Largo ends calcine deal

Executive Summary

• Largo Inc. has terminated its iron ore calcine sale agreement due to the counterparty's failure to make the required initial payment of $2.9 million, retaining full ownership of the 4.5 million tonnes of inventory.
• The company is assessing the impact of a recent U.S. Supreme Court decision regarding tariff authority, which struck down a 50% tariff on Brazilian imports, potentially allowing for reduced tariffs (10-15%) and improved competitiveness for its vanadium products.
• Vanadium prices have strengthened significantly since the February 12 update, with U.S. Ferrovanadium (FeV) prices rising to over $21/lb (near $23/lb) and European FeV prices increasing to ~$27.7/kg, while Vanadium Pentoxide (V2O5) prices have also risen above $5.5/lb.

Key Details

• Iron Ore Calcine Agreement Termination:
  • The definitive agreement for the sale of up to 4.5 million tonnes of iron ore calcine was terminated.
  • The agreement required an initial payment of $2.9 million (U.S.), originally due January 30, 2026, which was deferred to February 9, 2026.
  • A cure period was granted until February 20, 2026, but the payment was not received.
  • No iron ore calcine was delivered under the agreement.
  • Largo retains full ownership of the 4.5 million tonnes of calcine inventory generated by its vanadium operations at the Maracas Menchen mine in Brazil.
  • Largo intends to pursue rights and remedies against the counterparty.
  • The termination is not expected to have a material impact on the company's financial position, liquidity, or continuing operations.
  • Largo is advancing discussions with alternative potential buyers.
• U.S. Tariff Authority Update:
  • The U.S. Supreme Court struck down the 50% tariff on direct Brazilian imports into the United States.
  • Media reports suggest tariff rates on certain products could be reimposed at 10-15% pending legal processes.
  • A reduction in tariffs would improve the competitiveness of Largo's Brazilian-origin material (V2O5 and FeV) and boost supply flexibility in the U.S.
• Bonded Inventory Status:
  • Largo holds high-purity vanadium units in a bonded warehouse within the United States.
  • These units have not yet been imported due to high U.S. tariffs, tying up working capital.
  • If tariffs are reduced, these units can be quickly released to supply U.S. customers in steel, aerospace, defense, and specialty alloy sectors.
• Vanadium Market Price Updates (Since Feb 12, 2026):
  • European FeV: Increased from ~$25.6/kg to ~$27.7/kg.
  • U.S. FeV: Increased from ~$17-18.5/lb in mid-February to over $21/lb, with recent trades near $23/lb. This represents a widening premium over European markets.
  • V2O5: Prices have moved upward for the first time since the beginning of the year, now above $5.5/lb, signaling tightening fundamentals.
• Company Positioning:
  • Largo remains a Western-aligned primary producer capable of supplying FeV and high-purity vanadium.
  • The company is positioned to contribute additional primary units to the U.S. market as tariff constraints ease.

Notable Quotes

• No direct quotes from the CEO/President were included in the provided text.