LGO - Earnings call transcript Q1 2022

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Operator

Good day and thank you for standing by. Welcome to Largo's First-Quarter 2022 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. I would now like to hand the conference over to your speaker today. of please Manager ahead Senior Guthrie, External go Relations, sir. Alex

Alex Guthrie

joining everyone. earnings And morning, our thanks Good for first-quarter conference call.

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

and MD&A on most AIF QX financial to Our website, and relate available also SEDAR, the EDGAR. recent on statements are on

Before to including information statements, continuing some will the you call you the forward-looking outlook. today, of without I limitation, call would of today's consist remind like those will regarding during hear business that future

other and cash be may ratios operating have public available Actual call. pound, EDGAR, measures website. the risk differ and on cash during no also from sold per discussed royalties conference meaning affect financial operating and materially similar excluding revenues discussed under as costs, are not per and pound issuers. These which and comparable results measures today's at the standard be anticipated to will could that AIF other are latest call detailed those company's could results on in such SEDAR, non-GAAP financial filings, addition, also this costs during factors company's In IFRS by and disclosed

EDGAR. on MD&A, ratios website, measures all also and release are most non-GAAP For in regarding the earnings and are in which recent the our latest Largo information available SEDAR press recent available company's our

and is our upon economic data from by derived has is and industry sources which reference information management and provided We it such good and faith accurate and market industry reliable. this during incorporated market of that Lastly, call believe data obtained or sources. by industry been from the estimates are contained concerning based trends industry

follow the verified not morning as update projections future information is of agenda assumptions trends and and the of vanadium on And follows; with our we The provide However, the quarter are provide financial market, QX on this sales our Largo independently with division. company's an guarantee from such will an Stephen will will accuracy the Ernest update trading, Physical call cannot a progress. and our first close based. an results. upon company's Clean Paulo will progress we have update overview Energy Vanadium. which our Paul the on for

have and open to for that over kindly if re-queue we'll you opportunity the questions I'll that, to to restrict allow others the then call We questions. any ask to questions it you And Finally, hand additional two then your with participate. Paulo. the

Paulo Misk

continue to Thank focus able online. good to it to restructure to everyone our relates morning first-quarter call two to our you, Alex to join would who and call like been us on and I business earnings our pillar the has as progress. strategy

core note The important strongly believe our we to value exist profitable and within Vanadium creation [Indiscernible] business. that

our adding Titanium Clean business. upside Energy have to and We portfolio opportunity substantial products our through emerging

key points four take call. in, Before to -- we from are there jump away three really this

full-year inflationary global make real as well of against the pressures. we've And our quarter, strengthening first adjustments Brazilian to had U.S. XXXX weaker as from the Firstly, the up in continuous dollars. on the factoring guidance payout

focused to sales ability going forward. and However, targets on its these rates additional our confident reach production very in on we are improvements update making and are

of the of pound so. the guidance, Our to Unfortunately, $X.XX costs, updated pleasure rayos of something annual in figure, the excluding cash now and range it's ability. our mitigating environment narrowing focused effects per the best on we operating $X.XX are is

order to tones, to sold per sales in Kansas perform thousand which XX,XXX tons and our equivalent. XX,XXX continued unprecedent navigating equivalent logistical face VXOX tons sales of per XXXX total now, now is XXX guidance well supply to chain production tons. despite XX,XXX guidance products approximately problems. up a eventually is our in equivalent VXOX VXOX of our constraints, to to Our XX,XXX and note, includes the case And team APIO first-quarter global of positive under In single-digits disciplines. In sales

the we we logistical As release improvements during issued yesterday press second the in noted catch-up half of to sales constraints. the chain supply in and evening, perform, but expect the following of year

significance highlight given will association our its Vanadium to value or I later. But Physical ventures feel encouraged I are energized by we previous potential, which our capitalizing is later of am business especially, on to a would the the bit relatively of on price attending bullish particularly the expect future what's overview the something vanadium happening as detailed sales the month. on the a [Indiscernible] this I on, call demand conference year. in we well. a Paul Energy of in cost Ernest expected we Secondly, provide will for say as going year, touch in will last and provide low like producer of our market. we Largo focused remainder we market of the Clean more the gas a for products ahead continue will after year producer also we a is of a the that in that data advantage commodities. the alluded have to remain forward. source us emerging note. increased update as forecast half elevated are Vanitec in company annual LPV, end an But quite the environment we for positive by year excited second call, We for am the from is Paul that vanadium the as recent the producer

