Equibles

6-K

Largo Inc. (LGO)

6-K 2023-08-10 For: 2023-06-30
View Original
Added on April 12, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of August 2023

Commission File Number: 001-40333

LARGO INC.

(Translation of registrant's name into English)

55 University Avenue

Suite 1105

Toronto, Ontario M5J 2H7

Canada

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F ☐              Form 40-F ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

Exhibit Index

Exhibit No. Description of Exhibit
99.1 Unaudited Condensed Interim Consolidated Financial Statements for the three and six months ended June 30, 2023 and 2022
99.2 Management's Discussion and Analysis for the three and six months ended June 30, 2023
99.3 Form 52-109F2 Certification of Interim Filings Full Certificate - CEO
99.4 Form 52-109F2 Certification of Interim Filings Full Certificate - CFO
99.5 Press release dated August 9, 2023

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: August 9, 2023

LARGO INC.

By: /s/ Ernest Cleave Name: Ernest Cleave Title: Chief Financial Officer

Largo Inc.: Exhibit 99.1 - Filed by newsfilecorp.com

Largo Inc.

Unaudited Condensed Interim Consolidated Financial Statements

For the Three and Six Months Ended June 30, 2023 and 2022

(Expressed in thousands / 000's of U.S. dollars)

Table of Contents

Condensed Interim Consolidated Statements of Financial Position 1
Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) 2
Condensed Interim Consolidated Statements of Changes in Equity 3
Condensed Interim Consolidated Statements of Cash Flows 4
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
1) Nature of operations 5
2) Statement of compliance 5
3) Basis of preparation, significant accounting policies, and future accounting changes 5
4) Amounts receivable 6
5) Inventory 6
6) Other intangible assets 6
7) Mine properties, plant and equipment 7
8) Accounts payable and accrued liabilities 8
9) Debt 8
10) Issued capital 9
11) Equity reserves 10
12) Earnings (loss) per share 11
13) Taxes 11
14) Related party transactions 12
15) Segmented disclosure 12
16) Commitments and contingencies 16
17) Financial instruments 17
18) Revenues 20
19) Expenses 20

Largo Inc.

Expressed in thousands / 000's of U.S. dollars

Condensed Interim Consolidated Statements of Financial Position

As at
June 30, December 31,
Notes 2023 2022
Assets
Cash $ 63,980 $ 54,471
Restricted cash 734 470
Amounts receivable 4 23,984 20,975
Inventory 5 63,164 64,221
Prepaid expenses 8,466 14,007
Total Current Assets 160,328 154,144
Other intangible assets 6 6,749 7,263
Mine properties, plant and equipment 7 199,701 175,237
Vanadium assets 24,400 14,510
Deferred income tax asset 13(b) 2,141 4,596
Total Non-current Assets 232,991 201,606
Total Assets $ 393,319 $ 355,750
Liabilities
Current portion of lease liability $ 590 $ 581
Accounts payable and accrued liabilities 8 28,539 26,634
Deferred revenue 3,138 1,698
Debt 9 18,000 4,000
Current portion of provisions 6,914 6,060
Total Current Liabilities 57,181 38,973
Lease liability 1,205 1,473
Non-current accounts payable and accrued liabilities 8 250 326
Long term debt 9 47,000 36,000
Provisions 5,414 4,424
Deferred income tax liability 13(b) 713 -
Total Non-current Liabilities 54,582 42,223
Total Liabilities 111,763 81,196
Equity
Issued capital 10 412,324 411,646
Equity reserves 11 11,974 14,138
Accumulated other comprehensive loss (97,061 ) (112,165 )
Deficit (54,671 ) (48,227 )
Equity attributable to owners of the Company 272,566 265,392
Non-controlling Interest 8,990 9,162
Total Equity 281,556 274,554
Total Liabilities and Equity $ 393,319 $ 355,750
Commitments and contingencies 7, 16
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   1
---
--The accompanying notes form an integral part of the consolidated financial statements--

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares (except per share information)

Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

Three Months ended Six Months ended
June 30, June 30,
Notes 2023 2022 2023 2022
Revenues 18 $ 53,110 $ 84,804 $ 110,531 $ 127,492
Expenses ****
Operating costs 19 (43,029 ) (50,704 ) (88,960 ) (79,662 )
Professional, consulting and management<br>fees (5,824 ) (6,380 ) (11,363 ) (12,296 )
Foreign exchange (loss) gain (817 ) 2,410 (400 ) 943
Other general and administrative expenses (3,333 ) (5,102 ) (6,606 ) (6,757 )
Share-based payments 11 (413 ) (491 ) 929 (1,301 )
Finance costs 19 (1,981 ) (314 ) (3,407 ) (491 )
Interest income 480 213 1,192 397
Technology start-up costs (1,539 ) (1,847 ) (4,308 ) (4,817 )
Exploration and evaluation costs (1,301 ) (180 ) (1,540 ) (285 )
(57,757 ) (62,395 ) (114,463 ) (104,269 )
Net income (loss) before tax $ (4,647 ) $ 22,409 $ (3,932 ) $ 23,223
Income tax recovery (expense) 13(a) 295 (7,115 ) (38 ) (7,717 )
Deferred income tax (expense) recovery 13(a) (1,614 ) 2,671 (3,203 ) 505
Net income (loss) $ (5,966 ) $ 17,965 $ (7,173 ) $ 16,011
Other comprehensive income (loss)
Items that subsequently will be reclassified to operations:
Unrealized gain (loss) on foreign currency
translation 10,223 (19,319 ) 15,104 7,293
Comprehensive income (loss) $ 4,257 $ (1,354 ) $ 7,931 $ 23,304
Net income (loss) attributable to:
Owners of the Company $ (5,763 ) $ 18,140 $ (7,001 ) $ 16,291
Non-controlling interests $ (203 ) $ (175 ) $ (172 ) $ (280 )
$ (5,966 ) $ 17,965 $ (7,173 ) $ 16,011
Comprehensive income (loss) attributable to:
Owners of the Company $ 4,460 $ (1,176 ) $ 8,103 $ 23,584
Non-controlling interests $ (203 ) $ (178 ) $ (172 ) $ (280 )
$ 4,257 $ (1,354 ) $ 7,931 $ 23,304
Basic earnings (loss) per Common Share 12 $ (0.09 ) $ 0.28 $ (0.11 ) $ 0.25
Diluted earnings (loss) per Common Share 12 $ (0.09 ) $ 0.28 $ (0.11 ) $ 0.25
Weighted Average Number of Shares Outstanding (in 000's)
- Basic 12 64,045 64,824 64,025 64,786
- Diluted 12 64,045 65,133 64,025 65,208
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   2
---
--The accompanying notes form an integral part of the consolidated financial statements--

Largo Inc.

