Largo Inc (LGO) 2023 Q3 法說會逐字稿

Good day, and thank you for standing by. Welcome to Largo's third-quarter 2023 financial results conference call. (Operator Instructions)

美好的一天，感謝您的支持。歡迎參加 Largo 2023 年第三季財務業績電話會議。 （操作員說明）

I would now like to hand the conference over to your speaker today, Alex Guthrie, Senior Manager of External Relations. Please go ahead.

現在我想將會議交給今天的發言人，對外關係高級經理 Alex Guthrie。請繼續。

Good morning, everyone. Thank you for attending Largo's third-quarter financial results conference call. Largo's Q3 financial statements, related MD&A, and most recent AF can be accessed on our website at largoinc.com, as well as on SEDAR+ and EDGAR.

大家，早安。感謝您參加 Largo 第三季財務業績電話會議。 Largo 第三季的財務報表、相關 MD&A 以及最新的 AF 可在我們的網站 largoinc.com 以及 SEDAR+ 和 EDGAR 上存取。

Before continuing the call, I would like to remind you 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，我想提醒您，您在今天的討論中將聽到的一些資訊將包含前瞻性陳述，包括但不限於有關未來業務前景的資訊。

On the call today is Daniel Tellechea, Largo's Interim Chief Executive Officer and Director; Ernest Cleave, Largo's Chief Financial Officer; Paul Vollant, Largo's Chief Commercial Officer; and Francesco D'Alessio, the President of Largo Clean Energy. Following delivery of the prepared remarks, we'll open the call for questions. (Operator Instructions)

今天參加電話會議的是 Largo 臨時執行長兼董事 Daniel Tellechea； Ernest Cleave，Largo 財務長； Paul Vollant，Largo 首席商務官；以及 Largo Clean Energy 總裁 Francesco D'Alessio。在發表準備好的演講後，我們將開始提問。 （操作員說明）

So with that, let me turn the call over to Daniel.

那麼，讓我把電話轉給丹尼爾。

Thank you. Thank you, Alex, and good day to those joining us for our quarterly update call. I want to begin by acknowledging that Q3 was another challenging quarter for Largo. We faced some unforeseen obstacles that impacted our operations. And I would like to provide you with an update on these events and how we are moving forward.

謝謝。謝謝你，亞歷克斯，祝那些加入我們季度更新電話會議的人們美好的一天。首先，我想承認第三季對 Largo 來說是另一個充滿挑戰的季度。我們遇到了一些影響我們營運的不可預見的障礙。我想向您提供有關這些活動的最新資訊以及我們的進展。

For Q3, V205 equivalent production was 2,163 tons, which is a decrease from the 2,639 tons produced in Q2 2023 and the 2,906 tons produced in Q3 2022. For the nine months ended September 30, 2023, V2O5 production was 6,913 tons versus 8,432 tons for the same period in 2022.

第三季度，V2O5 當量產量為2,163 噸，較2023 年第二季度的2,639 噸和2022 年第三季度的2,906 噸有所下降。截至2023 年9 月30 日的九個月，五氧化二釩產量為6,913 噸，而2023 年第三季為8,432 噸。2022 年同期。

In July, we were deeply saddened by a tragic accident at our chemical plant, which resulted in a capacity bottleneck in the evaporator section. This unfortunate incident led to lower vanadium production rates in July and August. I want to express our gratitude to our dedicated team for their rapid response and the safe commissioning of the evaporator circuit within early September, which is now operating as is originally planned.

7月份，我們的化工廠發生了一場悲慘事故，導致蒸發器工段出現產能瓶頸，我們對此深感悲痛。這一不幸事件導致七月和八月釩產量下降。我要對我們的專業團隊表示感謝，感謝他們的快速響應，並在 9 月初安全調試了蒸發器迴路，目前該迴路正在按原計劃運行。

In addition to the accident, we experienced technical delays in the commissioning of our new crushing plant, which was designed to offset the impact of lower ore grades. While this delay impacted vanadium production in Q3, our operating team is working hard to resolve those issues. I would like to emphasize that our mining operations are in fact proceeding as planned, with mined material being 46% higher in Q3 as compared with the same period of last year.