[Indiscernible] begin for Vanadium and that company in business. titanium from We titanium on very It's contribute the the from pillar announced company be operation require an us Thirdly, to set. began this It future on Brazil. the will moment reap business to [Indiscernible] of we added of content announced company's be new understand the the advancement and our part doesn't undertaken vanadium cost or benefit. It as LPV, we've execute mining announced two project and value of low with certain to will strategic qualifying the created emerging notable made to and made supplier LPV. Phase progress transactions. In the of previous we the this mainly vanadium a I project aggressive we believe commencements our on On projects ilmenite concentration projects. exciting efforts company's projects company's ongoing the any has was important the construction April, existing updated a proposed the with will for previous quite strategy as company plant battery sourced as the

Operator

One we reconnect Operator. the This while the is speaker. moment

Alex Guthrie

lost we I to up just pick think Paul, we've want with Ernest. but

Operator

Thank you all again for your patience.

Ernest Cleave

Yeah. No problem.

that and a announced full that on improved Canadian the Largo. final not capital Exchange to awarded of ownership batteries. the strategic takeaways of cost in transition environment made progress business for of out A proud of The scores will tightening improved for industries of of as transaction, In focus to installation commitment would will important to and from our Paulo be the and flow regulatory some BBB transaction to increasing use under proposed and a the and our attractive supply which LPV by all demand. energy we Eco LPV and strategy, upfront We're greener that remain out and and those score, believe vanadium, dramatically fundamentals improved metal fourth note of part on with the rating. our is update our approximately long-term we to ratings received an It's announced As to storage from to we mentioned such the $XX MSCI, and reflected XXXX, approvals, million. XXX like Stock practices of customers, on vanadium opportunity our today, exposure under silver team XX applicable our Vadis taken of the steel, direct reducing of an sustainability presented Largo batteries previously and sustainability note qualifying XXX, in XX the which which by continue in key included raise LPV, also will completion of qualifying potential to

our explore opportunities to identifying and sources scope main the greenhouse reduction. on gas We we of further and towards also reporting emissions, by continue journey X for net zero X began and scope

rates, You the strong report market our and July. material can stress production sustainability early as selling to is capitalize fundamentals. can June vanadium expect our XXXX be in to or much to we released on as I premium main on focus like late that would

again. shareholders we We of for this Largo, for price deliver position those results our top vanadium aware what into a as in been we've And strong translates to want before. are

and $XX constraints, pound than was year which The to As liquidity. vanadium the XX% the updates, in And remains XXX million during approximately report logistical of important excited That's X, comparison pound. the revenues it to technical higher and our quarters. $X.XX sold which ahead increase value-added per of latest per financial to quarter stands exception about due delivering to QX negatively financial of currently, We're results prices to our global undervalued financial sold. the pound of statements approximately price in our on note in that high in and in forward last $X.XX temporary impacts impacts year coming most from the company's equivalent projects On significantly a strategic an revenues tons the of generated the impacted maintenance over of used such our some valuation look the the report. quarter. VXOX we the in reflects a this transition both XXXX. to average sale vanadium was metrics achieved it's QX

our sold revenues we increases $X.XX. generated is the enthused fundamentals. of current market This VXOX pound Looking and at million approximately Vanadium why vanadium last per we and tons that to revenues really $XX about leverage of year, XXX underscores process remain of sold on X, equivalent, of

