Largo : MD&APDF ,335 KB

Published: 2025-03-29 09:35:05 ET LGO.TO

Management's Discussion and Analysis

For The Year Ended December 31, 2024

Table of contents

To Our Shareholders .............................................................................................................................. 1

The Company ......................................................................................................................................... 1

2024 Highlights ....................................................................................................................................... 1

Significant Events and Transactions Subsequent to 2024 ................................................................... 3

2024 Summary ..................................................................................................................................................... 3

Selected Quarterly Information ............................................................................................................ 12

2025 Guidance ........................................................................................................................................ 12

Operations .............................................................................................................................................. 13

Financial Instruments ............................................................................................................................ 14

Liquidity And Capital Resources ............................................................................................................ 15

Outstanding Share Data ........................................................................................................................ 16

Transactions With Related Parties ........................................................................................................ 17

Commitments And Contingencies ......................................................................................................... 17

Disclosure Controls And Procedures And Internal Controls Over Financial Reporting ...................... 18

Significant Accounting Judgments, Estimates And Assumptions ....................................................... 18

Changes In Accounting Policies ............................................................................................................. 19

Non-GAAP Measures .............................................................................................................................. 19

Risks And Uncertainties ......................................................................................................................... 24

Cautionary Statement Regarding Forward-Looking Information ....................................................... 24

Additional Information .......................................................................................................................... 30

To Our Shareholders

The following Management's Discussion and Analysis ("MD&A") relates to the financial condition and results of operations of Largo Inc. ("we", "our", "us", "Largo", or the "Company") for the year ended December 31, 2024 ("2024") and should be read in conjunction with the annual consolidated financial statements and related notes for the same period. References in the below discussion refer to the note disclosures contained in the annual consolidated financial statements for the years ended December 31, 2024 and 2023 ("2024 annual consolidated financial statements"). References in the below discussion to "Q4 2024" and "Q4 2023" refer to the three months ended December 31, 2024 and December 31, 2023 and references to "2023" refer to the year ended December 31, 2023.

The financial statements and related notes of Largo have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to a going concern. Certain non-GAAP measures are discussed in this MD&A, which are clearly disclosed as such. Additional information about the Company has been filed electronically through SEDAR+ and is available online under the Company's profile atwww.sedarplus.caand www.sec.gov.

This MD&A reports the Company's activities through March 28, 2025, unless otherwise indicated. References to "the date of this MD&A" mean March 28, 2025. Except as otherwise set out herein, all amounts expressed herein are in thousands of U.S. dollars, denominated by "$". The Company's shares, options, units and warrants are expressed in thousands. Prices are not expressed in thousands. References to the symbol "C$" mean the Canadian dollar and references to the symbol "R$" mean the Brazilian real.

Mr. Emerson Ricardo Re, MSc, MBA, MAusIMM (CP) (No. 305892), Registered Member (No. 0138) (Chilean Mining Commission), is a Qualified Person as defined under National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed and approved the technical information in this MD&A.

The Company

Largo is a Canadian based company that is one of the world's leading high-quality vanadium suppliers with its VPURE® and VPURE+® products, which are sourced from the Company's Maracás Menchen Mine in Brazil. As one of the world's largest primary vanadium producers, Largo produces critical materials that empower global industries, including steel, aerospace, defence, chemical and energy storage sectors. Largo is also strategically invested in the long-duration energy storage sector through its 50% ownership of Storion Energy, a venture with Stryten Energy that is initially focused on scalable domestic electrolyte production for utility-scale vanadium flow battery long-duration energy storage solutions in the U.S.

The Company is organized and exists under the Business Corporations Act (Ontario) and its common shares are listed on the Toronto Stock Exchange under the symbol "LGO" and on the Nasdaq Stock Market under the symbol "LGO".

2024 Highlights

• The Company's Maracás Menchen Mine produced 9,264 tonnes of vanadium pentoxide ("V2O5") equivalent in 2024, within the annual production guidance range of 9,000 - 11,000 tonnes, including 1,775 tonnes of V2O5 equivalent produced in Q4 2024. The global V2O5 recovery rate for 2024 was 76.4%, with 77.9% seen in Q4 2024.

