Largo Resources Ltd (OTCMKTS:LGORF) Gets More Interesting on the Pullback

Largo Resources Ltd (OTCMKTS:LGORF) Gets More Interesting on the Pullback

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Largo Resources Ltd (OTCMKTS:LGORF) shares saw a kneejerk lower on Tuesday, but still remain quite interesting as one of the very few firms that actively mines and produces vanadium pentoxide. One of its main uses is to make steel products stronger and less susceptible to corrosion. To further flesh out the story, the company just reported third-quarter 2018 production results from its Maracás Menchen Mine highlighting record quarterly vanadium pentoxide production during the quarter and a new record overall V2O5 recovery rate during the month of September.

According to the release, “The Maracás Menchen Mine achieved yet another quarterly production record of 2,563 tonnes of V2O5 produced in Q3 2018 compared to 2,513 tonnes in Q3 2017 and 2,458 in Q2 2018. This marks the third consecutive quarter of strong production in 2018 and the highest quarterly production recorded in the Company’s history.” In other words, despite the negative reaction in the stock, the company’s primary value proposition continues to progress.

Largo Resources Ltd (OTCMKTS: LGORF) bills itself as 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.

Moreover, 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.“

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As noted above, the company just reported tthird-quarter2018 production results from its Maracás Menchen Mine highlighting record quarterly vanadium pentoxide production during the quarter and a new record overall V2O5 recovery rate during the month of September. In all, we’ve witnessed 31% tacked on to share pricing for the listing in the past month.

In addition, the stock has seen interest climb, with an increase in recent trading volume of nearly 130% above its longer-run average levels.

Mr. Smith, Chief Executive Officer of Largo, stated: “The Maracás Menchen Mine demonstrated another strong operational quarter in Q3 with record production of 2,563 tonnes of V2O5, while also achieving the highest monthly average overall V2O5 recovery rate in the Company’s history. With 7,235 tonnes of V2O5 produced so far this year, the Company is well positioned to achieve the upper end of its increased and revised 2018 guidance range of 9,150 to 10,150 tonnes of V2O5 produced for the full year.”

Now commanding a market cap of $1.4B, LGORF has a significant war chest ($285.4M) of cash on the books, which compares with about $271.5M in total current liabilities. One should also note that debt has been growing over recent quarters. LGORF is pulling in trailing 12-month revenues of $296.9M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 188.6%. As more color becomes clear on the name, we will review the situation and update our take. 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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