Moving onto other our also global costs, navigating like with pressures today, business. most we're inflationary companies

the annual with who from poised these cash Brazil and lower acknowledged we on future our and these production pound, from managing to pressures it. our to fiscal to actively $X.XX good these end strengthening been positive increased reflect Real, cash with was year discuss pressures, a impacts a from our focused for durability. sake and XXXX. cost to Even them, these we're best do to outlook. position along $X.XX guidance we to operating cost overall credit but team of This recently per have impacts We on a we've mentioned, remain give and As impacts the

is year. increasing anticipate we ended our point of the with quarter first onwards. expected to And quarter position $XX are cash cash for the while QX million, approximately we cash The be low of from

period, time five can we I flows change, At anticipate sales cash free million current $X around geopolitics a fiscal our with per exiting of of uncertainties global approximately Very two million, the the Brazilian approximately provide of cash tons, XXXX. year of prices of same vanadium May for year $XXX and for way exchange prices. the for the account the free of of prices dollar ultimately balance million the anticipate the within within of such tons guidance vanadium to course, take XX,XXX pound US for December inclusive or $XX different $XX represents of cash to Given At XXXX. cash estimates, rough for the would and vanadium of and $XXX produced into that exiting sense pound in purchase will year-end of $XX with importantly, approximately 'XX cash guidance that prices X,XXX cost frame, to and rate materials XX,XXX vanadium range to million averages flows that XXXX. we per of product represents fiscal one of sales

previously the over Before just of touched I our capital value future company as a believe We've underlying normal it to on. course as has does the last during discussed not commence our that adequately we projects strategy that approved earnings the reflect contentions we price bid board to hand the allocation or current issuer call. the we of Paul, announced share

provide that, will pass I updates coming progress will call With the additional the Paul. weeks. We as to look on matters over now to

Paul Vollant

were in And material. X,XXX XXXX. Ernest. VXOX jump which XXX and of tons into April it. were let's right We equivalent vanadium sales of approximately Thanks, sold of In VXOX tons purchased X,XXX tons

constraints. of As mentioned remainder the before, stabilization the improvement the for and catch-up chain anticipate expected production, supply following year we in same that of

of since in Europe Regarding average demand, as or the company's strong sharp reflected key the QX, in VXOX in period. $XX.XX XX% the remains price the XXXX. approximately benchmark Up was that markets tons increase May Xth. over start was price of The which of

average average pound was the average quarter, versus from per VXOX not QX XX% prices the $XX.XX pricing of XXXX. The an KgV, Bulletin According Europe but think current increase it's tons was per Europe price VXOX QX do that $XX.XX outlook, We in situations expect safe supply elevated in was to Although detentions. exacerbate XXXX. in to $X.XX Vanitec, $XX.XX Metal than more of to I Ferrovanadium potential there in global past logistical a the of price medium-term. provide we XXXX. of in of remain the The future have say in that the equivalent X,XXX geopolitical a and to deficit average

this taking remains going results focus on high Our advantage forward of prices. delivering positive sales

million made XX on like Canadian we I financing. to as mention very I with that announced progress the dollar we pleased Before hand Stephen, the recent NPV, over are it would to

strategic are significant industry. to the long-term support LPV to We initial it our strategy, as and would be Largo bring you. value to investors the entire Stephen, investor confident, over venture proud and Xp we're

Stephen Prince

Paul. Thanks,

We our continue at during to Clean first progress to quarter highlight I'd today. which the like division Energy

Our United in center completion, is in formal this state manufacturing and the our Massachusetts expect headquarter month. States of the development the configuration, nearing we Energy VRFB completion Clean this and configuration stack product including of

excited producing quarter new in facility electrolyte customer began month. and are to stacks this purifying We that visits and this in we first and supplier the welcome we prospective very announce

audits ISO scheduled VCHARGE with our month. the XXXX certification On with management proceeded product CE this quality side, system we of certification later of certification the and our

we -- profitable believe advancing market compounded well diligently energy on This, the expected our out, a note commitments. XXXX. course, outlook to is McKinsey. of as as March in for the costing to estimates line. began quantify pricing the Energy by division, have the we the offering, turn the initiated as With on Energy long-duration a three competitiveness comprehensive cost open that advancement reflects to in the comprehensive capabilities which process is Clean business expected that, current described over vanadium division to future storage Operator review review storage most accurately and our than to we'd remain our it close by marketplace. significant or our and our Largo in which expected Long long-duration energy is months, advanced questions Thank and Before ensure cost-savings forth questions, solutions by VRFB needs, to initiative, puts those like To cost the our Energy the of team from is pull we focused complemented of quantification take longer call practices, technology of call the Duration for associated we it product of muscle from Clean the of the This in VRFBs and Storage the back anticipated Vanadium. as you. the no that proposition to council our This up I'll any LPV Physical