Expressed in thousands / 000's of U.S. dollars and shares

Condensed Interim Consolidated Statements of Changes in Equity

Attributable to owners of the Company
Issued Equity Accumulated Other Non-controlling Shareholders'
Shares Capital Reserves Comprehensive Loss Deficit interest Equity
Balance at December 31, 2021 64,727 $ 415,982 $ 17,814 $ (118,772 ) $ (49,327 ) $ - $ 265,697
Share-based payments - - 1,301 - - - 1,301
Exercise of warrants 10 124 (34 ) - - - 90
Exercise of stock options 18 162 (68 ) - - - 94
Exercise of restricted share units 81 1,263 (1,263 ) - - - -
Share repurchase (25 ) (323 ) - - - - (323 )
Sale of non-controlling interest - - - - - 250 250
Currency translation adjustment - - - 7,293 - - 7,293
Net income (loss) for the period - - - - 16,291 (280 ) 16,011
Balance at June 30, 2022 64,811 $ 417,208 $ 17,750 $ (111,479 ) $ (33,036 ) $ (30 ) $ 290,413
Balance at December 31, 2022 64,006 $ 411,646 $ 14,138 $ (112,165 ) $ (48,227 ) $ 9,162 $ 274,554
Share-based payments - - (1,408 ) - 479 - (929 )
Exercise of restricted share units 44 678 (678 ) - - - -
Expiry of warrants - - (78 ) - 78 - -
Currency translation adjustment - - - 15,104 - - 15,104
Net loss for the period - - - - (7,001 ) (172 ) (7,173 )
Balance at June 30, 2023 64,050 $ 412,324 $ 11,974 $ (97,061 ) $ (54,671 ) $ 8,990 $ 281,556
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   3
---
--The accompanying notes form an integral part of the consolidated financial statements--

Largo Inc.

Expressed in thousands / 000's of U.S. dollars

Condensed Interim Consolidated Statements of Cash Flows

Three Months ended Six Months ended
June 30, June 30,
Notes 2023 2022 2023 2022
Operating Activities
Net income (loss) for the period $ (5,966 ) $ 17,965 $ (7,173 ) $ 16,011
Adjustment for Non-cash Items
Depreciation 7,005 5,972 15,049 10,695
Share-based payments 11 413 491 (929 ) 1,301
Unrealized foreign exchange loss (gain) 245 (2,455 ) 264 (3,044 )
Finance costs 19 1,981 314 3,407 491
Interest income (480 ) (213 ) (1,192 ) (397 )
Income tax (recovery) expense 13(a) (295 ) 7,115 38 7,717
Deferred income tax expense (recovery) 13(a) 1,614 (2,671 ) 3,203 (505 )
Income tax paid (676 ) (1,118 ) (676 ) (1,118 )
Cash Provided Before Working Capital Items 3,841 25,400 11,991 31,151
Change in amounts receivable 10,507 (10,319 ) (2,016 ) (9,933 )
Change in inventory (3,868 ) (8,692 ) 2,930 (20,991 )
Change in prepaid expenses 1,669 (4,758 ) 6,081 (4,012 )
Changes in accounts payable and accrued
liabilities and provisions 5,036 5,816 2,584 5,582
Change in deferred revenue 872 (4,545 ) 1,440 (2,945 )
Net Cash Provided by (Used in) Operating Activities 18,057 2,902 23,010 (1,148 )
Financing Activities
Receipt of debt 9 - 15,000 25,000 15,000
Repayment of debt 9 - (15,000 ) - (15,000 )
Interest paid (2,092 ) - (2,092 ) -
Interest received 479 213 1,191 397
Lease payments (143 ) (139 ) (286 ) (278 )
Change in restricted cash - (15,524 ) (264 ) (15,524 )
Sale of non-controlling interest - - - 250
Share repurchase 10 - (323 ) - (323 )
Issuance of common shares 11 - 94 - 184
Net Cash (Used in) Provided by Financing Activities (1,756 ) (15,679 ) 23,549 (15,294 )
Investing Activities
Intangible assets (104 ) (716 ) (194 ) (1,689 )
Mine properties, plant and equipment (12,654 ) (10,667 ) (27,380 ) (13,962 )
Vanadium assets (1,525 ) - (10,115 ) -
Net Cash Used in Investing Activities (14,283 ) (11,383 ) (37,689 ) (15,651 )
Effect of foreign exchange on cash 387 (1,356 ) 639 1,181
Net Change in Cash 2,405 (25,516 ) 9,509 (30,912 )
Cash position - beginning of the period 61,575 78,394 54,471 83,790
Cash Position - end of the period $ 63,980 $ 52,878 $ 63,980 $ 52,878
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   4
---
--The accompanying notes form an integral part of the consolidated financial statements--
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements

1) Nature of operations

Largo Inc. ("the Company") is a producer and supplier of high-quality vanadium products, which are sourced from one of the world's highest-grade vanadium deposits at the Company's Maracás Menchen Mine located in Brazil. The Company is also focused on the advancement of renewable energy storage solutions through Largo Clean Energy and its vanadium redox flow battery technology ("VRFB"), as well as providing investors with exposure to physical vanadium through Largo Physical Vanadium Corp. ("LPV"). In addition to advancing its US- based clean energy storage business, the Company is in the process of implementing an ilmenite concentration plant using feedstock from its existing operations. While the Company's Maracás Menchen Mine has reached commercial production, future changes in market conditions and feasibility estimates could result in the Company's mineral resources not being economically recoverable.

The Company is a corporation governed by the Business Corporations Act (Ontario) and domiciled in Canada whose shares are listed on the Toronto Stock Exchange ("TSX") and on the Nasdaq Stock Market ("Nasdaq"). The head office, principal address and records office of the Company are located at 55 University Avenue, Suite 1105, Toronto, Ontario, Canada M5J 2H7.

2) Statement of compliance

These unaudited condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard ("IAS") 34, Interim Financial Reporting.

The unaudited condensed interim consolidated financial statements were approved by the Board of Directors of the Company on August 8, 2023.

3) Basis of preparation, significant accounting policies, and future accounting changes

The basis of presentation, and accounting policies and methods of their application in these unaudited condensed interim consolidated financial statements, including comparatives, are consistent with those used in the Company's audited annual consolidated financial statements for the year ended December 31, 2022 and should be read in conjunction with those statements.

These unaudited condensed interim consolidated financial statements are presented in thousands of U.S. dollars, unless otherwise noted. References to the symbol "C$" or "CAD" mean the Canadian dollar, references to the symbol "EUR" mean the Euro and references to the symbol "R$" or "BRL" mean the Brazilian real, the official currency of Brazil.

a) Critical judgements and estimation uncertainties

The preparation of unaudited condensed interim consolidated financial statements requires the Company's management to make judgments, estimates and assumptions about the carrying amount of its assets and liabilities that are not readily apparent from other sources. These estimates and assumptions are disclosed in note 3(d) of the Company's audited annual consolidated financial statements for the year ended December 31, 2022. There have been no significant changes to the areas of estimation and judgment during the three and six months ended June 30, 2023.

b) Significant accounting policies

These unaudited condensed interim consolidated financial statements, including comparatives, have been prepared following the same accounting policies and methods of computation as the audited annual consolidated financial statements for the year ended December 31, 2022.

