Largo Q2 2026 Earnings Report

Largo EPS Results

• Actual EPS: -C$0.30
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Largo Revenue Results

• Actual Revenue: $62.51 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Largo Announcement Details

• Quarter: Q2 2026
• Date: 8/14/2026
• Time: After Market Closes
• Conference Call Date: N/A
• Conference Call Time: N/A

Largo (TSE:LGO) Inc is committed to the production and supply of high-quality vanadium products. The Company is also focused on the advancement of renewable energy storage solutions through Largo Clean Energy and its vanadium redox flow battery technology. The Company is engaged in the mining, exploration, and development of mineral properties, primarily in Brazil, through which it produces and supplies vanadium products VPURE Flake, VPURE+ Flake, and VPURE+ Powder.

Largo Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Operating performance improved: Second-quarter vanadium production rose 28.5% year over year to 2,900 tons, while vanadium and ilmenite sales increased 53% and 67%, respectively. Revenue grew 68.5% to $44 million, and adjusted EBITDA returned to positive territory at $2.7 million.
• Negative Sentiment: Higher diesel, explosives, reagent and other input costs pushed adjusted cash operating costs excluding royalties to $4.12 per pound from $3.18 a year earlier. Largo reported a $22.7 million net loss, although management said it was substantially affected by non-cash asset write-downs and deferred tax expense.
• Positive Sentiment: Debt restructuring reduced near-term refinancing risk: Approximately $82.2 million of commercial debt was extended from September 2026 to March 2030, including a six-month principal grace period and 36 months of quarterly amortization. Management said the agreement provides additional liquidity runway, while stating that the announced terms do not require an equity raise.
• Positive Sentiment: Largo secured a $60.1 million U.S. Defense Logistics Agency delivery order, with deliveries expected to begin at 20 tons per week and cash receipts on net-30 terms. Vanadium oxide imported from Brazil under the relevant classification was also exempted from the new 25% Brazil-specific U.S. tariff, though Brazilian ferrovanadium remains subject to it.
• Positive Sentiment: Copper-PGM production has begun as a byproduct using existing flotation infrastructure, with initial guidance of 300–380 tons per month and expected grades of approximately 15% copper and 41 grams per ton of PGMs and gold. Management characterized the stream as high margin because most costs are shared with vanadium production, while ilmenite output has been temporarily paused during the ramp-up.

Presentation

[Operator]

Good morning, ladies and gentlemen. Welcome to Largo's second quarter 2026 earnings call. This conference is being recorded, and the replay will be available at the company's website at largoinc.com. We would like to inform that all attendees will be listen-only mode on the conference during the presentation. Questions must be submitted in writing using the Q&A function on the webcast platform. The company will be reviewing the questions received and select a number for management to address. Similar questions may be combined, and we may not be able to answer every question submitted. Before we continue, please note that today's discussion may include forward-looking statements and references to non-GAAP financial measures. These statements are subject to the risks and uncertainties described in Largo's public filings. Reconciliations of non-GAAP measures and additional information are included in the company's second quarter 2026 earnings release, financial statements, and MD&A.

[Operator]

Present at this conference, we have Mr. Alberto Arias, Executive Chairman and Co-Chief Executive Officer, and Mr. Jim Bannantine, Co-Chief Executive Officer. Now, I will turn the conference over to Mr. Arias and Mr. Bannantine. Please, you may begin your conference.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Thank you, and good afternoon, everyone, and thank you for joining us today. The second quarter show us the work underway across Largo is gaining real momentum. We produced more, sold more, grew revenue, and returned to positive adjusted EBITDA. Just as importantly, the progress we made since the quarter end across our balance sheet, our U.S. commercial position, and our copper-PGM initiative have strengthened the business and broadened the opportunities ahead. Let's start with our second quarter operating results. Ore availability improved during the quarter. Total ore mined increased 46.6% year-over-year to 712,198 tons, reflecting better mine access and continued improvement in execution. The better ore availability, together with improved plant stability, helped lift vanadium production 28.5% to 2,900 tons, near the upper end of our quarterly guidance range.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

For the first half of the year, production reached 5,516 tons, up 55.2% from the same period last year. Importantly, our commercial performance kept pace with the improvement in production. Vanadium sales increased 53% to 2,773 tons of vanadium pentoxide equivalent. Ilmenite concentrate sales also performed well, increasing 67% to 10,059 tons. The market backdrop also became more supportive. European vanadium pentoxide benchmark averaged $6.03 per pound, up 17.5% year-over-year. European ferrovanadium prices increased 15.6%, while the average U.S. ferrovanadium benchmark also rose 45.8%. The stronger pricing flow through our realized revenue per pound sold, which increased to $6.96 from $5.80 in the first quarter and $6.39 a year ago. The combination of higher volumes and better pricing translated directly into our financial results. Revenue increased 68.5% to $44 million, including $42 million from vanadium and $1.4 million from ilmenite. Jim?

