Largo Inc (LGO) 2022 Q4 法說會逐字稿

Good day, and thank you for standing by. Welcome to Largo's Fourth Quarter and Full Year 2022 Webcast and Conference Call. (Operator Instructions) I would now like to hand the conference over to your speaker today, Alex Guthrie, Senior Manager of External Relations. Please go ahead.

美好的一天，謝謝你的支持。歡迎來到 Largo 的第四季度和 2022 年全年網絡廣播和電話會議。 （操作員說明）我現在想將會議交給您今天的發言人，對外關係高級經理 Alex Guthrie。請繼續。

Good morning, everyone, and thanks for joining our fourth quarter and annual 2022 earnings conference call and webcast. On the call today is Daniel Tellechea, Largo's Interim CEO and Director; Ernest Cleave, Largo's Chief Financial Officer; and Paul Vollant, Largo's VP of Commercial.

大家早上好，感謝您參加我們的第四季度和 2022 年年度收益電話會議和網絡廣播。今天接聽電話的是 Largo 的臨時首席執行官兼董事 Daniel Tellechea； Largo 首席財務官 Ernest Cleave；和 Largo 的商業副總裁 Paul Vollant。

To accompany the call today, we've uploaded a supplemental last presentation, which is available on our website at largoinc.com. Our annual 2022 financial statements related MD&A and most recent AIS are also available on the website as well as on SEDAR and EDGAR.

為了配合今天的電話會議，我們上傳了最後一份補充演示文稿，可在我們的網站 largoinc.com 上找到。我們的 2022 年年度財務報表與 MD&A 和最新的 AIS 也可以在網站以及 SEDAR 和 EDGAR 上找到。

Before continuing the call, I would like to remind you all that some of the information you will hear during today's discussion will consist of forward-looking statements, including, without limitation, those regarding future business outlook.

在繼續通話之前，我想提醒大家，在今天的討論中，你們將聽到的一些信息將包含前瞻性陳述，包括但不限於有關未來業務前景的陳述。

Please refer to Slide 2 for a full description of the company's cautionary notes. The agenda for our call today is as follows: Daniel will provide an update on the company's Q4 and year-end progress with an outlook for the year ahead, followed by Ernest, who will provide overview of our fourth quarter and annual financial results, and Paul will close the call with an update on the company's sales and trading progress. The vanadium market and an update on Largo Physical Vanadium. Following these updates we will then open the call for questions. (Operator Instructions) So with that, I'll now turn the call over to Daniel.

有關公司警示性說明的完整說明，請參閱幻燈片 2。我們今天電話會議的議程如下：Daniel 將提供公司第四季度和年終進展的最新情況以及對未來一年的展望，隨後是 Ernest，他將提供我們第四季度和年度財務業績的概述，以及保羅將以公司銷售和交易進展的最新情況結束電話會議。釩市場和 Largo Physical Vanadium 的更新。在這些更新之後，我們將打開問題電話。 （操作員說明）因此，我現在將電話轉給丹尼爾。

Thank you, Alex, and good morning, and good afternoon for those here in Toronto and elsewhere across the globe. As you know, we're going to be discussing our fourth quarter and year 2022 results today. Let me start with Slide #5. 2022 was a challenging 12 months for us, and it led to an underperformance on both production and cost metrics. In Q4, we produced just over 2,000 metric tonnes of V2O5, our cash cost excluding royalties of $15 per pound. As we noted previously in our pre-reported operational update in January, Q4 production was heavily affected by abnormally high rainfall in December, which flooded the pit and made it difficult to access our ore.

謝謝你，亞歷克斯，早上好，下午好，多倫多和全球其他地方的人們。如您所知，我們今天將討論第四季度和 2022 年的業績。讓我從幻燈片 #5 開始。 2022 年對我們來說是充滿挑戰的 12 個月，它導致生產和成本指標表現不佳。在第四季度，我們生產了 2,000 多公噸的 V2O5，我們的現金成本不包括每磅 15 美元的特許權使用費。正如我們之前在 1 月份預先報告的運營更新中指出的那樣，第 4 季度的生產受到 12 月份異常高降雨的嚴重影響，雨水淹沒了礦坑，使我們難以進入礦石。

With typical higher sufficient stockpiles to have a seize with unexpected impacts to the various checkpoints along our operational route. However, our mining contractor transition in September resulted in a lack of stockpiles to help mitigate the impact of heavy rains. These impacts when combined with preventive and corrected maintenance on the kiln facility in Q1 '22 and the kiln yield and cooler refractory enforcement in Q3 '22, made for a less than favorable annual production of just over 10,400 tonnes of V2O5 at an annual cash operating costs, excluding royalties or $5.57 per pound.

擁有通常較高的充足庫存，可以對我們作戰路線沿線的各個檢查站產生意想不到的影響。然而，我們的採礦承包商在 9 月過渡導致缺乏庫存來幫助減輕大雨的影響。這些影響與 22 年第一季度對窯爐設施的預防性和糾正性維護以及 22 年第三季度的窯爐產量和冷卻器耐火材料實施相結合，導致年產量略低於 10,400 噸 V2O5，年現金運營成本，不包括特許權使用費或每磅 5.57 美元。

Production came in 6% below our revised production guidance and cash costs were 2% above our revised cash cost guidance for 2022. Unfortunately, down stills effect from the rainfall in December continued to impact production in January and February. Despite these impacts, we expect to remain in line with the quarterly production guidance for Q1 2023, likely landing closer to the midpoint of 2,050 tonnes or just under.

產量比我們修訂後的 2022 年生產指導低 6%，現金成本比我們修訂後的 2022 年現金成本指導高 2%。不幸的是，12 月降雨帶來的停滯效應繼續影響 1 月和 2 月的生產。儘管存在這些影響，我們預計仍將與 2023 年第一季度的季度產量指導保持一致，可能會接近 2,050 噸或略低於中點。

Since I start assuming the role of interim CEO by mid last month, I have spent a fair bit of time with our operations team in Maracás. And I am very optimistic about the expected improvements in production levels for the remaining of the year.

自從我上個月中旬開始擔任臨時首席執行官以來，我花了相當多的時間與我們在馬拉卡斯的運營團隊在一起。我對今年剩餘時間生產水平的預期改善非常樂觀。

We expect a 10% increase in production in 2023 over 2022, which includes an aggressive high-purity vanadium production plan to meet the increased demand and expect to sell over 25 of our production into this sector in 2023.

我們預計 2023 年的產量將比 2022 年增加 10%，其中包括一項積極的高純度釩生產計劃以滿足不斷增長的需求，並預計到 2023 年我們將超過 25% 的產品銷往該行業。

To support this production growth, management changes have been implemented in Maracás, including the promotion of Mr. Alvaro Resende from Operations Director to COO of our Brazilian operations and projects. Alvaro has spent the last 7 years at our operations in Maracás and he has the full support of our operations team to get the job done.

為了支持這種產量增長，馬拉卡斯實施了管理變革，包括將 Alvaro Resende 先生從運營總監提升為我們巴西運營和項目的首席運營官。 Alvaro 過去 7 年一直在我們馬拉卡斯的運營部門工作，我們的運營團隊全力支持他完成工作。

Cost management is a tough priority for Largo, and we expect cash cost, including royalties to decrease as the year progresses with half of the year in 2023 cost being closer to the lower end of our reported guidance range of $4.85 to through $5.25 per pound of V2O5 sold. Due to elevated operating costs and working capital requirements as well as growth CapEx related to our ilmenite plant. We secured additional working capital facilities in December and January to effectively manage our cash needs during this -- the first half of the year. However, we are in the process of implementing cost control procedures, including an analysis of productivity to identify areas of business where we can reduce costs and improve performance.

成本管理是 Largo 的首要任務，我們預計現金成本（包括特許權使用費）會隨著時間的推移而減少，2023 年下半年成本將接近我們報告的每磅 4.85 美元至 5.25 美元指導範圍的下限V2O5 出售。由於運營成本和營運資金需求增加以及與我們的鈦鐵礦工廠相關的資本支出增長。我們在 12 月和 1 月獲得了額外的營運資金貸款，以有效管理今年上半年的現金需求。然而，我們正在實施成本控製程序，包括分析生產力以確定我們可以降低成本和提高績效的業務領域。

Today, we're already seeing distribution costs ease and expect to recognize some additional cost savings on some of our key consumables this year. I will let Ernest to discuss these matters in detail later on the call. This is a good moment also to discuss some of our expected catalysts in our key priorities for the remainder of the year.