• The Company sold 9,600 tonnes of V2O5 equivalent in 2024 (including 415 tonnes of purchased products and 1,200 tonnes related to the Company's inventory supply agreement), within the annual sales guidance range of 8,700 - 10,700 tonnes, with sales in Q4 2024 of 3,033 tonnes (including 8 tonnes of purchased products and 1,200 tonnes related to the Company's inventory supply agreement).

• The Company recorded a net loss before tax of $71,245 for 2024 and net loss of $50,565 after the recognition of an income tax recovery of $2,813 and a deferred income tax recovery of $17,867.

• The Company's cash balance at December 31, 2024 was $22,106, with debt of $92,280.

• On March 18, 2024, the Company announced that it and Stryten Energy LLC ("Stryten") (together the "Parties") had signed a non-binding letter of intent to establish a new venture, owned equally by each of the Parties, that would combine the Company's wholly owned subsidiary, Largo Clean Energy Corp. ("LCE"), with Stryten's vanadium flow battery business. On December 18, 2024, definitive agreements were signed to

establish a joint venture in Storion Energy, LLC ("Storion") with the following key terms upon closing of the transaction:

◦ Each of LCE and Stryten will contribute certain of their vanadium flow battery-related assets and liabilities to Storion;

◦ Stryten will pay $1,000 directly to LCE and contribute a total of $6,000 over time to Storion for the purpose of funding Storion's operations;

◦ LCE and Stryten will each hold a 50% equity interest in Storion, with customary pre-emption rights and certain other anti-dilution protections;

◦ Board representation of Storion will be generally proportional to ownership, with Stryten holding one additional seat so long as LCE and Stryten hold similar ownership interests; and

◦ Largo and Storion will enter into a separate supply agreement providing Storion a right of first offer, subject to certain terms and conditions, to purchase vanadium products from Largo.

Subsequent to the year-end December 31, 2024, the transaction closed on January 31, 2025.

• In May 2024, the Company secured a working capital debt facility with a bank in Brazil for a limit of $8,000. Drawdowns on the facility were repayable in 90 days together with accrued interest at a rate of 8.25% p.a., with renewals subject to approval by the bank. On May 10, 2024, the Company received $7,813 from this facility and it was repaid in full in August 2024. In September 2024, the facility was amended to a total limit of R$50,000 with drawdowns repayable in 120 days together with accrued interest at a rate of 9.00% p.a.. On September 30, 2024, the Company received R$50,000 ($9,235) from this facility. In January 2025, the term was extended for a further 120 days with no change in the interest rate.

• In May 2024, a further working capital debt facility with a term of 60 days was secured with another bank in Brazil for a total limit of $2,000 and an interest rate of 8.65% p.a. The Company received $1,914 from this facility in May 2024 and it was repaid in full in July 2024. In August 2024, the Company received $1,799 from this facility and it was repaid in full in October 2024.

• On June 25, 2024, the Company signed an inventory financing agreement for up to $10,000. Under the terms of this facility, which has a term until December 31, 2025 for the receipt of funds and a further four months for the repayment of amounts received, the Company can use its vanadium finished products inventory to secure drawdowns of up to $10,000 for a maximum period of 100 days. Amounts repaid include a commission fee of 1%, interest at a rate of the one month U.S. Secured Overnight Financing Rate ("SOFR") plus 3.0% and other direct costs. The Company began drawing down on this facility in July 2024.

• On July 5, 2024, the Company signed an additional inventory financing agreement for up to $10,000. Under the terms of this facility, which has a term until June 30, 2026, the Company can use its vanadium finished products inventory to secure drawdowns of up to $10,000 for a maximum period of 90 days. Amounts repaid include a commission fee of 1%, interest costs and other direct costs. The Company began drawing down on this facility in July 2024.

• On October 28, 2024, the Company announced the results from an updated life of mine plan and pre-feasibility study for its Maracás Menchen Mine in Brazil. Please refer to the Company's news release dated October 28, 2024 for full details. On November 26, 2024, the Company announced the filing of the technical report for this update. Please refer to the Company's news release dated November 26, 2024 for full details.

