LGO - Earnings call transcript Q4 2021

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Operator

0:04 Good day and thank you for standing by. Welcome to Largo's Fourth Quarter and Annual 2021 Earnings Webcast and Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. 0:19 I would now like to hand the conference over to your speaker today, Mr. of Manager Senior Guthrie, External Relations. Alex ahead. go Please

Alex Guthrie

our X:XX annual and joining Good everyone. Thanks morning, fourth XXXX quarter for earnings call. conference

available Ernest call Prince, Stephen the our and Vollant, largoinc.com. presentation, today Paulo VP Cleave, the and our Misk, Paul at our To is Commercial the Energy President webcast a On call, supplemental of on CFO. we Division. website our uploaded is Clean our CEO; and President accompany of which have

and EDGAR. most remind on today, future including, statements, MD&A will AIF continuing XXXX (ph) well information available those related Our limitation, like you without financial call also recent the the discussion of consist as you are statements of outlook. to the some would business regarding I on X:XX will forward-looking as that today's website hear SEDAR and Before during

industry is and are been We lastly, industry it this and which are and from and of SEDAR, the during and measures also and information financial upon cash EDGAR and economic as In trends will market and financial market sold comparable company's sources as contained by anticipated, which X:XX could operating on measures materially during no risk These are standard excluding public based results those may meaning be obtained available industry have could by other AIF operating detailed pound, revenues royalties costs, accurate filings, addition, ratios, per pound, or today's And conference from be data cost pound other per concerning discussed that call. such by today's such that latest estimates and derived on non-GAAP good discussed affect the per faith and industry to believe factors not differ from Actual reliable. call similar the in call company's sources. and our website. IFRS during issuers. management is reference under results data disclosed cash incorporated has provided

verified However, this market, call we questions will upon update to Clean additional X:XX we kindly projections Paul and information, a Ernest future you then such independently with X:XX of company's morning ask the to of an assumptions provide results. the its accuracy Paul sales as follow call update for have and the not your well for and with our the trading on based. others as Paulo. on is the an the proposition vanadium value will cannot We will company's which our that open restrict are guarantee an re-queue from progress. of questions. The as agenda and if update follows: participate. we will Finally, company's to provide the overview X:XX allow division. progress operational to on financial update close will hand on the opportunity an call the Stephen have Energy over now X I'll and questions you trends

Paulo Misk

Largo's will value the vanadium increasing battery and the it our keep from the price. periods important to upside of the market. investors, today. potential of enjoys discussing revenue few and Largo production we points. producer business through largest energy that long one of lowest selling the presents want generating during I pillar, vanadium vanadium a on a to X:XX Focused that proposition and primary you, to especially value supplier operating welcome vanadium vanadium valuation costs, which in now and will its is supplier; keep XXX% creation: the Largo us is our world's emphasize everyone of to run. secondly, a Thank call few and our to two-pillars I'd business storage firstly, serve joined presented expected through the like spend to on as minutes Alex, long-duration

that the Based frame We in we $X.XX based is on for price latest price which life reference, value XXXX. on spend XXXX top on price million, Construction and anticipate anticipated proposition. plant bottom bottom of growth a increase and will time and Energy to X:XX product increase our our line the $XX dollar of be $X just million is to over $XX in line We X-pillar ilmenite in is emerging March first ilmenite lines. NPV the tech million over expect plant per $XX mine the $XX billion be vanadium of in XX. $XX.XX our to report, pound, next And half years, and CapEx to second titanium the production the of X our to X of every ilmenite say respectively. concentrate today need start represents vanadium anticipate vanadium. each weeks. next pound pillar our Secondly, so average the plant current Clean standard-grade and expected the about of on titanium I on As per year. to $X producing $X.XX anticipated additive is million for X:XX the of to after-tax vanadium top $X.XX fact the from adds the business million ilmenite

continue revenue to Largo's to this the incremental expect benefit batteries. of from vanadium-based from we advance As sales we business,

of announced to damage long-duration grow Corp, buy cost providing a we our our believe benefit that XXXX, other be value global and investors vanadium by Physical over traded minimal energy recently be vanadium, our energy the As used to Vanadium share that with source expected in X:XX the storage at initiate and from the publicly driven largely vanadium-based expects a the US to of storage that vanadium solutions. over the company LPV. vehicle renewable expect an will LPV to to grid. also aware, potentially Largo of substantially you vanadium we storage time, It's will We long-duration Over strategy storage energy transition XXX approximately providing price. hold could by reaching batteries of LPV are energy customers, cost exposure company next increase terawatt-hours council most in decade,

