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Largo Resources achieves record monthly production at the Maracas mine

Published: 11:10 08 Jun 2015 EDT

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Largo’s management is confident that it will easily reach or surpass its production goal of 26 tonnes per day

Largo Resources (CVE:LGO) (OTCMKTS:LGORF) produced 487 tonnes of vanadium pentoxide in May at its Maracas Menchen mine in Brazil, reaching a new a new monthly overall production record since production started in August 2014.

Largo also set a new daily production record of 23 tonnes, representing some 87% of the plant’s Phase 1 design capacity and a 7% increase from the 21 tonne/day record, or 81% capacity, set last March.

The company, which continues to ramp up production at Maracas has also seen recoveries at the project increasing significantly, achieving greater stability. Indeed, for Largo said that including at the leaching system.

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 was able to produce at a rate of 18 tonnes per day or better, or approximately 68% capacity. For at least a week during that period, meanwhile, production reached an average of 19 tonnes, or approximately 72% capacity.

Largo suggests that as improvements are made at the plant it can expect to achieve new single day, weekly or monthly production records, contributing to overall plant stability.

"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," said Largo’s Chief Operating Officer, Michael Mutchler.

Largo’s management is confident that it will easily reach or surpass its production goal of 26 tonnes per day, during three daily production periods, given that it has already realized between 8 and 9 tonnes in a single shift.

The production ramp up success has been matched by no less significant quality targets such that the end-product vanadium pentoxide (V2O5) has been of extremely high quality, having met standard specifications since first production was achieved in August, 2014, said Largo in a statement.

Largo warns that as the ramp up continues, some equipment glitches, minor or systemic, can be expected, affecting production and daily tonnage rates.

But, Largo has been addressing issues, optimizing operations in order to ensure as continuous and stable operations as possible to reach production targets. To this effect, Largo installed a dry-magnetic separation unit to compliment the milling and beneficiation system, which has already achieved design capacity targets.

Largo completed a C$$75.2 million private placement at the end of May, which will enable it to conduct remaining optimization projects over the next few months in order to achieve its full Phase 1 design capacity in or about the third Quarter of 2015.

These include the replacement of the pan-conveyor at the leaching system, which has constrained heat retention, impacting recoveries and demanding extensive maintenance down-time. Largo also plans to add another leach tank to increase the leaching residence time and improve the system's recovery and availability as well as a leaching system back-up belt filter to increase the system's capacity and overall availability.

The month over month performance improvements serve as a solid foundation for continued growth and the Toronto-based miner is expecting 2015 production to come in at 17 million pounds of vanadium pentoxide, at a cost of US$4.15 per pound, although costs are expected to drop to US$3.21 per pound by the end of 2015.

Looking out to 2016, the company also has the option to complete a $32 million expansion, which would raise capacity by some 50 percent and make Maracas the largest and lowest cost vanadium mine in production.

The company has made a series of important moves in 2015, including the appointment of new chief executive officer Mark A. Smith --- who is the former CEO of Molycorp and the current executive chairman of NioCorp --- to lead Largo into a new phase of growth.

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