[Jim Bannantine, Co-CEO at Largo]

Thanks, Alberto. This is Jim. On the financial front, adjusted EBITDA returned to positive territory at $2.7 million, compared with $34,000 a year ago. Mining operations adjusted EBITDA increased 64.8% to $4.4 million. Cash generation improved as well. Cash provided before working capital items more than tripled to $6.6 million from $2.2 million in the prior year period. Turning to costs, the quarter reflected a combination of higher input prices and increased operating activity as sales volumes grew. Cash operating costs excluding royalties were $5.10 per pound sold, compared with $4.63 a year ago. On an adjusted basis, cash operating costs excluding royalties were $4.12 per pound compared with $3.18 per pound a year ago. These reflect the increased material costs from the Iran war.

[Jim Bannantine, Co-CEO at Largo]

The increase largely affected the higher prices for diesel, explosives, and sulfur-derived reagents, together with the higher level of activity needed to support the increased sales. Some of these pressures are external, but the response is within our control in the form of disciplined execution, stable plant performance, and tighter cost management. As production and sales strengthen, our goal is to convert that momentum into better unit economics, margins, and cash generation. On the bottom line, we reported a net loss of $22.7 million. It is important to put that result into context. The quarter included significant non-cash items, principally a write-down of vanadium assets and a deferred income tax expense. It also included higher operating professional and finance costs.

[Jim Bannantine, Co-CEO at Largo]

We don't minimize the reported loss, but the return to positive adjusted EBITDA and the improvement in cash provided before working capital adjustments show that the underlying business moved in the right direction.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Let me now turn on what happens since the quarter end, because these developments meaningfully change the context for Largo. First, we added to the management team, Jim Bannantine, as Co-CEO of Largo. I have known Jim for over 15 years, when my private equity fund was one of the largest shareholders of Aura Minerals. Jim was appointed CEO of Aura back then, and I saw firsthand the positive contribution Jim had to that company, which was a great investment for my fund and all its shareholders. Moving back to Largo, on June 30th, Largo had $5.1 million in cash and $114.2 million in debt. Addressing our short-term maturities was therefore an immediate priority. On August 20th, we announced a binding agreement with Banco do Brasil, BTG Pactual, Bradesco, Santander, and Caixa Econômica Federal to restructure approximately $82.2 million of outstanding commercial debt.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

The agreement extends the final maturity from September 2026 to March 2030, materially reducing near-term refinancing risk. Under the revised terms, principal payments benefit from a six-month grace period, followed by a 36-month quarterly principal amortization, while interest remains paid monthly. This is an important milestone for Largo and addresses a key near-term financial priority. The revised schedule improves our near-term liquidity profile and gives us greater runway to execute our operating plan, improve cash generation, and advance the value creation opportunities at Maracás Menchen and Largo in general. Jim?

[Jim Bannantine, Co-CEO at Largo]

Thanks, Alberto. Meanwhile, back in the United States, two developments have strengthened our commercial position. First, on July 7th, Largo secured a $60.1 million delivery order from the U.S. Defense Logistics Agency's Strategic Materials Department under our existing five-year contract with that agency. This order is a strong endorsement of our product quality and commercial capabilities, and it reinforces Largo's role in U.S. critical mineral supply chains. Second, we receive greater clarity on U.S. trade policy and tariffs. Vanadium oxides and hydroxides under HTSUS classification 2825.30 were expressly exempt from the additional 25% tariff recently applied to certain Brazilian products. As a result, Brazilian origin V2O5 imported under this classification is not subject to the new Brazil-specific tariff, an important outcome for our valuable high-purity business. The exemption, unfortunately, does not extend to ferrovanadium exported directly from Brazil.