今天，我們已經看到分銷成本有所下降，並預計今年會在我們的一些主要消耗品上節省一些額外的成本。我會讓歐內斯特稍後在電話中詳細討論這些問題。現在也是討論我們在今年剩餘時間的主要優先事項中的一些預期催化劑的好時機。

In addition to growing production level this year and increasing our vanadium sales in the high purity sector Largo ilmenite plants remains on track for completion and is expected to generate a new revenue source for the company. We anticipate providing guidance on ilmenite production for the year closer to the completion of the plant starting in the second half of the year.

除了今年產量水平的提高和增加我們在高純度部門的釩銷售外，Largo 鈦鐵礦工廠仍在按計劃完工，預計將為公司帶來新的收入來源。我們預計從今年下半年開始，在接近工廠完工的那一年提供有關鈦鐵礦生產的指導。

We also remain on track with the completion of our inaugural VRFB deployment for Enel Green Power in Spain and shipped the remaining 6, 12 electrolyte storage containers in early 2023. Provisional acceptance, which include the completion of our operational testing by Enel is expected to be completed by the end of May 2023.

我們還在為西班牙 Enel Green Power 完成首次 VRFB 部署，並在 2023 年初運送了剩餘的 6、12 個電解液儲存容器。臨時驗收，其中包括 Enel 完成我們的運營測試，預計將於2023 年 5 月底前完成。

Also as Largo Clean Energy and Ansaldo Green Tech continues to focus on the formation of a joint venture for the manufacture and commercial deployment of VRFBs in the European, Africa and Middle East power generation market, as noted in an operational update in January, the company previously announced MOU has been extended to March 31, 2023, to allow for the negotiation and enter into a joint venture and other ancillary agreements.

此外，正如 Largo Clean Energy 和 Ansaldo Green Tech 在 1 月份的運營更新中指出的那樣，繼續專注於組建合資企業，在歐洲、非洲和中東發電市場製造和商業部署 VRFB此前宣布的諒解備忘錄已延長至 2023 年 3 月 31 日，以允許談判並簽訂合資企業和其他附屬協議。

I think it's safe to say that the manufacturing and installation of our first battery project was a significant learning curve for the team at LCE. As you are aware, we have encountered in some delays with this deployment, but they were confident that with this battery -- first battery project will be a crucial step forward for our clean energy business. And we anticipate that the completion of this project will present additional deployment opportunities in the future.

我認為可以肯定地說，我們第一個電池項目的製造和安裝對 LCE 團隊來說是一個重要的學習曲線。如您所知，我們在這次部署中遇到了一些延誤，但他們相信，有了這個電池——第一個電池項目將是我們清潔能源業務向前邁出的關鍵一步。我們預計該項目的完成將在未來提供更多的部署機會。

With one of our most advanced VRFB technologies and a technical team that is among the most knowledgeable in the industry, we are confident that we have one of the best long duration solutions in the world. I think it is important to note that we continue to receive and address various inquiries of our product from significant players in the sector, both in the U.S. and in Europe.

憑藉我們最先進的 VRFB 技術之一和業內知識最淵博的技術團隊，我們相信我們擁有世界上最好的長期解決方案之一。我認為值得注意的是，我們繼續收到並處理來自美國和歐洲該行業重要參與者對我們產品的各種詢問。

As our negotiation with Ansaldo [protest] and we finalize the installation of our battery in Spain. I hope to share more with you regarding developments of LCE very soon. Lastly, I want to touch on Largo continues focus on ESG principles at the company. We continue to improve our overall ESG performance and public disclosure in 2022, and this is reflected in additional improved ratings and scores.

隨著我們與 Ansaldo 的談判 [抗議]，我們最終完成了在西班牙的電池安裝。我希望盡快與您分享更多有關 LCE 發展的信息。最後，我想談談 Largo 繼續關注公司的 ESG 原則。我們將在 2022 年繼續改善我們的整體 ESG 績效和公開披露，這反映在評級和分數的進一步提高上。

This is most evident in our standard and -- Standard & Poor's Global CSA rating, having improved approximately by 38% placing the company in the top quartile of its mining peer group for 2022. We look forward to issuing our fifth consecutive sustainability report at the start of the second half of this year. I would like to reiterate our focus to returning to a steady state operations and cost management as we experienced in previous binary years.

這在我們的標準和標準普爾全球 CSA 評級中最為明顯，該評級提高了約 38%，使該公司在 2022 年的礦業同行中名列前四分之一。我們期待在 2022 年連續發布第五份可持續發展報告。今年下半年開始。我想重申我們的重點是回到我們在前二年所經歷的穩定狀態運營和成本管理。

This year, I believe Largo is an inflection point as our production began to strengthening and more of our units are placed in the premium markets. Our Clean Energy Division continued its focus on delivering our first VRFB in Spain, which will -- which we believe will unlock additional potential for additional deployments in the future.

今年，我相信 Largo 是一個轉折點，因為我們的生產開始加強，我們的更多單位被投放到高端市場。我們的清潔能源部門繼續專注於在西班牙交付我們的第一個 VRFB，我們相信這將釋放未來額外部署的更多潛力。

This time is an opportune time as vanadium demand remains quite strong the long-term market fundamentals for the commodity looks extremely attractive, driven by the recursion in demand from the aerospace sector and from new deployments and capacity addition for new deployment of VRFBs. As we embark on the next chapter of Largo, I am confident we have the right team in place, and I look forward to assisting the company in advancing our strategy, while the Board continues its search for a permanent CEO.

這次是一個合適的時機，因為釩的需求仍然相當強勁，商品的長期市場基本面看起來極具吸引力，這是由航空航天領域的需求遞歸以及新部署和新部署 VRFB 的產能增加所推動的。在我們開啟 Largo 的新篇章之際，我相信我們擁有合適的團隊，我期待著協助公司推進我們的戰略，同時董事會繼續尋找常任首席執行官。

Underpinned by significant growth in vanadium demand as we continue the execution on our 2-pillar strategy as a Tier 1 vanadium supplier with an emerging clean energy business, I sincerely believe that the we will close the valuation gap for Largo and offer [considered upside] opportunity for new and existing shareholders of the company.

隨著我們作為具有新興清潔能源業務的一級釩供應商繼續執行我們的 2 支柱戰略，在釩需求顯著增長的支撐下，我真誠地相信我們將縮小 Largo 的估值差距並提供 [考慮上行空間]公司新老股東的機會。

With that, let me turn the call over to our CFO, Ernest Cleave, to review our financial performance for the quarter and the year. Ernest?

有了這個，讓我把電話轉給我們的首席財務官 Ernest Cleave，以審查我們本季度和本年度的財務業績。歐內斯特？

Thank you, Daniel. Good afternoon to those on the call today. Presented on Slide 10 is a brief overview of the company's financial performance in the fourth quarter and year-end 2022. I'll begin with a review of our consolidated financial results before touching on our 2023 guidance and the balance sheet. The year was marked by favorable increases in vanadium prices, which led to top line growth of 16% in 2022 over 2021, particularly driven by revenues recognized in Q2 of last year.

謝謝你，丹尼爾。今天接聽電話的各位下午好。幻燈片 10 簡要概述了公司在 2022 年第四季度和年底的財務業績。在談到我們的 2023 年指導和資產負債表之前，我將首先回顧一下我們的綜合財務業績。這一年的特點是釩價格的有利上漲，導致 2022 年的收入比 2021 年增長 16%，特別是在去年第二季度確認的收入的推動下。

In 2022, revenues per pound sold were $9.38, and that represents a 19% increase over 2021. In Q4 of 2022, we generated $47.5 million in revenues from the sale of 2,772 tonnes of V2O5 equivalent or $7.77 per pound sold. Revenues decreased around 6% when compared with Q4 2021, while revenues per pound sold were largely in line with the same comparative period last year.

2022 年，每磅銷售收入為 9.38 美元，比 2021 年增長 19%。在 2022 年第四季度，我們通過銷售 2,772 噸 V2O5 當量或每磅銷售 7.77 美元產生了 4750 萬美元的收入。與 2021 年第四季度相比，收入下降了約 6%，而每磅銷售額與去年同期基本持平。

I think last year can really be defined by costs, both from an inflationary perspective but also from increases and operational impacts and write-downs throughout the year. For 2022, operating costs increased 28% to approximately $170 million. This was largely driven by a 26% increase in direct mine and production costs and a 73% increase in distribution costs.