Amendments to IAS 1, Presentation of Financial Statements, IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors and IAS 12, Income Taxes, became effective on January 1, 2023 with no impact on the Company's unaudited condensed interim consolidated financial statements.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   5
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements

4) Amounts receivable

June 30, December 31,
2023 2022
Trade receivables $ 20,320 $ 18,285
Current taxes recoverable - Brazil 2,401 2,156
Current taxes recoverable - Other 1,235 506
Other receivables 28 28
Total $ 23,984 $ 20,975

5) Inventory

June 30, December 31,
2023 2022
Finished products $ 44,711 $ 48,546
Work-in-process 558 998
Stockpiles 1,234 284
Warehouse materials 16,661 14,393
Total $ 63,164 $ 64,221

During the three and six months ended June 30, 2023, the Company recognized a net realizable value write- down of $nil and $107 for battery components (three and six months ended June 30, 2022 - $nil and $nil), with the write-down included in technology start-up costs. The value of battery components inventory at June 30, 2023 and December 31, 2022 was $nil. During the three and six months ended June 30, 2023, the Company recognized a net realizable value write-down of $683 and $683 for finished products (three and six months ended June 30, 2022 - $2,285 and $2,285). As inventory is sold, previously recorded net realizable value write- downs are reclassified from inventory write-down to direct mine and production costs or product acquisition costs as appropriate (note 19).

6) Other intangible assets

At June 30, 2023, the remaining estimated useful life of patents held by the Company was 7.5 years (December 31, 2022 - 8 years). At June 30, 2023, the remaining estimated useful life of capitalized software costs was 4.5 years (December 31, 2022 - 5 years).

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   6
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Intellectual
--- --- --- --- --- --- ---
Property Software Total
Cost
Balance at December 31, 2021 $ 4,366 $ - $ 4,366
Additions - 4,041 4,041
Balance at December 31, 2022 $ 4,366 $ 4,041 $ 8,407
Additions - 118 118
Balance at June 30, 2023 $ 4,366 $ 4,159 $ 8,525
Accumulated Depreciation
Balance at December 31, 2021 $ 437 $ - $ 437
Depreciation 436 271 707
Balance at December 31, 2022 $ 873 $ 271 $ 1,144
Depreciation 218 414 632
Balance at June 30, 2023 $ 1,091 $ 685 $ 1,776
Net Book Value
At December 31, 2022 $ 3,493 $ 3,770 $ 7,263
At June 30, 2023 $ 3,275 $ 3,474 $ 6,749

7) Mine properties, plant and equipment

At June 30, 2023 and December 31, 2022, the Company's economic interest in the Maracás Menchen Mine totaled 99.94%. The remaining 0.06% economic interest is held by Companhia Baiana de Pesquisa Mineral ("CBPM") owned by the state of Bahia. CBPM retains a 3% net smelter royalty ("NSR") in the Maracás Menchen Mine. The property is also subject to a royalty of 2% on certain operating costs under the Brazilian Mining Act. Under a separate agreement, Anglo Pacific Plc receives a 2% NSR in the Maracás Menchen Mine.

Office and Buildings,
Computer Mine Plant and Construction
Equipment Vehicles Properties Equipment In Progress Total
Cost
Balance at December 31, 2021 $ 3,968 $ 243 $ 94,477 $ 163,234 $ 5,113 $ 267,035
Additions 2,530 61 7,147 6,788 27,575 44,101
Disposals (152 ) - - (4,205 ) - (4,357 )
Reclassifications - - - 3,523 (3,523 ) -
Effects of changes in foreign exchange rates 42 17 4,831 10,963 259 16,112
Balance at December 31, 2022 $ 6,388 $ 321 $ 106,455 $ 180,303 $ 29,424 $ 322,891
Additions 144 - 12,203 157 12,788 25,292
Reclassifications - - - 14 (14 ) -
Effects of changes in foreign exchange rates 56 26 7,405 14,354 3,227 25,068
Balance at June 30, 2023 $ 6,588 $ 347 $ 126,063 $ 194,828 $ 45,425 $ 373,251
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   7
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Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Office and Buildings,
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Computer Mine Plant and Construction
Equipment Vehicles Properties Equipment In Progress Total
Accumulated Depreciation
Balance at December 31, 2021 $ 508 $ 243 $ 32,450 $ 87,175 $ - $ 120,376
Depreciation 1,198 5 4,701 18,270 - 24,174
Disposals (152 ) - - (4,205 ) - (4,357 )
Effects of changes in foreign exchange rates 21 17 1,595 5,828 - 7,461
Balance at December 31, 2022 $ 1,575 $ 265 $ 38,746 $ 107,068 $ - $ 147,654
Depreciation 605 6 3,674 9,702 - 13,987
Effects of changes in foreign exchange rates 38 22 2,607 9,242 - 11,909
Balance at June 30, 2023 $ 2,218 $ 293 $ 45,027 $ 126,012 $ - $ 173,550
Net Book Value
At December 31, 2022 $ 4,813 $ 56 $ 67,709 $ 73,235 $ 29,424 $ 175,237
At June 30, 2023 $ 4,370 $ 54 $ 81,036 $ 68,816 4$5,425 $ 199,701

Of the additions noted above, $25,205 related to the Mine Properties segment (year ended December 31, 2022 − $36,556) and $85 related to Largo Clean Energy (year ended December 31, 2022 − $3,599).

8) Accounts payable and accrued liabilities

June 30, December 31,
2023 2022
Accounts payable $ 22,518 $ 20,459
Accrued liabilities 4,554 3,122
Accrued financial costs 948 287
Other taxes 769 3,092
Total $ 28,789 $ 26,960
Current $ 28,539 $ 26,634
Non-current 250 326
Total $ 28,789 $ 26,960

9) Debt

June 30, December 31,
2023 2022
Total debt $ 65,000 $ 40,000
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   8
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Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Cash flows
--- --- --- --- --- --- --- --- --- ---
December 31, June 30,
2022 Proceeds Repayment 2023
Total debt $ 40,000 $ 25,000 $ - $ 65,000
Total liabilities from financing activities $ 40,000 $ 25,000 $ - $ 65,000
Cash flows
December 31, December 31,
2021 Proceeds Repayment 2022
Total debt $ 15,000 $ 55,000 $ (30,000 ) $ 40,000

Credit facilities

In April 2022, the Company repaid in full its $15,000 working capital facility. At the same time, the Company secured a new working capital facility with a bank in Brazil. This facility was fully drawn down and proceeds of $15,000 were received. This facility was originally due to be repaid as a lump sum payment in April 2023, together with accrued interest at a rate of 3.65% per annum. The facility was repaid in full in December 2022.

In October 2022, the Company secured an additional debt facility of $20,000 with a bank in Brazil. Following an amendment finalized in June 2023, the facility is for three years, with the principal due for repayment at maturity. In addition to a fee of 0.8%, accrued interest at a rate of 8.51% p.a. is to be paid every six months.

In December 2022, the Company secured an additional debt facility of $20,000 with a bank in Brazil. The facility is for three years, with equal principal repayments due semi-annually after a grace period of 360 days. In addition to a fee of 0.70%, accrued interest at a rate of 8.20% p.a. is to be paid every six months.

In January 2023, the Company secured a two-year debt facility of $15,000, bearing interest at 6.85% per annum. Payments are due quarterly with principal repayments starting after a grace period of 180 days. Also in January 2023, and amended in June 2023, the Company secured a three-year debt facility of $10,000, bearing interest at 8.51% per annum and an initial fee of 0.80%. The principal is due for repayment at maturity, with interest payments due semi-annually.