除了這起事故之外，我們的新破碎廠的調試也經歷了技術延誤，該廠旨在抵消礦石品位較低的影響。雖然這項延遲影響了第三季的釩產量，但我們的營運團隊正在努力解決這些問題。我想強調的是，我們的採礦作業實際上正在按計劃進行，第三季開採的材料比去年同期增加了 46%。

A major problem we encountered was a large amount of ore that remained stockpile following failure in engineering and design in the crusher and magnetic separator or stages. Consequently, in response to the aforementioned challenges, we have undertaken a change in leadership at our Maracás facility.

我們遇到的一個主要問題是，由於破碎機和磁選機或階段的工程和設計失敗，大量礦石仍然庫存。因此，為了因應上述挑戰，我們對馬拉卡斯工廠的領導階層進行了調整。

We want to assure you that a comprehensive plan is in place to address the challenges discussed today. Our focus remain on improving our processes to ensure that the mined ore can be processed as going forward. As a sign of improvement, the crushing plant produced more than 1,000 tons of contained V2O5 in October despite further improvement is scheduled for November and December.

我們想向您保證，我們已經制定了全面的計劃來應對今天討論的挑戰。我們的重點仍然是改進我們的流程，以確保開採的礦石能夠繼續進行加工。作為改善的跡象，儘管計劃在 11 月和 12 月進行進一步改善，但破碎廠在 10 月生產了超過 1,000 噸的 V2O5。

We are also optimizing additional operational efficiencies at Largo for further improve our performance in the future. These include the increase of high-purity vanadium production, which now represents approximately 44% of total production in the first nine months of 2023 versus 27% in the same period of last year. And during the month of October, represented 72% of total production.

我們也在 Largo 進一步優化營運效率，以進一步提高我們未來的績效。其中包括高純度釩產量的增加，目前高純度釩產量約佔 2023 年前 9 個月總產量的 44%，而去年同期為 27%。 10月份，佔總產量的72%。

We're also restructuring maintenance process at the mine and ramping up production to diversify our product and revenue mix going forward.

我們也正在重組礦場的維護流程並提高產量，以實現未來產品和收入組合的多元化。

Significant strides are being made in reducing costs with, notable reduction in key consumable costs such as sodium carbonate, as well as additional and headcount reductions. As we continue to realize the benefit of our optimization offer, we should expect to see additional cost benefits in future quarters. These initiatives are crucial to mitigate the impact of decreasing vanadium prices.

在降低成本方面取得了重大進展，碳酸鈉等關鍵消耗品成本顯著降低，並且額外減少了員工人數。隨著我們不斷認識到優化產品的優勢，我們預計在未來幾季看到額外的成本優勢。這些措施對於減輕釩價格下跌的影響至關重要。

Before I hand the call over to Ernest, I will note that we have made substantial investments over the past year. These include increased waste rock pre-stripping and infill drilling to optimize future production. The commissioning of an ilmenite plant, the construction of a new magnetic separation crashing plant progresses with the delivery of our first vanadium battery to Enel, a European energy storage customer.

在將電話轉交給歐內斯特之前，我要指出的是，我們在過去一年中進行了大量投資。其中包括增加廢石預剝離和加密鑽探，以優化未來的生產。隨著我們向歐洲儲能客戶 Enel 交付第一塊釩電池，鈦鐵礦工廠的調試和新的磁選破碎工廠的建設取得進展。

We're also invested in ongoing -- on going at Maracás with the goal of increasing measure and indicated resources. In the first nine months of 2023, we have completed approximately 19,000 meters of diamond drill holes at our Campo de Alegre Lourdes (sic - "Campo Alegre de Lourdes") in Maracás targets. We plan to provide an update on this program soon.

我們也投資於馬拉卡斯正在進行的項目，目標是增加措施和指定資源。 2023 年前 9 個月，我們在 Maracás 目標的 Campo de Alegre Lourdes（原文如此，「Campo Alegre de Lourdes」）完成了約 19,000 公尺的鑽石鑽孔。我們計劃很快提供有關該計劃的更新。

Again, as we see, this investment is critical to ensure the sustainability of our operations in a lower vanadium price environment.

