Largo Resources (CVE:LGO) shares jumped on Thursday after the company revealed a fresh record monthly output of vanadium pentoxide.
Largo produced 730 tonnes of vanadium pentoxide during April - surpassing its previous record for monthly production of approximately 681 tonnes set in October, 2015, by 7%.
Largo said that it achieved two new daily production records in April, with the first being on Saturday, April 23, where 32 tonnes of vanadium (V) oxide (V2O5) were produced, representing approximately 121% of the plant's daily design capacity, and the second occurring on Sunday, April 24, with daily production totalling 33 tonnes of V2O5 - approximately 125% of the plant's daily design capacity.
Furthermore, Largo said another production milestone was achieved when 188 tonnes of V2O5 was produced during the week of April 18 to April 25, representing approximately 26.9 tonnes per day, or 102% of design capacity.
The April production levels offer a balm following the challenges experienced in the first quarter of 2016. In particular, as a result of lower crusher availability (prior to the installation of the new portable crushing system in January) and extremely heavy rains in late January, production of 347 tonnes for January was much lower than expected. In addition, and as a result of the flooding in late January, February production remained low as the company worked to re-establish roads, berms and diversion ditches, as well as pumping out the mine pit to reaccess the higher-grade ore.
Production in March improved to 436 tonnes but still remained lower than expected due to process and instrumentation issues encountered in the precipitation section of the chemical plant in the first half of the month. As these issues were addressed, the second half of March yielded stronger production results, and, despite the lower-than-expected production in the first quarter, the company is now experiencing the benefits of the remedial actions taken in the first quarter through the dramatically increased production results for the first month of the second quarter of 2016.
"These new production achievements highlight the ongoing success at the Maracas Menchen mine. I would like to applaud our operations team on these three new production records which demonstrate the plant's increasing operating efficiency," said Mark A. Smith, president and chief executive officer of Largo.
"We expect to see continuing growth in average production rates, and, with the recent increases to the vanadium price, the Maracas Menchen mine will be very strongly positioned," he added.
Largo shares were up 8.7% at C$0.50 on Thursday.