Symbol: LGO (TSX.V)
TORONTO, June 8, 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.
The Company is pleased to report that in May 2015 it achieved record monthly overall production of approximately 487 tonnes, the highest level since first production commenced in August, 2014. During the month of May the Company also achieved a record to date for single day production of 23 tonnes, representing approximately 87% of the Plant's design capacity.
In general, production rates, recoveries and availability of operations are improving and greater stability has been achieved. For example, for about half of the past three month period, the Plant has operated at or above 18 tonnes per day, or approximately 68% capacity, with over one-third of those days at or above 19 tonnes, or approximately 72% capacity. Additionally, the operations regularly realize production in a single shift of 8 and 9 tonnes, which management expects will result in the capability to eventually produce at or above its full Phase 1 capacity level (or approximately, 26 tonnes per day based on 3 shifts per day).
Overall the Company is extremely encouraged by these recent records and results and believes that they are strong signals of the Plant's capability to produce at its intended design capacity, as well as the effectiveness of its ongoing optimization efforts. Additionally, and importantly, the Plant's end-product vanadium (V2O5) is of extremely high quality, having met standard specifications since first production was achieved in August, 2014.
As is expected during the ramp-up of operations of this kind, various interruptions with respect to equipment are experienced which temporarily impact daily tonnage rates – some of which are minor, normal-course occurrences related to a particular piece of equipment, and some of which are more systemic and require longer term solutions to address on an ongoing basis.
As the Plant's overall production capabilities are highly dependent on continuous and stable operations being maintained, Largo had previously identified and disclosed several critical optimization projects which will address ongoing variances in daily production rates (see press release dated March 9, 2015). A few of these optimization projects have already been implemented and positive results are currently being realized. For instance, the Company installed a dry-magnetic separation unit to compliment the milling and beneficiation system. Since its commissioning, the milling and beneficiation system has demonstrated its ability to achieve design capacity targets.
Since completing its previously disclosed private placement financing of approximately CDN$75.2 million (see press release dated May 28, 2015), the Company has taken action to aggressively address remaining optimization projects and expects that these will be completed and commissioned over the next few months.
Some of these projects include:
- A more robust and dependable replacement for its current pan-conveyor at the leaching system which has been a consistent limitation on the leaching system's heat retention and has a significant impact on recoveries as well as requires extensive maintenance down-time.
- An additional leach tank which will increase the leaching residence time and improve the system's recovery and availability.
- A back-up belt filter for the leaching system which will be utilized to increase the system's capacity and overall availability.
With these projects, coupled with the other optimization efforts which have already been completed or are presently underway, the Company expects to achieve its full Phase 1 design capacity in or about the third Quarter of 2015.
In the meantime, the Company anticipates that it will continue to achieve new single day production records, as well as weekly and monthly records, which will result in modest month over month increases in production. As each optimization project is completed and benefits are realized, the Company expects continued growth in availability and overall Plant stability.
Mr. Michael Mutchler, Chief Operating Officer to Largo, stated: "We are extremely pleased with our recent progress. With our recent records and overall growth in production we have really begun to see the Plant's ability to operate at its intended capacity. The key systems at the Plant all work very well and the quality of the material we have been producing since day one attest to that. However some modifications will greatly improve these systems and we are excited to see how much production improves as we bring each of these projects online."
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.
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
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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.
For further information: Darcie Ladd, Vice President of Investor Relations, 416-861-9406, [email protected]