[Jim Bannantine, Co-CEO at Largo]

However, our exposure is limited here because the majority of Largo's ferrovanadium sales to the U.S. are not supplied directly from Brazil. We are also moving quickly to unlock more value from the material we already mine at Maracás Menchen.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Yes. Brazil's National Mining Agency approved our request to produce and sell copper, platinum group metals, nickel, cobalt as byproducts from our existing operation. Following successful industrial-scale test, we began full-scale copper-PGM concentrate production on August 7th, using our existing ilmenite flotation infrastructure. What makes this opportunity especially compelling is its economics. Copper-PGM concentrate is a byproduct of vanadium production, so most of its costs are shared with our primary operation. Combined with the use of infrastructure already in place and the absence of material capital expenditure, this makes copper-PGM a high-margin, new revenue stream that can significantly improve resource utilization and unlock additional value for Maracás Menchen Mine. To maximize this opportunity during the initial ramp-up, we have temporarily paused ilmenite concentrate production and are prioritizing copper-PGM output through the existing flotation circuit.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

At the same time, we are evaluating additional equipment that would allow us to recover ilmenite from copper flotation tailings and capture value for both product streams over time.

[Jim Bannantine, Co-CEO at Largo]

Commercial discussions with potential smelters and traders are progressing for our first copper-PGM shipment. As our operational and commercial opportunities expand, we have strengthened the leadership team as well to help drive the next phase of our execution. As we look ahead, our previously issued vanadium guidance remains unchanged, and we are also introducing initial guidance for copper-PGM concentrate. We continue to expect full-year vanadium production of 10,500 tons-12,000 tons of vanadium pentoxide equivalent, and sales of 7,509 tons-9,500 tons. We are also maintaining our adjusting cash operating cost guidance at this point of $350-$450 per pound. For copper-PGM concentrate, our initial guidance is 300 tons-380 tons per month, with expected average grades of approximately 15% copper, 41 grams per ton of PGMs and gold, and 53 grams per ton of silver.

[Jim Bannantine, Co-CEO at Largo]

We expect output to become progressively more consistent within this range as we continue to optimize the operation.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

With that roadmap in place, our focus is on execution, sustaining the improvement at the Maracás Menchen operations, meeting our vanadium production and sales targets, fulfilling the DLA order, and ramping up copper-PGM production. It also means converting grading, operating stability, and higher volumes into lower unit cost and a stronger cash generation. The debt restructuring gives us greater financial flexibility to advance these priorities and further strengthen Largo's financial position. Taken together, these developments give Largo a stronger foundation and several clear avenues for growth. We are the world's largest primary vanadium producer with an established high-purity business and growing relevance to U.S. critical mineral supply chains. Copper-PGM broadens our opportunity by allowing us to capture additional value from the resource and infrastructure already in place at the Maracás Menchen operations.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

We still have work to do, particularly on cost and cash generation, but we believe Largo enters the second half of the year with stronger operations, greater financial flexibility, and more opportunities to create value.

[Jim Bannantine, Co-CEO at Largo]

Thank you again, Alberto, and I am very pleased to have joined Largo at such an important point for the company. The progress described in this call gives us a solid platform, but there is still a great deal of work to do. My focus is straightforward: build on the improving consistency at Maracás Menchen Mine, strengthen cost and cash performance, and help the team capture the opportunities in front of us. Largo has a strong operating asset, an established position in vanadium, and growing relevance to critical mineral supply chains in the United States. The DLA order and copper-PGM production give us practical avenues to create value, while the debt restructuring gives us greater runway to pursue them. I look forward to working with Alberto, the board, and the entire Largo team to turn this momentum into consistent results. Thank you.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Thank you, Jim, and thank you to all of our employees, customers, and shareholders for their continued support. Operator, we are now ready to take questions.

[Operator]

Thank you. We will now start Q&A. If you would like to ask a question, please press the Q&A button at the bottom of the screen. We already received our first question. How does the debt restructuring change Largo's priorities over the next 12 months?

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Yes. No, thank you. The restructuring gives us this runway that we need but does not change our focus on financial discipline. This extension of approximately $82 million of commercial bank debt from September 2026, which is next month, to March 2030 have removed a significant near-term refinancing pressure. We also are going to be benefiting from this six-month principal grace period followed by the quarterly amortizations over 36 months. Our priorities continue to be on improvements of cash generations to fulfill the DLA contract, which is extremely important for us, and the ramp-up and improvements of the copper-PGM production that we have been discussing in this conference call. As we have performance improve, we remain focused on reducing debt and in strengthening the balance sheet.