10) Issued capital

a) Authorized

Unlimited common shares without par value.

b) Issued

Six months ended Year ended
June 30, 2023 December 31, 2022
Number of Number of
Shares Cost Shares Cost
Balance, beginning of the period 64,006 $ 411,646 64,727 $ 415,982
Exercise of warrants (note 11) - - 10 124
Exercise of stock options (note 11) - - 36 320
Exercise of restricted share units (note 11) 44 678 106 1,308
Share repurchase - - (873 ) (6,088 )
Balance, end of the period 64,050 $ 412,324 64,006 $ 411,646
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   9
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Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements

11) Equity reserves

RSUs Options Warrants
Weighted Weighted
average average
exercise exercise Total
Number Value Number price Value Number price Value value
December 31, 2021 216 $ 1,551 889 C12.78 $ 4,857 1,832 C11.78 $ 11,406 $ 17,814
Share-based payments - 564 - - 1,714 - - - 2,278
Granted 111 640 363 11.79 359 - - - 999
Exercised (123 ) (1,308 ) (36 ) (6.70 (133 ) (10 ) (11.50 (34 ) (1,475 )
Expired - - - - - (1,480 ) - (4,573 ) (4,573 )
Forfeited (4 ) (7 ) (208 ) (13.23 (898 ) - - - (905 )
December 31, 2022 200 $ 1,440 1,008 C12.55 $ 5,899 342 C13.00 $ 6,799 $ 14,138
Share-based payments - 333 - - 276 - - - 609
Granted 230 132 424 6.60 201 - - - 333
Exercised (62 ) (678 ) - - - - - - (678 )
Forfeited (85 ) (694 ) (407 ) (12.18 (1,656 ) (14 ) - (78 ) (2,428 )
June 30, 2023 283 $ 533 1,025 C10.23 $ 4,720 328 C13.00 $ 6,721 $ 11,974

All values are in US Dollars.

During the three and six months ended June 30, 2023, the Company recognized a share-based payment expense related to the grant, vesting and forfeiture of stock options and RSUs of $413 and a recovery of $929 (three and six months ended June 30, 2022 - expenses of $491 and $1,301) for stock options and RSUs granted to the Company's directors, officers, employees and consultants. The total share-based payment expense was charged to operations.

a) RSUs

During the three and six months ended June 30, 2023, the Company granted 230 RSUs to officers and employees of the Company. These RSUs vest over time, with one-third vesting during each of the years 2024, 2025 and 2026.

b) Stock options

Weighted Weighted Weighted
average average average
No. No. remaining exercise grant date
Range of prices outstanding exercisable life (years) price share price
C$ 5.71 - 10.00 742 332 4.0 C$ 6.70 C$6.70
15.01 - 20.00 222 141 3.3 17.33 17.33
20.01 - 25.00 29 29 0.1 24.00 24.00
30.01 - 30.40 32 32 0.5 30.40 30.40
1,025 534 C$ C10.23

All values are in US Dollars.

During the six months ended June 30, 2023, the Company granted 424 (year ended December 31, 2022 - 363) stock options with a weighted average exercise price of C$6.60. The chart below details the inputs to the Black-Scholes model used in determining the fair value of the options granted during the year (with 0% dividend yield and 0% expected forfeiture rate).

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   10
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Six months ended
--- --- --- --- --- --- --- --- --- --- ---
June 30, 2023 June 30, 2022
Risk-free interest rate 3.13% 3.04% 3.29% 1.62% 0.95%
Expected volatility 68.58% 68.25% 68.48% 75.50% 81.13%
Expected life of options 5 5 5 5 5
Fair value on grant date $ 4.75 $ 3.92 $ 3.38 $ 6.93 $ 12.58
Exercise price $ 8.04 $ 6.67 $ 5.71 $ 11.22 $ 19.52
Number of options granted (000) 34 313 77 54 176
Expiry 01/12/28 04/13/28 05/18/28 01/20/27 04/01/27

Options vest in equal installments of one-third on the anniversary date of the grant. The remaining weighted average contractual life of options outstanding at June 30, 2023 was 3.6 years (December 31, 2022 - 2.7 years).

c) Warrants

Expected Risk-free
No. No. Grant Expiry Exercise Expected dividend Interest
outstanding exercisable Date Date price life (years) yield rate
328 328 12/07/20 12/08/25 C   13.00 5.00 0% 0%
328 328 C   13.00

All values are in US Dollars.

12) Earnings (loss) per share

The total number of shares issuable from options, warrants and RSUs that are excluded from the computation of diluted earnings (loss) per share because their effect would be anti-dilutive was 1,636 and 1,636 for the three and six months ended June 30, 2023 (three and six months ended June 30, 2022 - 1,004 and 1,004).

13) Taxes

a) Tax expense

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Income tax recovery (expense) $ 295 $ (7,115 ) $ (38 ) $ (7,717 )
Deferred income tax (expense) recovery (1,614 ) 2,671 (3,203 ) 505
Total $ (1,319 ) $ (4,444 ) $ (3,241 ) $ (7,212 )

b) Changes in deferred tax assets and liabilities

June 30, December 31,
2023 2022
Deferred income tax asset $ 2,141 $ 4,596
Deferred income tax liability (713 ) -
Net deferred income tax asset $ 1,428 $ 4,596
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   11
---
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Six months
--- --- --- --- --- --- ---
ended Year ended
June 30, December 31,
2023 2022
Net deferred income tax asset, beginning of the period $ 4,596 $ 3,343
Deferred income tax (expense) recovery (3,203 ) 1,423
Effect of foreign exchange 35 (170 )
Net deferred income tax asset, end of the period $ 1,428 $ 4,596

14) Related party transactions

In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company.

The remuneration of directors and other members of key management personnel during the period was as follows:

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Short-term benefits $ 370 $ 1,889 $ 1,460 $ 2,523
Share-based payments 151 578 280 1,261
Total $ 521 $ 2,467 $ 1,740 $ 3,784

Refer to note 16 for additional commitments with management.

15) Segmented disclosure

The Company has six operating segments: sales & trading, mine properties, corporate, exploration and evaluation properties ("E&E properties") (included as part of inter-segment transactions & other), Largo Clean Energy and Largo Physical Vanadium. Corporate includes the corporate team that provides administrative, technical, financial and other support to all of the Company's business units, as well as being part of the Company's sales structure.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   12
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Inter-
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Largo Largo segment
Sales & Mine Clean Physical transactions
trading properties Corporate Energy Vanadium & other Total
Three months ended June 30, 2023
Revenues $ 43,810 $ 43,940 $ 35,737 $ - $ - $ (70,377 ) $ 53,110
Operating costs (50,806 ) (36,952 ) (34,492 ) - - 79,221 (43,029 )
Professional, consulting and management fees (456 ) (624 ) (1,997 ) (2,444 ) (303 ) - (5,824 )
Foreign exchange gain (loss) 9 (453 ) (381 ) (13 ) 21 - (817 )
Other general and administrative expenses (452 ) (545 ) (880 ) (1,253 ) (29 ) (174 ) ^1^ (3,333 )
Share-based payments - - (413 ) - - - (413 )
Finance costs (10 ) (1,662 ) (3 ) (18 ) (286 ) (2 ) ^1^ (1,981 )
Interest income 1 141 338 - - - 480
Technology start-up costs - - - (1,539 ) - - ^1^ (1,539 )
Exploration and evaluation costs - (625 ) - - - (676 ) ^2^ (1,301 )
(51,714 ) (40,720 ) (37,828 ) (5,267 ) (597 ) 78,369 (57,757 )
Net income (loss)
before tax (7,904 ) 3,220 (2,091 ) (5,267 ) (597 ) 7,992 (4,647 )
Income tax recovery 228 67 - - - - 295
Deferred income tax (expense) recovery 237 (1,675 ) (176 ) - - - (1,614 )
Net income (loss) $ (7,439 ) $ 1,612 $ (2,267 ) $ (5,267 ) $ (597 ) $ 7,992 $ (5,966 )
Revenues (after elimination of inter-segment transactions) $ 43,721 $ 8,974 $ 415 $ - $ - $ 53,110
At June 30, 2023
Total non-current assets $ 1,697 $ 171,774 $ 19,437 $ 10,621 $ 25,234 $ 4,228 $ 232,991
Total assets $ 64,169 $ 291,507 $ 99,227 $ 15,255 $ 26,437 $ (103,276 )^3^ $ 393,319
Total liabilities $ 42,142 $ 101,877 $ 70,082 $ 6,204 $ 228 $ (108,770 )^4^ $ 111,763

