Largo shares surge 15% as it adds copper, PGMs to Brazil mine
Move comes after Brazil mining authority cleared Largo to add copper and PGMs production at its flagship vanadium mine.
Shares in Largo (TSX, Nasdaq: LGO) surged by nearly 15% on Monday following the miner's announcement of starting copper and platinum group metals (PGM) production as by-products at its Maracás Menchen vanadium mine in Bahia, Brazil. In New York, Largo's stock was trading at $0.80 in early trading, resulting in a market capitalization of nearly $108 million.
This stock boost came after Brazil's National Mining Agency granted the company permission to extract and sell copper, PGMs, nickel, and cobalt as by-products from the mine. This approval marked a transition from successful industrial-scale testing to ramping up commercial production of copper-PGM concentrate, using the existing vanadium processing plant and ilmenite flotation infrastructure at the mine.
By producing copper-PGM concentrate, Largo aims to extract more value from ore it already mines while diversifying away from vanadium and ilmenite. The company anticipates that copper-PGM concentrate can generate higher margins than ilmenite concentrate if production ramps up and commercial sales are established. Largo plans to utilize existing infrastructure at Maracás Menchen for the new product, rather than building a separate processing operation.
This approach could enhance the long-term revenue contribution from the mine by adding exposure to copper and precious metals, while improving margins at the flagship Bahia operation. The regulatory approval also extends to nickel and cobalt, potentially providing Largo with opportunities to recover and sell additional critical minerals from the ore already processed at the site.
Largo expects copper-PGM concentrate production to yield higher profit margins than its ilmenite concentrate business, provided the company can successfully ramp up and commercialize the new product. However, the company did not disclose production targets, expected sales volumes, or revenue forecasts for copper and PGMs at this time.
The new product stream would broaden Largo's exposure beyond vanadium, as miners increasingly seek to maximize value from existing deposits and processing facilities.
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