[Operator]

The next question comes from Tate Sullivan with Maxim Group. How might the U.S. Defense Logistics Agency manage the buying piece of vanadium from Largo? Might the DLA make cash payments for forward supply delivery? Based on developments in the vanadium flow battery market, do you think that the value of our vanadium flow battery joint venture investments has increased?

[Jim Bannantine, Co-CEO at Largo]

Why don't I take the Defense Logistics Agency, and then Alberto can talk about the batteries? The Defense Logistics Agency contract, remember, is a stockpiling objective by the U.S. government of strategic materials. So the initial delivery schedule is 20 tons per week, which is governed by the Defense Logistics Agency's logistics capability to accept the material in their warehouse. So we'll have at least 20 tons a week, but as the warehouse availability and loading capacity becomes available, we could accelerate that, and the DLA has told us that. The DLA, remember, pays us on a net 30 basis for whatever we deliver, so if we accelerate deliveries, then we'll accelerate cash receipts.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Right. The question on the vanadium flow battery, that's a very exciting part of the vanadium story in general. From a supply-demand perspective, what we have seen is the biggest increase in demand coming out of this industry, primarily in China. I think China is demonstrating to the world that commercial flow batteries is a commercial reality for the vanadium industry. We're seeing it firsthand through our joint venture partnership in Storion, where we have a 37%. Our partners are seeing significant increase in demand for vanadium coming on flow battery projects that are focused on data centers. So that's become a key priority, and I think that's what's going to be a source of future value creation for Largo.

[Operator]

One more time. If you would like to ask a question, please press the Q&A button at the bottom of the screen. Please hold while we pull for questions. Our next question comes from [Jael Pride with D.A. Davidson. Do you think that the final terms of the debt restructuring will require Largo to raise equity or impose other punitive terms for the current shareholders?

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Right. No, thank you for the question, and probably that is driven by the last year debt extension we did. No, that is not been asked by the banks. Obviously, the details of the final documentation are going to come out probably in the middle of September. But we are very grateful for the Brazilian banks. They have been very supportive. They have been very commercial. What we have done in yesterday's press release is communicate to the market the binding terms, and I think that reflects what the agreement is. People will have to wait for a few weeks for the final documentation, but I think the essence of the transaction has been announced yesterday.

[Operator]

One more time. If you would like to ask a question, please press the Q&A button at the bottom of the screen. Please hold while we pull for questions. Our next question comes from an individual investor, Hen Harbor. Could you please give some comment regarding vanadium market in general? Is the market still oversupplied from China and Russia? If it is oversupplied, when do you think the market will balance? Thank you.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

I can take that question. In terms of supply-demand, it is something that obviously is critically important for Largo and its business. What we have seen the previous couple of years has been an oversupply market. It is mainly driven by the slowdown of the construction markets in China. That is the biggest consumer of vanadium, and rebar is the main use for vanadium globally. However, I believe that we are seeing positive signs emerging. First, we started to see a significant increase in prices in the United States, and mainly driven by tariffs and protectionism in the United States That helped some of the price realizations of Largo. But we are starting to see, as I mentioned before, that vanadium in Asia, particularly in China, have been surprising a lot of observers in the vanadium industry. We are seeing that that trend will probably continue and extend itself into the West.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

There's been very significant announcements of vanadium flow batteries in Europe recently. But I think, as I mentioned with our joint venture on Storion, that we are hopeful to see much better demand from vanadium coming on the vanadium flow battery industry in the United States.

[Operator]

Okay. We already received the next question. What are the main actions underway to improve until costs and cash generation?

[Jim Bannantine, Co-CEO at Largo]

Why don't I take that one? As everybody knows, the vanadium market that Alberto just discussed is challenging. We are adjusting our operating objectives and methodology to optimize our cost structure against profitable production levels. Not all vanadium sales are profitable in this market. We've got to select the profitable ones and then adjust production accordingly. Then we optimize our variable and fixed costs against that production level, which is how we're going forward. The first-order objective is profitability as opposed to just maximize production. Thank you.

[Operator]

One more time, if you would like to ask a question, please press the Q&A button at the bottom of the screen. Please hold while we pull for questions. Our next question comes from Kevin Shea. Does the company have a smelter or trading partners set up for purchasing the copper concentrate? If you so do they have estimates for sale price per ton?