我認為去年真的可以用成本來定義，既可以從通貨膨脹的角度來看，也可以從全年的增長、運營影響和減記來看。到 2022 年，運營成本增加了 28%，達到約 1.7 億美元。這主要是由於直接礦山和生產成本增加了 26% 以及分銷成本增加了 73%。

The increase in direct mine and production costs were largely driven by increases in our critical consumables and including HFO, ammonium sulfate and sodium carbonate which was further compounded by the increase consumption of these critical consumable due to operation impact throughout the year. The increase in product acquisition costs reflects the company realizing costs from the sale of purchased vanadium material during the year, which was required to effectively manage customer contract commitments.

直接礦山和生產成本的增加主要是由於我們關鍵消耗品的增加，包括 HFO、硫酸銨和碳酸鈉，由於全年運營影響導致這些關鍵消耗品的消耗量增加，進一步加劇了這種情況。產品購置成本的增加反映了公司在年內銷售所購釩材料的變現成本，這是有效管理客戶合同承諾所必需的。

As Daniel mentioned earlier, as we move through the year and our unit cost should begin to decrease, ending closer to the lower range of our guidance by year-end. We're already seeing some transportation costs easing this year and are expecting additional savings on sodium carbonate as the year progresses.

正如 Daniel 之前提到的，隨著時間的推移，我們的單位成本應該開始下降，到年底接近我們指導的較低範圍。今年我們已經看到一些運輸成本有所下降，並且預計隨著時間的推移，碳酸鈉會進一步節省。

For 2022, I think what's important to note is that the company's core mining business was profitable with net income of $23.5 million. The company incurred various nonrecurring expenditures of around $15 million, including approximately $5.1 million in legal provisions and approximately $6.4 million, which related to an inventory write-down at LCE. The increase in legal provisions related to a supply agreement for the Maracás Menchen Mine, which was filed with the court way back in October 2014, and the ruling requires the company to pay amounts due plus interest and legal fees.

對於 2022 年，我認為值得注意的是該公司的核心採礦業務實現盈利，淨收入為 2350 萬美元。公司產生了大約 1500 萬美元的各種非經常性支出，其中包括大約 510 萬美元的法律條款和大約 640 萬美元，這與 LCE 的庫存減記有關。 2014 年 10 月向法院提交的 Maracás Menchen 礦供應協議相關的法律條款有所增加，該裁決要求公司支付到期款項以及利息和法律費用。

Additionally, the company wrote down battery component inventory to the expected net realizable value, which relates to our first VRFB project at our Clean Energy Division. As Daniel mentioned, this is the case for most first time endeavors and is not uncommon in this particular sector as these type of demonstration projects generally exhibit learning opportunities and development growth.

此外，公司將電池組件庫存減記至預期可變現淨值，這與我們清潔能源部門的第一個 VRFB 項目有關。正如 Daniel 所提到的，這是大多數首次嘗試的情況，並且在這個特定領域並不少見，因為這些類型的示範項目通常表現出學習機會和發展增長。

Moving to Slide 11. We plan to invest approximately $50 million on capital expenditures in 2023, including $13 million to $14 million on sustaining CapEx, $12 million to $13 million on capitalized stripping and $17.5 million to $18.5 million on completing the ilmenite plant.

轉到幻燈片 11。我們計劃在 2023 年投資約 5000 萬美元用於資本支出，其中 1300 萬至 1400 萬美元用於維持資本支出，1200 萬至 1300 萬美元用於資本化剝離，1750 萬至 1850 萬美元用於完成鈦鐵礦工廠。

The increase in sustaining CapEx is largely driven by maintenance required at the crushing and V2O3 circuits with increases for cap stripping being driven by the movement of waste in the pit in accordance with the mine plan. We've also allocated a few million dollars to purchase an additional dry magnetic separator, which will provide greater throughput and flexibility in the processing of ores.

維持資本支出的增加主要是由破碎和 V2O3 迴路所需的維護推動的，而根據礦山計劃，礦坑中廢物的移動推動了封蓋剝離的增加。我們還撥出數百萬美元購買額外的干式磁選機，這將提高礦石處理的吞吐量和靈活性。

Moving on to the statement of financial position. Cash at year-end was approximately $54 million, with debt of $40 million and a net working capital surplus of $116 million. Subsequent to year-end, we acquired additional debt of $25 million, as was described in the annual financial statements.

轉到財務狀況表。年底現金約為 5400 萬美元，債務為 4000 萬美元，淨營運資本盈餘為 1.16 億美元。如年度財務報表中所述，到年底後，我們獲得了 2500 萬美元的額外債務。

I'll close out by mentioning that management has made the decision to postpone the company's existing plans to develop its titanium plant until additional funds are made available either internally or externally. At this time, we continue to explore alternative debt financing or strategic association options with advisers, and we will provide an update as things progress.

最後，我將提及管理層已決定推遲公司現有的鈦工廠開發計劃，直到內部或外部獲得額外資金。目前，我們將繼續與顧問探討替代債務融資或戰略合作方案，我們將隨著事情的進展提供最新消息。

Let me now turn the call over to Paul.

現在讓我把電話轉給保羅。

Thanks, Ernest, and thanks, everyone, for joining today. Moving on to Slide 13. I'd like to briefly discuss our sales results for last year and move on to some very exciting developments in the vanadium sector. Annual sales where within our revised guidance range and we sold 11,091 tonnes of V2O5 equivalent in 2022, which included 1,057 tonnes of purchase materials. Sales for the year are down slightly compared to 2021, largely due to production impact throughout the year.

謝謝歐內斯特，也謝謝大家今天的加入。轉到幻燈片 13。我想簡要討論我們去年的銷售結果，然後繼續討論釩行業的一些非常令人興奮的發展。年銷售額在我們修訂後的指導範圍內，我們在 2022 年銷售了 11,091 噸 V2O5 當量，其中包括 1,057 噸採購材料。與 2021 年相比，全年銷售額略有下降，這主要是由於全年的生產影響。

As Ernest mentioned, our purchased product sales increased this year quite significantly in order to meet contractual obligations. However, as we begin to normalize production level, I expect purchase product sales to be lower in 2023. The improved logistical situation post-COVID should also help to increase sales throughout the gradual reduction of our stock levels.

正如歐內斯特所提到的，為了履行合同義務，我們今年採購的產品銷售額大幅增加。然而，隨著我們開始使生產水平正常化，我預計 2023 年採購產品的銷售額將會下降。COVID 後物流狀況的改善也應該有助於在我們的庫存水平逐漸降低的過程中增加銷售額。

Moving on to exciting developments in the Vanadium market. We are pleased with the recent strengthening of vanadium prices. And as of today, the benchmark price for V2O5 in Europe is trading just below $11 per pound. This compares to about $9.50 at the end of the previous year, and a 44% increase from the lows of 2022. This increase is due to healthy consumption from all key markets and especially in the high-purity sectors.

繼續關注釩市場令人振奮的發展。我們對近期釩價走強感到高興。截至今天，歐洲 V2O5 的基準價格交易價格略低於每磅 11 美元。相比之下，去年年底約為 9.50 美元，比 2022 年的低點增長了 44%。這一增長歸功於所有主要市場，尤其是高純度行業的健康消費。

Aerospace demand came back faster and stronger than anyone expected after the lows of 2020 to 2021 and are now back to pre-COVID levels. We're in an advantageous position as a key supplier of both high-grade V205 and V203 and are able to place more units in this sector, so as to benefit from the associated price premiums. We intend to capitalize on this demand growth for many years to come. However, the most significant change in consumption and future expectations is coming from the energy storage industry, especially in China, where new VRFB deployments could total around 2 gigawatt hour or approximately 10% of global vanadium output in 2023.

航空航天需求在 2020 年至 2021 年的低點後恢復得比任何人預期的更快、更強勁，現在已回到 COVID 之前的水平。作為高檔 V205 和 V203 的主要供應商，我們處於有利地位，並且能夠在該領域放置更多單元，從而從相關的價格溢價中獲益。我們打算在未來許多年利用這種需求增長。然而，消費和未來預期中最顯著的變化來自儲能行業，尤其是在中國，到 2023 年，新的 VRFB 部署總量可能約為 2 吉瓦時，約佔全球釩產量的 10%。

Additionally, recent announcements from China also indicate the potential for new VRFB manufacturing capacity of around 20 gigawatt hour over the coming years. As Daniel mentioned, Largo itself is at an inflection point, but I have to add that the vanadium industry is also at one as well. To supply this energy storage capacity and maintain the current level of consumption in our traditional markets, the vanadium industry would have to grow by over 100% over that period.

