Largo Produces Record Vanadium Pentoxide in Third Quarter

Vanadium pentoxide, a yellow-brown inorganic compound with the formula V2O5, is commonly used as an alloy to strengthen steel while reducing its weight as compared to other compounds and minerals.

With a constant drive to make steel stronger and lighter, vanadium demand is expected to remain strong for the foreseeable future, playing into the growth strategy of Toronto-based Largo Resources Ltd. (TSX:LGO)(OTCQB:LGORF).

Largo's portfolio includes various properties, including the vanadium pentoxide-producing Maracás Menchen Mine, the Currais Novos Tungsten Tailings Project and the Campo Alegre de Lourdes Iron-Vanadium Project in Brazil; and the Northern Dancer Tungsten-Molybdenum property in the Yukon Territory.

On Tuesday, Largo said that it hit new record of V2O5 production at Maracás during the third quarter. The company produced 2,513 tonnes of V2O5 during the quarter, topping the previous record of 2,311 tonnes that was set in Q2 2016 by 8.8%. Production of 2,513 tonnes was nearly 5% over the nameplate capacity of the Maracás plant.

The higher production dovetails nicely for the company with a surge in V2O5 pricing. During Largo's third quarter last year, V2O5 was fetching US$3.51 per pound. This past quarter, V2O5 prices were up 249% to US$8.47 per pound.

As the only pure-play vanadium producer, Largo believes its improved operational performance and low-cost production will deliver "record breaking results as vanadium prices continue to remain high."

Shareholders agree judging by shares climbing from a 52-week low of 33.5 cents in July to a 2-1/2 year high of $1.35 last month. After pulling back from that high to a low of 84 cents on September 25, shares are back on the climb, including a jump of 11.1% today to $1.00 at the lunch break.