Largo : AIFPDF ,966 KB
LGO.TO
ANNUAL INFORMATION FORM
FOR THE YEAR ENDED DECEMBER 31, 2024
Dated as of March 28, 2025
120780489 v9
TABLE OF CONTENTS
Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION ......................................... 1
CAUTIONARY NOTE TO UNITED STATES INVESTORS ....................................................................... 4
MARKET AND INDUSTRY DATA ............................................................................................................... 5
OTHER INFORMATION .............................................................................................................................. 5
QUALIFIED PERSON .................................................................................................................................. 5
CURRENCY PRESENTATION AND DATE OF INFORMATION .............................................................. 5
NON-GAAP MEASURES ............................................................................................................................ 6
CORPORATE STRUCTURE ....................................................................................................................... 7
GENERAL DEVELOPMENT OF THE BUSINESS .................................................................................... 9
DESCRIPTION OF THE BUSINESS ........................................................................................................ 14
RISK FACTORS ......................................................................................................................................... 41
DIVIDENDS ................................................................................................................................................ 69
DESCRIPTION OF CAPITAL STRUCTURE ............................................................................................ 69
MARKET FOR SECURITIES .................................................................................................................... 70
DIRECTORS AND OFFICERS ................................................................................................................. 71
AUDIT COMMITTEE DISCLOSURE ........................................................................................................ 76
LEGAL PROCEEDINGS AND REGULATORY ACTIONS ...................................................................... 77
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ............................... 77
TRANSFER AGENT AND REGISTRAR .................................................................................................. 77
MATERIAL CONTRACTS ......................................................................................................................... 78
INTERESTS OF EXPERTS ....................................................................................................................... 78
ADDITIONAL INFORMATION ................................................................................................................... 78
SCHEDULE A GLOSSARY ......................................................................................................................... 1
SCHEDULE B AUDIT COMMITTEE CHARTER ........................................................................................ 1
2024 ANNUAL INFORMATION FORM | i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
This AIF, including documents incorporated by reference herein, contains "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities laws (together, "forward-looking information") concerning the Company's projects, capital, anticipated financial performance, business prospects and strategies and other general matters. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking information. The use of words such as "intend", "anticipate",
"continue", "estimate", "expect", "may", "will", "project", "should", "believe" and similar expressions are intended to identify forward-looking information. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may constitute forward-looking information. Statements relating to Mineral Resources are also forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the Mineral Resources described can be profitably produced in the future. There is no certainty that it will be commercially viable to produce any portion of the Mineral Resources.
Forward-looking statements are necessarily based upon a number of estimates and assumptions related to the factors set forth below that, while considered reasonable by Largo as at the date of this Annual
Information Form in light of management's experience and perception of current conditions and expected developments, are inherently subject to significant business, economic and competitive uncertainties and contingencies.
Forward-looking information includes, without limitation, statements with respect to:
• the Company's sales operations and anticipated sales of vanadium products, ilmenite and TiO2;
• the timing and amount of estimated future production and sales;
• costs of future activities and operations;
• the extent of capital and operating expenditures;
• eventual production from the Ilmenite Plant and/or the titanium project;
• the Company's ability to sell ilmenite, titanium dioxide pigment, V2O5 or other vanadium commodities on a profitable basis;
• the Company's ability to produce V2O5, FeV and V2O3 according to customer specifications;
• expectations regarding the continuity of mineral deposits;
• future prices of V2O5, V2O3, TiO2, FeV, and ilmenite;
• future production at our Maracás Menchen Mine;
• the extent and impact of global freight delays and higher inventory transit time;
• the realization of the anticipated benefits of previously announced transactions or other expectations after the completion of previously announced transactions;
• the competitiveness of the Company's investment in vanadium flow battery technology in the long duration energy storage systems market;
• the Company's ability to maintain, protect and develop its intellectual property and technology;
• the adoption of vanadium flow battery technology generally in the market;
• the cost of producing and implementing the vanadium flow battery technology;
• the impact of the ongoing conflict between Russia and Ukraine, including the potential for broader economic disruption;
• the results in the Technical Report including resource estimates;
• expectations regarding any environmental issues that may affect planned or future exploration and development programs and the potential impact of complying with existing and proposed environmental laws and regulations;
• receipt and timing of third party approvals;
• government regulation of mineral exploration and development operations in Brazil;
2024 ANNUAL INFORMATION FORM | 1
• expectations regarding any social or local community issues in Brazil that may affect planned or future exploration and development programs; and
• statements in respect of V2O5, V2O3, TiO2, ilmenite, and LDES systems demand and supply.
These statements and information are only predictions based on current information and knowledge, some of which may be attributed to third party industry sources. Actual future events or results may differ materially. Undue reliance should not be placed on such forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and other forward-looking information will not be realized.