此外，中國最近發布的公告還表明，未來幾年新的 VRFB 製造能力可能達到約 20 吉瓦時。正如 Daniel 提到的，Largo 本身正處於拐點，但我必須補充一點，釩行業也處於拐點。為了提供這種儲能能力並維持我們傳統市場目前的消費水平，釩行業必須在此期間增長 100% 以上。

Already, according to Vanitec, a global vanadium organization, the VRFB sector was the second largest source of vanadium demand just after still in Q3 2022. Government support is also growing as long-duration energy storage is becoming a key priority towards decarbonization. Let's pause here and put this into perspective in terms of market overview.

根據全球釩組織 Vanitec 的數據，VRFB 行業已經成為僅次於 2022 年第三季度的第二大釩需求來源。隨著長期儲能成為脫碳的關鍵優先事項，政府的支持也在增加。讓我們在這裡暫停一下，從市場概覽的角度來看待這個問題。

As most of you are aware, the VRFB technology was invented in the 70s by a professor in Australia. From that point until the end of 2021, there have been approximately 400 megawatt-hours of VRFB installed across the globe. In 2022 alone, there was another 400 megawatt-hours of VRFB deployment, essentially doubling deployments in 1 year than all other deployments over the last 40 to 50 years.

眾所周知，VRFB 技術是 70 年代由澳大利亞一位教授發明的。從那時到 2021 年底，全球已安裝了大約 400 兆瓦時的 VRFB。僅在 2022 年，就有另外 400 兆瓦時的 VRFB 部署，與過去 40 至 50 年的所有其他部署相比，一年內的部署基本上翻了一番。

This is quite remarkable. But more importantly, it is estimated that another 2 gigawatt hours of VRFB will be installed in 2023, representing another 2.5x increase from the previous installation amount. Historically, VRFB has accounted for approximately 1% to 2% of global vanadium consumption. In 2022, that number is estimated to be around 6%. And in 2023, it could represent more than 10% of global consumption. I think it's safe to say that this is the definition of exponential growth.

這是非常了不起的。但更重要的是，預計 2023 年將再安裝 2 吉瓦時的 VRFB，比之前的安裝量再增加 2.5 倍。從歷史上看，VRFB 約佔全球釩消費量的 1% 至 2%。到 2022 年，該數字估計約為 6%。到 2023 年，它可能佔全球消費量的 10% 以上。我認為可以肯定地說這就是指數增長的定義。

At Largo, we're extremely excited about it, and it gives strong credence to the VRFB commercialization story, but also support our Vanadium supplier pillar with additional sources of demand. Historically, supply has been slow to respond to dramatic demand shocks, and it's important to position ourselves with the structural changes.

在 Largo，我們對此感到非常興奮，它為 VRFB 商業化故事提供了強有力的證據，同時也為我們的釩供應商支柱提供了額外的需求來源。從歷史上看，供應對劇烈的需求衝擊反應緩慢，因此讓我們自己適應結構性變化很重要。

Let's move on to another potential source of increased demand for vanadium sector, Largo Physical Vanadium or LPV. And entity, we are very proud of having created. As we said, it's a truly innovative tool for investors seeking exposure to a key metal and will be a cornerstone to assist Largo in advancing its clean energy strategy. LPV's net assets are now over 90% as in physical vanadium products and near-term delivery commitments. The launch of LPV in September 2022 coincided with lower vanadium price, which allowed us to purchase vanadium units at favorable market prices. As of March 8, LPVs is now CAD 2.56 per share, as 35% above the closing share price of CAD 1.9 on the same day.

讓我們繼續討論釩行業需求增加的另一個潛在來源，Largo Physical Vanadium 或 LPV。和實體，我們為創造了它而感到自豪。正如我們所說，對於尋求接觸關鍵金屬的投資者來說，這是一個真正的創新工具，並將成為幫助 Largo 推進其清潔能源戰略的基石。 LPV 的淨資產現在超過 90%，因為實物釩產品和近期交付承諾。 LPV 於 2022 年 9 月推出，恰逢釩價較低，這使我們能夠以有利的市場價格購買釩裝置。截至 3 月 8 日，LPVs 現為每股 2.56 加元，比同日收盤價 1.9 加元高出 35%。

Keeping the LPV app on, we believe our extreme not to share price discount offers current and new investors an attractive investment case and closing this disconnect is now LPV's key focus. We are now working on a broad marketing and communication campaign to raise awareness and its investment proposal going forward.

保持 LPV 應用程序的運行，我們相信我們的極端不股價折扣為現有和新投資者提供了一個有吸引力的投資案例，並且關閉這種脫節現在是 LPV 的重點。我們現在正在開展廣泛的營銷和傳播活動，以提高認識和推進其投資建議。

I'll stop there and turn it back to Daniel.

我會在那裡停下來，然後把它轉回給丹尼爾。

Thank you, Paul. Before moving into Q&A, I want to highlight Slide 14 that summarizes our key priorities for 2023. As I mentioned at the beginning of this call, the return of a normalized production level, cost control in advancing our clean energy divisions remains front and center in the ensuing year. This comes on the back of increased demand in the vanadium sector and a very healthy demand outlook for the future for both the commodity and the new global VRFB deployments. By successfully achieving all these priorities, we hope to reach the end of 2023 with a solid foundation to maximize shareholder value of the company.

謝謝你，保羅。在進入問答環節之前，我想強調幻燈片 14，它總結了我們 2023 年的主要優先事項。正如我在本次電話會議開始時提到的，恢復正常生產水平、推進清潔能源部門的成本控制仍然是我們的首要任務和中心接下來的一年。這是因為釩行業的需求增加以及商品和新的全球 VRFB 部署的未來需求前景非常健康。通過成功實現所有這些優先事項，我們希望到 2023 年底為實現公司股東價值最大化奠定堅實的基礎。

With that, let's go ahead and open it up for questions.

有了這個，讓我們繼續並打開它來提問。

(Operator Instructions) Our first question comes from the line of Andrew Wong with RBC Capital Markets.

（操作員說明）我們的第一個問題來自加拿大皇家銀行資本市場公司的 Andrew Wong。

So I just wanted to ask about Ansaldo and the potential partnership there a little bit more to the degree that you can talk about it before an actual agreement is concluded. Can you -- maybe just provide a little bit more detail on how potential partnership might work, what does Ansaldo bring? What does Largo bring? And like what's your plan for kind of growing that business in Europe?

所以我只是想問問關於 Ansaldo 和那裡的潛在合作夥伴關係的問題，你可以在達成實際協議之前談論它。你能不能 - 也許只是提供更多關於潛在合作夥伴關係如何運作的細節，Ansaldo 帶來了什麼？ Largo 帶來了什麼？以及您在歐洲發展該業務的計劃是什麼？

Thank you, Andrew. I think I can start by saying that we believe that any potential deal with Ansaldo would be a very significant milestone and catalyst for the organization. Ansaldo brings a number of things to the table, but not least of which is their industrial capacity, they're technical now, the know-how in the energy industry. So we look forward to hopefully completing a successful joint venture arrangement with them. It would be a traditional JV type structure, basically 50-50, where Ansaldo will fund some of the early development costs and start-up costs to some degree and after that point share equally in the operations of the business and its outcome.

謝謝你，安德魯。我想我可以首先說，我們相信與 Ansaldo 的任何潛在交易都將成為該組織的一個非常重要的里程碑和催化劑。安薩爾多帶來了很多東西，但其中最重要的是他們的工業能力，他們現在是技術人員，是能源行業的專有技術。因此，我們期待與他們成功完成合資安排。這將是一個傳統的 JV 類型結構，基本上是 50-50，Ansaldo 將在一定程度上資助一些早期開發成本和啟動成本，然後平均分享業務運營及其成果。

So we think that the ability of Ansaldo to engender and enable our European business is very significant. So we are extremely excited about it. The deal is not done yet. There are certainly no guarantees, but our negotiations have been very strong. We have a great relationship with Ansaldo. So we look forward to hopefully having a very positive outcome there.