VXOX direct advance release of year, formation additional X:XX regulatory in guidance like in Brazil and the end Despite low and logistics a we've results, vanadium rain to global encountering noted including delays the to transaction, Moving adapted LPV, exceeded this the company's addressing throughout as on the tonnes also XXXX X:XX 'XX. sales its produced sold. the completed results far in Largo work of XXXX. tonnes few XX,XXX and updates qualifying provide VXOX the VXOX recent plant to equivalent on in with XX,XXX equivalent construction and QX of impacts challenge in vanadium maintenance to announcing to we coupled our QX As thus budget hope minutes the I'd team of certain strategy, quarter, market. year. press we our with in the ramp-up experienced spend heavy more last XXXX XXXX QX of of operational this The of and planned approvals company

tonnes to with as cooler maintenance impacts will this component More customers have to begin I'm of brand process the XXXX. year was facility, February. in production experienced of performance some some result on X:XX this of of we in VXOX of of to equipment happy selling company this and XXX report expects March corrective and on and operational anticipate XXXX shipping XXX a budget. tonnes, conclude that January VXOX Sales the XXX VXOX to February Despite producing XX,XXX We January in tonnes quarter. QX of our in we during operations in tonnes. tonnes box, XXX recently, was

greater market. of a continue to We We in a maintain potential we for building our to as understand plan are state stability the steady to our avoid operation as and production mitigate well working bottlenecks to sales and imminently additional guidance impacts the have stocks at and increase predictive vanadium focus XXXX. metrics correct on future. X:XX formulated importance the We achieve

Before to call member Ernest, division our Energy I will like over be would going the to forward. of leading Mr. Prince, Clean introduce newest I team, the who Stephen our pass

look our Largo vision has that management and storage advance to technical energy for strategy. We the are for of Stephen in it the and very look his excited will commercial join Stephen call. growing to and later significant XXXX. to this knowledge XX:XX I and building We an hand update sector a from for Stephen demonstrated forward team Ernest QX and the financial on chose of brings history fleet hear over more Now, forward results and high-performance company's

Ernest Cleave

and XX:XX an provide very our Thanks cash XXXX for for a Paulo. outlook few spend I results would like the year. financial for ensuing briefly minutes to discussing

the year. year a benchmark of begin $XX.X evening. This overview was versus net prices. Let's $X.X of by results increases driven average company in million European in XXXX million were XXXX and brief largely our last income generated yesterday VXOX with full The difference ferrovanadium released which

financial production compared XXXX, and of royalties with for of in position, excluding received that mine in $X.XX year-over-year credits of With operating compares attributable per in These include increases XXXX. $XX current with and we XX:XX balance the will earlier, and On pound Cash production a on the year versus critical The leveraged in vanadium during million were benchmark cash with The tax our improve going is one-time $XX.X cash in costs $XX.X XXXX. and costs million. production forward. operating look consumables. we As operating vanadium operating ended and XX:XX in $XX cost million million to $XX.X Paulo front and XXXX. fundamentals $XXX costs costs of noted to in direct are prices, costs $X.XX XXXX. costs increase on sales regard are million increase XXXX. debt per to of million primarily the Largo’s change and with highly pound capitalize we And

in XX a to another $XX expect credit facility We over for million roll months. Brazil

On importantly approximately projects. this we planned additional million for providing forward We a are believe these provided breakdown basis with we debt In outlook end of earlier, XX:XX Paulo and balance fiscal and million that's that, very to more With over a additional $XXX million groundwork plan year. VXOX they investments $XX $XX equivalent earlier and Paul. we the million the net pound million and $XXX mentioned now as of will the for value in we progress. amount this for CapEx call for based to $XX these guidance We achieving year projects for I of deduct year tonnes updates production is the the growth expect XX,XXX of terms in between and per comprehensive $XXX the cash our remainder a a XXXX, creating company of million. invest for amounts multiple the for and price to significant cash vanadium on the of $XXX the our if look pass year, that to to of XXXX. As sales cash lays

Paul Vollant

XX:XX everyone, year-to-date and Thanks, today. our on starting with trading few in performance a will XXXX. the call overview for focus well topics, and Ernest, an XXXX joining of I as sales as

and of give we the VXOX XXXX. in the XX:XX lower mentioned an December. our equivalent vanadium We I As what current update with of will Secondly, market to tonnes in strong guidance X,XXX year earlier, on expect ahead. the had we the year exceeded situation Paulo sales for end finish sales a

X,XXX sales shipment sales totaled its a the of in a actions for available inventory. took XXXX However, company as of increase to start to delays the combination of slow equivalent. was spot of VXOX year This first the months due X and decrease tonnes

