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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (105837)	3/16/2014 10:04:43 AM
From: LoneClone	Read Replies (1) \| Respond to of 196640

Largo Resources has potential to become major low cost vanadium producer: Euro Pacific Canada Fri 10:31 am by Mourad Haroutunian proactiveinvestors.com Euro Pacific Canada initiated coverage on the shares of Largo Resources ( CVE:LGO) (OTCMKTS:LGORF), a junior Canadian miner focused on Brazil, with a "speculative buy" and a 12-month target price of 50 Canadian cents per share, or an 81.8 percent return above its March 12 close of 28 Canadian cents per share. The Toronto, Ontario–based brokerage pointed to Largo's high-grade and high-quality deposit, its expected production and sales this year, and the off-take deal it has secured for 100 percent of all all vanadium products from the Maracás mine. "Given its high-quality deposit we believe Largo has the potential to become a major low cost producer of vanadium," Euro Pacific's analyst Luisa Moreno wrote in a research note to clients yesterday. The Maracás mine is the highest-grade vanadium deposit in the world, Moreno said. The low silica and high vanadium pentoxide (V2O2) concentrations favor easier processing and lower production costs. Largo has 13.1 Mt of proven and probable reserves at 1.34 percent V2O5, 24.6Mt of measured and indicated resources at 1.11 percent V2O5, and 30.4 Mt of inferred resources at 0.83 percent V2O5. The deposit has great potential for further resource expansion, which could extend current mine life, augment output, and position Largo as a dominant supplier of low cost vanadium in the long term, Moreno added. Largo, which is currently in commissioning phase, expects to start producing vanadium concentrate in the first quarter. To date, the construction and commissioning work has advanced mostly on schedule. Largo is utilizing conventional metallurgical processes for the production of V2O5 and ferrovanadium (FeV). "Given the type of deposit and low concentrations of impurities in the ore, we do not anticipate major technical issues or delays during the ramp-up period," Moreno wrote. "Therefore, we expect Largo to be in commercial production within the next 12 months." Largo, based in Toronto, has secured a six-year sale contract with Switzerland's Glencore International AG for 100 percent of all vanadium products from the Maracás mine. The deal could be renewed for an additional six years or longer, assuming demand for vanadium does not fall significantly and Largo remains a competitive producer of vanadium products, according to the analyst note. Euro Pacific has also cited Largo's strong mining jurisdiction. Largo’s vanadium operations are in Brazil, which is one of the world’s safest mining jurisdictions and a major producer of key resources such as iron ore, niobium, oil, and agricultural products. Largo has received favorable loans from Brazilian banks and is a major employer in the local region, the brokerage said in its note. Largo's shares were flat at 26.5 Canadian cents at 10 a.m. in Toronto. The stock has rallied 26 percent so far this year, giving the company a market value of C$260 million.