• During the year ended December 31, 2024, the Company entered into a contract for the sale of 2,100 tonnes of V2O5, with deliveries occurring between October 17, 2024 and March 31, 2025 (the "inventory supply agreement"). The Company receives proceeds upon completion of each delivery. At the option of the buyer, who must elect the total volume no later than 90 days prior to September 30, 2027, the Company may be obligated to repurchase up to a maximum of 2,100 tonnes of V2O5 at a fixed price not exceeding $7.00 per lb of V2O5, with payment and delivery occurring at September 30, 2027. During the year ended December 31, 2024, the Company delivered 1,200 tonnes of V2O5 into this inventory supply agreement and received proceeds of $13,638 (refer to note 23).

Significant Events and Transactions Subsequent to 2024

• In January 2025, the Company extended the term of its R$50,000 facility for a further 120 days with no change in the interest rate.

• On January 31, 2025, the Company and Stryten closed the previously disclosed transaction to establish Storion.

2024 Summary

Financial

Year ended December 31, December 31, 2024 2023

Movement

Revenues

$ 124,920 $

198,684

$ (73,764) (37%)

Operating costs

(145,818)

(174,758)

28,940 (17%)

Direct mine and production costs Professional, consulting and management fees Foreign exchange loss

(68,478)

(103,545)

35,067 (34%)

(16,304)

(23,068)

6,764 (29%)

(12,517)

Other general and administrative expenses Share-based payments

(5,429)

(183) (11,792)

(1,321)

362

(12,334) 6,740% 6,363 (54%) (1,683) (465%)

Finance costs

(9,460)

(9,630) 170 (2%)

Interest income Technology start-up costs Write down of vanadium assets Exploration and evaluation costs

1,523

2,018 (495) (25%)

(3,392)

(1,119)

(2,328)

(196,165)

(6,122) (4,862) (5,705) (233,740)

2,730 (45%)

3,743 (77%)

3,377 (59%)

37,575 (16%)

Net loss before tax

$ (71,245) $

(35,056)

$ (36,189) 103%

Income tax recovery (expense) Deferred income tax recovery Net loss

2,813

(88)

2,901 (3,297%)

17,867

2,786 15,081 541%

$ (50,565) $

(32,358)

$ (18,207) 56%

Unrealized (loss) gain on foreign currency translation

(35,327)

13,965

(49,292) (353%)

Comprehensive loss

$ (85,892) $

(18,393) $ (67,499) 367%

Basic loss per share (note 16)

Diluted loss per share (note 16)

Adjusted EBITDA1

Mining Operations Adjusted EBITDA1

$ $ $ $

(0.78) $ (0.78) $

(0.51) (0.51)

$ $

(0.27) 53%

(2,076) 7,976

$ $

11,948 29,992

$ (14,024) (117%)

$ (22,016) (73%) Cash provided before working capital items (operating activities)

3,234

Net cash provided by operating activities Net cash provided by financing activities Net cash used in investing activities

11,159

12,044

9,335 21,197 29,127

(6,101) (65%)

(10,038) (47%)

(17,083) (59%)

(42,226)

Net change in cash

(20,608)

(62,885) 20,659 (33%) (11,757) $ (8,851) 75%

1. Adjusted EBITDA and Mining Operations Adjusted EBITDA are each a non-GAAP financial measure with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this MD&A.

Three months ended December 31, December 31, 2024 2023

Movement

Revenues

24,268 $

44,170

$ (19,902) (45%)

Operating costs

(30,194)

(43,218)

13,024 (30%)

Direct mine and production costs Professional, consulting and management fees Foreign exchange (loss) gain

(11,823)

(25,784)

13,961 (54%)

(3,272)

(5,730)

2,458 (43%)

(8,560)

823

(9,383) (1,140%)

Other general and administrative expenses Share-based payments

1,843

(2,061)

3,904 (189%)

(138)

(231)

93 (40%)

Finance costs

(2,360)

(4,096)

1,736 (42%)

Interest income Technology start-up costs Write down of vanadium assets Exploration and evaluation costs

280

(188) (67%)

(793)

(911)

118 (13%)

(3,535) 3,613 (102%)

(250)

(1,871) 1,621 (87%)

(43,554)

(60,550)

16,996 (28%)

Net loss before tax

(19,286)

(16,380)

(2,906) 18%

Income tax expense Deferred income tax recovery Net loss

(29)

(40)

11 (28%)

6,325

$ (12,990) $

3,119 (13,301)

3,206 103%

$ (2%)

311

Unrealized (loss) gain on foreign currency translation

(15,791)

6,005

(21,796) (363%)

