019 with a cash
price and that’s what happened with
balance of $206.2mn.
vanadium.” Last year, according to
In addition to vanadium’s natural
Vanadium Price, the Chinese market
propensity for sustainably enhancing
price of Vanadium Pentoxide (V2O5)
the steel supply chain, Largo Resourc-
Flake rose from $11.50/lb in January, to
es is determined to marry its profitabil-
$32.00/lb in November. The combina-
ity with a sustainable approach that
tion of soaring prices and the high
benefits both the environment and the
quality of the Maracás Menchen Mine
communities surrounding the Maracás
resulted in the operation reporting
Menchen Mine. “We value and take
record production figures of 9,830
very seriously the ways in which we
tonnes of V2O5 in 2018 (2,595 of
contribute to our community,” says
which were mined in Q4), a 6%
Misk. “We must do our best to improve
increase over 2017, which led to the
and have a positive impact on the
$521mn
CA
Approximate revenue
1988
Year founded
800+
Approximate number of employees and contractors
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E XE CU T I VE PRO FI LE
Paulo Misk is a mining engineer with over 33 years’ experience in operational management. He was responsible for some successful mining operations in Brazil such as RHI-Magnesita and AMG — Advanced Metallurgical Group N.V. (Niobium, Tantalum, Tin and Lithium Operation). Most recently, Mr. Misk ran Anglo American’s Catalão Project from 2011 to 2014 as Head of Niobium Operations doubling its EBITDA. Paulo has lead the Vanadium operation of Largo Resources since its start in 2014 implementing innovative policies and fostering a high-performance culture that greatly improved production and outstanding financial results. Paulo is also President of Sindimiba (a mining companies association in Bahia), Director of FIEB (Bahia Industry Federation) and responsible for mining chapter of CCBC (Commerce Chamber of Brazil-Canada). w w w.l a rgo re so urc es . com
LARGO RESOURCES
C O M PA N Y FACT S
•N et income of $316.0mn and basic earnings per share of $0.61 in 2018 •R evenues of $521.4mn in 2018, a 211% increase over 2017 •C ash provided before non-cash working capital items of $403.2mn in 2018, an increase of $336.1mn over 2017 10
•C ash operating costs excluding royalties of $4.41 (US$3.38) in 2018 • $ 206.2mn in cash exiting 2018 •R ecord production of 9,830 tonnes of V2O5 in 2018, exceeding midpoint guidance of 9,650 tonnes by 2% and a 6% increase over 2017 •F our consecutive quarters of production growth in 2018 •E xpansion plan completion target of Q2 2019 with ramp up to follow in Q3 2019
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LARGO RESOURCES
GEA Solutions for Mining & Mineral Enhancing cost-effectiveness and environmental compatibility of the required production processes
GEA is the world leader in evaporation and all types of crystallization equipment design and technology. Our expertise includes thousands of installations worldwide. With this deep knowledge base, GEA is able to implement the R&D necessary to devise the process components which best meet the customer’s needs. By closely coordinating project protocols, our customers regularly meet and exceed quality and production targets. For more information please visit GEA’s website.
community. Largo Resources has very
footprint of the mine itself”, according
robust social programs, which focus
to Misk, where native species are
on professional vocations and providing
preserved on over 2,200 hectares of
support to local entrepreneurs. We
natural forest. Wild animals found in
also have other programs that support
the project area are captured and
local education, sports, culture and
released onto the reserve. A native
entertainment. We help our workers’
plant greenhouse with the capacity to
families have a better place to live.”
produce 20,000 trees is also being
Largo Resources is also committed
cultivated to reforest the surrounding
to limiting its environmental impact.
area. “I think mining has a lot of very
The company, through the Maracás
good options to contribute to the
Menchen Mine, owns and oversees the
planet’s future,” says Misk. “Not only
San Conrado farm and nature reserve,
by providing materials for new tech-
“an area 25 times larger than the
nologies, which reduce environmental
“THE WHOLE WORLD SHOULD USE VANADIUM TO HAVE A BETTER ENVIRONMENTAL SITUATION IN THE FUTURE” — Paulo Misk, COO and President, Largo Resources
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impact overall, but by ensuring that our actions are creating the smallest environmental impact possible, and even improving the environmental situation if we can. We are here to do our best and to make our world better. That’s our responsibility.” With regard to its business ventures, Largo Resources is undoubtedly doing its best, utilising tier-one technology from innovative, world-class suppliers like GEA Group, in order to create a product that is superior to the company’s competition. “Largo has the best w w w.l a rgo re so urc es . com
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“WE VALUE AND TAKE VERY SERIOUSLY THE WAYS IN WHICH WE CONTRIBUTE TO OUR COMMUNITY” — Paulo Misk, COO and President, Largo Resources
ore grade vanadium deposits in the world. It’s a fantastic deposit. World class. Also, we have very good technology, and an innovative, learning based approach,” Misk says. “Add that to our amazing team, and success is just a matter of time. When you look at plant performance, our recovery from the ore to flake to final product is 77%, which we’re looking to raise to around 80% in 2019. We have a very good ore grade; it is, on average, 1.2% V2O5, which is much higher than any of our competitors w w w.l a rgo re so urc es . com
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“WE ARE READY TO BREAK NEW RECORDS IN 2019 AS WELL” — Paulo Misk, COO and President, Largo Resources
around the world. Also, after mining and ore treatment, the concentrate that’s generated is about 3.2%, more than 50% higher than any other competitor.” The high quality and efficiency of production ensure that Largo Resources is able to achieve increasingly lower costs. “We have been constantly improving our process,” says Misk. “High recovery is a big factor and we adapted our
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LARGO RESOURCES
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“CONSIDERING THE CURRENT SUPPLY AND DEMAND, WE SHOULD SEE A VERY STRONG MARKET FOR VANADIUM OVER THE NEXT THREE TO FOUR YEARS” — Paulo Misk, COO and President, Largo Resources
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process to yield the lowest amounts of
is expected to deliver an additional
raw materials like ammonia sulfate. This
200 tonnes of V2O5 per month. “We
way we get a very low cost and still have
expect to keep increasing our produc-
the best quality product in the world.”
tion. Considering the current supply
Misk is optimistic about the future
and demand, we should see a very
of Largo Resources. In November,
strong market for vanadium over the
the company announced a planned
next three to four years,” says Misk.
expansion to the Maracás Menchen
“We are ready to break new records in
Mine. Scheduled for completion in
2019 as well.”
June 2019, the project will focus on the milling, fusion, evaporation and filtering capabilities of the facility, and w w w.l a rgo re so urc es . com
Largo Resourses 55 University Avenue Suite 1105 Toronto, Ontario M5J2H7 Canada T +55 31 99178 9382 www.largoresources.com