Canada NewsWire
TORONTO, Nov. 15, 2016
TORONTO, Nov. 15, 2016 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") today released highlights of its financial results for the quarter ended September 30, 2016. The Company is releasing highlights of its third quarter, as filed in full on SEDAR at http://www.sedar.com and on the Company's website at http://www.largoresources.com.
Highlights of the Company's financial results1:
Sep. 30, 2016 |
Dec. 31, 2015 | |||
Cash |
1,683 |
2,869 | ||
Total Current Assets |
23,545 |
19,718 | ||
Mine properties, plant and equipment |
321,724 |
296,041 | ||
Total Assets |
345,269 |
315,759 | ||
Total Current Liabilities |
76,266 |
100,313 | ||
Total Liabilities |
306,832 |
282,817 | ||
Q3 2016 |
Q3 2015 |
YTD 2016 |
YTD 2015 | |
Revenues |
20,758 |
- |
49,751 |
- |
Direct mine and mill costs2 |
(20,499) |
- |
(55,525) |
- |
Net loss |
(24,705) |
(50,005) |
(43,976) |
(93,995) |
Basic loss per share |
(0.06) |
(0.25) |
(0.12) |
(0.61) |
Net cash provided by (used in): |
||||
Operating activities |
32 |
(2,701) |
(20,461) |
(5,660) |
Financing activities |
2,131 |
(8,213) |
31,240 |
46,362 |
Investing activities |
(4,103) |
(13,003) |
(12,119) |
(33,848) |
Cash operating costs3 since the commencement of commercial production on October 1, 2015:
Production Tonnes |
Production Pounds Equivalent |
CDN$ Cost per pound |
US$ Cost per pound | |
Q4 2015 |
1,654 |
3,646,441 |
$5.97 |
$4.47 |
Q1 2016 |
1,169 |
2,577,201 |
$6.52 |
$4.75 |
Q2 2016 |
2,311 |
5,094,877 |
$4.19 |
$3.25 |
Q3 2016 |
2,182 |
4,810,481 |
$4.67 |
$3.59 |
Mark Smith, President and Chief Executive Officer for Largo, stated: "We are delighted with the Company's operational improvements, as evidenced by strong production results and improvements in cash operating costs since the beginning of the fiscal year. We are especially gratified by the fact that the Company was able to record positive cash from operating activities during Q3 2016."
He continued: "We believe the Company is poised to capture additional economic benefit from recent increases in vanadium prices. The price of vanadium pentoxide was quoted at approximately US$ 2.36 per pound during December 2015 and currently trades in a range of US$ 4.65 to US$ 4.85 per pound, which is already significantly higher than prices quoted during Q3 2016. We anticipate that the recent improvements in vanadium pricing will continue during 2017."
1 |
Financial numbers are reported in thousands of Canadian dollars, except for per share and per pound amounts or as otherwise noted. References to "Q3" and "YTD" refer to the three-month and nine-month periods ended September 30, respectively, and as reported in the Company's unaudited condensed interim consolidated financial statements for Q3 and YTD, 2016 and 2015. |
2 |
Refer to Note 17 in the Company's unaudited condensed interim consolidated financial statements for Q3 and YTD, 2016 and 2015. |
3 |
Refer to the "Non-GAAP Measures" section of the Company's Management's Discussion and Analysis for Q3 2016 ("MD&A") and the production guidance section of this press release for a discussion of Non-GAAP Measures and the calculation of cash costs. |
Highlights of Q3 2016
Significant events and transactions subsequent to Q3 2016
Maracás Menchen Mine
Reiterating production guidance for 2016:
Annual Production High-End |
Annual Production Low-End |
Average Annual Production |
Estimated Annual Average US$/CDN$ Cash Operating Costs Per Tonne 1,2,3 |
Estimated Annual Average US$/CDN$ Cash Operating Costs Per Pound 1,2,3 | |
2016 2,6 |
8,543 tonnes 4,5 ~ 18.8 million lbs |
7,543 tonnes 4,5 ~ 16.6 million lbs |
8,043 tonnes 4,5 ~ 17.7 million lbs |
US$8,541 CDN$11,166 |
US$3.87 CDN$5.07 |
1. |
The cash operating costs reported are on a non-GAAP basis. Cash operating costs include all cash expenditures, the main categories being mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, commissions on sales, royalties and sales, general and administrative costs ("SG&A"). Cash operating costs excludes depreciation and amortization charges, interest or any other debt servicing costs. Refer to the "Non-GAAP Measures" section of the Company's MD&A. See also 3. below. The estimated average annual R$/US$ and CDN$/US$ exchange rates used for 2016 are approximately 3.46 and 1.31 respectively. |
2. |
Excludes corporate SG&A or CAPEX (Capital Expenditures). |
3. |
The reader is cautioned that the cash operating costs presented are intended to serve as a guide to the magnitude of the Company's monthly operating expenditures on a cash basis and excludes financing costs associated with the operations and non-cash accounting charges (including but not limited to depreciation and amortization expense, accretion, share-based payments, or foreign exchange and derivative gains or losses). The measure may therefore not be comparable to other companies or the results of similar operations and does not meet any definition of GAAP. Refer to the "Non-GAAP Measures" section of the Company's MD&A. |
4. |
Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs. |
5. |
Total CAPEX for fiscal 2016 is anticipated to amount to $13.9 million. The Company periodically reviews its CAPEX needs and will update the market when its estimates change by a material amount. |
6. |
Calculated from "CDN$ Cost per pound" using average CDN$/US$ foreign exchange rates of 1.34, 1.37, 1.29 and 1.30 for the 4th Quarter 2015, 1st Quarter 2016, 2nd Quarter 2016 and 3rd Quarter 2016, respectively. |
About Largo
Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadium pentoxide at its Vanadio de Maracás Menchen Mine. Vanadium is primarily used as an alloy to strengthen steel and reduce its weight. Vanadium enhanced steels are used in a vast and growing range of products that are used and encountered every day; including, rebar, automobiles, transport infrastructure etc. With consumption increasing at a compound annual growth rate of over 8% for the past several years (Roskill, 2015), vanadium is a bourgeoning commodity which lacks opportunities for investment in the wider market place. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to continue this growth over the medium and long term. Largo also has interests in a portfolio of other projects, including: a 100% interest in the Currais Novos Tungsten Tailings Project in Brazil; a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project in Brazil; and a 100% interest in the Northern Dancer Tungsten-Molybdenum property in the Yukon Territory, Canada. For more information, please visit www.largoresources.com.
Cautionary Notes:
This press release contains forward-looking information under Canadian securities legislation. Forward-looking information includes, without limitation, statements with respect to completion of a listing on a U.S. stock exchange. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Largo to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on SEDAR from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo's annual and interim MD&As.
Neither the Toronto Stock Exchange (nor its regulatory service provider) accepts responsibility for the adequacy or accuracy of this release.
SOURCE Largo Resources Ltd.
We use cookies to tailor your experience, measure site performance and present relevant offers and advertisements. By clicking ‘Accept’ or any content on this site, you agree that cookies can be placed on your browser. You can view our privacy policy to learn more.
If you would like to get more data, alerts and access to Real Vision videos, join us as an Insider Tracking Advantage Ultra member