Comprehensive loss

$ (28,781) $ (7,296)

$ (21,485) 294%

Basic loss per share Diluted loss per share

Adjusted EBITDA1

Mining Operations Adjusted EBITDA1

$ $ $ $

(0.19) $ (0.21) (0.19) $ (0.21)

0.02 (10%)

2,337 $ 793 4,466 $ 3,503

1,544 195%

$ 963 27% Cash provided before working capital items (operating activities)

5,716 13,293%

5,759 $ 43

Net cash provided by operating activities

7,746 5,845 1,901 33%

Net cash (used in) provided by financing activities Net cash used in investing activities

(3,387) 6,786 (10,173) (150%)

Net change in cash

(12,332) (8,344)

(10,777) (1,555) 14%

2,209 (10,553) (478%)

The movements in the discussion below refer to those shown in the previous table.

• The Company recorded a net loss of $50,565 in 2024, compared with a net loss of $32,358 in 2023. This movement was primarily influenced by a 37% decrease in revenues. This was partially offset by a 17% decrease in operating costs, a 29% decrease in professional, consulting and management fees, a 54% decrease in other general and administrative expenses, a 59% decrease in exploration and evaluation costs, a 45% decrease in technology start-up costs and a 541% increase in deferred income tax recovery.

• For Q4 2024, the Company recorded a net loss of $12,990, compared with net loss of $13,301 for Q4 2023. This movement was primarily attributable to a 30% decrease in operating costs, a 43% decrease in professional, consulting and management fees and a 189% decrease in other general and administrative expenses. This was partially offset by a 45% decrease in revenues and a 103% increase in deferred income tax recovery.

• For 2024, adjusted EBITDA decreased by 117% and mining operations adjusted EBITDA decreased by 73% from that seen in 2023. For Q4 2024, adjusted EBITDA improved by 195% and mining operations adjusted EBITDA improved by 27% from that seen in Q4 2023.

Commercial

• In Q4 2024, the Company sold 3,033 tonnes of V2O5 equivalent (Q4 2023 - 2,605 tonnes), including 8 tonnes of purchased products (Q4 2023 - 139 tonnes) and 1,200 tonnes related to the Company's inventory supply agreement. This is above the Q4 2024 guidance range of 2,200 to 2,700 tonnes of V2O5 equivalent. Revenues recognized for produced V2O5 equivalent sold decreased, with revenues recognized for 4,024 (000s lb) sold in Q4 2024, as compared with 5,437 (000s lb) in Q4 2023.

• In Q4 2024, the Company also sold 10,570 tonnes of ilmenite, which is within the Q4 2024 guidance range of 10,000 to 15,000 tonnes of ilmenite.

• For 2024, the Company's sales were within its revised annual sales guidance of 8,700 to 10,700 tonnes of V2O5 equivalent with total sales of 9,600 tonnes of V2O5 equivalent (2023 - 10,396 tonnes), including 415 tonnes of purchased products (2023 - 929) and 1,200 tonnes related to the Company's inventory supply agreement.

• The Company delivered both standard grade and high purity V2O5, as well as vanadium trioxide ("V2O3") and ferrovanadium ("FeV") to customers globally.

• The Company continues to actively manage its logistics and supply chain operations to provide premium products and service to its customers. Shipping operations from Brazil continued to be impacted by congestion and delays.

• The average benchmark prices per lb of V2O5 in Europe and the average benchmark prices per kg of FeV in Europe were as follows:

December 31, 2024

December 31, 2023

Movement

- Three months ended V2O5 Europe (per lb)

- As at

- Three months ended

FeV Europe (per kg)

- As at

$ $ $ $

5.34 $ 5.37 $ 26.04 $ 25.38 $

6.46 (17)%

6.53 (18)%

26.61 (2)%

28.70 (12)%

• Vanadium spot demand softened in Q4 2024, primarily due to weaker demand in the Chinese and European steel industries, while the U.S. steel market remained stable. Aerospace sector demand remained strong, and China's energy storage sector is expected to drive additional consumption in upcoming quarters.

• In 2025, U.S. steel demand is expected to remain stable, while European and Asian steel markets face continued softness. The aerospace sector is projected to see increased demand, particularly in the second half of 2025 and China's energy storage market is expected to be a key driver of vanadium consumption as the sector continues to accelerate.

