Largo(US:LGO) TMX Newsfile·2026-02-12 11:11Core Viewpoint - Largo Inc. is facing a potential termination of its iron ore calcine transaction due to non-receipt of initial payments, while simultaneously observing significant price increases in the ferrovanadium market, particularly in the U.S. [3][4][6] Update on Iron Ore Calcine Transaction - The initial payment of $2.9 million due by January 30, 2026, has not been received, and the company has deferred the payment until the week of February 9, 2026 [3] - A second payment of $1.9 million is due by February 16, 2026, and the company has notified the counterparty of non-compliance, providing a cure period until February 20, 2026 [4] - If the first payment is not received by the deadline, the agreement will be terminated, and the company will explore alternative commercialization opportunities [5][18] Strong Upward Momentum in FeV Prices - U.S. ferrovanadium prices have surged from the mid-$13 per pound range to approximately the mid-$17 per pound range over the past month, marking a 30% increase [7] - In Europe, prices have risen from approximately $23.8/kg to $25.6/kg, reflecting a 7-8% increase during the same period [7] - The current U.S. price of approximately $17 per pound translates to about $37-38 per kilogram, significantly higher than European prices, indicating a premium in the U.S. market [8] Structural Tightness in the U.S. Market - The U.S. ferrovanadium market is experiencing structural tightness, with limited available supply and conversion capacity constraints [9] - Trade measures and regulatory restrictions have further constrained access to alternative material sources, impacting supply flexibility [10] - The combination of these factors has reduced supply elasticity and contributed to the recent price acceleration in the U.S. market [11] Tariff Implications - Largo is subject to a 50% tariff on direct Brazilian imports into the U.S., affecting both vanadium pentoxide and ferrovanadium [12] - The company primarily supplies the North American market through a Canadian conversion partner, avoiding tariffs on vanadium converted into ferrovanadium in Canada under the USMCA agreement [12] - Removal of tariff constraints could enable Largo to directly supply ferrovanadium from Brazil, addressing the widening supply gap in the U.S. market [13] Company Positioning - Largo is positioned as a reliable, Western-aligned primary producer capable of supporting the U.S. market amid tightening fundamentals [14] - The company has the capability to supply ferrovanadium converted in Brazil and high-grade vanadium material, which could significantly contribute to meeting U.S. steel demand [14]