[Jim Bannantine, Co-CEO at Largo]

I'll take that one. Yes, there's a great demand for this copper concentrate. Not only is copper in high demand, as everyone knows, but the PGM precious metal grades in this concentrate are very good. We have a strong demand from both the smelter and the trading community for the product. Multiple interested buyers. You can see the grades, the approximate grades in our press release for the copper and PGMs, but it's a very good price per ton.

[Operator]

The next question comes from Leo Correa with BTG Pactual. Hi. Thank you. Any updates on the potential tungsten sale?

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Right. We, maybe over a month ago, put a press release saying that we are looking at strategic options for our tungsten assets. That was mainly driven by what we have seen in the tungsten market, a significant increase in prices. China had restricted exports of tungsten, and prices really have gone up 10 times since we last operated Currais Novos, which was one of our operations in Brazil. There's been some, as we mentioned on that press release, inbounds of expressions of interest. We are very engaged of talking with the potential interested parties. We are going to optimize the value for Largo shareholders as a consequence of this interest for those assets. Just as a highlight, there are two of them. We have Northern Dancer in the Yukon territory of Canada. It is one of the world's largest undeveloped tungsten deposits.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

There's a lot of the technical reports that were published back in 2011. Then we have the Currais Novos, which was an operation of tailings reprocessing that Largo operated in 2011 and 2012. We basically put it in care of maintenance because the company wanted to focus its attention on the development of the Maracás vanadium mine. But tungsten prices have gone up tenfold since then. I think it's a very interesting opportunity for a number of companies and customers. But there's nothing really to report exactly about a price or a timing, but we're diligently working on that process.

[Operator]

Next question comes from Doug Adams. What avenues and margin expectations for the new PGM program?

[Jim Bannantine, Co-CEO at Largo]

I'll take that one. Just referencing our press releases, you can see what the copper and PGM grades are for the concentrate that we're selling. You can also see the guidance in the volume of the tonnage we expect to sell. As far as margin goes, as Alberto and I both referred to, the copper concentrate is a byproduct, so it doesn't have much additional cost to our existing vanadium production. So it's a very high margin as well. Thank you.

[Operator]

Next question comes from Hen Harbor again. Will Europe do a similar thing like what the United States did with vanadium, critical metal stockpile?

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Well, just to put into context that vanadium is becoming a critical metal and critical material in a lot of jurisdictions. We have seen a lot of interest of this stockpiling of vanadium, given that there has been recent reports in China that they have changed their category of vanadium to a strategic metal that is subject to stockpiling and potential export controls. So that's raised a lot of flags of warning that vanadium is very important to be stockpiled. In the report that is available in the Vanitec website for everyone to read, it clearly says that China currently produces around 72% of the vanadium supply. I should remind people that Russia is another important producer, around 15%, but both countries really dominate the vanadium market. Therefore, the need of the DLA and other jurisdictions to come up with these type of strategies.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

If there is needs for stockpiling, the endorsement that we got from DLA was very important. Being part of the supply chain for the Department of Defense and the Defense Logistics Agency has been very important for Largo as a company, and I think it actually paves the way to be participants of any other stockpiling in other parts of the world.

[Jim Bannantine, Co-CEO at Largo]

We've actually seen the EU, the U.K., Australia, Canada, basically kind of the free world, following these initiatives.

[Operator]

More time. If you would like to ask a question, please press the Q&A button at the bottom of the screen. Please hold while we pull for questions. This concludes the questions and answers section. At this time, I would like to turn the floor back to Arias for closing remarks.

[Alberto Arias, Executive Chairman and Co-CEO at Largo]

Well, thank you very much for attending this conference call. We appreciate your support. I know it's been a very tough time for all investors and stakeholders to be in this depressed environment for vanadium, but from the Largo perspective and the team behind Largo, we're all working diligently for the benefit of all the stakeholders, for the communities that work with us, with our suppliers, our customers. We think that these signs that we have recently in terms of the support of the Brazilian commercial banks is showing that we're here together to make Largo a success, and we're very committed on that. Thank you very much.

[Operator]

Thank you. This does conclude today's presentation. You may disconnect now and have a nice day.

Participants

Executives

• Alberto Arias, Executive Chairman and Co-CEO
• Jim Bannantine, Co-CEO