[Ferro-Alloys.com] Largo Reports Fourth Quarter and Full Year 2023 Operational and Sales Results Highlighted by Record Quarterly High Purity V2O5 Production; Provides 2024 Guidance

All amounts expressed are in U.S. dollars, denominated by “$”

Q4 and FY 2023 Highlights

• Quarterly V₂O₅ equivalent production of 2,768 tonnes (6.1 million lbs¹) in Q4 2023, a 38% increase over the 2,005 tonnes produced in Q4 2022
• Annual V₂O₅ production of 9,681 tonnes (21.3 million lbs¹) in 2023 vs. 10,436 tonnes in 2022; Within the Company’s 2023 annual production guidance range of 9,000 – 11,000 tonnes
• Quarterly global V₂O₅ recovery of 79.4% in Q4 2023, a 6% increase over the 74.7% achieved in Q4 2022; Annual global V₂O₅ recovery of 80.0% in 2023 vs. 79.1% in 2022
• Quarterly sales of 2,605 tonnes of V₂O₅ equivalent (inclusive of 139 tonnes of purchased material) in Q4 2023 vs. 2,774 tonnes in Q4 2022
• Annual V₂O₅ equivalent sales of 10,396 (inclusive of 929 tonnes of purchased material) tonnes in 2023 vs. 11,091 tonnes in 2022; Within the Company’s annual 2023 sales guidance of 8,700 – 10,700 tonnes
• Ramp up of the Company’s ilmenite concentrate production remains ongoing with 8,970 tonnes produced in Q4 2023; Ilmenite production was 814 tonnes in October, 2,546 tonnes in November and 5,610 tonnes in December
• In October, Largo Clean Energy’s (“LCE”) 6 megawatt-hour vanadium redox flow battery (“VRFB”) deployment for Enel Green Power España (“EGPE”) was validated to operate on test conditions according to EGPE specifications and LCE test procedures
• The Company’s review of strategic alternatives for LCE to evaluate opportunities to maximize value in the clean energy transition remains ongoing
• The Company published its second annual Climate Report, aligned to the Taskforce on Climate-related Financial Disclosures which highlighted improvements to certain climate-related metrics and targets

Vanadium Market Update²

• The average benchmark price per lb of V₂O₅ in Europe was $6.46 in Q4 2023, a 22% decrease from the average of $8.25 seen in Q4 2022; The average benchmark price at December 31, 2023 was $6.53, a 31% decrease from the average of $9.44 at December 31, 2022
• The average benchmark price per kg of ferrovanadium in Europe was $26.61 in Q4 2023, a 20% decrease from the average of $33.20 seen in Q4 2022; The average benchmark price at December 31, 2023 was $28.70, a 21% decrease from the average of $36.50 at December 31, 2022
• Vanadium spot demand was soft in Q4 2023, primarily due to adverse conditions in the Chinese and European steel industries, however, strong demand from the aerospace sector continued; Demand in the energy storage market is anticipated to increase in future quarters, specifically in China
• The decline in vanadium prices during the quarter is expected to negatively impact the Company's Q4 2023 financial results

Largo Inc. ("Largo" or the "Company") today announces annual production of 9,681 tonnes (21.3 million lbs1) of vanadium pentoxide (“V2O5”) equivalent from its Maracás Menchen Mine and sales of 10,396 tonnes of V2O5 equivalent in 2023.

Daniel Tellechea, Interim CEO of Largo, stated: “The Company continues to improve the operational efficiency of its Maracás Menchen Mine, and saw a considerable improvement in production results in the fourth quarter of 2023. As a result, the Company managed to achieve its annual production and sales guidance for 2023. The Company continues to place as many units as possible in the premium yielding high purity vanadium sector, achieving a record production of 1,670 tonnes of high purity V₂O₅ equivalent in Q4 2023, representing 60% of the Company's quarterly V₂O₅ output.This improvement is expected to partially offset the impact of lower vanadium prices in Q4 2023, which fell to their lowest level in approximately two years, and lower sales volumes compared to Q4 2022.