The following are some of the assumptions upon which forward-looking information is based:
• that general business and economic conditions will not change in a material adverse manner;
• the continued and growing demand for LDES systems and the movement towards a low- carbon future;
• demand for, and stable or improving price of, V2O5, V2O3, FeV, ilmenite, TiO2 and other vanadium commodities;
• that the estimates of the Mineral Resources and Mineral Reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based);
• that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company's operations at the Maracás Menchen
Mine;
• the availability of financing for operations and development;
• that the Company will enter into agreements for the sales of vanadium, ilmenite and TiO2 products on favourable terms and for the sale of substantially all of its annual production capacity;
• the Company's ability to mitigate the impact of future rainfall;
• the benefit of Largo Physical Vanadium Corp. ("LPV") to Largo, the Storion JV, and the vanadium market generally;
• receipt of regulatory and governmental approvals, permits and renewals in a timely manner;
• the Company's ability to procure equipment and operating supplies in sufficient quantities and on a timely basis;
• the competitiveness of the Company's investment in vanadium flow battery technology;
• that the Company's plans for iron ore, ilmenite, titanium dioxide pigment and vanadium flow batteries can be achieved;
• the potential impact of the ongoing conflict between Russia and Ukraine on the Company
• the Company's ability to attract and retain skilled personnel and directors; and
• the ability of management to execute strategic goals.
Actual results could differ materially from those anticipated in this forward-looking information as a result of the risks and uncertainties including, without limitation:
• volatility in prices of, and demand for, V2O5, V2O3, FeV, ilmenite, TiO2 and other vanadium commodities;
• uncertainties regarding the rate of inflation and its effect on the profitability of long-term contracts;
• unexpected operational events and delays;
• risks inherent in mineral exploration and development;
• uncertainties associated with estimating Mineral Resources and Mineral Reserves (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based);
• uncertainties related to title to the Company's mineral projects;
• risks inherent with the introduction and reliance on recently developed vanadium flow battery technology;
• revocation of government approvals;
• risks associated with our material financing arrangements and our covenants thereunder;
• tightening of the credit markets, global economic uncertainty and counterparty risk;
• failure of plant, equipment or processes to operate as anticipated;
• competition for, among other things, capital and skilled personnel;
• geological, technical and drilling problems;
• fluctuations in foreign exchange or interest rates and stock market volatility;
• rising costs of labour and equipment;
• disruption caused by labour actions;
• risks associated with political and/or economic instability in Brazil;
• compliance with applicable sanctions regimes;
• inherent uncertainties involved in the legal dispute resolution process, including in foreign jurisdictions;
• changes in income tax and other laws of foreign jurisdictions; and
• other factors discussed under "Risk Factors" in this AIF.
Assumptions relating to the potential mineralisation of the Maracás Menchen Mine are discussed in the
Technical Report which is available under the Company's profile on SEDAR+ and available onwww.sec.gov.
Additional risks and uncertainties not currently known to the Company, or that the Company currently deems to be immaterial, may also materially and adversely affect the Company's business and prospects. Should one or more of these risks and uncertainties materialize, or should any of the underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking information.
Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. The reader is cautioned not to place undue reliance on forward-looking information.
The forward-looking information is presented for the purpose of assisting investors in understanding the
Company's plans, objectives and expectations in making an investment decision and may not be appropriate for other purposes. This forward-looking information is expressly qualified in its entirety by this cautionary statement. Forward-looking information contained in this AIF or documents incorporated herein by reference are made as of the date of this AIF or the document incorporated herein by reference, as applicable, and are accordingly subject to change after such date. The Company disclaims any obligation to update any such forward-looking information to reflect events or circumstances after the date of such information, or to reflect the occurrence of anticipated or unanticipated events, except as required by law.
CAUTIONARY NOTE TO UNITED STATES INVESTORS
Disclosure regarding the Company's mineral properties, including with respect to Mineral Reserve and
Mineral Resource estimates included in this AIF, was prepared in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects.
In accordance with NI 43-101, the terms "mineral reserve", "proven mineral reserve", "probable mineral reserve", "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred
mineral resource" are Canadian mining terms as defined in accordance with NI 43- 101 and the
Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") - CIM Definition Standards on Mineral
Resources and Mineral Reserves (the "CIM Definition Standards"), adopted by the CIM Council, as amended.
The United States Securities and Exchange Commission ("SEC") adopted amendments to its disclosure rules (the "SEC Modernization Rules") to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the U.S. Securities Exchange Act of 1934 (the "U.S. Exchange Act"), which are codified in Regulation S-K subpart 1300. Under the SEC Modernization Rules, the historical property disclosure requirements for mining registrants included in SEC Industry Guide 7 have been replaced. As a foreign private issuer under United States securities laws that files its annual report on Form 40-F with the SEC pursuant to the multi-jurisdictional disclosure system ("MJDS"), the Company is not required to provide disclosure on its mineral properties under the SEC Modernization Rules and will continue to provide disclosure under NI 43-101 and the CIM Definition Standards.