XX:XX standard our for I vanadium, ESG focus offtake our our in sustainability ensures the offtake on vanadium XX-year for exclusive disappointed demand with been facility our the plans integrated the Gladieux supply with purchase to recovers are and metallurgical growth emphasize demand recycling signed Largo's applications, that also various I vanadium in sales-wise, from standards in US. company Gladieux increases price focus sold in footprint XX:XX chemical year throughout principles. and agreement is the Recycling This since is clear but plant all to entire market, and agreements to on Texas. chain market continued its that and the has for would It the highlight of aligned with petroleum providing in capitalize and this start to the supports alumina Before catalyst environment high-purity products vanadium spent discussing and is in a quarters of would process. like the come. the Metals We XXXX. nickel, recycling cobalt higher the that and environmental molybdenum, our high, compliance business The products like

was year. XX, was approximately years respectively, ahead, XXXX. believe for of Division. future. and As XX% more XX% due but As for an XX:XX [Indiscernible], prices Europe, increasing most recently, supply will to advancement and Stephen aware, which for of deficit kilogram as led tonnes high approximately per eclipse average world's VXOX flow per the the was of to to Europe hand V, months tensions in the $XX of deficit difficult the is ferrovanadium supply first prices the according greener pricing have in of particularly me broadly of of $XX the the Energy vanadium to the on It is XXXX. come, More the mentioned, that which of X vanadium and XXXX pound ex-China. let driven vanadium batteries. for XXXX in This that, cases, of accounts Russia to since by the we Paulo than you Clean V, tonnes supply a persist VXOX immediate are economy need the of it the an as of beginning outline use XX:XX X.X to prices increase per given an extremely XX:XX vanadium of steel part we've was year deployment XX% of pound With of increasing in before, that new beginning the benchmark More been have to in geopolitical our for noted outlook XX% and over March expected and soared Eastern of represents to of Additionally, the of for market grow the elevating $XX.XX of X,XXX pace XXXX. price since to

Stephen Prince

I sectors. I'll operator me Paul. and for it led like over with Storage led background my begin XX what to what a to experiences path overview Largo. energy the provide industry Energy and its the on Thanks, the an and on update open the division. business to years questions. brief my Largo Clean plan experience call to our and then XX:XX business I'd give execution in of spent me pass and my and XX:XX to Let's Energy utility to

battery in energy previously tenure, I've offerings a to expert on that senior resources investment energy ESCO During storage, model. technology XX:XX sector. energy become the companies business within I've energy-as-a-service served transition adviser recognized seeking solutions a the optimization as and distributed banking capital

improved of the Over around leadership I've technology execution. successfully several my course strategic commercial career, turned and energy companies through

vanadium rates have market the renewable as as you is shrinks energy conventional of all and global the Recent oil Europe sensitivities As increase generation accelerated long-duration concerning foreign growing dispatchable XX:XX and storage and energy Western stack advantage is know, what our of which gas the the possesses part can furthering components. lead to capacity fewer and long-duration solutions in leading excites an VCHARGE possesses say this energy may cell for storage smaller fast parts of and calls energy I with in I'm me footprint on Largo’s penetration company transition. have supplier a passionate Largo, led US. systems transition dependencies only and through integration power storage why within coal business. This proposition. superior phenomena me with is unique physical this that a discussed emerging strategic to As renewables would an energy colleagues of integrated my before, XX:XX density, as

demonstration just I to a battery uniquely been at be disruptor, However, vanadium market, this removing its as my greater flow signing This to energy front commercial from largely vanadium is has And measure been Enel microgrid opportunities understanding XX:XX for a grid is that through our and project, the and segue that lead note, with safety, the size drive the up megawatt-hours. opportunities and times I of potentially to assessed long-duration industrial think signing multiple I'd we being cycle to with requirements. impact and for customers could that adoption price of to system can we islands commercial diligence of it's a includes my letter with XX:XX leveraged proposition it clear initial by due and opportunities these chain part large of vanadium cost and from requirements be Note, the type important component our prospect battery future upon a with emphasize adoption size. scale of the remove in working expect in a great opportunities of of XX the Cell component to sites, value external diversity to continues experience strategy be the assessments. the development Physical compliance undertaking applications months volatility impediment environmental in systems. look Cube solutions. for the and If can competitive is advantage typical have longer. the and supply-side and Corp., opportunity XX providing than life through VCHARGE being with and volumes. a another current consider by megawatts behind-the-meter developer, local XX:XX to we financing securing Vanadium the systems, and unique scale say time I identified months risk intent Largo vanadium like supply This between of meter. customer a discuss what business contract signing more commission more growing another take deploy health If and contract battery the contact to VRFBs permitting prospect and and redox remote storage even could potential

we QX stack out, retrofit megawatts. stack annual provide of with a in point anticipate being purification electrolyte progress. We projects we project XX efforts. for by as new To manufacturing facility updates substantial XX:XX and approximately to track This Wilmington capacity announce continues advance XXXX, we and to on close our manufacturing will where on can they budget, complete to continue

overhead the answering by we used and in Additionally, Federal the concerning DOE is US questions grant message currently are negotiations, Government.