正如我們所看到的，這項投資對於確保我們在釩價較低的環境下業務的可持續性至關重要。

In summary, we recognize the challenges we faced in Q3 and the importance of the investment we have made. We remain committed to optimizing our operations, reducing costs, and achieving our targets. We believe these actions put us on the path to stabilize operation and cost of production in a safe environment. And we appreciate your continued support as we navigate through these challenges.

總之，我們認識到我們在第三季面臨的挑戰以及我們所做投資的重要性。我們仍然致力於優化營運、降低成本並實現我們的目標。我們相信這些行動使我們走上了在安全環境下穩定營運和生產成本的道路。我們感謝您在我們應對這些挑戰時持續提供的支持。

With that, I will now turn the call over to Ernest to provide an overview of our financial performance for Q3.

現在，我將把電話轉給歐內斯特，概述我們第三季的財務表現。

Thank you, Daniel, and thank you to those that could join us on the call today. Taking a closer look at the financial performance for Q3 2023, it's clear that we faced significant headwinds during the quarter. I'll now provide a summary of our financials for Q3.

謝謝丹尼爾，也感謝那些今天能加入我們電話會議的人。仔細研究 2023 年第三季的財務業績，很明顯，我們在該季度面臨重大阻力。我現在將提供第三季的財務狀況摘要。

Revenues for the quarter totaled $44 million, a decline from the $54.3 million recorded in Q3 2022. This decline can be attributed to two primary factors, lower vanadium prices and reduced vanadium sales volumes. This also translated to revenues per pound sold of $8.34 compared to $8.80 in the same periods last year.

本季營收總計 4,400 萬美元，較 2022 年第三季的 5,430 萬美元有所下降。這種下降可歸因於兩個主要因素：釩價格下降和釩銷量減少。這也意味著每磅銷售收入為 8.34 美元，而去年同期為 8.80 美元。

On the cost side, we recognized operating costs of $42.5 million in Q3 2023, which is a reduction from the $45.6 million incurred in Q2 2022. The decrease in operating costs is primarily a result of the lower overall sales volumes in the quarter. This includes a reduction in the sale of purchase products and lower royalties due to lower sales.

在成本方面，我們確認 2023 年第三季的營運成本為 4,250 萬美元，比 2022 年第二季的 4,560 萬美元有所減少。營運成本的下降主要是由於該季度總體銷售下降。這包括減少採購產品的銷售以及由於銷售額下降而降低的特許權使用費。

As Daniel pointed out, we are actively focusing on reducing costs across the organization. At our mine site, this includes a reduction in our fixed cost structure through various initiatives, including contract renegotiations and optimizing key operational areas. This also involves a further examination of our mining operations, maintenance procedures, equipment rental, and consumables. As noted earlier, we are committed to enhancing efficiency across the board.

正如丹尼爾指出的那樣，我們正在積極致力於降低整個組織的成本。在我們的礦場，這包括透過各種措施減少固定成本結構，包括合約重新談判和優化關鍵營運領域。這也涉及對我們的採礦作業、維護程序、設備租賃和消耗品的進一步檢查。如前所述，我們致力於全面提高效率。

In terms of cash flow, we reported cash used before working capital items of $4.4 million in Q3 2023, and this compares to cash provided before working capital items of $4.3 million in the same period of 2022. As of the end of Q3 2023, our cash balance stands at $39.5 million, with a net working capital surplus of $91 million and a debt of $65 million.

在現金流方面，我們報告2023 年第三季在營運資本項目之前使用的現金為440 萬美元，而2022 年同期在營運資本項目之前提供的現金為430 萬美元。截至2023 年第三季末，我們的現金餘額為 3,950 萬美元，淨營運資本盈餘為 9,100 萬美元，債務為 6,500 萬美元。

To close out, while we did face a challenging quarter, our team is actively working on strategies to adapt to these market conditions, optimize our cost structure, and enhance our financial resilience. We remain focused on our long-term goals and are working diligently to navigate through the challenges discussed on the call today.

最後，雖然我們確實面臨著充滿挑戰的季度，但我們的團隊正在積極制定策略，以適應這些市場條件，優化我們的成本結構，並增強我們的財務彈性。我們仍然專注於我們的長期目標，並正在努力應對今天電話會議中討論的挑戰。

I'll now turn it over to Paul for his update.