因此，我們認為 Ansaldo 產生和支持我們歐洲業務的能力非常重要。所以我們對此感到非常興奮。交易尚未完成。當然沒有任何保證，但我們的談判非常有力。我們與 Ansaldo 有著良好的關係。因此，我們期待在那裡取得非常積極的成果。

That's great. And then maybe just for Paul here. You talked a little bit about vanadium prices and strength. Maybe just discuss a little bit more about what -- how much of that -- the recent strength is attributed to things like China reopening or the battery project that's being built there. And how sustainable are current prices right now?

那太棒了。然後也許只是為了保羅。您談到了釩的價格和強度。也許只是多討論一下什麼——其中有多少——最近的強勢歸因於中國重新開放或在那裡建造的電池項目等事情。當前價格的可持續性如何？

Sure. Thanks, Andrew. It's always very hard to predict where prices are going. But being in the vanadium market every day, I'm very confident looking at the number. Demand in our traditional market essentially steel and chemicals is strong. And then there is a lot of reasons to be happy about these numbers. But the outliers there are 2. One is the aerospace industry. We have to think back about 2, 3 quarters ago. The aerospace industry was still suffering from the effect of COVID. And it was the [general] industry expectation that there will be a gradual recovery to pre-COVID level and will be there by 2025 to 2026.

當然。謝謝，安德魯。預測價格走勢總是非常困難。但是每天都在釩市場上，我非常有信心看著這個數字。我們的傳統市場主要是鋼鐵和化學品的需求強勁。然後有很多理由對這些數字感到高興。但異常值有 2 個。一個是航空航天業。我們必須回想一下 2、3 個季度前。航空航天業仍在遭受 COVID 的影響。並且 [普遍] 行業預期將逐漸恢復到 COVID 前的水平，並將在 2025 年至 2026 年恢復。

Six months later, I think everyone in the industry is convinced that we'll be back to 2020 -- to pre-COVID level this year, right? So we really accelerated that recovery by 2 to 3 years, which is an extremely good news for us, a challenge to adapt, but definitely a great opportunity in front of us. The other outlier, as I mentioned during my part of the call is VRFB, the growth in deployment of Vanadium Redox Flow Battery and the growth in capacity to build this battery has just been nothing short of the amazing. They are planning over 2 gigawatt hours to be deployed in 2023. 2 gigawatt hour will represent a roughly 20,000 tonnes of V2O5 equivalent. That's a 10% of the world production. That's truly amazing, right? We're coming from 1% to 2% of the vanadium industry just a few years ago to about 10%.

六個月後，我認為業內每個人都相信我們將回到 2020 年——今年回到 COVID 之前的水平，對嗎？所以我們真的把復甦加快了 2 到 3 年，這對我們來說是一個極其好的消息，一個適應的挑戰，但絕對是擺在我們面前的一個很好的機會。另一個異常值，正如我在電話會議中提到的那樣，是 VRFB，釩氧化還原液流電池部署的增長以及建造這種電池的能力的增長簡直令人驚嘆。他們計劃在 2023 年部署超過 2 吉瓦時。2 吉瓦時相當於大約 20,000 噸 V2O5 當量。那是世界產量的 10%。這真的很了不起，對吧？幾年前，我們佔釩行業的 1% 至 2%，現在約為 10%。

So it's truly amazing growth. The amount of the capacity that is being built is also mind blowing. There's about 20 gigawatt hour of new capacity announced just in the month of February. So yes, we I think the current price level are justified that there is nothing in the market that is telling us that things will be slowing down. And as I said, it's hard to predict where it's going to go, but we feel very comfortable with the state of demand at this stage.

所以這真是驚人的增長。正在建設的容量數量也令人震驚。僅在 2 月份就宣布了大約 20 吉瓦時的新產能。所以是的，我們認為目前的價格水平是合理的，市場上沒有任何東西告訴我們事情會放緩。正如我所說，很難預測它將走向何方，但我們對現階段的需求狀況感到非常滿意。

Okay. And then maybe just one quick follow-up on the China [VFRB]. Like do we know if they have vanadium already secured? Or is that something that they might be purchasing in the market? Like how does that impact today?

好的。然後也許只是對中國 [VFRB] 的快速跟進。就像我們知道他們是否已經獲得釩一樣？或者這是他們可能在市場上購買的東西？這對今天有何影響？

Yes, it's a very good question. Just as a background, China produces and consume about 55% of the vanadium units globally, right? So it's really by far the largest market globally. So they are the unit, right? They have enough units to cater through the [VFRB]. But unless there's a significant change in supply structure, which no one think can happen in the short term. There's going to be extra demand that will have to be met by extra supply. And if China becomes a net importer in the quarters to come. It's a possibility.

是的，這是一個很好的問題。作為背景，中國生產和消費了全球約 55% 的釩單位，對嗎？所以它確實是迄今為止全球最大的市場。所以他們是單位，對吧？他們有足夠的單位來滿足 [VFRB] 的需求。但除非供應結構發生重大變化，否則任何人都認為這不會在短期內發生。將會有額外的需求，必須通過額外的供應來滿足。如果中國在未來幾個季度成為淨進口國。這是一種可能性。

China over the past few years has been either marginal exporter or marginal importer, very balanced market. It could be that yes, the China becomes as important, but we will see what happens in the coming quarters. There are some good official statistics about that, that we follow very closely. But yes, China has a lot of vanadium resources, but if they need an extra more than 10% units, the structure of the market will have to change.

中國過去幾年要么是邊際出口國，要么是邊際進口國，市場非常平衡。可能是的，中國變得同樣重要，但我們將看到未來幾個季度會發生什麼。關於這一點，有一些很好的官方統計數據，我們會密切關注這些數據。但是，是的，中國有很多釩資源，但如果他們需要額外超過 10% 的單位，市場結構將不得不改變。

Heiko Ihle with H.C. Wainwright.

Heiko Ihle 與 H.C.溫賴特。

Can you hear me all right?

你能聽到我說話嗎？

Yes. Great. Thank you.

是的。偉大的。謝謝。

Perfect. In 2022, the company's net loss included about $15 million of nonrecurring stuff. Q4 was $6.3 million of that. We're 2 weeks away from the end of Q1. I mean, given the fairly large and consistent numbers. Is there any nonrecurring but cash expenses that we should expect to see in Q1?

完美的。 2022 年，該公司的淨虧損包括約 1500 萬美元的非經常性虧損。第四季度是其中的 630 萬美元。我們距離第一季度末還有 2 週的時間。我的意思是，鑑於相當大且一致的數字。我們應該在第一季度看到任何非經常性但現金的支出嗎？

Well, Heiko, at every reporting period, end of period, we would do NRV analysis on inventories, et cetera. But there's nothing that we were anticipating at this stage. So that's certainly something that we should plan for.

好吧，Heiko，在每個報告期、期末，我們都會對庫存等進行 NRV 分析。但在這個階段我們沒有期待任何事情。所以這當然是我們應該計劃的事情。

Got it. Okay. And since I got you, anyways, I mean you gave a little bit of color on the ilmenite project earlier on this call, then everything is on track, everything is fine. And I know you'll be giving guidance after commissioning of the plan, but can you just maybe give a bit of color on what's been spent year-to-date? And then also maybe just go through the requirements of cash spend by quarter, if you could?

知道了。好的。既然我找到了你，無論如何，我的意思是你早些時候在這次電話會議上對鈦鐵礦項目做了一點顏色，然後一切都步入正軌，一切都很好。而且我知道您會在計劃調試後提供指導，但您能否對今年迄今花費的內容進行一些說明？然後，如果可以的話，也許還可以按季度檢查現金支出的要求？

Yes. So I'm not going to be able to do cash spend by quarter. But last year on the ilmenite side, we spent just shy of $19 million. And our guidance is 19 to -- guidance was $19 million to $21 million. And then remaining to be spent this year, we're looking at another $17.5 million to $18.5 million to be spent this year, relatively even, I guess, ultimately, between Q1 and Q2 because we're supposed to be up and running and selling ilmenite by Q3 of this year. So I hope that gives some color.

是的。所以我無法按季度進行現金支出。但去年在鈦鐵礦方面，我們花費了將近 1900 萬美元。我們的指導是 19 到 - 指導是 1900 萬美元到 2100 萬美元。然後今年還有待支出，我們正在考慮今年再支出 1750 萬至 1850 萬美元，我想最終會在第一季度和第二季度之間相對平均，因為我們應該啟動並運行和銷售今年第三季度鈦鐵礦。所以我希望能給一些顏色。

We'll go next to Gordon Lawson with Paradigm Capital.