last manufacturing will the on that you I'll late the the line. announced in million provide said, turn you. based to As operator questions storage long-duration XX:XX systems. from up of US of over flow reimbursements year, Thank those With $X.X grant to call and battery for scale any the

Operator

take Instructions] our We'll with [Operator you. first Thank Heiko XX:XX from question Ihle Wainwright. H.C.

Marcus Giannini

Marcus in XX:XX This Heiko. for Giannini is calling

of popped closure from and an actually So my thing which one down for inflation. financial assumes X%, currently provision up And went of change us statements your expectation XXXX impacts your ever piqued adjusted the that there your walk for rate this that that on X.XX%. little levels? and curiosity you rate this through be through gets ultimate and provide end that color of a inflation at reclamation the was just we current is Could to may more search if

Ernest Cleave

that, I'll guys. take Yes. XX:XX

For of the relates of rate line specific this for specific for accounting, accounting to goes so – item. the that Brazil, that risk-free that piece to in vagaries

general quote etc. wouldn't to inflation I So that expectations,

Marcus Giannini

do XX:XX for a the paid X, came fully Okay, idea enough. quick impact much have change you fair the for on name when And will is incurred? release then be accounted and so I clarification. pretty rebranding any this for is but has cost you assume expenses November how small, the and corporate The just this these point? at

Ernest Cleave

Yes, broad but very $XXX,XXX, done. I'm $XXX,XXX. de-minimis. a fully number very It's it's not XX:XX out throwing paid significant. It's for and it's just

Marcus Giannini

hop for Thanks. sounds good. Okay, in XX:XX I’ll the That's me. queue. it back

Operator

We'll our Wong XX:XX take Capital Thank from with question RBC next you. Andrew Markets.

Andrew Wong

previously, sales? an targeting feasible, just ramp-up the of timing on mid-XXXXs. of that around maybe the a in the business Thanks. business? any Can And you for the then have directly on have on the Is what thoughts into around any update is used full deploying I the into were to bottleneck? Largo battery come more vanadium that term XX:XX Does just margin of systems? amount a equipment is And all LPV, provide sold vanadium good is just the the vanadium provide earning from longer your your does Hey, batteries into gets customers model? the potentially since not ramp-up for like battery ramp-up go expectation there the vanadium and of LPV, batteries? sort will that kind given Or you need can vanadium that installations, of Largo's LPV? of XX:XX may around still some then on you think amount of new morning. LPV battery impact in So

Stephen Prince

QX. I at both that XX:XX developments our progress XX communicated at take on cost days, review not So upon in based a and updates Largo result of will long understanding pricing commercial why assumptions This Stephen storage have the the the question, costs, giving that Energy energy look least. a a first pricing part that This as Prince. having though. here our the changes the I And macro were anticipate been been our duration of our our comment long-duration of is occurred, of analysis don't in Clean including is and conducting communicated commercial and and in market. that, to margins approximately shortly -- thereafter, I'm position, in past. previously that's

Paulo Misk

storage -- me to are launch competitive XX:XX time. really this me products energy this preparing years' And will LPV X, market. at Let question. demand in long-duration be our will X backed really Largo, let be the with We, in answer very

we just of preparing cost have product but vanadium So also not battery remove a the equation. the to good from to are

to will provide to expecting the batteries. we small vanadium to vanadium are the deploy very LPV cost inventory a the So the on due as have vanadium

rate. with concern, technologies will fantastic competitive market is same which to very at So deploy competitive our the time, we in we that that Maracás strategy, to that are but vanadium to the have really vanadium selling Everybody knows a the allow batteries that that's we bidding. the produce the in to and but a keep available something prepared in rate to vanadium cost need be vanadium

Andrew Wong

okay. Okay, XX:XX

for it off-take. or Gladieux And vanadium? that for for it around will the use market be terms the intended you the of What's to about just ask provide some contract? we'll details the Could more sale maybe -- is me Let battery the the business?

