Largo TSE: LGO reported higher second-quarter production, sales and revenue, alongside a return to positive adjusted EBITDA, as improved ore availability and plant stability supported its vanadium operations at the Maracás Menchen mine.
Executive Chairman and Co-Chief Executive Officer Alberto Arias said the company’s second-quarter progress extended beyond operations, pointing to a debt restructuring agreement, a new U.S. Defense Logistics Agency delivery order and the start of copper-platinum group metals concentrate production after the quarter ended.
Production and sales increased
Total ore mined rose 46.6% year over year to 712,198 tonnes in the second quarter, which Arias attributed to improved mine access and execution. Vanadium production increased 28.5% to 2,900 tonnes, near the upper end of Largo’s quarterly guidance range.
For the first half, vanadium production totaled 5,516 tonnes, up 55.2% from the prior-year period. Vanadium sales rose 53% to 2,773 tonnes of vanadium pentoxide equivalent, while ilmenite concentrate sales climbed 67% to 10,059 tonnes.
The company said pricing conditions improved during the quarter. The European vanadium pentoxide benchmark averaged $6.03 per pound, up 17.5% from a year earlier. European ferrovanadium prices increased 15.6%, while the average U.S. ferrovanadium benchmark rose 45.8%.
Largo’s realized revenue per pound sold was $6.96, compared with $5.80 in the first quarter and $6.39 a year earlier. Revenue increased 68.5% to $44 million, including $42 million from vanadium sales and $1.4 million from ilmenite sales.
Adjusted EBITDA turns positive, while costs and loss rise
Co-CEO Jim Bannantine said adjusted EBITDA was $2.7 million, compared with $34,000 in the prior-year quarter. Mining operations adjusted EBITDA increased 64.8% to $4.4 million, while cash provided before working-capital items more than tripled to $6.6 million from $2.2 million.
Costs also increased as the company expanded operating activity and faced higher input prices. Cash operating costs excluding royalties were $5.10 per pound sold, compared with $4.63 per pound a year earlier. Adjusted cash operating costs excluding royalties were $4.12 per pound, up from $3.18 per pound.
Bannantine said diesel, explosives and sulfur-derived reagent costs increased due to what he described as the impact of the Iran war, along with the higher activity levels required to support increased sales. He said Largo’s focus is on plant stability, disciplined execution and tighter cost management to improve unit economics and cash generation.
The company reported a net loss of $22.7 million for the quarter. Bannantine said the result included significant non-cash items, principally a write-down of vanadium assets and deferred income-tax expense, as well as higher operating, professional and finance costs.
Debt extension and U.S. commercial developments
As of June 30, Largo had $5.1 million in cash and $114.2 million in debt, Arias said. On Aug. 20, the company announced a binding agreement with Banco do Brasil, BTG Pactual, Bradesco, Santander and Caixa Econômica Federal to restructure about $82.2 million of commercial debt.
The agreement extends the debt’s final maturity from September 2026 to March 2030. Principal repayments will have a six-month grace period followed by quarterly amortization over 36 months, while interest will continue to be paid monthly.
Arias said the agreement reduces near-term refinancing pressure and provides additional runway to execute Largo’s operating plans. He added that the company remains focused on cash generation, debt reduction and strengthening its balance sheet. In response to a shareholder question, he said the banks had not requested an equity raise under the binding terms announced, though final documentation was expected around mid-September.
Separately, Largo secured a $60.1 million delivery order from the U.S. Defense Logistics Agency’s Strategic Materials Department on July 7 under its existing five-year contract. Bannantine said the initial delivery schedule is 20 tonnes per week, subject to the agency’s warehouse capacity, and that the DLA pays on net-30 terms for delivered material.
The company also said vanadium oxides and hydroxides imported from Brazil under HTSUS classification 2825.30 were exempt from an additional 25% tariff on certain Brazilian products. The exemption does not apply to ferrovanadium exported directly from Brazil, though Largo said most of its U.S. ferrovanadium sales are not supplied directly from Brazil.
Copper-PGM production begins
Brazil’s National Mining Agency approved Largo’s request to produce and sell copper, platinum group metals, nickel and cobalt as byproducts from its existing operation. Following industrial-scale testing, the company began full-scale copper-PGM concentrate production on Aug. 7 using existing ilmenite flotation infrastructure.
Largo has temporarily paused ilmenite concentrate production during the initial ramp-up to prioritize copper-PGM output through the flotation circuit. It is evaluating equipment that could allow it to recover ilmenite from copper flotation tailings in the future.
The company expects copper-PGM concentrate production of 300 to 380 tonnes per month, with average grades of about 15% copper, 41 grams per tonne of PGMs and gold, and 53 grams per tonne of silver. Bannantine said commercial discussions with smelters and traders were progressing for the first shipment and that multiple potential buyers had expressed interest.
Largo maintained its 2026 guidance for vanadium production of 10,500 to 12,000 tonnes of vanadium pentoxide equivalent, sales of 7,500 to 9,500 tonnes and adjusted cash operating costs of $3.50 to $4.50 per pound.
Looking ahead, Bannantine said the company would prioritize profitable production rather than simply maximizing output in the current vanadium market. Arias said Largo sees demand potential from vanadium flow batteries, including projects associated with data centers, while continuing to focus on fulfilling the DLA order and improving cost and cash performance.
About Largo (TSE:LGO)
Largo 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.
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