Largo Resources Ltd. [LGO-TSX; LGORF-OTCQX] said Thursday January 14 that it is considering a potential listing of its shares in the U.S. with a view to increasing its access to U.S. capital markets. The move comes as the company continues to develop its recently-launched Largo Clean Energy division into an industry-leading, vertically integrated redox flow battery business.
The newly-formed company, located in Delaware, aims to provide vanadium battery systems for the renewable energy storage market.
In keeping with that plan, Largo has called a shareholders meeting on March 1, 2020, in order to gain authorization for a share consolidation at a ratio of up to one post consolidated share for every 10 pre-consolidated shares.
Largo shares advanced on the news, rising almost 12% or 18 cents to $1.71 on active volume of 1.6 million. The 52-week range is $1.66 and $0.56.
Largo is a rare pure-play vanadium producer and is currently one of the world’s lowest-cost producers of the metal. The company is focused on the production of vanadium flake, high purity vanadium flake, and high purity vanadium powder at the Maracas Menchen Mine in Bahia State, Brazil.
With roughly 350 employees on the payroll (as well as 350 on contract), the Maracas Menchen Mine produced a record 3,092 tonnes (6.8 million pounds) of V2O5 in the third quarter of 2020. During the quarter, the mine also achieved a new record recovery rate of 84.2%.
The company recognized revenues of US$27.5 million from sales of 2,320 tonnes of V205 equivalent in the third quarter, marking an increase of 14% from the comparable period in 2019. The company posted a third quarter profit of US$2.5 million or $0.00 per share, marking a rebound from a year-ago loss of US$5.9 million or $0.01 per share.
Maracas Menchen is expected to produce 11,750-12,250 tonnes of V2O5 this year, according to company forecasts at a cash cost of between US$3.20 and US$3.40 a pound. The company has previously stated that it planned to increase annual production to 25,000 tonnes.
When Largo released its third quarter results on November 12, 2020, the company said it was on track to meet the lower end of its 2020 guidance with strong production results expected in the fourth quarter.