• In 2021, the Company signed a 10-year exclusive off-take agreement with a third party for the purchase of all standard and high purity grade vanadium products they produce. The Company is committed to the purchase of 570 tonnes of V2O5 they produce in 2025.

• Largo Physical Vanadium Corp. ("LPV") has deployed its available capital and is focused on marketing and strategic initiatives to establish its business model.

• Subsequent to Q4 2024, sales in January 2025 were 687 tonnes of V2O5 equivalent and 4,397 dry tonnes of ilmenite and in February 2025, sales were 551 tonnes of V2O5 equivalent and 2,255 dry tonnes of ilmenite

• During Q4 2024, the Company recognized revenues from vanadium sales of $23,046 (Q4 2023 - $44,170) from sales of 1,833 tonnes of V2O5 equivalent (Q4 2023 - 2,605 tonnes) and revenues from ilmenite sales of $1,222 (Q4 2023 - $nil). Of the total revenues, $18,146 is related to the Sales & trading segment, $5,968 is related to the Mine properties segment and $154 is related to the Corporate segment (after the elimination of inter-segment transactions).

• During 2024, the Company recognized revenues from vanadium sales of $118,549 (year ended December 31, 2023 - $198,577) from the sales of 8,400 tonnes of V2O5 equivalent (year ended December 31, 2023 - 10,396 tonnes) and revenues from ilmenite sales of $6,371(year ended December 31, 2023 - $nil). Of the total, $99,708 is related to the Sales & trading segment, $24,429 is related to the Mine properties segment and $783 is related to the Corporate segment (after the elimination of inter-segment transactions).

• Under the terms of the Company's inventory supply agreement, the Company delivered 1,200 tonnes which are subject to refund. Accordingly, no revenues were recognized and amounts received were recognized as revenues subject to refund in the Company's consolidated statement of financial position. Refer to note 23.

• In the year ended December 31, 2024, the Company's revenues were from transactions with multiple customers, including one customer who represented more than 10% of revenues. Total revenues with this customer were $12,360 (included in the Sales & trading segment). The Company's V2O3 revenues were predominantly from transactions with three customers, with V2O5 revenues including four customers who each represented more than 10% of V2O5 revenues and FeV revenues including one customer who represented more than 10% of FeV revenues. Refer to note 23.

Three months ended

Year ended

December 31, December 31,

2024 2023

V2O5 revenues per pound of V2O5 sold1, 2

- Produced material $

5.00

7.83

6.16

8.81

- Purchased material $

5.65

5.61

7.06

5.00

7.67

6.15

8.65

V2O3 revenues per pound of V2O3 sold1, 2

- Produced material $

7.75

10.42

9.30

11.35

- Purchased material $

13.13

7.75

10.42

9.30

11.47

FeV revenues per kg of FeV sold1, 2

- Produced material $

20.88

23.54

21.11

27.87

- Purchased material $

21.20

21.46

27.72

20.88

23.54

21.14

27.86

Revenues per pound sold1, 2

8.66

- Total $

5.70

6.40

V2O5 revenues per pound of V2O5 sold, V2O3 revenues per pound of V2O3 sold, FeV revenues per kg of FeV sold and revenues per pound sold are non-GAAP

ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-

GAAP Measures" section of this MD&A.

Calculated based on the quantity sold during the stated period.

Costs

• Operating costs of $30,194 in Q4 2024 (Q4 2023 - $43,218) include direct mine and production costs of $11,823 (Q4 2023 - $25,784), conversion costs of $2,217 (Q4 2023 - $1,768), product acquisition costs of $99 (Q4 2023 - $1,974), royalties of $1,630 (Q4 2023 - $2,243), distribution costs of $1,601 (Q4 2023 - $2,366), vanadium and warehouse materials inventory write-down of $2,494 (Q4 2023 - $2,407), depreciation and amortization of $7,984 (Q4 2023 - $6,592), ilmenite costs and write-down of $2,317 (Q4 2023 - $nil) and iron ore costs of $29 (Q4 2023 - $84).