Paulo Misk

XX:XX you... sorry, [Indiscernible] can I'm

Paul Vollant

Paulo. it, XX:XX I'll take

Paulo Misk

Yeah. XX:XX

Paul Vollant

extremely Texas. said to years giving be to market. into to Gladieux' They're aligned try be for to a going is Largo grow great as depending support grade an to Market. be, to and US producing to I industry for of great both our battery. footprint the as will XX:XX sell or for vanadium redox product, will to very So Largo's And the partnership outcome it. question. the opportunity US, traditional Gladieux products in the market in as take purity. vanadium the the it's companies. us we products vanadium vanadium well be standard all going fast-growing further industry and products, in same sell which maximize it's their high high we into as going and quality the out intend to of market the for I the It's also Largo earlier, thanks amazing both of May Andrew, exclusive is And And XX on products. whether footprint the we for purity the flow that a aerospace -- XX:XX steel in for give

Andrew Wong

or how arrangement marketing where pay like what this this Gladieux? Is market work? like a Largo does pricing to is like does -- it So XX:XX

Paul Vollant

overall XX:XX commission, and in main vanadium agreement the which attraction Largo. have us -- again, I larger on Yes, the is us yes. to for a We perform of enabling is enabling But is fact Largo our market. insist footprint profit services for strategic, that this this work a -- a all to on

Andrew Wong

Okay. XX:XX Thanks.

Operator

We'll Thank Alba with take Carlos Morgan De question our from XX:XX you. next Stanley.

Carlos De Alba

if on have of battery business. on opportunity then and couple questions Good the everyone. couple traditional the very the much. business a Yes. XX:XX morning, I you A maybe Thank

inventories the if understand if one, of the to the propose me going retain along, for guys excluded to for benefits Largo LPV business are proposition prices not, battery the again, vanadium business battery and I the because more on. model in But the one the I remove clients going On first please is and correctly, that build-up understand the a all balance you ownership presented volatility energy sheet the was of was to that help I'm vanadium. result have you remember that really of original

I'm please hasn't mistaken that case. changed, and that correct unless if So me the really is

any or are there. us Or small to that number working more clearly, So why question the XX:XX Spain. how this the battery Largo the you or change guess is, business, than the part I one than going guys what Or of think been you sign and is, a you do what anything? second did haven't many tell it of potential can couple of that you then on, sell traditional there? for business, And impediment the other -- contracts has launched in to small megawatt-hours? pipeline in said you is question the one the since we Because either has a progress a is deals on negotiations of And you seen the year been lot ones. other

would the was which price, terms the linked for realized costs quarter, that be talking rest the maybe is than in of your Chinese potentially first was we -- more what guidance the realized of than I'm that what in was -- fourth of quarter. $XX. $XX those had for below price above impact the rather year. saw XX:XX price in about than Presumably, know, this that have you year, cash it more don't the the -- And the reference the expectations on then impression keep is but under I you higher also rest I Largo's quarter the production mistaken, Given the slightly higher operating of year, are to your in the for the of that European terms price,

that, clarify be great. would could you if maybe that So

Paulo Misk

your for so you much Thank XX:XX question.

will course, price last we business the compared in going year before regarding the And last that Vollant business I vanadium of regarding Largo the of all, today the rentals answer will which mainly company, be not based keep we're And LPV will market. that on to of the strategy and a you, completely to in fact, Paul deploy be investor, there will I way Stephen, all doesn't to in will market LPV, investors vanadium and are our that inventory which with going is LPV Maracás electrolyte. batteries batteries the market All will change we and vanadium to characteristic question of an Largo -- said we And first contracts restructure into pass we're take ownership me into like for then Largo LPV, safekeeper belong be independent XX:XX We So seed price. is vanadium today. then we're different. is electrolyte the Let huge charge exposed a to the it's which and vanadium Largo sold the Carlos, to will on. production the from the The degrade. that year the LCE the considering LCE. unique the LPV will whole so that but for vanadium. the And and in inventory, to to an going the the be to is for form questions is use build and inventory. would independent talk company, about the and Largo,

inside battery. So we that say of the can keep

different So that's complete a proposition.

being with market We be the having revenue additional. from will all and sold the the in will revenue vanadium batteries keep

main that's the point. So [Indiscernible].

Carlos De Alba

fact they have wouldn't prices in vanadium never have balance exposed have the been the is transaction electrolyte. What But in this that the XX:XX is, capital does really to the it who sheet. volatility or right, wouldn't I the Sorry, Largo's working it only if tied own what -- change been works, question, that would very because vanadium but removes that exposed doesn't doesn't because customers it the it confirms of that said. the clear really that answer what been

that So changing. not is

with and So are the getting never exposure of guys my down vanadium really they not is clients up to way have had getting contracts really volatility if any prices? would question why you into and

Paulo Misk

XX:XX Okay.

the the fee rental fair keeping -- need charge customers that vanadium you a in Before, to energy fact, for electrolyte.