我們將與 Paradigm Capital 的戈登勞森一起去。

Pretty simple question for you here. The lower recoveries at the mill. Was that simply a reflection of processing a stockpile material?

在這裡問你一個非常簡單的問題。工廠的回收率較低。這僅僅是處理庫存材料的反映嗎？

I think it's a function of stockpile material and the actual progression through the pit at the time because we couldn't access higher-grade magnitude at the bottom of the pit due terrains, it had some impact. So I wouldn't overstate it, but I'll hand it over to Daniel that may have some additional color on this.

我認為這是儲存材料和當時通過坑的實際進展的函數，因為由於地形我們無法在坑底獲得更高等級的震級，它產生了一些影響。所以我不會誇大它，但我會把它交給丹尼爾，他可能對此有一些額外的顏色。

It's a matter of the combination between disseminated material that, as you know, has lower magnetics and massive material who has the highest magnetics. So when you mix the blending between disseminated and the massive material, that's when you have an effect in the recovery of the [kiln]. So that is something that we're working right now in order to keep the right blending and you can keep the right blending when you have these stockpiles from when you can reach that combination of different materials, but sometimes recoveries are being affected when you don't have the right blending.

如您所知，這是磁性較低的散佈材料與磁性最高的大塊材料之間的組合問題。因此，當您將散佈的材料和塊狀材料混合在一起時，就會對 [窯爐] 的恢復產生影響。所以這是我們現在正在努力的事情，以保持正確的混合，當你有這些庫存時，你可以保持正確的混合，當你可以達到不同材料的組合時，但有時當你不這樣做時，恢復會受到影響'有正確的混合。

Okay. And my second, if I may, are we at or around the current run rate for ferrovanadium production? Or do you expect that to fluctuate the market?

好的。我的第二個問題是，如果可以的話，我們是否處於或接近當前釩鐵生產的運行速度？還是您認為這會引起市場波動？

No. We had lower production as everyone is aware, in Q1 from the leftover impacts of the rainfall, but we are back up and running. And so we're not predicting any variation of deviance from ferrovanadium production. We produced V2O5 and send that off for conversion at ferrovanadium converters, but the amount of ferro, let's say, that we are anticipating selling for the year is still roughly the same, no change.

沒有。眾所周知，第一季度由於降雨的遺留影響，我們的產量較低，但我們已經恢復運行。因此，我們不會預測釩鐵生產的任何偏差變化。我們生產了 V2O5 並將其發送到釩鐵轉換器進行轉換，但是鐵的數量，比方說，我們預計今年的銷售量仍然大致相同，沒有變化。

It's been not change at all. Basically, the affectation of the heavy rain with a lot of stress on the sequence of mining at the open pit. But right now in the month of February, we are almost back to normal. And our intention with described during my presentation was that our intention is to try to normalize operation as we move along during the year.

一點都沒有變。基本上，大雨對露天礦開採順序的影響很大。但就在二月份，我們幾乎恢復了正常。在我的演講中描述的我們的意圖是，我們的意圖是隨著我們在這一年的進展而努力使運營正常化。

We'll go next to Carlos De Alba with Morgan Stanley.

我們將與摩根士丹利一起去 Carlos De Alba。

Yes. I just had one question. Would you mind sharing with us how much of the electrolyte -- pure vanadium electrolyte that is going to go into the Enel Green Power Spain battery will be produced or has been produced by Largo Clean Energy. Is it 100% of that electrolyte?

是的。我只有一個問題。您介意與我們分享 Largo Clean Energy 將生產或已經生產多少電解液——用於 Enel Green Power Spain 電池的純釩電解液嗎？是 100% 的電解質嗎？

It's 100% with one small caveat. When we acquired the assets of VionX back in the day, some of the assets we acquired with some inventories of electrolyte. And so we've actually used some of it in this particular project, but largely it's coming from LCEs own production.

這是 100%，但有一個小警告。當我們當天收購 VionX 的資產時，我們收購的一些資產有一些電解液庫存。所以我們實際上在這個特定項目中使用了其中的一些，但主要來自 LCE 自己的產品。

But -- so that's coming from the stock past, if I understood correctly. Are you currently in a position to produce that electrolyte yourselves? Would you have to rely on third-party purchases?

但是 - 如果我理解正確的話，那是來自過去的股票。您目前能夠自己生產這種電解液嗎？您是否必須依賴第三方購買？

Yes. So we would purify electrolyte. So the first stage of electrolyte production, we would send to third parties to produce the electrolyte from vanadium that we provide to them. And then we have patent purification processes to further refine that electrolyte. So again, it's a mixed bag answer.

是的。所以我們會淨化電解質。因此，在電解液生產的第一階段，我們將發送給第三方，用我們提供給他們的釩生產電解液。然後我們有專利的提純工藝來進一步提煉電解液。所以，這又是一個混雜的答案。

And is there a reason why you are not able to produce the 100% of the process in-house or do 100% of processing in-house?

為什麼您不能在內部生產 100% 的過程或在內部進行 100% 的加工？

No, we could certainly choose to do it. It's basically just a very simple chemical process, the first part of the process. So we send it to toll-converters right now because it's very cheap to do that. And it's not consequential to the overall process. But if we wanted to spend a couple of million to buy some tanks and do some mixing ourselves, we could do so. But it's not key or critical to the process.

不，我們當然可以選擇這樣做。它基本上只是一個非常簡單的化學過程，是過程的第一部分。所以我們現在將它發送給收費轉換器，因為這樣做非常便宜。而且它對整個過程沒有影響。但如果我們想花幾百萬買一些罐子，自己做一些混合，我們可以這樣做。但這對流程來說不是關鍵或關鍵。

We'll go next to Steve Silver with Argus Research.

接下來我們將與 Argus Research 的 Steve Silver 一起討論。

I appreciate all the details in the prepared remarks and between that and the Q&A so far, most of my questions have already been asked. But I was hoping if you could just ask broadly, if you could provide any color on quantifying the high demand in the aerospace market. Just as it relates to the overall production capacity for the company, just trying to size up the potential to recognize the premium for the high-purity market in the total products sold.

我很欣賞準備好的評論中的所有細節，在評論和問答之間，我的大部分問題都已經被問到了。但我希望你是否可以廣泛地詢問，是否可以提供任何顏色來量化航空航天市場的高需求。正如它與公司的整體生產能力有關，只是試圖評估在銷售的總產品中識別高純度市場溢價的潛力。

Yes, sure. Thanks, Steve. As I would say, the aerospace industry is expected to get back to pre-COVID levels this year. We can expect around 5,000 to 6,000 [MTV]. So about -- I would say, 10,000 to 12,000 tonnes of V2O5 equivalent required by this industry this year. Largo's total capacity -- nameplate capacity is around 12,000 tonnes. And we have the largest capacity globally for high purity production. So essentially, I think with our entire production, we could cover the whole demand. Obviously, we won't be able to do that. We have a competition in the market, but I'm very confident that this year, Largo will be the largest supplier to the aerospace industry. So it's our target we have the capacity in-house to supply close to the entire market, and we will do our best to perform in this market.

是的，當然。謝謝，史蒂夫。正如我所說，航空航天業有望在今年恢復到 COVID 之前的水平。我們可以預期大約 5,000 到 6,000 [MTV]。那麼 - 我會說，今年這個行業需要 10,000 到 12,000 噸 V2O5 當量。 Largo 的總產能——銘牌產能約為 12,000 噸。我們擁有全球最大的高純度生產能力。所以基本上，我認為通過我們的整個生產，我們可以滿足整個需求。顯然，我們無法做到這一點。我們在市場上有競爭，但我非常有信心，今年 Largo 將成為航空航天業最大的供應商。所以我們的目標是我們有能力在內部供應接近整個市場的產品，我們將盡我們最大的努力在這個市場上表現。

Great. That's helpful. And one last one. Just trying to size up as you move forward with the clean energy business and getting close to servicing one deal potentially establishing the JV for other opportunities. Given the potential for long contracting for new opportunities in the space, just trying to get a sense of how you look at the progress in the clean energy business in terms of when you might expect recognition from the market as you continue to execute on that plan.