• The decrease seen in direct mine and production costs in Q4 2024 as compared with Q4 2023 reflects the 30% decrease in vanadium sold, as well as the impact of the Company's previously announced initiatives to reduce production costs and improve productivity. Further, shared mining and production costs up to the milling process are allocated between vanadium and ilmenite, which reduces the amount recognized in direct mine and production costs. The vanadium and warehouse materials inventory write-down of $2,494 in Q4 2024 includes a write-down of vanadium finished products of $2,517. Of the total operating costs, $17,504 is related to the Sales & trading segment, $12,409 is related to the Mine properties segment and $281 is related to the Corporate segment (after the elimination of inter-segment transactions).

• Operating costs of $145,818 for 2024 (2023 - $174,758) include direct mine and production costs of $68,478 (2023 - $103,545), conversion costs of $8,240 (2023 - $7,319), product acquisition costs of $4,996 (2023 - $15,354), royalties of $7,052 (2023 - $9,162), distribution costs of $7,418 (2023 - $8,540), vanadium and warehouse materials inventory write-down of $14,135 (2023 - $3,624), depreciation and amortization of $26,795 (2023 - $26,048), ilmenite costs and write-down of $8,192 (2023 - $444) and iron ore costs of $512 (2023 - $722). Ilmenite costs includes the shared mining and production costs up to the milling process that are allocated to ilmenite, as well as the direct production costs for the ilmenite plant.

• Total distribution costs for 2024 of $7,418 is lower than the Company's total guidance range for distribution costs of $8,000 to $12,000.

• The 34% decrease in direct mine and production costs is attributable to a 19% decrease in vanadium sold, as well as the factors as noted above.Of the total, $91,074 is related to the Sales & trading segment, $53,824 is related to the Mine properties segment and $920 is related to the Corporate segment (after the elimination of inter-segment transactions).

• Vanadium unit costs:

Three months ended

Year ended

December 31, December 31,

2024 2023

Cash operating costs per pound1 Cash operating costs excluding royalties per pound1

Adjusted cash operating costs excluding royalties per pound1

$ 4.08

$ 3.67

$ 3.05

$ $ $

5.86 $ 5.24

5.44 $ 4.84

5.04 $ 4.05

$ 5.74

$ 5.30

$ 5.19

1. Cash operating costs per pound, cash operating costs excluding royalties per pound and adjusted cash operating costs excluding royalties per pound are non-GAAP ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this MD&A.

• Cash operating costs excluding royalties per pound, which is calculated on pounds of produced V2O5 sold, were $3.67 per lb in Q4 2024, compared with $5.44 for Q4 2023. Adjusted cash operating costs excluding royalties per pound, which excludes the impact of inventory write-downs for produced products of $2,517 for Q4 2024 (Q4 2023 - $nil), was $3.05 per lb, compared with $5.04 for Q4 2023. The decrease in unit costs seen in Q4 2024 compared with Q4 2023 is largely due to the impact of the Company's previously announced initiatives to reduce production costs and improve productivity, including reducing haulage distances, reducing the number of contractors and a comprehensive review of all contracts. The Company expects to continue seeing the benefits of these initiatives in its financial results going forward.

• For 2024, cash operating costs excluding royalties per pound were $4.84 per lb, compared with $5.30 for 2023. Adjusted cash operating costs excluding royalties per pound were $4.05 per lb, compared with $5.19 for 2023. This highlights the significant impact of inventory write-downs for vanadium produced products of $13,897 for 2024 ($nil in 2023).

• Professional, consulting and management fees in Q4 2024 decreased from Q4 2023 by 43%. Of the total professional, consulting and management fee expense in Q4 2024, $564 is related to the Sales & trading segment (Q4 2023 - $521), $474 is related to the Mine properties segment (Q4 2023 - $887), $1,069 is related to the Corporate segment (Q4 2023 - $2,780), $976 is related to the Clean Energy segment (Q4 2023 - $1,335) and $173 is related to LPV (Q4 2023 - $166). The decreases seen are primarily attributable to the Company's focus on reducing costs, as well as reduced headcounts and reduced activity at LCE. For 2024, total professional, consulting and management fees decreased from 2023 by 29%, primarily due to the focus on reducing costs and reduced activity and headcount at LCE as a result of the initiation of the strategic review. Of the total, $2,323 is related to the Sales & trading segment (2023 - $1,839), $1,875 is related to the Mine properties segment (2023 - $3,102), $6,086 is related to the Corporate segment (2023 - $8,496), $5,481 is related to Clean Energy (2023 - $8,721) and $521 is related to LPV (2023 - $859). The increase seen in the Sales & trading segment is due to employee severance costs.