我現在將其轉交給保羅以獲取最新情況。

Thanks, Ernest, and thanks, everyone, for joining the call. This third quarter continued to be difficult for vanadium prices with the overall market facing headwinds, especially from the steel industries in China and Europe. Prices have further decreased over the past months and the short-term outlook seems challenging.

謝謝歐內斯特，也謝謝大家加入這次電話會議。第三季釩價持續困難重重，整體市場面臨阻力，尤其是來自中國和歐洲鋼鐵業的阻力。過去幾個月價格進一步下跌，短期前景似乎充滿挑戰。

The average benchmark price per pound of V2O5 in Europe was $8.03 in Q3 2023, a 2.5% decrease from the average of $8.23 in Q3 2022, and was $6.65 at the publication last Friday.

2023 年第三季度，歐洲每磅五氧化二釩的平均基準價格為 8.03 美元，比 2022 年第三季的平均每磅 8.23 美元下降 2.5%，上週五公佈的價格為 6.65 美元。

On a positive note, we continue to see strong growth from the aerospace and energy storage sectors, further highlighting the importance of our ability to adapt to new market demands and produce high-quality vanadium products.

從積極的方面來看，我們繼續看到航空航太和儲能領域的強勁成長，進一步凸顯了我們適應新市場需求和生產高品質釩產品的能力的重要性。

In the past quarter, we sold 2,385 tons of V2O5 equivalent, which is a decrease from the 2,796 tons sold in Q3 2022, but we remain in line with our annual guidance. As Daniel mentioned, we're excited to have signed our first sales contract for ilmenite. Subject to any operational delays, we should record the sale of the shipment date from Brazil by the end of November, which beats our original estimate of Q1 2024.

上一季度，我們銷售了 2,385 噸 V2O5 當量，比 2022 年第三季銷售的 2,796 噸有所減少，但我們仍然符合我們的年度指引。正如丹尼爾所提到的，我們很高興簽署了第一份鈦鐵礦銷售合約。考慮到任何營運延誤，我們應該在 11 月底之前記錄從巴西發貨的銷售日期，這超出了我們對 2024 年第一季的最初估計。

We have developed a strong sales pipeline and are confident in our ability to place these units either locally or internationally other productions ramp up. These new income streams is of utmost importance to diversify our revenues and increase the profitability of our main assets.

我們已經開發了強大的銷售管道，並且對我們將這些產品投入本地或國際其他生產的能力充滿信心。這些新的收入來源對於實現我們的收入多元化和提高我們主要資產的盈利能力至關重要。

Thank you for your time, and I'll stop there to turn it over to Francesco.

感謝您抽出寶貴的時間，我將在此將其轉交給弗朗西斯科。

Thanks, Paul. I'll focus my time on a few key updates we made at our clean energy business during the third quarter and some made subsequent to the quarter end.

謝謝，保羅。我將重點放在第三季清潔能源業務的一些關鍵更新以及季度末之後的一些更新。

First and foremost, we're pleased to announce that our 6-megawatt-hour vanadium redox flow battery deployments for Enel Green Power Spain was validated to upgrade on test conditions according to EGP. in October. This is a fairly significant milestone achieved both for Largo and LCE. It showcases the adoption and use case of our VRFB technology and the clean energy storage solution LCE offers to the market.

首先，我們很高興地宣布，我們為西班牙 Enel Green Power 部署的 6 兆瓦時釩氧化還原液流電池已通過驗證，可根據 EGP 的測試條件進行升級。在十月。對於 Largo 和 LCE 來說，這是一個相當重要的里程碑。它展示了我們的 VRFB 技術以及 LCE 向市場提供的清潔能源儲存解決方案的採用和用例。

While this deployment faced delays, it demonstrates our team's ability to successfully implement a grid-scale battery and we believe is expected to provide an important catalyst for our strategic evaluation process for LCE. To that point, our ongoing strategic review to unlock and maximize the value of Largo Clean Energy continues to gain momentum.