偉大的。這很有幫助。還有最後一個。只是在您推進清潔能源業務時嘗試擴大規模，並接近完成一項可能建立合資企業以獲得其他機會的交易。考慮到該領域新機會的長期合同的潛力，只是想了解您如何看待清潔能源業務的進展，在您繼續執行該計劃時，您預計何時會得到市場的認可.

Sure. You're 100% correct. The negotiation and the commissioning and construction of these projects take a long time. So we're very hopeful and anticipatory around our ability to enter into contracts at some point this year, but you would not see those contracts being delivered until earliest next year, and some of them maybe even 2 years out. But during that time, obviously, you would be constructing and involved in any number of those projects. So we're working hard on that right now. we're very optimistic that could come from a number of sources. We have potential projects in the wing should the joint venture actually see fruition. And we're talking with other parties in the U.S. as well on potential projects as well, which are all ongoing. So we have to bring some good news to the market in the future.

當然。你是 100% 正確的。這些項目的談判和投產建設耗時較長。因此，我們對我們在今年某個時候簽訂合同的能力充滿希望和期待，但您要到明年最早才能看到這些合同交付，其中一些甚至可能需要 2 年時間。但顯然，在那段時間裡，你會構建並參與其中的任何數量的項目。所以我們現在正在為此努力。我們非常樂觀，這可能來自多個來源。如果合資企業真正看到成果，我們有潛在的項目。我們也在與美國的其他各方就潛在項目進行談判，這些項目都在進行中。因此，我們必須在未來為市場帶來一些好消息。

We'll go next to Jim Young with Midwest Investments.

我們將與 Midwest Investments 一起去 Jim Young 旁邊。

And Daniel, likes to have you aboard Largo. My first question really is can we talk about the high purity marketplace. What's your definition of high purity, please? And secondly is what price premium are you realizing for the current high -- probably high-purity premium?

丹尼爾喜歡帶你登上 Largo。我的第一個問題真的是我們能談談高純度市場嗎？請問您對高純度的定義是什麼？其次，對於當前的高價——可能是高純度溢價，你實現了多少價格溢價？

Thank you, Jim. Paul, can you take care of that?

謝謝你，吉姆。保羅，你能處理好嗎？

Sure. Jim, there's no clear cut definition of high purity, but essentially, it's a grade that is above what is required by the steel industry to have a broad range in V2O5 equivalent if they are grade between 99% plus and 99.5% plus. To your -- what is also very important in the high-purity product is the low contaminant. So low impurities. To your question on premium, as you can imagine, it is extremely confidential, very, very key aspects of our negotiation with our customers. So I won't be able to share that. What I can share, though, is that different customers have different specification in terms of V2O5 purity and also contaminant allowance.

當然。 Jim，高純度沒有明確的定義，但本質上，如果 V2O5 含量介於 99% 以上和 99.5% 以上之間，那麼它是一個高於鋼鐵行業要求的等級，具有廣泛的 V2O5 當量範圍。對您來說，高純度產品中同樣非常重要的是低污染物。這麼低的雜質。對於您關於溢價的問題，您可以想像，這是我們與客戶談判的極其機密、非常、非常關鍵的方面。所以我不能分享那個。不過，我可以分享的是，不同的客戶在 V2O5 純度和污染物容許量方面有不同的規格。

And the higher the requirement is the higher the premium. So there is a fairly wide range depending on specific application in the aerospace chemical and Vanadium redox flow battery applications.

而且要求越高保費越高。因此，根據航空航天化學和釩氧化還原液流電池應用中的具體應用，存在相當廣泛的範圍。

Okay. And the second question is pertains to is back to the electrolyte issue because it seems that they -- the way you describe it, you're not really producing any electrolyte, but you're actually taking your vanadate, your V2O5 that you produce at the Maracás facility in Brazil, and you're sending that to an outside third party, and they're making the electrolyte and you're kind of cleaning it up. Also could you just explain how this is going to work going forward?

好的。第二個問題與電解質問題有關，因為看起來它們——按照你描述的方式，你並沒有真正生產任何電解質，但你實際上是在服用釩酸鹽，你生產的 V2O5巴西的 Maracás 工廠，你將其發送給外部第三方，他們正在製造電解液，而你正在清理它。另外，您能否解釋一下這將如何進行？

It's correct, Jim. So [industry] while, let's say, volumes are low, you wouldn't expand the capital cost to create your own mixing for the first stage, which is just producing the electrolyte. Again, it's a simple chemical process. So you send that off to toll converters and thereafter, we put it through our patent purification process. And there are 2 steps to it. But if you have sufficient volumes and a number of different contracts then we would spend some additional CapEx to actually have the first part of the process in-house as well. So I don't think you'd start with it, but eventually, you'd have it in ours as well.

這是正確的，吉姆。因此，[工業]雖然體積很低，但你不會增加資本成本來為第一階段創造你自己的混合，這只是生產電解質。同樣，這是一個簡單的化學過程。因此，您將其發送到收費轉換器，然後，我們將其通過我們的專利純化過程。並且有 2 個步驟。但是，如果您有足夠的數量和許多不同的合同，那麼我們將花費一些額外的資本支出來實際在內部進行流程的第一部分。所以我不認為你會從它開始，但最終，你也會擁有它。

Okay. So is the -- where the -- the vanadium that you're delivering to get this converted to the electrolyte is happening in Europe or in Brazil or where this burns taking place? And is this being clean [energy] facility in Boston? Or what -- can you say that it's getting further defined in Boston? Is it happening in Boston?

好的。那麼 - 您正在交付以將其轉化為電解質的釩是在歐洲或巴西發生的，還是在發生這種燃燒的地方發生的？這是波士頓的清潔[能源]設施嗎？或者什麼——你能說它在波士頓得到進一步定義嗎？它發生在波士頓嗎？

So we -- we currently have a facility in Boston to do that, that's correct. But once you enter into contracts, logistics are very important. So you would likely, in the absence of having your own first stage of the process probably use of toll converters in whichever region your project is in. And then we have the ability to actually put in place institute on site or electrolyte purification. So you would not send it back to Massachusetts and then back to the project, let's say, if it was in Europe, you would actually do the purification close to the project. So logistics super important, but it would not go back and forth to our Wilmington facility. That's just where we have it right now.

所以我們 - 我們目前在波士頓有一個設施可以做到這一點，這是正確的。但是一旦簽訂合同，物流就非常重要。因此，如果您沒有自己的流程的第一階段，您可能會在您的項目所在的任何地區使用收費轉換器。然後我們有能力實際建立現場機構或電解液淨化。所以你不會把它送回馬薩諸塞州，然後再送回項目，比方說，如果它在歐洲，你實際上會在項目附近進行淨化。所以物流非常重要，但它不會來回我們的威爾明頓工廠。這就是我們現在擁有它的地方。

You will save a lot of money, Jim, by doing the conversion close to the -- where the site of the project is otherwise you're moving liquid from Boston or from Brazil to the different places where you are building batteries in order to save cost, it's much better to have all this conversion of the electrolyte, where the project is. And that is in the intention that we're planning into the near future.

吉姆，通過在靠近項目地點的地方進行轉換，你會節省很多錢，否則你要將液體從波士頓或巴西轉移到你建造電池的不同地方以節省成本，在項目所在的地方進行所有這些電解液轉換要好得多。這就是我們計劃在不久的將來的意圖。

We'll go next to [Bryan Robson] with Breakout Investors.

我們將與 Breakout Investors 一起去 [Bryan Robson]。

Your -- the first question is for Paul, and it's kind of a 2-part question. Your -- the market price for both Q3 '22 and Q4 '22 was relatively consistent. And your realized price was about $1 or less quarter-over-quarter. And then as we look back a couple of quarters before that, your realized price was higher than your -- the market price for each of the last 2 quarters, and then it was lower this quarter. Can you first explain why you had the drop in realized price in Q4? And then how we should be looking at realized price versus market price as we enter into 2023?

你的第一個問題是給保羅的，這是一個由兩部分組成的問題。你的——22 年第三季度和 22 年第四季度的市場價格相對一致。你實現的價格環比約為 1 美元或更少。然後當我們回顧之前的幾個季度時，您的實際價格高於您的 - 過去兩個季度中每個季度的市場價格，然後本季度較低。你能先解釋一下為什麼第四季度的實際價格下降了嗎？然後，當我們進入 2023 年時，我們應該如何看待實際價格與市場價格？

Sure, Brian. I think there's 2 main points that I'd like to make on your question. Number one is the timing, right? And you're right in saying that sometimes our realized price is not perfectly aligned with the market price. And that's because the vast majority of our contracts are based on the quotation of payers that trade 1 to 2 months the actual market price.