  1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

  2. Amount relating to E&E properties.

  3. Inter-segment transaction elimination of $107,548 partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total assets of $4,270 and E&E properties total assets of $2.

  4. Inter-segment transaction elimination of $108,853 partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total liabilities of $83 and E&E properties total liabilities of $nil.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   13
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Inter-
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Largo Largo segment
Sales & Mine Clean Physical transactions
trading properties Corporate Energy Vanadium & other Total
Three months ended June 30, 2022
Revenues $ 74,471 $ 66,027 $ 57,922 $ - $ - $ (113,616 ) $ 84,804
Operating costs (61,844 ) (42,319 ) (55,776 ) - - 109,235 (50,704 )
Professional, consulting and management fees (568 ) (1,567 ) (1,584 ) (2,337 ) (324 ) - ^1^ (6,380 )
Foreign exchange (loss) gain (57 ) 2,651 (202 ) 1 17 - 2,410
Other general and administrative expenses (137 ) (3,051 ) (390 ) (1,354 ) (41 ) (129 ) ^1^ (5,102 )
Share-based payments - - (491 ) - - - (491 )
Finance costs (8 ) (264 ) (3 ) (21 ) (1 ) (17 ) ^1^ (314 )
Interest income - 153 60 - - - 213
Technology start-up costs - - - (1,730 ) - (117 ) ^1^ (1,847 )
Exploration and evaluation costs - (178 ) - - - (2 ) ^2^ (180 )
(62,614 ) (44,575 ) (58,386 ) (5,441 ) (349 ) 108,970 (62,395 )
Net income (loss) before tax 11,857 21,452 (464 ) (5,441 ) (349 ) (4,646 ) 22,409
Income tax expense (810 ) (6,305 ) - - - - (7,115 )
Deferred income tax recovery (expense) (340 ) 3,435 (424 ) - - - 2,671
Net income (loss) $ 10,707 $ 18,582 $ (888 ) $ (5,441 ) $ (349 ) $ (4,646 ) $ 17,965
Revenues (after elimination of inter-segment transactions) $ 74,471 $ 10,333 $ - $ - $ - $ - $ 84,804
At December 31, 2022
Total non-current assets $ 934 $ 148,508 $ 20,525 $ 12,389 $ 15,344 $ 3,906 $ 201,606
Total assets $ 73,874 $ 250,926 $ 90,770 $ 15,941 $ 27,086 $ (102,847 )^3^ $ 355,750
Total liabilities $ 56,566 $ 72,842 $ 53,373 $ 5,092 $ 374 $ (107,051 )^4^ $ 81,196

  1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

  2. Amount relating to E&E properties.

  3. Inter-segment transaction elimination of $(106,773) partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total assets of $3,924 and E&E properties total assets of $2.

  4. Inter-segment transaction elimination of $(107,225) partially offset by Largo Titânio Ltda. and Largo Tech Ltda. total liabilities of $174.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   14
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Inter-
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Largo Largo segment
Sales & Mine Clean Physical transactions
trading properties Corporate Energy Vanadium & other Total
Six months ended June 30, 2023
Revenues $ 94,244 $ 82,522 $ 74,508 $ - $ - $ (140,743 ) $ 110,531
Operating costs (98,733 ) (71,141 ) (72,148 ) - - 153,062 (88,960 )
Professional, consulting and management fees (902 ) (1,468 ) (3,684 ) (4,846 ) (463 ) - (11,363 )
Foreign exchange gain (loss) 63 (201 ) (294 ) (22 ) 54 - (400 )
Other general and administrative expenses (625 ) (973 ) (2,096 ) (2,685 ) 51 (278 ) ^1^ (6,606 )
Share-based payments - - 929 - - - 929
Finance costs (19 ) (3,059 ) (7 ) (32 ) (287 ) (3 ) ^1^ (3,407 )
Interest income 2 658 532 - - - 1,192
Technology start-up costs - - - (4,307 ) - (1 ) ^1^ (4,308 )
Exploration and evaluation costs - (862 ) - - - (678 ) ^2^ (1,540 )
(100,214 ) (77,046 ) (76,768 ) (11,892 ) (645 ) 152,102 (114,463 )
Net income (loss) before tax (5,970 ) 5,476 (2,260 ) (11,892 ) (645 ) 11,359 (3,932 )
Income tax expense (38 ) - - - - - (38 )
Deferred income tax (expense) recovery 80 (2,731 ) (552 ) - - - (3,203 )
Net income (loss) $ (5,928 ) $ 2,745 $ (2,812 ) $ (11,892 ) $ (645 ) $ 11,359 $ (7,173 )
Revenues (after inter-segment eliminations) $ 92,578 $ 16,049 $ 1,904 $ - $ - $ - $ 110,531

  1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

  2. Amount relating to E&E properties.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   15
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Inter-
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Largo Largo segment
Sales & Mine Clean Physical transactions
trading properties Corporate Energy Vanadium & other Total
Six months ended June 30, 2022
Revenues $ 108,621 $ 102,893 $ 88,950 $ - $ - $ (172,972 ) $ 127,492
Operating costs (93,792 ) (69,132 ) (85,667 ) - - 168,929 (79,662 )
Professional, consulting and management fees (1,061 ) (2,603 ) (3,474 ) (4,650 ) (508 ) - (12,296 )
Foreign exchange (loss) gain (83 ) 944 78 (2 ) 6 - 943
Other general and administrative expenses (248 ) (3,318 ) (808 ) (2,197 ) (56 ) (130 ) ^1^ (6,757 )
Share-based payments - - (1,301 ) - - - (1,301 )
Finance costs (14 ) (413 ) (6 ) (39 ) (1 ) (18 ) ^1^ (491 )
Interest income - 297 100 - - - 397
Technology start-up costs - - - (4,566 ) - (251 ) ^1^ (4,817 )
Exploration and evaluation costs - (281 ) - - - (4 ) ^2^ (285 )
(95,198 ) (74,506 ) (91,078 ) (11,454 ) (559 ) 168,526 (104,269 )
Net income (loss) before tax 13,423 28,387 (2,128 ) (11,454 ) (559 ) (4,446 ) 23,223
Income tax expense (956 ) (6,761 ) - - - - (7,717 )
Deferred income tax recovery (expense) (387 ) 1,587 (695 ) - - - 505
Net income (loss) $ 12,080 $ 23,213 $ (2,823 ) $ (11,454 ) $ (559 ) $ (4,446 ) $ 16,011
Revenues (after inter-segment eliminations) $ 108,621 $ 18,557 $ 314 $ - $ - $ - $ 127,492

  1. Amounts relating to Largo Titânio Ltda. and Largo Tech Ltda., which are not an operating segment.

  2. Amount relating to E&E properties.

16) Commitments and contingencies

At June 30, 2023, the Company was party to certain management and consulting contracts. Minimum commitments under the agreements are approximately $1,808 and all payable within one year. These contracts also require that additional payments of up to approximately $2,712 be made upon the occurrence of certain events such as change of control. As the triggering event has not occurred, the contingent payments have not been reflected in these consolidated financial statements.