雖然此部署面臨延遲，但它證明了我們團隊成功實施電網規模電池的能力，我們相信預計將為我們的 LCE 戰略評估流程提供重要的催化劑。到目前為止，我們正在進行的旨在釋放和最大化 Largo Clean Energy 價值的策略審查繼續獲得動力。

We're pleased to report that our efforts have attracted interest from various parties, reflecting the potential of our VRFB technology holds within the industry. As mentioned by Daniel, LCE is not immune to the need for cost cutting measures at the organization. As part of these measures, we've instituted a reduction in headcount at LCE, and we'll continue to explore additional efforts to reduce costs at this subsidiary going forward.

我們很高興地報告，我們的努力引起了各方的興趣，反映了我們的 VRFB 技術在業界的潛力。正如丹尼爾所提到的，LCE 也不能免受組織成本削減措施的影響。作為這些措施的一部分，我們已經減少了 LCE 的員工人數，我們將繼續探索其他措施來降低該子公司的成本。

We acknowledge that a substantial investment has been made in LCE, and we remain confident that our strategic review process will optimize the value proposition of LCE and allow us to actively participate in the clean energy transition, with vanadium playing a pivotal role as a critical materials.

我們承認LCE已進行了大量投資，我們仍然相信我們的策略審查流程將優化LCE的價值主張，並使我們能夠積極參與清潔能源轉型，其中釩作為關鍵材料發揮關鍵作用。

And with that, I'll close out by saying that we look forward to updating you on our progress in the continued coming quarters, and thank you for your continued support. I'll now hand over to the operator for our question-and-answer sessions. Thank you.

最後，我要說的是，我們期待向您通報我們在未來幾季的最新進展，並感謝您的持續支持。我現在將把問答環節交給接線員。謝謝。

(Operator Instructions) Andrew Wong, RBC.

（操作員說明）Andrew Wong，RBC。

Hi, good afternoon. Thanks for having me on. Just sorry if this might have been already answered, I came on a little bit late. Could you just talk about some of your early expectations for 2024 in terms of production and cost? It sounds like some of these improvements might start picking up steam into next year and start contributing. And how does that look like versus what we saw this year?

嗨，下午好。謝謝你邀請我參加。抱歉，如果這個問題已經得到回答，我來晚了一點。您能否簡單談談您對 2024 年產量和成本的一些早期預期？聽起來其中一些改進可能會在明年開始加速並開始做出貢獻。與我們今年看到的情況相比，情況如何？

I can take that call, Ernest.

我可以接電話，歐內斯特。

Okay.

好的。

For 2024, we are expecting as we already have the infill drilling, so I can give you the final mining information. We are planning to produce around 1.5 million tons of material mine from the mine every month in order to continue stripping the mine and create additional flexibility in the future operations.

我們預計到 2024 年，因為我們已經進行了加密鑽探，所以我可以向您提供最終的採礦資訊。我們計劃每月從該礦山生產約 150 萬噸原料礦，以便繼續剝離該礦山並為未來的營運創造更多靈活性。

We are planning to plus 11,000 tons of V205, that's about an average between 900 and 950 tons per month. And we're planning to create around 3.6 million tons of V205 stockpiles in order to prevent issues with the bottlenecks into the future. So that's how we look into 2024 production at the mine.

我們計劃增加 11,000 噸 V205，平均每月約 900 至 950 噸。我們計劃建立約 360 萬噸 V205 庫存，以防止未來瓶頸問題。這就是我們對 2024 年該礦產量的看法。

In terms of cost, I still don't have the final information because we are right now working on our forecast for 2024. So I will skip for the time being that particular information.

在成本方面，我仍然沒有最終訊息，因為我們現在正在研究 2024 年的預測。所以我將暫時跳過該特定資訊。

Okay, that's understandable. It's great to see the ilmenite plant ramping up here. Can you talk about what sort of financial contribution we might be expecting as we go into next year? What do prices look like for ilmenite today and how are prices that you would realize? How does that look like relative to the market? Thanks.

好吧，這是可以理解的。很高興看到鈦鐵礦工廠在這裡蓬勃發展。您能否談談明年我們可能期望獲得什麼樣的財務貢獻？目前鈦鐵礦的價格如何？您認為的價格如何？相對於市場而言，情況如何？謝謝。

Paul, can you take on the prices and I will take at the end the volumes that they were expecting?