He continued: “In Q4 2023, we continued to ramp up our ilmenite concentrate plant and are pleased to provide the first annual guidance for this material in 2024. With a substantial investment in this new plant in 2022/2023, we look forward to reaping the benefits of diversifying Largo's product offering and revenues in 2024 from expected ilmenite sales as by-product of our traditional vanadium operations. We completed our first 500 tonne ilmenite sale in January 2024 and expect to sell between 8,500 – 10,500 tonnes in Q1 2024. For the coming year, it is our priority to remain focused on optimizing our operations, reducing costs, and achieving our production and sales targets as we continue to navigate a lower vanadium price environment. Lastly, Largo remains dedicated to advancing its exploration program surrounding the Maracás Menchen Mine as we strive to plan for future growth.”

Maracás Menchen Mine Operational and Sales Results

Q4, FY 2023 and Other Updates

• Total ore mined was 473,958 tonnes in Q4 2023, a 45% increase over the 326,552 tonnes mined in Q4 2022. The Company closed 2023 with 1,752,982 tonnes of ore mined, representing a 29% increase as compared to the previous year.
• Crushing availability improved in Q4 2023 with total ore crushed of 465,619 tonnes, representing an 8% increase over the 430,256 tonnes crushed in Q3 2023 and a 35% increase over the 343,773 tonnes crushed in Q4 2022. The Company closed 2023 with 1,685,166 tonnes of ore crushed, being 9% higher than 2022.
• The global recovery³ achieved in Q4 2023 was 79.4%, being 6% higher than 74.7% achieved in Q4 2022 and 3% higher than the 76.9% achieved in Q3 2023. The global recovery³ in October was 79.2%, 78.9% in November and 80.0% in December. The global recovery achieved in 2023 was 80.0%, being 1% higher than the 79.1% achieved in 2022.
• In December, the Company secured an additional debt facility of $10.0 million with a bank in Brazil. The facility is for two years with a fee of 0.85% and an accrued interest rate of 10.45% p.a. to be paid on maturity. This debt facility is being used to fund working capital requirements.
• In December 2023, the Company provided an update on the ongoing exploration program surrounding its Maracás Menchen Mine, including an initial phase of drilling conducted in 2023 and the further analysis of past exploration work completed at the Company’s Campbell Pit and exploration targets located both north and south of the Campbell Pit. The Company’s goal for this program is to establish a potential mineralized trend measuring more than 7 kilometres (“km”) along strike by establishing a correlation between the known mineralization intercepted between Novo Amparo North (“NAN”) to the Campbell Pit (see press released dated December 18, 2023).
  • In 2022 and 2023, the Company conducted a drill program north and south of the Campbell Put consisting of 19 drill holes and 245 surface samples, 148 infill holes in the Campbell Pit and 33 holes in the Southern District (the “2023 Campaign”)The Company is in the process of analyzing its historical drill data and the remaining holes from the 2023 Campaign with results expected in Q1 2024.
  • In 2024, the Company anticipates completing approximately 15,300 metres of exploration drilling with efforts primarily focusing on areas north and south of the Campbell Pit with known magnetic and geochemical anomalies. Exploration efforts will also focus on concessions surrounding the Maracás Menchen Mine that require drilling in order to maintain good standing in accordance with the applicable rules and regulations in Brazil. The Company’s 2024 drilling campaign is expected to begin in February 2024.

2024 Guidance

Tables summarizing the Company’s 2024 production, sales and cost guidance is provided below. The Company expects lower V₂O₅ equivalent production in Q1 2024 due to a planned kiln refractory replacement in February 2024.

V₂O₅ Equivalent Production, Sales and Cash Operating Costs Excluding Royalties

Ilmenite Concentrate Production and Sales

2024 Capital Expenditures Guidance

The Company plans to invest approximately $33.0 million on capital expenditures in 2024, including approximately $14.0 million for sustaining capital requirements, $15.6 million for capitalized stripping and $3.5 million for certain production process items related to the ilmenite concentrate plant.

About Largo

Largo is a globally recognized vanadium company known for its high-quality VPURE™ and VPURE+™ products, sourced from its Maracás Menchen Mine in Brazil. The Company is currently focused on the ramp up of its ilmenite concentrate plant and is undertaking a strategic evaluation of its U.S.-based clean energy business, including its advanced VCHARGE vanadium battery technology to maximize the value of the organization. Largo's strategic business plan centers on maintaining its position as a leading vanadium supplier with a growth strategy to support a low-carbon future.

• [Editor:tianyawei]