Operator

Instructions] question our Carlos from Morgan first Thank with Stanley. De We'll take Alba you. [Operator

Carlos De Alba

everyone. Thank you much. Good morning, very

you First just of as to customers color be hitting, question for And in maybe I Stephen, me provide short have question. visits those then perspective to How up, and what May. costumers a went could interesting will quite Paul, how yet of hear. feedback many where there you're more the

deficit. think XXXX. that important What up that an was prices Dan didn't vanadium go year last market the in that mentioned You do you much

Stephen Prince

have me visited Jane, and your Let us. George, by answering start question. Nancy all

facility. the invite facilities to prospects, within partners and suppliers, host to Wilmington mask continue We our

customers We call. names on you. Thank prospects, are facility of that a our disclosed the visit the this our not position or

Carlos De Alba

you you express, where concerns guys main can disclosed comment the key any? Steve, if to what topics they the that maybe that as But

Stephen Prince

has discussed attention that five offering couple One stack. and prospects visits because is interest surrounding. The VRFB circuits, lot a And received marketplace these in of it gets the Clean power patents stack. trade from we really the that and Sure, on have we density stack of we Largo of trade around the a our is secrets times what Energy differentiators. traditional center it

battery particular interest of storage focal and that lot solutions of So the areas. our component a conversation that's so one there's always in of energy

unique both approach, That's Supply I last on stack an have little evasive I'm discuss will very cost-effective I we because the think with of electrolyte company thing can provide around the quality its in on battery conversations discussion expectations. high always how would And we standards of and and a then perform there's electrolyte a reassure a a being electrolyte. a electrolyte to more basis purification manner the opportunities tactical to in ensure that provide lot a of customers you is performance. other these battery the adequately [Indiscernible] thing respect tendency have according the we discussion and a the in asking so will economic detail. fee lot And about say to of a quality and go. specific purified powered why we're that's a where position that there's Thank to That's that can a basis. is for and question. result

Carlos De Alba

Thank you very sir. much,

Paulo Misk

Carlos. deficit Yes, there question, supply a in To second big your was yes, XXXX.

translate a at year low that I of stocks XXXX finish downward as try really of with you we prices to saw beginning pressure the prices and end in sharply the every the year there's end year think of companies as see of at but did rose bit the not XXXX.

reflection started situation deficit that to rise of Europe. and in supply really way, before the that's the a by So Eastern

that consequence in already XXXX. seeing you're of that deficit think I the

Carlos De Alba

to vanadium of to price Chinese could given but more you few in weeks of coming is down, market, sort performance the in elaborate little seen China the have what on in Everything down. the last last maybe vanadium bit And anything prices start because on the have Understood. weeks. come highlight of few a the you

Paulo Misk

Yes.

You're in market energy pretty week, that historical up stabilized no are this disruption but and in but been correct. the few COVID above metal have about the of because more will came the ground situation worries set prices prices. Vanadium and average [Indiscernible] think past Europe, that. it's potential down really overall, to firm general and prices China, we off weeks, There I over in globally see a about immune

So yes.

Carlos De Alba

Thank you, Paul.

Paulo Misk

Sure.

Operator

from take Will you. RBC Andrew Capital next our question Wong Thank Markets. with

Andrew Wong

on few operations. Thanks. sales of you It ask sure, both after morning. I about Largo steps sales. the get can steadier in quarters, so challenging production, taken we just a just about good talk make Hey, April like to track on want run the looks back that forward production the to on going and some operations has

Paulo Misk

Andy. you, Thank

We facing we we season problems of Feb have to the pays have the the in definitely maintenance Also solved where want the rain sold. year. in been end all problems by last some

including We have April. X,XXX very have. as going much produced keep a going And produce that really we really a May, we March and range the producing that which our this with capacity. of are as is and in month optimistic will are we expect All range we're we forward, of forward. progress keep the X,XXX results a very generating recent we good and X,XXX, to going that in storms, a confident And nameplate tons Though we'll the forecasting.

