Largo Resources Ltd (OTCMKTS: LGORF) is a really exciting Canadian natural resource company seeing big growth over the past year transforming the stock into a volume leader and explosive runner making a significant run up the charts in 2018.
Largo got a recent boost after the Company announced reported Q3 results. Revenues were $149.5 million in Q3 2018, a 179% increase over Q3 2017 and a 45% increase over Q2 2018. Net income of $71.4 million and basic earnings per share of $0.14. The record numbers from Largo comas as production output was 2% higher than in Q3 2017 and 4% higher than in Q2 2018. The global recovery rate in Q3 2018 (77.1%) was slightly lower than Q2 2018 (79.2%), due to operational instability in the kiln as a result of the refractory liner maintenance in July and August. The kiln performance also impacted the leaching recovery during the same period. Additionally, the milling recovery was negatively affected by a coarser grind size. The September7 |P a g eglobal recovery level was however a record 82.2%, mainly due to improved kiln stability and better control of the milling section.
Largo Resources Ltd (TSX: LGO) (OTCQX: LGORF) is a Toronto based Canadian natural resource company organized and existing under the Business Corporations Act. Largo is listed on the TSX with a vanadium mine and vanadium and tungsten projects in Brazil and Canada. In Brazil, Largo currently owns the Maracás Menchen Mine, the Currais Novos tungsten tailings project and the Campo Alegre de Lourdes iron-vanadium project. In Canada, Largo owns the Northern Dancer tungsten-molybdenum property, located in the Yukon Territory. The Company is currently dedicated to the operation and expansion of the Maracás Menchen Mine and predominantly all of the Company’s activities are focused on this mine.
Largo is currently executive on its two-phased exploration program for 2018. Phase I is a 2,000 meter in-pit drill program designed to further define the reserve block model for production in the next two to three years. This program began in the middle of April 2018 and was completed on May 30, 2018. The in-pit program completed 31 holes totaling 2,323 meters. At present the logging and sampling are complete. The data is being modelled and used for mine planning and development purposes.
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Consultants from GE21 Consultoria Mineral Ltda have been assisting in the modelling.Phase II includes a 4,950-metre drilling program focused on upgrading and expanding the satellite deposits and along strike high priority targets. Drilling began with two rigs at Novo Amparo Norte on June 4, 2018 and has completed 24holes totaling 4,120 meters. This included 13 infill and 11 step out holes. This program has expanded the mineralization to the north and south, while the infill drilling aims to upgrade the category of resource. At present all resources at Novo Amparo Norte are inferred. Currently, there are a few holes being drilled on targets south of the Campbell pitwhere a vegetation suppression license is not required. The drill program is targeted to be completed on October 23,2018.
In addition, Phase II includes a program of ground magnetic survey, mapping and samplingof the concessions north ofNovo Amparo Norte. Landowners are being contacted for permission to cross their land in order to do this work. Thisis approximately 12 kilometres of strike extension that has not previously been investigated. At present, six kilometers of ground magnetic survey has been completed. The goal of this work is to further evaluate the potential for along strike continuation of the magnetite mineralization and to maintain the Company’s concessions
Mark Smith, Chief Executive Officer for Largo, stated on Q3 results “Largo delivered robust financial performance as a result of record operational output from the Maracás Menchen Mine in the third quarter. The Company also reported the highest ever revenues and operating cash flows to date of $149.5 million and $113.4 million, respectively, and continues to strengthen its balance sheet every quarter. Production at the Maracás Menchen Mine continued to be strong delivering its best quarter of the year with record production of 2,563 tonnes of V2O5. We continue to advance the expansion project at the Maracás Menchen Mine and the Company remains on track to achieve its increased production guidance for 2018.”
The Company also said it will permit all outstanding unlisted warrants of the Company to be exercisable on a cashless exercise basis at the option of the Warrant holder. No other terms of the Warrants are being amended. Warrant holders may exercise their Warrants without cash consideration through the issuance of common shares in the capital of Largo equal to the following formula: (number of Warrants exercised * market price at the time of exercise) less (number of Warrants exercised * exercise price) / market price1 at the time of exercise.
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Disclosure: we hold no position in Largo Resources either long or short and we have not been compensated for this article.