Now -- fee need really LPV, Largo very we that with for don't to the to is very pay we small, small. LPV pay LPV,

So of but of of battery not most cost, the the out of vanadium is the volatility cost most equation. just

much energy battery forward. and of battery the more from competitive customers the So the going face price a will

sales, vanadium revenue keep for lot the customers. benefits So for well. it's that is proposition, is the reinforcing, as a different which gives a which Is a clear? the Largo will completely difference And of huge Largo all energy from

Carlos De Alba

XX:XX Yes. that's clear. No,

any is LPV are vanadium? to revenue not that the So question. rentals one LPV going just to stream? going from benefit for the not So charge owners

Paulo Misk

XX:XX independence on there Largo negotiation The to partially clear? from connection depends will to is The make to from offset energy that them. no has aiming between expenses agreement Largo the Largo to to -- it customers LPV total Largo the LPV. negotiation But small customers. Is a fee energy of due with Largo. pay LPV, is the and

Carlos De Alba

XX:XX Right.

customers? to So not rentals charge LPV is any to energy going

Paulo Misk

Exactly. XX:XX

Carlos De Alba

then of right. all vanadium wasn't Okay, the only that. the you issue cost Thank the volatility it's competitiveness prices, also for of system. I XX:XX right. guess Paulo All

Paulo Misk

XX:XX Yes.

cost your production. for about to Just you our the give QX -- comment

Of good as cost reduction cash will sales Maracás But that cost end we of than XXXX, well. guidance we have the of believe production meet January we the in February, another course, be our QX higher and as in year production by and guidance. will our the

production the of and regarding do still cost meeting this impact the lower about on a guidance. We're Largo? vanadium have to our Vollant talk Stephen or to I'd QX, time Paul pass have QX. market. European price we -- Chinese to in How the see QX, -- -- to to you like it's So

Paul Vollant

Yes. XX:XX

current It's good that that vanadium most year. will XXXX. the but The as for Carlos. the forecasts remaining in shortage class. of by prices has for can said, and you steel were still I Eastern [Indiscernible] we Sorry, to that expect that [Indiscernible] elevated I Paulo and Europe think can can know, and if prices was in would just what what at as [Indiscernible] are -- a [Indiscernible]? pay of seen throughout market the something we It that activating complement you company difficult, the can level we supply situation as say we've already question we new The expect

Paulo Misk

could the sales, XX:XX Okay. more LCE on you market provide on regarding please? the – and And clarity Stephen,

Stephen Prince

XX:XX Yes. you, Paulo. Thank

types. a will question So let answer me opportunities give on been your few the and that's perspectives question and asked, I about

those is of Energy focused Enel reference emerging. we're on excited an occupied they it's increased to what your those at to when significant the and delivering has that that. if and And an way delivering fewer our megawatt-hours. at with X,XXX described of regard you cycle up question demo to, energy microgrid about answer Clean involve a longer storage demo outcomes demonstration concerned I solutions in remarks. So level, But the lithium-ion represent delivered late And are is and a my kind kind different more industrial that at on example, about what's commercial island the represent about are nature venues last of opportunities the market contract contract to continue opportunities look the energy team, pipeline, we're commissioned been you from doing this so and coming opening signing commissioned XX:XX and at those that territories. progress scale a look and about we've quality the earlier. Majorca seeking interest to of it's end are then storage are been and with quite we're those talking made, The early-stage of XXXX. the conversations time be and progress referred the we the by To and grid-scale during being then agreement timelines of projects nascent Enel, made see some in really that specific even like year. they've gone remote the in traditionally weighted megawatt-hours. example smaller projects Largo has from type that And agreement longer-duration in And microgrid an be of until because life expected at perspective. So amount quarter procurement and and the XX us. in And you for cycles, people -- to independence I grid happened life safety that power and in are will to that of that And prospects XX:XX where towards customers issues not until more that of those asset engagements XXXX, are come microgrid starting to get heavily -- long-duration that's

represent to most for therefore, solutions. of so the about we XX:XX XX for time Energy reaching a first that megawatt-hours. have Largo they're there behind-the-meter certainly And And opportunities couple out Clean

megawatt-hours if doubled last measure almost X it in pipeline, over the the you months. has megawatt-hours So on