Andrew Wong

to broadly ask be along with the there it's mainly also potential Obviously, market, the Is about opportunistic cash? timing? are And just the it the repurchase with doing be that. magnitude and seems NCIB? anything to coming a weaker provide to in terms shares, May from of going time repurchases of I like

Paulo Misk

details it. can will to before -- about It's Yes. Ernest I more give passing

have future, in this I that our generate details But Ernest we'll very about well. we process. results think year are this as explain more confident that it shows our let's in

Ernest Cleave

you repeat please? Andrew, just, could question the Hi just

Andrew Wong

Yes.

be there you NCIB cash? of our from Just about like guys potential and around -- could mostly the the is of repurchase you and can timing provide coming magnitude anything repurchase potential a whether

Ernest Cleave

just put $XX million. could you above today constrained than X shares. million Look, much And we're more Francis, [Indiscernible] compress was and look, as you do a

We obviously an be do I are that not purchases think initial to and period. committing the would

believe you over here. months be not like time from of it that couple see would of first we'd that Christians from cash. the improve be and LGO part like What would to answer the shippers would there. cash. we'd I'm If So We to purchasing

Andrew Wong

this can like that's That's a got have issue, a mean, magnitude. one. you show I another if value wondering is the completely but IB, obviously you've all

from. we like, team wondering for and are repurchase? talking about for just the appetite part how Europe, So like potential management much

Ernest Cleave

the just to Look, like we on into be want does just we Cardiome market want for price the we, of go purchase. to to opportunistic would extent think so and candidly valuation that the to share like actual be

markets other the able we $XX not limitations more than So as worth. million be would do to

look we facetious somebody opportunistic. answer between mean look it the on to as that be of stick look to of XXX don't we handle to and try we say million sort Sort and would would a be to, would

Andrew Wong

that's the part on prices And Okay, that factoring how that strategic alternatives primarily offerings business at curious ion also strategic that then the Is fair. The one LCE? seeing like. review, that like strategic and LCE. things of and review of pricing review of is maybe much side energy kind the the on moving last of up also just just I for lithium into on was competitive looking

Ernest Cleave

absolutely. Yes,

need what solution. doing do those also costs think an scalability mentioned our we market there's to seeing at the improve looking call, compare at So and market I share. can and But the on and VRFB around we're to solution, capture competitors our as currently inward competitors looking look to earlier be what and the we're at to how able specific we I greater our we where

being anticipate understanding success our commercial therefore substantial more So the year. foresee and we've costs see of with And differentiators marketplace. -- LPV, the in we launch and made even current competitive enter as progress we the

it'll positive year the good, been business current and to provides going say, I forward. LPV, the believe we has encouraging, has to addition comparisons in competitors lot of about progress of think feelings a and how you can additional and differentiation, progress take been the that and

Andrew Wong

Thanks. Cool. Okay.

Operator

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

Leon Cooperman

you questions already but Thank to have many haven't I so apologize ask if have you to I I But in release addressed to than had the you. you're I were morning June waiting to shareholder is approval. of you have regulatory importantly, be some he areas, pro XX% his running to read into you secondly, questions in is the agreeing tend that. There ownership? as assume, get I everything. other more admit press this have increasing well. I've nothing And that else rata, read or some conference Xst, because are risk calls and I to

Paulo Misk

Yeah. Sure.

you You're on part. correct first the

June So approval the getting the Xst around. is pure and setting bureaucracy everything regulatory just

make So need we to just weeks. three

the decisions to will shareholder, so capital blocks prerequisite, As our There's most make not increase the it mechanisms own an not of not could NCIB, they significant thing to certain you their from sell going participate, ownership do. did entity. to significantly right if parameters what even is the ownership, they certain within the under on -- would such that [Indiscernible] are the based But to where but there intention NCIB, increase it's is shareholding even believe of this overall. not

Leon Cooperman

of Were to X% you the company? XX% buy looking or back

Ernest Cleave

float. Yes, XX% of to we're the limited

but So we --

Leon Cooperman

to it XX had XX [Indiscernible] if takes up or intended. you

Ernest Cleave

we're own of not to obviously we're is them. the That to still it, but so fundamentals going their XX, mix [Indiscernible] level again, coupled controls above to about decisions their not so stick according Correct. concerned a

Leon Cooperman

think don't Well, a have either. thing us, tend not not but agree to positive him negative particularly with I its you has I been because presence would for rata to positive recommend to pro

in flow basically position for account free your that negative or The -- cash would the free went of and $XX you free or to is. mentioned cash for flow? you flow where the cash a buyback cash year Secondly, you XX% the did you million

Ernest Cleave

question. great a That's

the don't very know We So it's that's for land, going where not. all a those so or to numbers assume questions [Indiscernible]. nothing [Indiscernible]

Leon Cooperman

the importantly, Okay. titanium profitability And entering? the what you're most dioxide of business projected is

Ernest Cleave

Right.