In 2021, the Company signed a 10-year exclusive off-take agreement with a third party for the purchase of all standard and high purity grade vanadium products they produce. The annual quantity to be delivered to the Company in 2023 is 220 tonnes of V2O5, with the Company having a right of first refusal over additional amounts.

The Company is committed to the purchase of 60 tonnes per month of V2O5 from third parties for the remainder of 2023.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   16
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements

The Company's Largo Clean Energy business is required to pay a royalty of $120 per kilowatt capacity of a licensed product until such time as the licensed patents expire or are abandoned, and $60 per kilowatt thereafter. Refer to note 7 for details of the royalties payable at the Maracás Menchen Mine.

The Company is committed to a minimum amount of rental payments under five leases of office space which expire between December 31, 2023 and May 1, 2027. Minimum rental commitments remaining under the leases are approximately $299, including $185 due within one year.

At the Company's Maracás Menchen Mine and at Largo Clean Energy, the Company has entered into purchase order contracts with remaining amounts due related to goods not received or services not rendered as of June 30, 2023 of $9,315.

The Company, through its subsidiaries, is party to legal proceedings in the ordinary course of its operations related to legally binding agreements with various third parties under supply contracts and consulting agreements. During the year ended December 31, 2022, the Company received a ruling regarding one such proceeding in Brazil. This relates to a supply agreement for the Maracás Menchen Mine which was filed with the courts in October 2014. The ruling requires the Company to pay amounts due, plus interest and legal fees. At June 30, 2023, the Company recognized a provision of R$28,244 ($5,861) in the current portion of provisions (December 31, 2022 - $5,076). The Company is awaiting a further ruling from a higher court in Brazil.

The Company and its subsidiaries are party to legal proceedings regarding labour matters. A provision was recorded at December 31, 2022 for such proceedings in Brazil in an amount of R$1,223 ($234). At June 30, 2023, the provision recognized was R$1,223 ($254).

The outcome of these proceedings remains dependent on the final judgment. Management does not expect the outcome of any of the remaining proceedings to have a materially adverse effect on the results of the Company's financial position or results of operations.

17) Financial instruments

Financial assets and financial liabilities at June 30, 2023 and December 31, 2022 were as follows:

June 30, December 31,
2023 2022
Cash $ 63,980 $ 54,471
Restricted cash 734 470
Trade and other receivables 20,348 18,313
Accounts payable and accrued liabilities (including non-current) 28,789 26,960
Total debt 65,000 40,000

Restricted cash refers to cash amounts the Company was required to place on deposit. Refer to the liquidity risk discussion below regarding liabilities.

The Company's risk exposures and the impact on the Company's financial instruments are summarized below. There have been no changes in the risks, objectives, policies and procedures from the previous year.

a) Fair value

IFRS requires that the Company disclose information about the fair value of its financial assets and liabilities. Fair value estimates are made based on relevant market information and information about the financial instrument.

These estimates are subjective in nature and involve uncertainties in significant matters of judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect these estimates.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   17
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements

The fair value hierarchy categorizes into three levels the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

• Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly such as those derived from prices.

• Level 3 inputs are unobservable inputs for the asset or liability.

The carrying amounts for trade receivables, amounts receivable and accounts payable and accrued liabilities in the condensed interim consolidated statements of financial position approximate fair values because of the limited term of these instruments. Cash and restricted cash are classified as FVTPL and included in level 1. The debt facilities were secured at interest rates consistent with the rates seen at June 30, 2023 and thus the carrying amount of debt approximates fair value.

There have been no changes in the classification of financial instruments in the fair value hierarchy since December 31, 2022. The Company does not have any financial instruments measured using Level 3 inputs. The Company does not offset financial assets with financial liabilities and there were no transfers between Level 1 and Level 2 input financial instruments.

b) Credit risk

The Company's maximum amount of credit risk is attributable to cash, restricted cash and amounts receivable.

The Company minimizes its credit risk with respect to cash by placing its funds on deposit with the highest rated banks in Canada, Ireland, the U.S. and Brazil. Financial instruments included in amounts receivable consist primarily of receivables from unrelated companies. Sales to customers outside of Brazil are protected either by the Company's credit insurance policies, which establishes credit limits for each customer, or by the Company requiring letters of credit or up-front payment prior to delivery occurring.

Of the total trade receivables balance of $20,320, $11,468 relates to customers in Brazil, which are not covered by the Company's credit insurance policies. The ratings for these companies range from AA to AAA. The Company applies the IFRS 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables.

To measure expected credit losses, trade receivables are grouped based on risk characteristics and due dates. At June 30, 2023, no amounts are past due and in the six months ended June 30, 2023, the Company has not experienced any credit losses. At June 30, 2023, the loss allowance for trade receivables was determined to be $nil (December 31, 2022 - $nil), with any movement recognized as a component of finance costs (note 19). There have been no write offs of trade receivables.

c) Liquidity risk

The following table details the Company's expected remaining contractual cash flow requirements at June 30, 2023 for its financial liabilities with agreed repayment periods.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   18
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements
Less than 6 months
--- --- --- --- --- --- --- --- ---
6 months to 1 year 1 to 3 years Over 3 years
Accounts payable and accrued liabilities (note 8) $ 28,504 $ - $ 285 $ -
Debt (note 9) - 18,000 47,000 -
Operating and purchase<br>commitments 10,312 997 80 33
Total $ 38,816 $ 18,997 $ 47,365 $ 33

The Company's principal sources of liquidity are its cash flows from operating activities and cash of $63,980 (December 31, 2022 - $54,471). Refer to note 16 for other commitments and contingencies.

d) Market risk

Interest rate risk

The Company's interest rate exposure is limited to that portion of its debt that is subject to floating interest rates. At June 30, 2023, the Company had no debt that is subject to floating interest rates and does not have any exposure to floating interest rates.

Foreign currency risk

At June 30, 2023, the Company's outstanding debt is 100% denominated in U.S. dollars (December 31, 2022 - 100% U.S. dollar denominated).

The impact of fluctuations in foreign currency on cash and debt relates primarily to fluctuations between the U.S. dollar, the Canadian dollar, the Brazilian real and the Euro. At June 30, 2023, the Company's U.S. dollar functional currency entities had cash denominated in Canadian dollars, Euros and Swiss francs and the Company's Brazilian real functional currency entities had cash and debt denominated in U.S. dollars.