The SEC Modernization Rules include the adoption of terms describing mineral reserves and mineral resources that are substantially similar to the corresponding terms under the CIM Definition Standards.
As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of "measured mineral resources", "indicated mineral resources" and "inferred mineral resources". In addition, the SEC has amended its definitions of "proven mineral reserves" and "probable mineral
reserves" to be substantially similar to the corresponding CIM Definition Standards.
U.S. investors are cautioned that while terms are substantially similar to CIM Definition Standards, there are differences in the definitions and standards under the SEC Modernization Rules and the CIM
Definition Standards. Accordingly, there is no assurance any mineral reserves or mineral resources that the Company may report as "proven reserves", "probable reserves", "measured mineral resources", "indicated mineral resources" and "inferred mineral resources" under NI 43-101 will be the same as the
reserve or resource estimates prepared under the standards adopted under the SEC Modernization Rules.
U.S. investors are also cautioned that while the SEC now recognizes "measured mineral resources", "indicated mineral resources" and "inferred mineral resources", investors should not assume that any
part or all of the mineralisation in these categories will ever be converted into a higher category of mineral resources or into mineral reserves. Mineralisation described using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralisation that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any "measured mineral resources",
"indicated mineral resources", or "inferred mineral resources" on the Company's projects are or will be
economically or legally mineable.
Further, "inferred resources" have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, U.S. investors are also cautioned not to assume that all or any part of the inferred resources exist. In accordance with Canadian rules, estimates of "inferred mineral resources" cannot form the basis of feasibility or other economic studies, except in limited circumstances where permitted under NI 43- 101.
Accordingly, information contained in this AIF containing descriptions of mineral deposits may not be comparable to similar information made public by United States companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder. U.S. investors are urged to consider closely the disclosure on technical terminology under the "Glossary" in this AIF.
MARKET AND INDUSTRY DATA
Market and industry data contained and incorporated by reference in this AIF concerning economic and industry trends is based upon good faith estimates of our management or derived from information provided by industry sources. The Company believes that such market and industry data is accurate and that the sources from which it has been obtained are reliable. However, we cannot guarantee the accuracy of such information and we have not independently verified the assumptions upon which projections of future trends are based.
OTHER INFORMATION
In this annual information form, references to "Largo", the "Company", and "we" mean Largo Inc. and its subsidiaries as applicable (unless the context otherwise requires).
QUALIFIED PERSON
Except as otherwise noted in this AIF, Mr. Emerson Ricardo Re, BSc, MSc, MBA, MAusIMM (CP) and Registered Member (Chilean Mining Commission), of HCM Consultoria Geologica Eireli, Geology Advisor to the Company, is the Qualified Person (as that term is defined under NI 43-101) who has reviewed and approved the technical disclosure in this AIF. For a description of key assumptions, parameters and methods used to estimate Mineral Reserves and Mineral Resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal title, taxation, sociopolitical, marketing or other relevant factors, please see the Technical Report for our material property as filed by us on SEDAR+ atwww.sedarplus.com and available onwww.sec.gov.
CURRENCY PRESENTATION AND DATE OF INFORMATION
This AIF contains references to United States dollar, Canadian dollar, Brazilian real and to the European
Euro. All dollar amounts referenced herein, unless otherwise indicated, are expressed in United States dollars "$". Canadian dollars may be referred to as "Canadian dollars" or "C$". Brazilian reais may be referred to as "Brazilian reais" or "R$", and the European Euro may be referred to as "Euro" or "€".
The following tables set out the average annual exchange rates according to information published by the Bank of Canada and the resulting currency conversion if one United States dollar, one Brazilian real and one Euro were exchanged for the equivalent in Canadian dollars.
Year Ended December 31
One U.S. dollar
2024
2023
2022
Closing in Canadian dollars
C$1.3698
C$1.3497
C$1.3013
Year Ended December 31
One Brazilian real
2024
2023
2022
Closing in Canadian dollars
C$0.2553
C$0.2704
C$0.2525
Year Ended December 31
One Euro
2024
2023
2022
Closing in Canadian dollars
C$1.4818
C$1.4597
C$1.3696
Based on information published by the Bank of Canada, (i) the value of one United States dollar, if exchanged for one Canadian dollar, would have been C$1.4240 for the month of December 2024, (ii)
the value of one Brazilian real, if exchanged for one Canadian dollar, would have been C$0.2336 for the month of December 2024, and (iii) the value of one Euro, if exchanged for one Canadian dollar, would have been C$1.4916 for the month of December 2024.