I question, the think that Now around time a that from haven't you that the really we engage due the we we specific deep frames and are to signed circumstance easily an year. And to time can LOI an asked come time it deep, progress diligence, goes how a sign opportunity to very those seen contracts? and discuss

the in much time. flow. But we're position announce a we and the signings point can very -- we in are much so we And at very process deal in not not have where in this

Carlos De Alba

very was That you thank Paul Paulo. very and Thank Yes. much you comprehensive. XX:XX and

Paulo Misk

XX:XX You welcome, Carlos. are

Operator

Family Leon you. We'll Omega our take Office. Cooperman XX:XX with Thank from question next

Leon Cooperman

XX:XX Yes. you. Thank

me end million sure to regarding that the debt, and quite cash of Ernest. produced contracts Battery is disappointed. or in your observe expect $XXX one million year didn't and for Clean at the just that's in think very generation. that the $XXX you Clean question the Let result me But back million you to the where I the the what understood back trumpeted your is CapEx? make way cash market before overpromising I Energy so $XX under-delivering. I Day big Energy of to I contract, to is a anyway, minus get a you've go let The

Ernest Cleave

That's XX:XX in cash. that’s –

Leon Cooperman

XX:XX It's in cash.

Ernest Cleave

XX:XX Yes.

Leon Cooperman

$X.XX on $XXX cash? share XX-odd Do the percent of market about shares, XX:XX cash, to have in So $XXX million of that million million about so the in cash you cap is plans company. of would have which for any you XX the a that's use basically about about

Ernest Cleave

such the XX:XX dividends share that buybacks. There's around that anticipate this discussions be given some generation Board will early an level, and are at cash There year. things very as discussions we excellent some obvious

over now announce are have don't anything those we happening time. right So but to

Leon Cooperman

take XX:XX are Ernest, put these earnings giving and you're assuming? numbers the your the for expectations price it what assuming if and XXXX, you that you're together, production

Ernest Cleave

Yes. XX:XX

sort from range is if in an you're EBITDA of look where perspective, earnings So at looking an the $XX, about I [Indiscernible]. mid-XXs at of

Leon Cooperman

XX:XX Yes.

net You what your coming rate? tax And obviously in. is have interest

Ernest Cleave

our use. a number reasonable I rate, tax slightly use XX:XX Brazilian XX% tax range, the to would rate sort is something a think, I so of in of modified

Leon Cooperman

products earnings, assuming XX:XX that Okay. new on, years constant currently? upon it Based is I higher assume prices, materially working few a these expect in the you're be than company's to you'd

Ernest Cleave

XX:XX Yes.

year, some if extraordinary that go these where [Indiscernible]. continue, things to leverage banned the back pretty prices creates that you to XXXX, we on So had if price your

Leon Cooperman

doesn't that a was close that EBITDA from was $XXX but XX:XX Remind me if $XXX hit I'm like after million wrong, anymore. which that it? And I Glencore million, to the contract, year the think exist wasn't

Ernest Cleave

correct. XX:XX Correct, that's

Leon Cooperman

Got XX:XX you.

now guess from this of repurchase, kind So looking years because company a dividend EBITDA would a few decision impact versus really in the few would of you what is years? capable at generating this on

Ernest Cleave

at look Let model XX:XX me here. just little my

Yes, XXXs $XXX So XXXX looking $XX. almost at make million. me just high of 'XX hitting at -- $XX, second. to sorry, to I sure you're one those change XXXX, as Give EBITDA

I and XXXX, then $XX assuming it's [Indiscernible]. that, much higher, just XXXX So beyond use XXXX, so

Leon Cooperman

make would sense more believe stock the in. coming If repurchase XX:XX that you more than cash dividend, cash

by warrants of number this that the of year? largest the I due come think end

Ernest Cleave

Yes. XX:XX

in we're going is But missteps of And year. some know, but -- there burgeoning this lot market a a were there's this vanadium we especially situation year. languishing. price we're the if of kind admittedly, cash So we where make last to share

yes. does So if prefer would that continue, to shares, you buy back

Leon Cooperman

so. would All Stay Yes, safe. XX:XX luck. you. I right. Thank healthy. think Good Stay

Ernest Cleave

Thank XX:XX Thanks. much. Thanks very you.