A 5% change in the value of the Canadian dollar, the Euro and the Swiss franc relative to the U.S. dollar would affect the value of these cash balances at June 30, 2023 by approximately $178. A 5% change in the value of the Brazilian real relative to the U.S. dollar would affect the value of Brazilian real cash balances by approximately $291.

Price risk

The Company does not have any financial instruments with significant exposure to price risk.

Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   19
Largo Inc.<br><br> <br>Expressed in thousands / 000's of U.S. dollars and shares (except per share information)
---
Notes to the Unaudited Condensed Interim Consolidated Financial Statements

18) Revenues

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
V2O5 revenues
Produced products $ 30,558 $ 45,976 $ 65,084 $ 67,790
Purchased products 2,937 1,143 5,465 1,529
33,495 47,119 70,549 69,319
V2O3 revenues
Produced products $ 2,358 $ - $ 3,841 $ -
Purchased products - - 1,155 -
2,358 - 4,996 -
FeV revenues
Produced products $ 17,230 $ 22,883 $ 34,658 $ 41,911
Purchased products 27 14,802 328 16,262
17,257 37,685 34,986 58,173
Vanadium sales from contracts with customers $ 53,110 $ 84,804 $ 110,531 $ 127,492

19) Expenses

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Finance costs:
Interest expense and fees $ 1,674 $ 237 $ 3,025 $ 354
Interest on lease liabilities 14 35 28 53
Accretion 68 42 129 84
Write-down of vanadium assets 225 - 225 -
$ 1,981 $ 314 $ 3,407 $ 491
Operating costs:
Direct mine and production costs $ 24,976 $ 23,905 $ 53,395 $ 41,465
Conversion costs 2,220 2,337 4,138 4,184
Product acquisition costs 3,753 9,568 7,931 11,118
Royalties 2,450 3,742 4,895 5,768
Distribution costs 2,525 2,851 3,972 4,306
Inventory write-down (note 5) 683 2,572 683 2,572
Depreciation and amortization 6,202 5,507 13,453 9,812
Iron ore costs 220 222 493 437
$ 43,029 $ 50,704 $ 88,960 $ 79,662
Unaudited Condensed Interim Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022   20
--- 
Largo Inc.: Exhibit 99.2 - Filed by newsfilecorp.com

Management's Discussion and Analysis

For The Three and Six Months Ended June 30, 2023

Table of contents

To Our Shareholders 1
The Company 1
Q2 2023 Highlights 1
Significant Events and Transactions Subsequent to Q2 2023 1
Q2 2023 Summary 2
Selected Quarterly Information 9
2023 Guidance 9
Operations 10
Financial Instruments 12
Liquidity And Capital Resources 12
Outstanding Share Data 13
Transactions With Related Parties 14
Commitments And Contingencies 14
Disclosure Controls And Procedures And Internal Controls Over Financial Reporting 15
Significant Accounting Judgments, Estimates And Assumptions 15
Changes In Accounting Policies 16
Non-GAAP Measures 16
Risks And Uncertainties 19
Cautionary Statement Regarding Forward-Looking Information 19

To Our Shareholders

The following Management's Discussion and Analysis ("MD&A") relates to the financial condition and results of operations of Largo Inc. ("we", "our", "us", "Largo", or the "Company") for the quarter ended June 30, 2023 ("Q2 2023") and should be read in conjunction with (i) the unaudited condensed interim consolidated financial statements and related notes for the same period, (ii) the audited annual consolidated financial statements and related notes for the year ended December 31, 2022 and (iii) the MD&A for the year ended December 31, 2022. Note references in the following discussion refer to the note disclosures contained in the Q2 2023 unaudited condensed interim consolidated financial statements. References in the following discussion to "Q2 2022" refer to the quarter ended June 30, 2022.

The financial statements and related notes of Largo have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") applicable to a going concern. Certain non-GAAP measures are discussed in this MD&A, which are clearly disclosed as such. Additional information, including the Company's press releases, has been filed electronically through the System for Electronic Document Analysis and Retrieval ("SEDAR") and is available online under the Company's profile at www.sedar.com and www.sec.gov.

This MD&A reports the Company's activities through August 8, 2023, unless otherwise indicated. References to "date of this MD&A" mean August 8, 2023. Except as otherwise set out herein, all amounts expressed herein are in thousands of U.S. dollars, denominated by "$". The Company's shares, options, units and warrants are expressed in thousands. Prices are not expressed in thousands. References to the symbol "C$" mean the Canadian dollar and references to the symbol "R$" mean the Brazilian real.

Mr. Emerson Ricardo Re, MSc, MBA, MAusIMM (CP) (No. 305892), Registered Member (No. 0138) (Chilean Mining Commission), is a Qualified Person as defined under National Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI 43-101") and has reviewed the technical information in the MD&A.

The Company

Largo is a Canadian based company that is one of the world's leading high-quality vanadium suppliers with its VPURE^TM^and VPURE+^TM^products, which are sourced from the Company's Maracás Menchen Mine in Brazil. In addition to advancing its U.S.-based clean energy storage business, the Company is in the process of implementing an ilmenite concentration plant using feedstock from its existing operations. Largo's VCHARGE vanadium batteries offer an efficient, safe, and long-life storage system that is fully recyclable at the end of its expected 25+ year lifetime. The Company's strategy is centered around two important pillars: a profitable supply of its industry-preferred vanadium products from Brazil combined with its emerging clean energy storage business to support the world's low carbon future.

The Company is organized and exists under the Business Corporations Act (Ontario) and its common shares are listed on the Toronto Stock Exchange ("TSX") under the symbol "LGO" and on the Nasdaq Stock Market ("Nasdaq") under the symbol "LGO".

Q2 2023 Highlights

• The Company recorded net loss before tax of $4,647 for Q2 2023 and a net loss of $5,966.

• The Company's Maracás Menchen Mine produced 2,639 tonnes of vanadium pentoxide ("V^2^O^5^") in Q2 2023 and had sales of 2,557 tonnes of V^2^O^5^equivalent (including 289 tonnes of purchased products).

• On May 1, 2023, the Company announced that Ms. Andrea Weinberg had been appointed as an independent director of the Company's Board of Directors.

• On May 24, 2023, the Company announced the resignation of Ms. Koko Yamamoto and the appointment of Ms. Helen Cai as an independent director of the Company's Board of Directors.

