·
July's production record is a 25% increase over its prior
monthly record
production
·
Achieves full capacity production rate over single day in
July
· Revises
2015 production guidance
Symbol: LGO (TSX.V)
www.largoresources.com
TORONTO, Aug. 4, 2015 /CNW/ - Largo Resources Ltd.
("Largo" or the "Company") is pleased to provide an
update on recent production as well as an overview of its
operational outlook and goals for its Maracas Menchen Mine ("the
Plant" or "the Mine") in Bahia, Brazil.
Production Update:
The Company is pleased to report that it has produced 607 tonnes
of vanadium pentoxide during the month of July, surpassing its
previous record for monthly production of approximately 487 tonnes
set in May, 2015, or by 25%.
Overall production rates have improved dramatically averaging
approximately 19.6 tonnes per day, or approximately 74% of the
Plant's capacity during the month of July. The Plant has also
recently demonstrated its ability to produce at higher rates more
consistently. For example, it produced at or above 20 tonnes per
day, or approximately 75% of the plant's capacity, for a total of
18 days in July and of those, a total of 11 days were at or above
23 tonnes per day, which represents approximately 87% of the
plant's capacity.
Largo is additionally extremely pleased to report that during
the month of July the Company achieved its full capacity production
rate of 26 tonnes over the course of a single day which is a
significant milestone for the Company as it demonstrates the
Plant's ability to produce at its intended name plate capacity.
Operational Outlook:
The Company is extremely encouraged by recent production success
and believes that production rates will continue to improve as it
moves forward with its ongoing ramp-up optimization efforts,
including operational and engineering improvements.
As the Plant has now demonstrated its ability to produce at or
near its full design capacity rates (at or above 90%) over
significant periods of time, the focus will now be to stabilize at
these higher production levels on a constant daily basis.
In order to achieve this, Largo continues advancing several
engineering optimization projects all of which will further improve
the Plant's ability to produce consistently (see press release
dated June 8, 2015).
Mr. Michael Mutchler, Chief
Operating Officer to Largo, stated: "We are extremely excited to
report our production of 607 tonnes of vanadium produced in the
month of July, which represents approximately 74% of the Plant's
design capacity and the strongest month of production to date.
Additionally, we have demonstrated the Plant's ability to produce
at its full capacity levels over the course of a single day and
have also maintained stability at levels above 87% for a total of
11 days which are both tremendous operational milestones for the
Project. "
He continued: "We continue to aggressively pursue every
opportunity to further enhance the Plant's stability at these
record production levels through several ongoing engineering
optimization projects. We are greatly looking forward to achieving
increases in our daily and monthly production rates from here."
Revised Production Guidance:
The majority of the Company's engineering optimization projects
are already in the process of being implemented, however, due to
long lead times (including engineering, construction and delivery)
of several key items, the majority will not be commissioned and
operational until the end of the third quarter 2015.
Although Largo believes it will continue to achieve full
capacity rates over periods of time, and that production rates will
continue to improve in general during the third quarter, it now
anticipates that it will achieve nameplate capacity rates on a
stable and continuous basis during the fourth quarter of 2015
following the completion and commissioning of all its ongoing
optimization projects.
As such, Largo is revising its previously disclosed production
guidance (see press release dated February
2, 2015) to reflect this amendment to its ramp-up schedule.
|
Average
Annual
Production
|
Estimated
Average
Annual
Average
US$ Operating
Cost
Per
Tonne(i)
|
Estimated
Average
US$
Operating
Cost
Per
Pound(i)
|
Targeted
Year-
End Exit
US$
Costs Per
Pound(i)
|
2015
Revised
|
6,500
tonnes
~ 14.3 million lbs
|
$9,916
|
$4.50
|
$3.60
|
2015
Previous
|
7,850
tonnes
~17.3 million lbs
|
$9,150
|
$4.15
|
$3.21
|
(i)
|
Reported operating
costs for the Maracas Mine include all royalties, SG&A, sales
commissions but excludes CAPEX. The operating costs reported are on
a non-GAAP basis. Operating costs reflected are based
on the average of the high/low production rates and on a BRL/US
exchange rate of 3.20.
|
The Company's revised production guidance for 2015 takes into
account production-to-date as well as a forecast based on the
amended ramp-up schedule. Although projected production for 2015 is
lower than previously anticipated, projected cash costs have
increased only marginally as a result of successful ongoing
optimization efforts by the Company versus increased costs beyond
its control (e.g., power cost increases and changes to foreign
exchange rates).
Quality Assurance/Quality Control:
Mr. Michael Mutchler, Chief
Operating Officer to Largo, and a Qualified Person as defined by NI
43-101, has reviewed and approved the contents of this press
release.
About Largo
Largo (TSX-V: LGO) is a growing strategic mineral company
focused on continuing to ramp-up production at its Vanadio de
Maracás Menchen Mine.
Largo's Maracás Menchen Mine boasts the highest grade vanadium
deposit yet discovered and is expected to be a low cost producer.
With an off-take in place with Glencore, Largo is well positioned
to become a leading producer of vanadium globally and is expected
to generate substantial cash-flows.
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 a
compound annual growth rate of over 6% for the past several years
(Roskill, 2013), 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 is listed on the TSX Venture Exchange under the symbol
"LGO".
For more information please refer to Largo's website:
www.largoresources.com
Join our mailing list:
www.largoresources.com/English/about-us/contact/default.aspx
Disclaimer
This press release contains forward-looking information under
Canadian securities legislation. Forward-looking information
includes, but is not limited to, statements with respect to
completion of any financings; Largo's development potential and
timetable of its operating, development and exploration assets;
Largo's ability to raise additional funds necessary; the future
price of vanadium, tungsten and molybdenum; the estimation of
mineral reserves and mineral resources; conclusions of economic
evaluation; the realization of mineral reserve estimates; the
timing and amount of estimated future production, development and
exploration; costs of future activities; capital and operating
expenditures; success of exploration activities; mining or
processing issues; currency exchange rates; government regulation
of mining operations; and environmental risks. 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.
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SOURCE Largo Resources Ltd.