Largo Resources (LGO; LGORF): A Canadian Vanadium Producer Making Noise In Brazil

Stephen L Kanaval |

Vanadium was discovered in 1801 in Mexico. Originally called “Brown Lead” it was soon found to have unique chemical properties. The element was then named after the Scandinavian goddess of beauty and fertility. Vandium can mostly be found in the Earth’s crust and is commonly used as a metal alloy. The Maracás Menchen Mine in Bahia, Brazil boasts the highest grade vanadium resource in the world and (many think) positioned to be the lowest cost producer in the vanadium market.

Owned by Largo Resources (TSX: LGO) OTCQB: (LGORF), a Toronto-based operator, the company is positioned to become a leading producer of vanadium globally . Have a listen to some video below for Largo.



As an alloy to strengthen steel and reduce its weight, Vanadium enhanced steels are used in a vast and growing range of products that we use and encounter every day; including, rebar, automobiles, transport infrastructure etc. With a compound annual growth rate of over 6% for the past several years, vanadium is a bourgeoning commodity, with concentrated supply which lacks opportunities for investment in the wider market place. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to continue this growth over the medium and long term.

The 70,640 acre Maracas mine began in 2012 with first system production in 2014. The Company has achieve consecutive record production volumes in 2016 producing 730, 780 and 801 tons respectively. The mine is high grade and high quality ore body. The vanadium is contained within a massive, titaniferous magnetite that has much higher grades in both V2O5 and iron content than any other vanadium project in the world. Further, and equally importantly, it has very low levels of contaminants, like silica (SiO2). The mine uses a cost-effective open-pit mining process and after extraction the ore is sent through a magnetic separator to concentrate it.

Below are details of the mineral resources for the Maracás Menchen Mine:

Mineral Resources* (taken from company materials)

Mineral Reserve:

18.4 million tonnes @ 1.17% V2O5 (P&P)

Mineral Resource:

21.1 million tonnes @ 1.24% V2O5 (M&I)

This deal by Largo was named Metals and Mining Deals of the Year in 2012. The company is steadily progressing toward its goals on this property. Also of note, Largo has a non-binding memorandum with Vionx Energy Corp. to develop and produce Vanadium Redox Flow batteries. We look forward to talking with the company and relaying more details.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
LGO:CA Largo Resources Ltd. 0.85 0.02 2.41 9,400
LGORF Largo Resources Ltd 0.69 -0.00 -0.56 550

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