On March 27, 2025, the indicative exchange rate for Canadian dollars in terms of the United States dollar, as quoted by the Bank of Canada, was $1.00 = C$1.4309, the exchange rate for Brazilian reais was R$1.00 = C$0.2491, and the exchange rate for Euros, was €1.00 = C$1.5444.
The information in this AIF is presented as of December 31, 2024, unless otherwise indicated.
Statements relating to the currency of information without reference to a date and references to information being current as of "the date hereof" or "as of the date of this AIF" are current as of March 27, 2025.
NON-GAAP MEASURES
The Company has included non-GAAP financial measures in this AIF. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company's GAAP, and
might not be comparable to similar financial measures disclosed by other issuers. The measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Cash Operating Costs, Cash Operating Costs Excluding Royalties, and Adjusted Cash Operating Costs Excluding Royalties
This AIF refers to cash operating costs per pound and cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs and cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to plan and prior periods, and also to assess its overall effectiveness and efficiency.
Cash operating costs includes mine site operating costs such as mining costs, plan and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.
Cash operating costs excluding royalties is calculated as cash operating costs less royalties. Adjusted cash operating costs excluding royalties is calculated as cash operating costs excluding royalties less write-downs of produced products.
Cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash operating costs excluding royalties are obtained by dividing cash operating costs and cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine.
Cash operating costs, cash operating costs excluding royalties, cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company's ability to generate
operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.
Revenues Per Pound
This AIF refers to revenues per pound sold, V2O5 revenues per pound of V2O5 sold, V2O3 revenues per pound of V2O3 sold and FeV revenues per kg of FeV sold, which are non-GAAP financial measures that are used to provide investors with information about a key measure used by management to monitor performance.
For a discussion and reconciliation of cash operating costs and cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound for the Maracás
Menchen Mine to operating costs for the three months and fiscal year ended December 31, 2024 and 2023, please see "Non-GAAP Measures" in the Company's management's discussion and analysis for the fiscal year ended December 31, 2024, which is available under the Company's profile on SEDAR+
atwww.sedarplus.com.
CORPORATE STRUCTURE
Incorporation and Registered Office
Largo is a company continued under the Business Corporations Act (Ontario).
The Company was originally incorporated under the name Kaitone Holdings Ltd. in the Province of British Columbia on April 18, 1988. On September 3, 1991, the Company changed its name to Consolidated Kaitone Holdings Ltd. On May 8, 2003, the Company changed its name to Largo Resources Ltd. On June 10, 2004, the Company continued to the Province of Ontario and filed articles of amendment to amend its authorized share capital to an unlimited number of Common Shares. On October 17, 2014, the Company completed a consolidation of its Common Shares on the basis of one (1) post-consolidation Common Share for each ten (10) pre-consolidation Common Shares. On March 4, 2021, the Company completed a consolidation of its Common Shares on the basis of one (1) post-consolidation Common share for each ten (10) pre-consolidation Common Shares. On November 8, 2021, the Company changed its name from Largo Resources Ltd. to Largo Inc.
The head office and registered office of the Company is located at First Canadian Place, 100 King Street West, Suite 1600, Toronto, Ontario, Canada M5X 1G5.
Intercorporate Relationships
The following chart shows our principal subsidiaries, their jurisdiction of incorporation and the percentage of voting securities we beneficially own or over which we have control or direction:
Largo Inc.
(Ontario)
Notes:
(1)
Under Brazilian law, a corporation must have at least two shareholders or quotaholders, as applicable.
Shareholders or quotaholders, as applicable, can be individuals or legal entities.
(2)
The remaining shares of Largo Vanádio de Maracás S.A. are owned by Companhia Baiana de Pesquisa Mineral,
an entity controlled by the Brazilian State of Bahia. See also "Description of the Business - Material Project -
Maracás Menchen Mine - Project Description, Location and Access".
(3)
Holds a 100% interest in the tungsten-molybdenum Northern Dancer Project in the Yukon, Canada.
(4)
Holds a 100% interest in the tungsten tailings Currais Novos Project in Brazil.
(5)
Holds explorations rights and an option to lease the iron-vanadium Campo Alegre Project in Brazil pursuant to
an agreement with CPBM.
(6)
Holds a 100% interest in our Maracás Menchen Mine.
(7)
These entities facilitate the Company's sales and distribution capabilities. See also "Description of the Business
- Marketing and Distribution".
(8)
On September 15, 2022, LPV completed a qualifying transaction (as defined in the TSXV Company Manual) with
CCC. See "Three-Year History - Operations" for further details.
(9)
Incorporated to hold the Company's titanium-related assets in Brazil.
(10) Established pursuant to a joint venture with Stryten Critical E-Storage, LLC, who owns the other 50% of Storion
Energy, LLC.
Disclaimer
Largo Inc. published this content on March 29, 2025, and is solely responsible for the information contained herein. Distributed via , unedited and unaltered, on March 29, 2025 at 13:34 UTC.