當然，布賴恩。關於你的問題，我認為有兩點要點。第一是時機，對吧？你說得對，有時我們的實際價格與市場價格並不完全一致。那是因為我們的絕大多數合同都是基於與實際市場價格交易 1 到 2 個月的付款人的報價。

I'll give you a simple example. When we deliver material this month, let's say, in March, at the time of delivery, most of our contracts will be some sort of a formula based on the February price so that when we deliver the material, the price is known, right? So at the end of the day, over a long period of time, we follow exactly the trend, but we're just training. So that's the first thing on time line. It is sometimes not perfectly adjusted.

我會給你一個簡單的例子。當我們本月交付材料時，比方說，在 3 月，在交付時，我們的大部分合同將是某種基於 2 月價格的公式，因此當我們交付材料時，價格是已知的，對嗎？所以在一天結束的時候，在很長一段時間內，我們完全跟隨趨勢，但我們只是在訓練。所以這是時間線上的第一件事。它有時沒有完全調整。

The second answer that I'd like to make, and you've said it in some quarters, we make slightly lower and sometimes slightly higher than the published price. It's because I think what most people are looking at is the published vanadium pentoxide price, right? But a large portion of our sales are done on a ferrovanadium price, right? ferrovanadium is the product that goes into the steel industry. These 2 indexes are very correlated. But depending on supply and demand situation from time to time, they vary. Currently, ferrovanadium on the vanadium unit basis is trading at a deep discount to V2O5, right?

我想做的第二個答案，你在某些方面已經說過，我們的價格比公佈的價格略低，有時略高。因為我覺得大部分人看的是公佈的五氧化二釩價格吧？但是我們的很大一部分銷售是按釩鐵價格完成的，對嗎？釩鐵是進入鋼鐵行業的產品。這兩個指標非常相關。但根據不時的供需情況，它們會有所不同。目前，以釩為單位的釩鐵交易價格較 V2O5 大幅折扣，對嗎？

So for V2O5 sales, we're getting a better price on a unit basis compared to ferrovanadium sales. It was not always the case. Last year, ferrovanadium was trading at a premium to V2O5. But that probably explains the first part of your question. If you're only looking at one index, it's difficult to give the full picture. You need to look at the various indexes. And by the way, we sell products in Europe. We sell products in Asia, we sell product in the U.S. and all these regions have different pricing from time to time, very correlated over a long period of time. But at a specific point of time, there could be very significant premium or discount. So if you're only looking at one index or one product in one region, you don't always get the full picture.

因此，對於 V2O5 銷售，與釩鐵銷售相比，我們在單位基礎上獲得了更好的價格。情況並非總是如此。去年，釩鐵的交易價格高於 V2O5。但這可能解釋了你問題的第一部分。如果您只看一個指數，則很難給出全貌。您需要查看各種索引。順便說一句，我們在歐洲銷售產品。我們在亞洲銷售產品，在美國銷售產品，所有這些地區不時有不同的定價，在很長一段時間內非常相關。但在特定時間點，可能會出現非常顯著的溢價或折價。因此，如果您只查看一個地區的一個指數或一種產品，您並不總能了解全貌。

Okay. And this question is for Ernest. The product acquisition costs, it's something that you don't provide guidance on. It was $24 million in 2022, and that's $24 million that you're not getting margin on. And I guess my question has 2 parts to it again is what is the amount of purchased inventory that you have on hand at 12/31. And at this point in time, I think you'd have a good feel as to how much purchased inventory you'd have in Q1. And I'm guessing that you perhaps have a bit more just because of the low production of late. So if you can comment on that.

好的。這個問題是給歐內斯特的。產品購置成本，這是你沒有提供指導的東西。 2022 年是 2400 萬美元，而這 2400 萬美元是你沒有獲得利潤的。我想我的問題又分為兩個部分，即您在 12 月 31 日手頭的採購庫存量是多少。在這個時間點，我認為你對第一季度有多少採購庫存有很好的感覺。而且我猜你可能有更多只是因為最近產量低。所以，如果你可以對此發表評論。

Yes. So let me just quickly deal with the actual acquisition cost. It is not something to be concerned about because think of it as essentially a wash. So there is a cost for it, but you're earning the revenue at the same time. The only times that we do that is, for instance, when we've run into issues on logistics, where there are delivery time lines that are different from what was anticipated. And this was especially true in 2022 you're sometimes forced to go out into the market and purchase material to make sure that you fulfill your contractual obligations.

是的。因此，讓我快速處理實際購置成本。這不是什麼值得擔心的事情，因為將其視為本質上的洗滌。所以這是有成本的，但你同時也在賺取收入。例如，當我們遇到物流問題時，我們唯一這樣做的時候，交貨時間線與預期的不同。在 2022 年尤其如此，您有時會被迫進入市場購買材料，以確保履行合同義務。

But it's not a method for us to essentially trade in the market. It really just fulfills a practical necessity. So last year, we actually made money on purchase material, but that wasn't our plan. We made in the region and Paul can elucidate on it as well. But we probably made $4 million on that material last year. It wasn't our plan to trade -- it just -- it was pure happenstance at the time that we purchased the product and sold it later, we've gotten again.

但這不是我們在市場上進行本質交易的方法。它真的只是滿足了實際需要。所以去年，我們實際上在採購材料上賺了錢，但這不是我們的計劃。我們在該地區製造，Paul 也可以對此進行說明。但去年我們可能在該材料上賺了 400 萬美元。這不是我們的交易計劃——它只是——在我們購買產品並稍後出售時純屬偶然，我們又得到了。

So I would not focus on it, and we certainly don't plan for it or budget for it. At this stage, our objective is to sell what we produce. And if there is some unforeseen or untoward event that requires us to go and purchase in the market, we will do so.

所以我不會專注於它，我們當然不會為此做計劃或預算。在這個階段，我們的目標是銷售我們生產的產品。如果有一些不可預見或不幸的事件需要我們去市場購買，我們會這樣做。

But it's not something that we forecast or even anticipate. In terms of what's at hand at year-end, it's about 400 -- just over 400 tonnes right now. We've already taken whatever NRV write-down would have been required at the end of December. So in theory, we look forward when we're preparing the year-end financial statements, we already know what we would have made on the material.

但這不是我們預測甚至預期的事情。就年底手頭的庫存而言，大約有 400 噸——目前剛剛超過 400 噸。我們已經採取了 12 月底所需的任何 NRV 減記。所以從理論上講，我們期待在準備年終財務報表時，我們已經知道我們會在材料上做出什麼。

So you don't make additional gains or losses on the material there again a wash. So it's not something that I would have investors focus on. It really does only serve a practical purpose. It's not there is trading mechanism or a way for us to make additional profits, even though we may have made some profits last year on that.

這樣你就不會在材料上再洗一洗就產生額外的收益或損失。所以這不是我會讓投資者關注的事情。它確實僅用於實際目的。它沒有交易機製或方法讓我們賺取額外的利潤，即使我們去年可能已經從中賺取了一些利潤。

Also, we didn't have any purchases in the fourth quarter of last year. And none has happened during January and February of this year. What is happening is that right now, we are just selling and disposing of the inventory we have from last year, and most of that will disappear in the first quarter or first 4 months of 2023.

此外，我們在去年第四季度沒有任何採購。今年一月和二月期間沒有發生任何事情。目前的情況是，我們只是在出售和處理去年的庫存，其中大部分將在 2023 年第一季度或前 4 個月消失。

And that does conclude the Q&A portion of the call. I would like to turn the presentation back over to Alex Guthrie.

這確實結束了電話的問答部分。我想將演示文稿轉回給 Alex Guthrie。

Thanks, operator. And I just want to say thanks again for everyone who has joined the call today. That concludes our Q&A session and the quarterly investor call. Have a great day, everyone. Take care.

謝謝，運營商。我只想再次感謝今天加入電話會議的所有人。我們的問答環節和季度投資者電話會議到此結束。祝大家有個美好的一天。小心。

This does conclude today's call. You may now disconnect.

今天的電話會議到此結束。您現在可以斷開連接。