保羅，你能提供一下價格嗎？我最後會提供他們期望的數量嗎？

Sure. Hi, Andrew. Ilmenite prices today are between $250 to $350 [after the trial]. And that price really depends on the quality. Without targeted quality, we believe we'll end up around the middle of that range. But that will take a bit of time for us to quantify in, let's say, relevant customers and also to achieve the desired quality.

當然。嗨，安德魯。目前鈦鐵礦的價格在 250 美元至 350 美元之間[審判後]。這個價格實際上取決於品質。如果沒有目標質量，我們相信我們最終將處於該範圍的中間位置。但是，我們需要一些時間來量化相關客戶並達到所需的品質。

So we will see increasing prices as we improve our production quality. And we realized slightly lower prices before, but yeah, that's -- the current prices are between $250 to $350.

因此，隨著我們提高生產質量，我們將看到價格上漲。我們之前意識到價格略低，但是，是的，目前的價格在 250 美元到 350 美元之間。

Okay, thank you.

好的謝謝。

Now in terms of volumes, as we are moving forward with the commissioning of the plant between the first quarter -- in the first quarter, we're planning to produce around an average of around 300, 500 tons per month. And starting April of next year, we expect that the plant will be completed, terminated on his commission on time and we should be producing between 8,000 to 9,000 tons per month.

現在就產量而言，隨著我們在第一季期間推進工廠的調試，我們計劃在第一季平均每月生產 300 至 500 噸左右。從明年 4 月開始，我們預計該工廠將按時竣工並按時終止，每月產量應在 8,000 至 9,000 噸之間。

Okay. Great. Thank you.

好的。偉大的。謝謝。

Steve Silver, Argus Research.

史蒂夫·西爾弗，阿格斯研究中心。

Thank you, operator, and thanks for taking the question. From the prepared remarks, it sounds like the company is now planning for lower vanadium prices environments to continue over the near term than maybe you might have previously envisioned. I guess I'm just asking broadly if whether it's remaining surprising that vanadium prices are being as tied to China steel demand without finding support at some level from this pent-up demand for clean energy and battery applications.

謝謝您，接線員，也謝謝您提出問題。從準備好的言論來看，該公司現在正計劃在短期內繼續維持比您之前預想的更低的釩價格環境。我想我只是泛泛地問一下，釩價格與中國鋼鐵需求掛鉤，而沒有從被壓抑的清潔能源和電池應用需求中找到某種程度的支撐，這是否仍然令人驚訝。

Can you give us the price environment, Paul?

保羅，你能為我們介紹一下價格環境嗎？

Yeah, sure. Hi. Well, obviously, forecasting prices is always very difficult, right? But I want to say that at this point of time, we think price is being under pressure. As mentioned before, it's mainly due to a low performance in the Chinese and the European steel industries. But you're right, the brighter picture is with the high-purity demand on both the aerospace industries and also the battery sector.

好，當然。你好。嗯，顯然，預測價格總是非常困難，對吧？但我想說，目前，我們認為價格面臨壓力。如前所述，這主要是由於中國和歐洲鋼鐵業的低迷表現。但你是對的，更光明的前景是航空航太工業和電池產業的高純度需求。

We've seen a number of very big announcements on the ERP sector in the past few quarters. So we're also hoping that this demand will help to balance the demand.

在過去的幾個季度中，我們看到了 ERP 領域的許多重大公告。所以我們也希望這種需求能夠有助於平衡需求。

In the more longer term, when we look historically, we're in a very low price environment today, right? So there's a good chance that we see a rebound at some point. It's just very hard to predict when that will happen.

從更長遠的角度來看，當我們回顧歷史時，我們今天處於一個非常低的價格環境，對嗎？因此，我們很有可能在某個時候看到反彈。很難預測這種情況何時會發生。

That's helpful. Thank you. And one last one if I can. You'd mentioned the downturn in consumable costs beginning in the most recent quarter. Just trying to get a sense as to whether there are any other input metrics that you're looking at besides sodium carbonate that you're watching that could get in the way of a more sustained consumable cost decline moving forward?

