TORONTO, July 18, 2016 /CNW/ - Largo Resources Ltd. ("Largo" or the "Company") (TSX: LGO) (OTCQB: LGORF) is very pleased to announce that it has entered into a non-binding memorandum of understanding (the "MOU") with Vionx Energy Corporation ("Vionx"), a company which develops, produces and sells Vanadium Redox Flow Batteries ("VRBs") for utility grid applications. The MOU summarizes the principal terms upon which Largo and Vionx will continue discussions that may lead to the supply by Largo of vanadium electrolyte to Vionx to further the research and development of advanced VRBs utilizing VNX Grid Energy Storage Systems.
Largo and Vionx have agreed to continue discussions aimed at achieving stable pricing and necessary capacity with an industry leading value proposition for VRB systems, utilizing Vionx product technical, cost, and partner advantages combined with Largo supply capacity, cost advantage, and high quality processing capability.
The proposal set out between the parties in the MOU is conditional upon, among other things, the satisfactory completion of due diligence, negotiation and execution of a definitive agreement (the "Definitive Agreement") between Largo and Vionx setting out the terms and conditions of any transaction, approvals of the respective boards of directors and receipt of all necessary regulatory and contractual consents and approvals. In addition and to the extent that the Definitive Agreement, if any, contemplates the use of V205 production from Largo's Maracás Menchen Mine during the term of the Company's current exclusive offtake agreement with Glencore, the prior consent of Glencore would also be required.
The parties contemplate that the Definitive Agreement will provide that Vionx will be Largo's partner for cooperative sales of vanadium products in the utility grid market, and would also see Vionx agreeing to utilize Largo vanadium electrolyte in its VRB systems. The benefits and safety of VRB systems have been proven over the last two decades.
Subject to dealing with the conditions contained in the MOU, Largo and Vionx have agreed to work in good faith over the next 3 months to negotiate a Definitive Agreement, with the understanding that any supply of vanadium electrolyte may not occur for some time thereafter and that Largo may provide either V2O5 or electrolyte depending on the needs of both parties.
"This is a historic first step in establishing the first partnership between a VRB company and a global vanadium producer," said Mr. Mark A. Smith, president and chief executive officer of Largo. "We are extremely excited about this opportunity and the industry-leading value proposition that it presents. We are equally excited about joining the world-class ecosystem of Vionx partners including United Technologies Corp., Siemens, 3M, and Jabil".
David Vieau, president and chief executive officer of Vionx, commented "Our partnership with Largo represents the first of its kind in the VRB industry and we are thrilled to be at the leading edge of a transformative phase for the energy storage industry".
Largo Resources Ltd. is a growing strategic mineral company focused on the production of vanadium pentoxide at its Vanadio de Maracás Menchen Mine. Vanadium is primarily used as an alloy to strengthen steel and reduce its weight. Vanadium enhanced steels are used in a vast and growing range of products that are used and encountered every day; including, rebar, automobiles, transport infrastructure etc. With consumption increasing at a compound annual growth rate of over 8% for the past several years (Roskill, 2015), vanadium is a bourgeoning commodity which lacks opportunities for investment in the wider market place. As trends in the steel industry now demand increasingly stronger and lighter products for advanced applications, the use of vanadium is expected to continue this growth over the medium and long term. Largo also has interests in a portfolio of other projects, including: a 100% interest in the Currais Novos Tungsten Tailings Project in Brazil; a 100% interest in the Campo Alegre de Lourdes Iron-Vanadium Project in Brazil; and a 100% interest in the Northern Dancer Tungsten-Molybdenum property in the Yukon Territory, Canada. For more information, please visit www.largoresources.com.
Woburn based Vionx Energy Corporation is a leading supplier of long-duration grid-scale energy storage. Vionx's vanadium redox energy storage system brings together a 6-10 hour runtime with maintained capacity over a 20-year lifespan. It delivers the most flexible fully integrated, long duration energy storage solution to meet the needs of the power industry.
Vionx, together with its partners UTC, Siemens, 3M and Jabil Circuit, provide a fully integrated system comprised of energy storage, power conditioning, system control and thermal management subsystems packaged into turn-key building blocks placed wherever needed for instantaneous dispatch. Vionx is meeting a critical need in today's energy storage marketplace: making grid-scale energy storage practical, resilient and economical across a twenty-year time horizon at the lowest lifetime cost of ownership of any grid-scale storage system. For more information, visit: www.vionxenergy.com.
This press release contains forward-looking information under Canadian securities legislation. Forward-looking information includes, but is not limited to, negotiation of the Definitive Agreement and completion of the transactions contemplated in the MOU, 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: Alex Guthrie, Coordinator, Corporate Communications, 416.861.9797, [email protected]