Pure-play vanadium producer Largo Resources has recorded record output of vanadium pentoxide (V2O5) produced at its flagship Maracás Menchen mine, in Bahia, Brazil, during the third quarter ended September 30.
The TSX-listed company said on Tuesday the operation had produced 2 513 t of V2O5 in the quarter – 202 t more than the previous record set in the second quarter of 2016, and 4.7% above the plant’s nameplate capacity.
The record output dovetails into a 249% jump in V2O5 prices, which according to Metal Bulletin, averaged $8.74/lb in the period – up from the $3.51/lb average price in the same period of 2016. Recent V2O5 prices have touched the $11/lb level, as a Chinese crackdown on illegal miners and increased environmental enforcement push prices higher.
“Largo anticipates that its continuing positive operational performance and low-cost production will deliver record breaking results as vanadium prices continue to remain high. Largo has emerged as a key player in the vanadium industry,” stated Largo president and CEO Mark Smith in a news release.
Largo had navigated some tough times since the ramp-up of Maracás Menchen started in 2014, just as V2O5 prices fell to the lowest levels in decades. V2O5 prices bottomed at about $2.50/lb in 2016.
However, a management shakeup, successful negotiations with lenders to defer interest payments and extend maturities, and an ongoing focus on leveraging operating efficiencies to keep production costs at a minimum have helped the company pull through. It can now look forward to strengthening fundamentals for V2O5 as demand, including new sources of demand, grow.