Paulo Misk

XX:XX Leon. Thank you,

Operator

Instructions] from XX:XX question take with We'll Young [Operator next Investments. our Midwest James

Jim Young

a just hi, Stephen, Yes, aboard. and questions couple welcome for XX:XX of

electrolyte First of monthly capacity produced current [Indiscernible] much all a how on far secondly for the and basis electrolyte your production? is so what's you have in then,

Stephen Prince

around that is most to for production, ratable deployment. those contract. question Enel I first don't that I scheduled exact does as electrolyte some it we as deployment, involves know the long-term well system, the we that from meeting anticipated but we're electrolyte some value the So proves not marketing our on has reuse because can And to demonstrating we're degrade the value a know Worcester real timelines because as economic the as well vanadium and that market And from to it system life. certainly that purification XX:XX gallons, are schedule produce the which has

gallons exact it's X.X X-hour solution. to the the which Enel, it's megawatts battery that's but deliver is know and don't I required quantity So a

we're math regional the result and Ukraine for the as strategy of Ukraine, and of of evaluating transportation, and is electrolyte one general, And to production that -- deliver constructs. sorry head. required the I'm top war off electrolyte the that With through XX:XX our particular, the we've in upon transport impact knowing electrolyte, COVID So the model respect to in of for strategic we're a tanks things are my not that a to the to to electrolyte the in creation moving the the customers.

are based answer, process but I a in on capability basis it's a that States. construct don't exact to the targeting regional regions we we're that United upon work within -- have So the

as have regional you. don't and I leveraged of of I'm the but for will I the answer. So a nature comfortable technology don't strategy I'm that strategy, And have part be complete the very strategy. an number our sorry. exact with

Jim Young

for us the remind what deployment and the to Okay. then exactly for you XX:XX as battery, just schedule the the And Enel could is implementation please?

Stephen Prince

the of battery, second the XXXX. We're supply month part to we're Yes. The it And dynamics That sorry. in those of scheduled with XX:XX schedule customer, vendor's progressing the chain. But Enel. get our be working it we're XXXX delivered impacted December What December was to fluidness for has some being issues some question? schedule of components. your of through ability I'm have the around is it Enel of delivered accordingly. late by and in to the because in

Jim Young

quarter XX:XX you so I is and mean, the hopefully, have far what and fourth recognition? are to trying the the flow P&L to us the are understand expense battery off XXXX, into revenue how sheet given you and then balance flow? what on to deployment of is do that the trying really the in Thank recognition help timing for for the the I'm the of -- Okay. -- you. Just statement, for cash impacts paid this what And cash income the statements? future recognize understand the impacts? Could they already cash battery or how also also financial

Ernest Cleave

I'll take XX:XX Yes, that. Paulo.

value but that The $XXX,XXX lease in about that there is recognized So James, will a project. is revenue that the spread that the be bulk XXXX. life be of XX-year vanadium. over component on will that present only is of the of The actually $XXX,XXX exception to

XXXX. So be the bulk in of it recognized would

Jim Young

XXXX, you for -- in XX:XX revenue point you the to you Well, battery being have at in recognized What -- have milestones what recognize reach? do the can to time can revenues? be does Ernest, the

Ernest Cleave

Well, they've basis. as taken paid have your of essentially a we get cumulative there XX:XX you recognized and revenues. handover on is the all a that's milestone asset as But soon position, would when

Stephen Prince

practice contracts XX:XX -- common. is the The pretty are

electrolyte, is And going role to of XX:XX customers on which EPC is customer to all the the work, the to Let's invoke out local deliverables talk do those the a change chain. about including and without milestones this other of define with ask the because leave company. -- And battery. utility itself battery the play your the you you that in you has electrolyte the payment sensitivities. get portion, milestones to need upfront particular but typically that customer if the an will the Some you the depending site-specific you the work, customers, And work, respect supply then content. deployment a

separated in this -- So case, taking and the the responsibility the contract. work has our electrolyte work site component is customer for and in this

there's then and for a -- commissioning. so And typically, holdback

that customer. holdback the getting to critical is schedule commissioning that So payment from

And and it's that end. then solutions specifics common to is energy an regardless at milestones be payment, progress of So from XX% commissioning payments deployment in down the know XX%. very structure Enel, payments battery storage upon I but the based the those to can technology. on of don't anywhere broken payment a upfront

Jim Young

very I welcome. appreciate it. Great. and XX:XX much, And again, Thanks

Stephen Prince

XX:XX Thanks, sir.

Operator

for will that to And over back XX:XX remarks. any question-and-answer closing session. like time, call I'd turn the to our Guthrie At conclude or this Mr. additional

Alex Guthrie

our and investor call. a great conference you, now. Have Bye that operator, Thank XX:XX this day. session concludes and Q&A quarterly

Operator

will conclude your today's We appreciate XX:XX That participation. call.

Largo (LGO) 17 Mar 222021 Q4 Earnings call transcript