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Tuesday, November 24, 2020

Largo Resources Ltd (OTCMKTS: LGORF) Volume Explodes on Cooperman Comments

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In the category of recent explosions of trading volume, one should find the action today in Largo Resources Ltd (OTCMKTS: LGORF) at the top of the list. A stock that normally does about 50k shares/day did nearly 11M shares on Tuesday and was the most actively traded stock overall on the OTC for the day. Helping to push the action, the stock was mentioned on CNBC’s Halftime Report by investing legend Leon Cooperman as a strong micro-cap pick.

In addition, the company put out a press release citing the completion of its recent offering. According to the release, the offering consisted “of 60,000,000 common shares and an additional 9,000,000 common shares representing the exercise in full of the over-allotment option which was exercised on closing by the underwriters. The selling shareholders, listed below, received all of the net proceeds from the Offering.”

Largo Resources Ltd (OTCMKTS: LGORF) Largo Resources Ltd., a natural resource development and exploration company, engages in the acquisition, exploration, and development of mining and exploration properties located in Brazil and Canada. The company primarily explores for vanadium, iron, tungsten, molybdenum, chromite, palladium, and platinum group metals. Its flagship project is the Maracás Menchen Mine that consists of 18 concessions covering an area of 17,690.45 hectares located in Bahia State, Brazil. The company was formerly known as Consolidated Kaitone Holdings Ltd. and changed its name to Largo Resources Ltd. in June 2004. Largo Resources Ltd. was incorporated in 1988 and is headquartered in Toronto, Canada.

Largo Resources Ltd. (LGORF): Largo Resources Ltd. is a mid-tier mining development company primarily focused on the production of vanadium at its Maracas Menchen Mine in Brazil.

According to company materials, “Largo is a Toronto-based strategic mineral company focused on the production of vanadium flake, high purity vanadium flake and high purity vanadium powder at the Maracás Menchen Mine located in Bahia State, Brazil. The Company’s common shares are principally listed on the Toronto Stock Exchange under the symbol “LGO”. For more information on Largo, please visit our website at www.largoresources.com.“

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According to the release, “Credit Suisse Securities (Canada), Inc. and Morgan Stanley Canada Limited co-led the Offering, with CIBC Capital Markets acting as joint bookrunner, and Cormark Securities Inc., H.C. Wainwright & Co., LLC and Mackie Research Capital Corp. acting as co-managers. The selling shareholders under the Offering consisted of Arias Resource Capital Fund L.P., Arias Resource Capital Fund II L.P., Arias Resource Capital Fund II (Mexico) L.P., The Cranley Trust, Cranley Investments Holdings, LLC, and Mark Smith.”

The chart shows 19% piled on for shareholders of the stock during the trailing week. Furthermore, the company has witnessed a pop in interest, as transaction volume levels have recently pushed topping 1100% beyond what we have been seeing over the larger time frame.

Mr. Mark Smith, Largo’s President and Chief Executive Officer, commented “We are pleased that we now have the BNDES approval in-hand and we look forward to repaying in full amounts owing to both the BNDES and our syndicate of commercial banks in Brazil.  The repayment will allow us to realize the anticipated benefits of our recently completed note offering through the improvement in our capital structure, reduction in interest costs and the simplification of our reporting obligations.  The restructuring of our debts along with the most recent posted price range of V2O5 for the week ended July 13, 2018 of US$18.90/lb V2O5 to US$19.85/lb V2O5 (as reported by the European Metal Bulletin) presents an exciting opportunity for our Company.”

Now commanding a market cap of $674.8M, LGORF has a significant war chest ($54.6M) of cash on the books, which is balanced by about $56.2M in total current liabilities. LGORF is pulling in trailing 12-month revenues of $229.4M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 209.6%. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $LGORF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $LGORF, either long or short, and we have not been compensated for this article.

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