The Inside Scoop on Largo Resources Ltd (OTCMKTS: LGORF)

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Largo Resources Ltd (OTCMKTS: LGORF) got a boost after announcing record production of 2,595 tonnes of V2O5 in Q4 2018, a 2% increase over Q4 2017 Record FY 2018 production of 9,830 tonnes of V2O5, exceeding midpoint guidance of 9,650 tonnes by 2% and a 6% increase over FY 2017 and 2019 Guidance: Annual V2O5 production of 10,000-11,000 tonnes; Average annual cash operating costs excluding royalties1 of US$3.45-3.65/lb V2O5; Sustaining capital expenditures of US$10-14 million; Expansion capital expenditures of US$10-14 million

Largo Resources Ltd is a Toronto based Canadian natural resource company organized and existing under the Business Corporations Act. Largo is listed on the TSX with a vanadium mine and vanadium and tungsten projects in Brazil and Canada. In Brazil, Largo currently owns the Maracás Menchen Mine, the Currais Novos tungsten tailings project  and  the  Campo  Alegre  de  Lourdes  iron-vanadium  project.  In Canada,  Largo  owns  the  Northern  Dancer tungsten-molybdenum  property,  located  in  the  Yukon  Territory.  The  Company  is  currently  dedicated  to  the operation  and  expansion  of  the  Maracás  Menchen  Mine  and  predominantly  all  of  the  Company’s  activities  are focused on this mine.

Largo is currently executive on its two-phased exploration program for 2018. Phase I is a 2,000 meter in-pit drill program designed to further define the reserve block model for production in the next two to three years. This program began in the middle of April 2018 and was completed on May 30, 2018. The in-pit program completed 31 holes totaling 2,323 meters. At present the logging and sampling are complete. The data is being modelled and used for mine planning and development purposes.

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Consultants from GE21 Consultoria Mineral Ltda have been assisting in the modelling.Phase II includes a 4,950-metre drilling program focused on upgrading and expanding the satellite deposits and along strike high priority targets. Drilling began with two rigs at Novo Amparo Norte on June 4, 2018 and has completed 24holes totaling 4,120 meters. This included 13 infill and 11 step out holes. This program has expanded the mineralization to the north and south, while the infill drilling aims to upgrade the category of resource. At present all resources at Novo Amparo Norte are inferred.  Currently, there are a few holes being drilled on targets south of the Campbell pitwhere a vegetation suppression license is not required. The drill program is targeted to be completed on October 23,2018.

On January 9 Largo announced Record Q4 and Full Year 2018 Production Results and Provides 2019 Guidance: Total production from the Maracás Menchen Mine in 2018 was 9,830 tonnes of V2O5, exceeding the Company’s midpoint of guidance by 2%. This represents an increase of 6% over FY 2017 and is the strongest full year of production from the mine since operations commenced in 2014. The Company also achieved a new quarterly production record in Q4 2018 with 2,595 tonnes of V2O5 produced, up 2% from the previous quarter and representing the fourth consecutive quarter of production growth during 2018.

Global V2O5 recovery rates averaged 77.0% in 2018 representing an increase of 2% over the year prior. Recoveries of 75.3% in Q4 2018 averaged somewhat lower when compared to 77.1% in Q3 2018 due to issues with kiln stability. Following the kiln refractory replacement in Q1 2019, the Company expects recoveries to stabilize throughout the year as it continues its focus on established maintenance programs and best production practices at the mine.

Mark Smith, Chief Executive Officer of Largo, stated: “Largo’s ability to consecutively increase its production at the mine is a testament to the very skilled operations team at Maracás and has enabled the Company to exceed its midpoint guidance of 9,650 tonnes of V2O5 for the year. We are also very proud to report yet another quarterly production record from the Maracás Menchen Mine in addition to a new record of full year production for 2018.”

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Currently trading at a $1.2 billion market valuation Largo Resources has $128 million in the treasury and virtually no debt. Largo just announced. record production of 2,595 tonnes of V2O5 in Q4 2018, a 2% increase over Q4 2017 Record FY 2018 production of 9,830 tonnes of V2O5, exceeding midpoint guidance of 9,650 tonnes by 2% and a 6% increase over FY 2017 and 2019 Guidance: Annual V2O5 production of 10,000-11,000 tonnes; Average annual cash operating costs excluding royalties1 of US$3.45-3.65/lb V2O5; Sustaining capital expenditures of US$10-14 million; Expansion capital expenditures of US$10-14 million We will be updating on Largo Resources when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with it.

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

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