這很有幫助。謝謝。如果可以的話，還有最後一張。您提到從最近一個季度開始消耗品成本下降。只是想了解一下，除了碳酸鈉之外，是否還有其他輸入指標可能會阻礙未來消耗品成本的持續下降？

Yes. There are another two that they were watching very closely, one is sulfuric acid that has been almost even between 2022 and 2023. That is an important one. And the other one is the cost of the reagents that they were using in order to recover the ilmenite. So those are the ones that we have been noticing that it has been coming down from our original projections in that particular case.

是的。他們正在密切關注另外兩個指標，一個是硫酸，2022 年至 2023 年幾乎持平。這是一個重要的指標。另一個是他們為回收鈦鐵礦而使用的試劑的成本。因此，我們注意到這些是根據我們在特定情況下的原始預測得出的。

But in the case of the plant, because silica is the enemy in the recovery of the kiln for vanadium. That is the most important one that they were following. Vis a vis just to give you an idea on the sodium carbonate, in 2023 vis a vis our original budget, we have around BRL10 million of savings compared between the real price we are getting vis a vis our budget, and around BRL4.4 million compared to 2022.

但就工廠而言，因為二氧化矽是釩窯回收過程中的敵人。這是他們所遵循的最重要的一項。只是為了讓您對碳酸鈉有一個了解，到2023 年，與我們最初的預算相比，我們得到的實際價格與預算相比，節省了大約1000 萬雷亞爾，與大約440 萬雷亞爾相比，我們節省了大約1000 萬雷亞爾。與 2022 年相比。

So sodium carbonate, which is the main one, has been softening incredible in our favor. Sulfuric acid, as I said, is almost even in our cost structure.

所以碳酸鈉，這是主要的一種，已經軟化到對我們有利的程度。正如我所說，硫酸在我們的成本結構中幾乎持平。

Okay. That's very helpful. Thanks again for taking the questions.

好的。這非常有幫助。再次感謝您提出問題。

Mike Heim, Noble Capital Markets

麥克海姆 (Mike Heim)，貴族資本市場

Thank you. You've taken several steps to improve the grade issues. My question is how quickly should we expect to see grade improvement?

謝謝。您已採取多項措施來改善成績問題。我的問題是我們應該多快看到成績的提升？

Well, grades will continue more or less at this level during the last quarter and a little bit higher for 2024. Or just to give you an idea of the elements considered in the grades, the magnetics that they were mining in Campbell for 2023 is around 19% magnetics during 2023. We are expecting according to our infill drilling that that will increase to 22% in year 2024.

好吧，上個季度的等級將或多或少地保持在這個水平，2024 年會更高一些。或者只是為了讓您了解等級中考慮的元素，他們在 2023 年在坎貝爾開採的磁性約為2023年磁性材料佔19%。根據我們的加密鑽探，我們預計這一比例將在2024 年增加到22%。

Now, what the Largo has been doing in order to offset the effect of the lower magnetics in the last quarter of '23 and '24 is the main reason why we invest in the new drive mark, which means that all the disseminated ore that they were mining and will continue mining is being concentrated in the drive mark in order to keep the same rate -- the same grade that we need for feeding the concentrates into the kiln. So that is more or less the way we are looking into the future grades and the grades for this last quarter.

現在，Largo 一直在做的事情是為了抵消 23 年和 24 年最後一個季度較低磁力的影響，這是我們投資新驅動標記的主要原因，這意味著它們所處理的所有浸染礦石正在開採並將繼續開採的礦石集中在驅動標記處，以保持相同的速率，即我們將精礦送入窯爐所需的相同品位。這或多或少就是我們研究未來成績和上個季度成績的方式。

And then for my second question, in terms of the cost reduction you've done, including reducing the number of contractors at the mines, do you feel comfortable that you have adequate resources to make the projections you just gave for 2024? And if numbers were to grow in years beyond 2024, would you need to reverse some of these cost reductions?

對於我的第二個問題，就您所做的成本削減（包括減少礦山承包商數量）而言，您是否認為自己有足夠的資源來進行您剛剛給出的 2024 年預測？如果 2024 年後數字持續成長，您是否需要扭轉部分成本削減措施？

Well, if you are talking about the mine, I think that with the change in the contractor last, what it was July, August of this year, and our latest negotiation with them, we attain that we will continue mining in the order of 1.5 million tons per month. So that is already negotiated; that is already in place.