[Indiscernible] But projected at well. $XXXs. the EBITDA if you business look if onwards, year this [Indiscernible] So high the you as are in X

$XXX $XXX So depending. to million

contributor it our very a [Indiscernible] So becomes EBITDA. to significant

future to a but significant. not that? you it's elaborate very think success, I contributor understood do it's more our want So on Paulo, to well

Paulo Misk

Leon. Yes, and morning, good

Leon Cooperman

morning. Good

Paulo Misk

the there's of we per The titanium aluminate $XXX the is price and low aluminate profitability $XX per report. And produce you ton, when tech in price in that to demand, the $X,XXX from a current ton. range ton. cost produced is $X in cost in our expecting long our consider are is $X,XXX the tech very that we we feedstock around a metals look run That at the in the of you the getting report consider $XXX, per

So are it this good profitable. very And generate the we we optimistic business. us will margin has how very give very, been in this

Leon Cooperman

is $X All the Can business at at the Aaron, earn next and right. you, year Great. and EBITDA, $XX, what year? basic to expected this

Ernest Cleave

look of terms -- you just If at

Leon Cooperman

EBITDA.

Ernest Cleave

Yeah. This year sold $X.

a $XX like You're looking looking over sort $XX about -- at at just you're million at XXX and of $XXX million.

the flow. which about get back So to taxes cash free $XX CapEx to takes to XXX the you cash between deduct and down flow, you million,

Leon Cooperman

expect would dioxide, over time, going about assume time, is is grow million years’ or XXX titanium EBITDA? of excess in this to $XX enterprise Because you're and million and an have an What if be have I'll this XXX to saying you have in three-year having that XXX you'd that's you EBITDA. at that million company $X $X

question. last question. And Last Okay.

I'm I think no that orders. been current have has asking battery your not had have battery big know. to by so expect announced do credibility new but don't idea? I on you the not who, new in hurt or What's any orders you year going this we there? far battery and we've

Ernest Cleave

to question that hand going to difficult I'm Steve.

Stephen Prince

we'll commercial I anticipate question. the the current batteries. a that understand transactions I couple Leon, in would sign year involving our

the our battery offering. year see current transacting I with commercial think you in will

Leon Cooperman

stay you. and luck response Appreciate Thank healthy. the and everybody good

Operator

from question next our take You Wainwright. with Marcus Giannini H.C.

Marcus Giannini

can way and you input or there into their to only XXX a through impact. pressures that there's for you out with maybe you to sense fuel are break XXX. raw material taking costs also from And taking questions. the costs. you're costs, any we're guidance biggest inflation and walk other that Is XXX currency, seeing. Can It's cost XXX seeing like what Hey, us my maybe

Ernest Cleave

me start. Let

affected us. [Indiscernible] down to which a to to get X-XX into go very, XXX very be the coming increases want to were to, scenario movement and breakdown some impactors, of and in they instance, the to, briefly $X.XX, trend that instance, understand we from. the the worst-case year, I to the costs, inflame of different I foreign the Before guidance, XXX the exchange vagaries would guidance. just the X-XX well potentially our lead actually is the to of the you since. around exchange. up experienced upper from $X.XX contributes for give feasible consumable a is but of as [Indiscernible] another That end movement In costs. largest which where looking that's product the lowest COGS be that was That recognized high, for biggest again, bouncing low because because increases a There's Broadly for would to speaking, of sales sales That next the and costs, foreign if in about it of the delta. increases you're end sales our production X.X is that consumable very which for has another $X.XX. over adding about XX or impact a That's on be at would difference to better to is at our $X.X,XXX takes lower if you up Then to contemplates been the our average from replace. all

to the process, pick up to different balance increases. cost of but I'll good hand items consumable to gives it the of got some on So how us for that over that Paulo you to the

