Good day, and thank you for standing by. Welcome to Largo's Third Quarter 2023 Financial Results Conference Call. After the speaker's presentation, there will be a question-and-answer session. I would now like to hand the conference over to your speaker today, Alex Guthrie, Senior Manager of External Relations. Please go ahead.

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

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 cos that impacted our operations, and I would like to provide you with an update on these events and how we are moving forward. For Q3, P205 equivalent production was 2,163 tonnes, which is a decrease from the 2,639 tonnes produced in Q2 2023, and the 2,906 tonnes produced in Q3 2022. For the 9 months ended September 30, 2023, V2O5 production was 6,913 tonnes versus 8,432 tonnes for the same period in 2022. In July, we were deeply serve by a traffic tragic accident at our chemical plant which resulted in a capacity bottleneck in the evaporator section. These unfortunate incidents had to lower vanadium production furnaces in July and August. I want to express our gratitude our dedicated team for their rapid response and the safe commissioning of the evaporator circuit in early September which is now operating as its original. 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 mine material being 46% higher in Q3 as compared with the same period of last year. A major prevalent wind country was a large amount of ore that remain a stockpile following failure in engineering and design in the crusher and magnetic separator stages. Consequently, in response to the aforementioned challenges we have undertaken a change in leadership at our Maracás facility.…

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. Revenues for the quarter totaled $44 million, a decline from the $54.3 million recorded in Q3 2022. This decline can be attributed to 2 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 period last year. 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 cost is primarily a result of the lower overall sales volumes in the quarter. This includes a reduction in the sale of purchased products and lower royalties due to lower sales. 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. In terms of cash flow, we reported cash used before working capital items of $4.4 million in 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. 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 are looking diligently to navigate through the challenges discussed on the call today. I'll now turn it over to Paul for his update.

Thanks, Ernest, and thanks, everyone, for joining the call. The 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. The average benchmark price per pound of V205 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. 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. In the past quarter, we sold 2,385 tonnes of V2O5 equivalent which is a decrease from the 2,796 tonnes 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 at the shipment date from Brazil by the end of November, which is our original estimate of Q1 2024. We have developed a strong sales pipeline and are confident in our ability to place these units either all or internationally other production ramp up. This new income stream is of utmost importance to diversify our revenues and increase the profitability of our main assets. Thank you for your time, and I'll stop there and turn it over to Francesco. Francesco D’Alessio: 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. First and foremost, we're pleased to announce that our 6-megawatt hour Canadian Readers [ph] flow battery…

[Operator Instructions]. First question comes from Andrew Wong at RBC.

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?

I can take that call, Ernest. 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 tonnes of material mine from the mine every month in order to continue stripping the mine and create additional flexibility in the future operations, we are planning to plus 11,000 tonnes of V205. That's about an average between 900 and 950 tonnes per month, and we're planning to create around 3.6 million tonnes of V205 in stockpiles in order to prevent issues with [indiscernible] into the future. So that's how we look into 2024 production at the mine. 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.

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 or the night today and how are prices that you to realize how to develop like relative to the market?

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

Sure. Hi Andrew, ilmenite prices today are between $250 to $350 [indiscernible] 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 qualify onto the relevant customers and also to achieve the desired quality. So we will see increase in prices as we improve our production quality and we realized slightly lower prices before. But yes, that's the current prices are between 250 to 350.

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

The next question comes from Steve Silver from Argus Research.

From the prepared remarks, it sounds like the company is now planning for lower vanadium price environments to continue over the near term, than maybe you might have previously envisioned. I guess I'm just asking broadly, 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.

Can you give us the price environment, Paul?

Yes, sure. Well, obviously, forecasting prices is always very difficult, right? But I want to say that at this point of time, we think prices 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, I mean, the brighter picture is with high purity demand on both the aerospace industries and also the battery sector. We've seen a number of very big announcements on the sector in the past few quarters. So we're also hoping that this demand will help to balance the supply-demand in the more longer term, we look historically, we were 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.

That's helpful. And 1 last one, if I can. You 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 certain carbonate that you're watching that could kind of get in the way of a more sustained consumable cost decline moving forward?

Yes, there are another 2 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 1 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. But in the case of the plan, because Silica is the enemy in the recovery of the kill for vanadium. That is the most important 1 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 BRL 10 million of savings compared between the real price we are getting vis-a-vis our budget and around 4.4 million compared to 2022. So sodium carbonate, which is the main one, has been softening incredible in our favor. To forecast, as I said, is almost even in our cost structure.

The next question comes from Mike Heim from Noble Capital Markets.

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

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 candle for 2023 is around 19% magnetics during 2023. We are expecting according to our infill drilling that will increase to 22% in year 2024. 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 back in order to keep the same the same rate that the we need for feeding the concentrates into the kill. So that is more or less the way we are looking into the future grades and the guide for this last quarter.

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?

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 change that we will continue mining in the order of 1.5 million tonnes per month. So that is already negotiated. That is already in place. 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 [indiscernible] mine. So that is already there. So I don't see any major issues in the performance of the bank of the mine for the last quarter or going forward. 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 next year, is number one, an increase in capacity in the Midland that will require a minimum investment in order to put the 2 mills in parallel instead of changing what the way they are working today, which is 1 after the other. And what is happening is that the 1 mill is fully loaded and the other 1 is kind of loaded by half. 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. 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. 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 2 products. So those are the main elements that we're thinking. I don't see -- even with the head count 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 head count we had a couple of years alone, an 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 head count we had in the past.

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

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.

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