Largo Reports Strong Q2 2026 Production and Sales Growth and Highlights Strengthened U.S. Market Position
Largo’s Q2 sales surged on DLA deal and tariff relief, yet its balance sheet remains fragile.
Largo Inc. (LGO) reported second-quarter 2026 production and sales results from its Maracás Menchen Mine in Brazil, highlighting significant gains in vanadium output and sales. V₂O₅ production rose 28.5% year-over-year to 2,900 tonnes, while V₂O₅ equivalent sales surged 53.4% to 2,773 tonnes, driven by improved operational consistency and stronger commercial execution. Ilmenite concentrate sales increased 67% to 10,059 tonnes, although production fell 11.6% to 7,205 tonnes.
The company confirmed that vanadium oxides and hydroxides are exempt from the new 25% U.S. Section 301 tariff on Brazilian products, which takes effect on July 22, 2026. This exemption preserves the company’s competitive position in the U.S. market. Consequently, bonded U.S. inventory can now be released under the tariff exemption.
Largo is currently optimizing production to support the previously announced $60.1 million DLA delivery order under its five-year IDIQ contract. In the second quarter, high-purity V₂O₅ production accounted for only 6% of total output, down from 38% a year ago, as the company aligns its product mix with customer demand.
Largo Inc. (LGO) reported a positive second-quarter operational release, confirming that its production turnaround is underway and that increased sales are translating improved output into cash. The company has secured a tariff exemption, a development that removes a significant headwind which previously forced it to store high-purity inventory in bonded warehouses and sacrifice margins. Combined with a delivery order from the Defense Logistics Agency (DLA), the path to the U.S. market appears stronger than it did a quarter ago.
Despite these operational improvements, the company remains in a precarious financial position. Largo faces a working-capital deficit of $72.9 million, with all $108 million of its debt maturing within 12 months, alongside a going-concern warning. The incremental news does not resolve these financial risks. The stock has previously oscillated between $0.88 and $1.12 around the DLA award, and while the tariff exemption adds substance to the bullish case, it is unlikely to re-rate the equity on its own.
Largo Inc. operates the Maracás Menchen Mine in Bahia, Brazil, which is recognized as the world’s largest primary vanadium mine. The facility produces V₂O₅ and ilmenite concentrate, while also evaluating potential by-products including copper, PGM, nickel, and cobalt. The operation maintains a substantial iron-ore calcine stockpile.
The company also holds 100% ownership of two tungsten assets: Northern Dancer in the Yukon, Canada, and Currais Novos in Brazil. Both projects are at the preliminary economic assessment (PEA) stage, and a strategic review is currently underway. Additionally, Largo holds approximately a 37.4% interest in Storion Energy, a vanadium-flow-battery electrolyte venture that previously housed the electrolyte leasing model.