Paulo Misk

costs represents XX%. mitigate. the from means the end year, price Ernest. you, dollar this We for the [Indiscernible] we if -- those look -- we almost those basically year you it's costs diesel, look When all very all so we comment increased XX% had which main the last -- period, XX% Maracas. overview It difficult the And ones, don't at in about of is have an raw just a your material -- of and year. very year from you XX% carbonate, at to raw -- HFO, short total We double XX% last the had are materials. Sodium Are Thank just that increased from last of represents costs. the to

cost same It XX% November raw another year. been it It ammonium that XX% about supply decreased Largo with all shows in the the because how raw our represents it's has total short-term, last which are material dealing with have related -- sulfate. cash inflation. has to We well [Indiscernible]. we of is from as ensuring those the And of Free sorts the materials. amount all amount of

inflation that. other We area some any are actions impossible in reduce to to of the XXX%. costs mitigate mitigate It's and doing

will was budget normalize of material. shows year this have Just percent. We of can but idea we that $X Recently, that an future FX, the our hope but the in the until the was to the and year. how the consider was the [Indiscernible] different today. on we FX be five, is the raw market $X.XX In stable cannot end it

Marcus Giannini

Fair. are Brazil's earlier what costs? XX.X% inflation came today, with labor see you in at

Paulo Misk

our of big Labor Labor is total about not the represents It's one. we cost. give a I'll reference. the cost -- XX% big If not have. we

Sorry. It's XX%. XX%, about

is from is about so X% think all HFO everyone come the most it's really of not it's Another power only. material because the followers, cost energy that

So that the driven raw is materials. the main cost

Marcus Giannini

it. Got

you Thank Okay. so much.

Paulo Misk

you. Thank

Operator

Thank with next Jim Investments. you. Midwest from question Young our We'll take

Jim Young

couple questions have I for a Hi, you. here Yeah.

your You you please? mentioned [Indiscernible] price XXX. in at take did was place sales quarter [Indiscernible] April, those but first X,XXX what sold -- tonnes at that

Paulo Misk

was I but of give a If me you can couple [Indiscernible]. number, give $XX.X exact you over I remember the second it

Jim Young

It's the read I you. for number Can XX.XX.

Paulo Misk

on would April. that contracts of thing right? majority saving And is are VXOX sales, One contracts, [Indiscernible] long-term for maybe down have are was understand the Jim, divest long-term average to our use the a where time most periods, to of prior delivery based months the right? price. that Average a way benchmark quotation for in we on the price, price is so the structured

from -- Where So but I here behind mean run, it look you the month's a point right? doesn't the everything long what trading those With overtime, fast, specific are but if -- prices it when at equates increasing over right? is of we it in are that markets. -- increasing view, we gets matter

months Your prior from average. your materials you're trading because the pricing

Jim Young

Thank may, weeks ready in April. in several you then sales first you. the [Indiscernible] even which prices net sold of higher

Paulo Misk

were for of price Because April Yes. [Indiscernible]. most --

Jim Young

can -- and April, recoveries the of in the April? what rate XXXX, was please? you for in And you. recovery Thank global XX a month first-quarter that sense X/X%, secondly, your of how In proceeding to the the give as

Ernest Cleave

to want you did recovered? accretion take the Paulo,

Paulo Misk

of stability operation, we the really Yeah, the -- the and sorry. Jim, stability to whole of recovery it's related the [Indiscernible] in fact.

So from range in a we a getting will just of on, in of recovery matter we XX, stable in content remainder steadily. it's it And could -- the little bit but the for February, improve reduced go silica now of April the operations run of March, year. the to due the concentrate high

-- any achieve numbers. We problem no to those is not that there are

Jim Young

for So did of you recovery that the the remainder XX% XXXX? that I trend towards hear rate said would

Paulo Misk

of going forward XX%. Yeah, the range in

Jim Young

the those what's more now, if capacity business, LCE your you you leaders, -- two please. us question right what's Great. could the Okay. electrolyte are primary question I regarding have your thank [Indiscernible] in Well, Paulo, you. for can understand help to for the then

Paulo Misk

I will pass this answer to Stephen. Please, Stephen.