• Other general and administrative expenses in Q4 2024 decreased from Q4 2023 by 189% to an expense recovery of $1,843, which is primarily attributable to a decrease in legal provisions, as well as the continued focus on reducing costs and the reduced activity at LCE. The decrease seen in the Mine properties segment

is primarily due to a decrease in provisions of $3,097, as compared with an increase of $85 in Q4 2023. Of the total other general and administrative expenses in Q4 2024, $220 is related to the Sales & trading segment (Q4 2023 - $206), $3,135 is related to the Mine properties segment (Q4 2023 - $633), $758 is related to the Corporate segment (Q4 2023 - $600), $145 is related to the Clean Energy segment (Q4 2023 - $680) and $50 is related to LPV (Q4 2023 - $203). For 2024, total other general and administrative expenses decreased from 2023 by 54%. Of the total, $585 is related to the Sales & trading segment (2023 - $641), $1,069 is related to the Mine properties segment (2023 - $2,442), $2,518 is related to the Corporate segment (2023 - $3,450), $2,590 is related to the Clean Energy segment (2023 - $4,494) and $186 is related to LPV (2023 - expense recovery of $186). In addition, $119 is related to activities for the titanium project (2023 - $579).

• Total professional, consulting and management fees and other general and administrative expenses for the Sales & trading and Corporate segments for 2024 was $11,512, including termination benefits of $1,446. This was higher than the 2024 guidance range of $7,500 to $8,500 primarily due to increased legal and consulting fees.

• Share-based payments in Q4 2024 decreased from Q4 2023 by 40%. The total in Q4 2024 of $138 was related to the Corporate segment (Q4 2023 - $231). For 2024, share-based payments increased from the same prior year period by 465%, with the total of $1,321 related to Corporate (2023 - expense recovery of $362).

• Technology start-up costs in Q4 2024 decreased from Q4 2023 by 13% (decrease of 45% for 2024). This is primarily attributable to a decrease in activities at LCE in 2024 as the installation of its battery project nears conclusion.

• Total professional, consulting and management fees, other general and administrative expenses and technology start-up costs for the Clean Energy segment for 2024 was $11,463. This was higher than the 2024 guidance range of $7,000 to $9,000 primarily due to costs incurred in the Company's review of strategic alternatives for this business.

• Exploration and evaluation costs in Q4 2024 decreased from Q4 2023 by 87%. This was driven by near-mine deep drilling and geological model work at the Maracás Menchen Mine in Q4 2023 and 2023 in support of the Company's technical report update, as well as diamond drilling at Campo Alegre de Lourdes to support the maintenance of the Company's mineral rights. Exploration and evaluation costs decreased in 2024 by 59% due to the same reasons.

• Comprehensive loss for Q4 2024 increased from comprehensive income in Q4 2023 by 294% primarily due a decrease in net loss of 2%. For 2024, comprehensive loss increased from comprehensive income in 2023 by 367% primarily due to the increase in net loss, partially offset by a decrease in the unrealized gain to an unrealized loss on foreign currency translation of 353%. The unrealized loss on foreign currency translation in 2024 is primarily due to a weakening of the Brazilian Real against the U.S. Dollar by approximately 28% since December 31, 2023.

Non-recurring Items

• During Q4 2024, the Company recognized a net realizable value write-down of $2,517 for vanadium finished products (Q4 2023 - $1,380), a net realizable value write-down of $3,133 for ilmenite finished products (Q4 2023 - $427) and a net realizable value write-down reversal of $23 for warehouse materials (Q4 2023 - $21). The total inventory write-down of $5,627 (Q4 2023 - $2,407) is included in operating costs (note 24). For 2024, the total inventory write-down is $18,475 (2023 - $4,068).

• During Q4 2024, the Company recognized a write down reversal of vanadium assets of $78 (Q4 2023 - $3,535). For 2024, the write-down is $1,119 (2023 - $4,862).

• During 2024, the Company recognized a write down of mine properties, plant and equipment of $1,092 (2023 - $nil).

• During Q4 2024, the Company recognized a decrease in provisions in other general and administrative expenses of $3,097 (Q4 2023 - $85). For 2024, the decrease is $1,967 (2023 - increase of $692).

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.