嗯，如果你談論的是礦山，我認為隨著承包商的變化，今年7月、8月，以及我們與他們最近的談判，我們達成了我們將繼續以1.5的順序開採每月萬噸。所以這已經是協商好的了；這已經到位了。

The equipment and the manpower to run the mine from the contractor point of view is there and negotiated. We got a discount on a ton per move -- a ton per mine. So that is already there. So I don't see any major issues in the performance of the mine for the last quarter or going forward.

從承包商的角度來看，營運礦場的設備和人力已經存在並經過協商。我們每次移動都獲得一噸折扣——每個礦場一噸。所以那已經存在了。因此，我認為該礦上第一季或未來的業績不會有任何重大問題。

Now, in respect to the plant, most of the issues and things that you are going to see in the last quarter and basically by January of next year, is number one, an increase in capacity in the milling. That will require a minimum investment in order to put the two mills in parallel instead of changing what the way they are working today, which is one after the other. And what is happening is that the one mill is fully loaded and the other one is kind of loaded by half.

現在，就工廠而言，您將在上個季度（基本上到明年一月）看到的大多數問題和事情都是第一，即製粉能力的增加。這將需要最低限度的投資，以使兩家工廠並行運行，而不是改變它們目前一個接一個的工作方式。所發生的情況是，一台磨機滿載，另一台磨機負載一半。

So we're planning to do that between now and the end of January to increase the capacity of producing concentrates for the kiln. That will require only a small additional CapEx for that particular project, but it would not require nothing else.

因此，我們計劃從現在到一月底這樣做，以提高窯爐精礦的生產能力。對於該特定項目，這只需要少量的額外資本支出，但不需要其他任何東西。

In respect to the rest of the plant, most of the additional things that they were planning to do is the following: increase our capacity in the high grade and the high-purity market. That is basic because the way the market is now selling and converting V205 into ferrovanadium is at a discount on the V205 price. So the more we sell into the high market, on the high-purity market that goes for a premium, that makes all the sense.

對於工廠的其他部分，他們計劃要做的大部分額外事情如下：增加我們在高品位和高純度市場的產能。這是基本的，因為市場現在銷售 V205 並將其轉化為釩鐵的方式比 V205 價格有折扣。因此，我們向高端市場、高純度市場銷售的產品越多，溢價就越高，這是合理的。

So we're going to improve our investments and capacity in the V2O3 plant, as well on the powder V205 in order to gain and increase our sales mix on those two products. So those are the main elements that we're thinking.

因此，我們將提高 V2O3 工廠以及粉末 V205 的投資和產能，以增加這兩種產品的銷售組合。這些是我們正在考慮的主要要素。

I don't see -- even with the headcount that we are producing today in the contractor side, I don't see any danger or any major negative effect by those reductions because what they were doing is going back to the headcount we had a couple of years ago, and increase because of the construction of the ilmenite plant and the crushing system. So now that most of those projects are being finished, makes all the sense in the world to go back to the headcount we had in the past.

我不認為 - 即使我們今天在承包商方面生產的人數，我也沒有看到這些削減有任何危險或任何重大負面影響，因為他們所做的就是回到我們之前的人數幾年前，由於鈦鐵礦廠和破碎系統的建設，產量增加。因此，既然大多數專案都已完成，那麼回到過去的員工人數就很有意義了。

Okay, thank you.

好的謝謝。

Thank you. We have no further questions. I will turn the call back over to Alex Guthrie for closing remarks.

謝謝。我們沒有其他問題了。我會把電話轉回亞歷克斯·格思裡 (Alex Guthrie) 作結束語。

Thank you, operator, and thanks, everyone, for joining the call today. This concludes the Q&A session and the quarterly investor conference call. Have a great day.

謝謝接線員，也謝謝大家今天加入通話。問答環節和季度投資者電話會議到此結束。祝你有美好的一天。

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating, and we ask that you please disconnect your lines.

女士們、先生們，今天的電話會議到此結束。我們感謝您的參與，並請您斷開線路。