Mittwoch, 13.11.2019 18:41 von PR Newswire | Aufrufe: 200

Largo Resources Announces Third Quarter 2019 Results

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Canada NewsWire

All financial figures are in Canadian dollars unless otherwise stated.

Q3 2019 Highlights

  • Production of 2,952 tonnes (6.5 million pounds1) of V2O5, a 15% increase over Q3 2018
  • Cash operating costs excluding royalties2 of US$2.81 ($3.71) per pound of V2O5, a decrease of 8% over Q3 2018
  • Revenues of $32.1 million (net of the re-measurement of trade receivables / payables of $20.4 million on vanadium sales from a contract with a customer of $52.5 million)
  • Net loss of $8.6 million and a loss per share of $0.02
  • Cash balance of $154.8 million exiting Q3 2019
  • Average annual cash operating costs excluding royalties2 guidance lowered to US$3.30 to $3.40 per lb V2O5; Annual production guidance maintained
  • Expansion project expected to conclude in November 2019
  • Board approval for the construction of a ferrovanadium plant in Maracás, Brazil
  • Q3 2019 operational and financial results conference call: Thursday, November 14th, 2019 at 10:00 a.m. EST

TORONTO, Nov. 13, 2019 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") (TSX: LGO) (OTCQX: LGORF) announces its third quarter 2019 operational and financial results highlighted by 2,952 tonnes of vanadium pentoxide ("vanadium" or "V2O5") produced at a cash operating cost excluding royalties2 of US$2.81 per pound of V2O5.

Paulo Misk, President and Chief Executive Officer for Largo, stated: "Operations at the Maracás Menchen Mine performed well in the third quarter 2019 following increased production from the expansion project. Cash operating costs excluding royalties2 were US$2.81 per pound V2O5 in Q3 2019 representing a decrease of 8% over Q3 2018. Although the Company achieved lower operating and unit costs during the quarter, profitability continued to be impacted as a result of lower vanadium prices combined with the Company's re-measurement of trade receivables / payables as a result of its current off-take agreement and consequently, the Company recorded a net loss of $8.6 million in Q3 2019. The Board realizes that the share price does not currently reflect the business value of the Company and is considering instituting a share repurchase program by way of a Normal Course Issuer Bid."

He continued: "The Company believes that vanadium prices are unsustainably low and expects sentiment and prices to improve as evidenced by the recent price increase for ferrovanadium in Europe. Despite greater vanadium consumption in China over the last two years, the current price environment is largely attributable to high iron ore prices and a dramatic increase in Chinese V2O5 slag production earlier in 2019 from vanadium-titano magnetite (VTM) deposits. The increase in Chinese vanadium supply, combined with greater than anticipated niobium substitution put vanadium prices under pressure throughout 2019. Going forward, we expect vanadium market sentiment to improve following current shutdowns from high cost stone coal producers, a decline in V2O5 slag production and a reverse in niobium substitution on the back of lower vanadium prices."

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"The Company continues to advance its sales and trading business with the recently announced appointment Mr. Francesco D'Alessio as Head of Sales, Americas, who will support the Company's vanadium sales strategy in the North and South American markets. The Company has attended multiple conferences and continues to build the back-office team to support sales and ensure highest quality of service from May 2020 onwards."

He concluded: "We are also pleased to announce a strategic partnership with Boston Metal to further advance its Molten Oxide Electrolysis (MOE) testing using Largo's V2O5 to produce ferrovanadium. Boston Metal's patented metals-production process is more efficient, less costly and greener with Molten Oxide Electrolysis."

A summary of the operational and financial performance for Q3 2019 is provided in the tables below:

Financial








Three months ended


Nine months ended




September 30,
2019


September 30,
2018


September 30,
2019


September 30,
2018

Revenues


$

32,118

$

149,458

$

105,894

$

343,872

Direct mine and mill costs



(22,213)


(21,275)


(64,227)


(60,705)

Operating costs



(31,506)


(36,706)


(93,861)


(98,109)

Net income (loss) before tax



(9,850)


91,734


(28,715)


191,563

Income tax (expense) recovery



1,022


(6,930)


46


(15,773)

Deferred income tax (expense) recovery



238


(13,388)


(2,590)


32,205

Net income (loss)



(8,590)


71,416


(31,259)


207,995

Basic earnings (loss) per share



(0.02)


0.14


(0.06)


0.40

Diluted earnings (loss) per share



(0.02)


0.11


(0.06)


0.33











Cash provided (used) before non-cash
working capital items


$

(1,736)

$

120,448

$

12,123

 

$

268,800

Net cash provided by operating activities



11,662


113,439


128,837


207,909

Net cash (used in) financing activities



(28,137)


(64,164)


(127,432)


(112,975)

Net cash (used in) investing activities



(15,743)


(3,995)


(42,914)


(12,791)

Net change in cash



(35,463)


43,867


(51,373)


73,336










As at








September 30,
2019

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