Stephen Prince

the ramping the of the This have acquisition production assets via will the the now, Energy of from first project. Largo is built Onyx. battery the Right around Clean Enel electrolyte since we're that delivery

December, So I that to investigating in the investigating. means competitive. of to fulfill be shipping don't networks discovered team be the that Because of products significantly. increase say supplier We're We've and between I to chain it leveraging know in But and in to costs. capacity demands that regionally And process. to we're done project exact supply logistical process. the needs as leader impacts we're process have now will Those capacity but but rate, including meet. our a we that definitely and would that, have the own

for up reach that we're Largo it's in transactions. capacities that to us the need capacity the can stand Energy, So about we our less. an within our sell regions the Clean require ecosystem and to going

in we're the to we're regional early days process. a do based But [Indiscernible] that beyond So now the strategy. It's capacity that on capacity that of we to in process. means investigating increase the and have middle fulfill that

Jim Young

I've got you. the some be would offline, more Thank questions on the LCE business, but great. I to could that Stephen, file

Stephen Prince

to have that Always willing call.

Paulo Misk

Thank you, Jim.

Operator

follow-up We'll Cooperman [Operator Office. Leon Omega from Instructions] Family with a take

Leon Cooperman

given schmuck Let question this to when --any the bid its the Are normal very cheap. guys simple, homework etc course your not size, right it's very, and highly feel makes to buyback sense all you foolish. me you done comfortable is guys issuer you and the stock, question, you've a that most decision? you company for back confident Have ask you're that buy the making foolish

Stephen Prince

a in around quick standalone back It per would share. okay our business think be alone EBITDA reasonable me for the, -- that that $XX of Let us even probably just going to excess on discussions the valuation but to comments. couple the for business, the of excluding titanium basis, for seems we make very business a vanadium just a one

extent do we massive -- number excludes the discount that So that think it makes to that even to that their are a titanium such sense to we our so. business,

persists Our focus really persists. that being belaboring this at rather point, as certainly But a but but we current somewhat plan opportunistic seems to, brainer on to no go. -- this of is if [Indiscernible] prices - and will I'm dichotomy the we if it

Leon Cooperman

I'm the right or value, up then decide to for I the fetch always shares is I've help the back like for I'm shares, you if better and is of definitely I the a you're is a price market, little values, what think And not do, for buying private lecturing. but to to and investor to and XX% -- most public of either X considerations which thing will company. repurchase. is you're number Just not it the investor. market company, have the above entire companies pick will number out the I doing strategic financial value, to you you XXX I in If But that a your by so-called financial least apologize by two stock a to market doing said strategic so-called yours pay way. yourself bit, price if that Consideration X,XXX I'm the you a a at and understanding I sell now have which favor than paid investment sound company and seems stock. me phone is not and a

budget that you years, space cheap the is consideration different the so second if favor put be million set next in a five-year to $X probably I've reasonable would three of your X. to number believe the model stock test EBITDA assumptions now is The repurchase. out got in of discount there's a future value in with to very

are brainier, buyback no-brainier. what numbers share, a cash share, to stock are, per potential thing where back no the the multiples per does And given a on fourth make take earnings where dividend rates a that's let's better is is weakens a do interest buying and your share per which company. flow Third, is

cash, of all take so You more changed has don't to radically stock debt have back private. the you're less the profile relative equity, and and going unless the much the buy corporation way you risk

seen don't anything already that the largest any I make thinking lot right but shareholder, to through, do we companies in thing going greater repurchases, about of sure would I've thing, what mistakes one because So doing you're made And to latitude I I your make he's would that our is you're have interest? to doing it is want be opportunity but his here. lot terms have the not a in understand of want of think try -- it with to agree you if I than a

Ernest Cleave

listening you all the Thank the for and best. best

Paulo Misk

Next please.

Operator

quarterly great does Thank call. session answer Largo conclude you. question That and the day, a conference everyone. Have in investor

Paulo Misk

you. Thank

Largo (LGO) 12 May 222022 Q1 Earnings call transcript