Significant Events and Transactions Subsequent to Q2 2023

• On July 15, 2023, the Company was deeply saddened to report an employee fatality as a result of an accident that occurred on July 13, 2023 at the chemical plant of the Company's Maracás Menchen Mine.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   1

Q2 2023 Summary

Financial

Three months ended
June 30, June 30,
2023 2022 Movement
Revenues $ 53,110 $ 84,804 $ (31,694 ) (37%)
Operating costs (43,029 ) (50,704 ) 7,675 (15%)
Direct mine and production costs (24,976 ) (23,905 ) (1,071 ) 4%
Professional, consulting and management fees (5,824 ) (6,380 ) 556 (9%)
Foreign exchange (loss) gain (817 ) 2,410 (3,227 ) (134%)
Other general and administrative expenses (3,333 ) (5,102 ) 1,769 (35%)
Share-based payments (413 ) (491 ) 78 (16%)
Finance costs (1,981 ) (314 ) (1,667 ) 531%
Interest income 480 213 267 125%
Technology start-up costs (1,539 ) (1,847 ) 308 (17%)
Exploration and evaluation costs (1,301 ) (180 ) (1,121 ) 623%
(57,757 ) (62,395 ) 4,638 (7%)
Net income (loss) before tax (4,647 ) 22,409 (27,056 ) (121%)
Income tax recovery (expense) 295 (7,115 ) 7,410 (104%)
Deferred income tax (expense) recovery (1,614 ) 2,671 (4,285 ) (160%)
Net income (loss) $ (5,966 ) $ 17,965 $ (23,931 ) (133%)
Unrealized gain (loss) on foreign currency
translation 10,223 (19,319 ) 29,542 (153%)
Comprehensive income (loss) $ 4,257 $ (1,354 ) $ 5,611 (414%)
Basic earnings (loss) per share $ (0.09 ) $ 0.28 $ (0.37 ) (132%)
Diluted earnings (loss) per share $ (0.09 ) $ 0.28 $ (0.37 ) (132%)
Cash provided before working capital items $ 3,841 $ 25,400 $ (21,559 ) (85%)
Net cash provided by operating activities 18,057 2,902 15,155 522%
Net cash used in financing activities (1,756 ) (15,679 ) 13,923 (89%)
Net cash used in investing activities (14,283 ) (11,383 ) (2,900 ) 25%
Net change in cash 2,405 (25,516 ) 27,921 (109%)
Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   2
---
Six months ended
--- --- --- --- --- --- --- --- --- --- ---
June 30, June 30,
2023 2022 Movement
Revenues $ 110,531 $ 127,492 $ (16,961 ) (13%)
Operating costs (88,960 ) (79,662 ) (9,298 ) 12%
Direct mine and production costs (53,395 ) (41,465 ) (11,930 ) 29%
Professional, consulting and management fees (11,363 ) (12,296 ) 933 (8%)
Foreign exchange (loss) gains (400 ) 943 (1,343 ) (142%)
Other general and administrative expenses (6,606 ) (6,757 ) 151 (2%)
Share-based payments 929 (1,301 ) 2,230 (171%)
Finance costs (3,407 ) (491 ) (2,916 ) 594%
Interest income 1,192 397 795 200%
Technology start-up costs (4,308 ) (4,817 ) 509 (11%)
Exploration and evaluation costs (1,540 ) (285 ) (1,255 ) 440%
(114,463 ) (104,269 ) (10,194 ) 10%
Net income (loss) before tax $ (3,932 ) $ 23,223 $ (27,155 ) (117%)
Income tax expense (38 ) (7,717 ) 7,679 (100%)
Deferred income tax (expense) recovery (3,203 ) 505 (3,708 ) (734%)
Net income (loss) $ (7,173 ) $ 16,011 $ (23,184 ) (145%)
Unrealized gain on foreign currency translation 15,104 7,293 7,811 107%
Comprehensive income $ 7,931 $ 23,304 $ (15,373 ) (66%)
Basic earnings (loss) per share (note 12) $ (0.11 ) $ 0.25 $ (0.36 ) (144%)
Diluted earnings (loss) per share (note 12) $ (0.11 ) $ 0.25 $ (0.36 ) (144%)
Cash provided before working capital items $ 11,991 $ 31,151 $ (19,160 ) (62%)
Net cash provided by (used in) operating activities 23,010 (1,148 ) 24,158 (2,104%)
Net cash provided by (used in) financing activities 23,549 (15,294 ) 38,843 (254%)
Net cash used in investing activities (37,689 ) (15,651 ) (22,038 ) 141%
Net change in cash $ 9,509 $ (30,912 ) $ 40,421 (131%)

The movements in the discussion below refer to those shown in the previous tables.

• The Company recorded a net loss of $5,966 in Q2 2023, compared with net income of $17,965 in Q2 2022. This movement was primarily due to a 37% decrease in revenues, a 531% increase in finance costs and a 623% increase in exploration and evaluation costs. This was partially offset by a 15% decrease in operating costs and a 35% decrease in other general and administrative expenses.

• For the six months ended June 30, 2023, the Company recorded a net loss of $7,173, compared with net income of $16,011 for the same prior year period. This movement was primarily attributable to a 13% decrease in revenues and a 594% increase in finance costs, partially offset by an 8% decrease in professional, consulting and management fees and a 200% increase in interest income.

Commercial

• In Q2 2023, the Company sold 2,557 tonnes of V^2^O^5^equivalent (Q2 2022 - 3,291 tonnes), including 289 tonnes of purchased products (Q2 2022 - 508 tonnes). Produced V^2^O^5^equivalent sold decreased, with 5,000 (000s lb) sold in Q2 2023, as compared with 6,135 (000s lb) sold in Q2 2022. The Company delivered both standard grade and high purity V^2^O^5^, as well as vanadium trioxide ("V^2^O^3^") and ferrovanadium ("FeV") to customers globally.

• The Company continues to actively manage its logistics and supply chain operations to provide premium products and service to its customers. Logistical challenges and transport costs have eased from their highs and are now back to pre-COVID levels with a stable outlook.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   3

• During Q2 2023, the average benchmark price per lb of V^2^O^5^in Europe was $8.46, a decrease of 19% from the average of $10.39 seen in Q1 2023 and a decrease of 24% from the average of $11.08 seen in Q2 2022. The average European benchmark price at June 30, 2023 was approximately $7.98, compared with approximately $10.13 at March 31, 2023 and $9.15 at June 30, 2022. During Q2 2023, the average benchmark price per kg of FeV in Europe was $33.47, a decrease of 15% from the average of $39.38 seen in Q1 2023 and a decrease of 24% from the average of $43.83 seen in Q2 2022. The average benchmark price at June 30, 2023 was approximately $32.00, compared with approximately $38.50 at March 31, 2023 and $38.15 at June 30, 2022. The Company is now selling products with pricing based on several different V^2^O^5^and FeV benchmarks. The Company's revenues will be driven by the movements in these prices.

• Spot demand in Q2 2023 was soft, primarily due to adverse conditions in the Chinese and European steel industries. However, strong demand from the aerospace sector continued. Demand in the energy storage market is anticipated to increase in future quarters. The Company maintains a strong focus on developing new markets for its high purity products and increased sales of V^2^O^3^in Europe during the period.

• The Company is committed to the purchase of 60 tonnes per month of V^2^O^5^from third parties for the remainder of the year.

• LPV continued its acquisition of vanadium assets, with $1,525 spent during Q2 2023. LPV has deployed its available capital and is focussed on marketing and strategic initiatives to establish its business model.

• Subsequent to Q2 2023, sales in July 2023 were 860 tonnes of V^2^O^5^equivalent.

• During Q2 2023, the Company recognized revenues of $53,110 (Q2 2022 - $84,804) from sales of 2,557 tonnes of V^2^O^5^equivalent (Q2 2022 - 3,291 tonnes). Of the total revenues, $43,721 is related to the Sales & trading segment, $8,974 is related to the Mine properties segment and $415 is related to the Corporate segment (after the elimination of inter-segment transactions).

• During the six months ended June 30, 2023, the Company recognized revenues of $110,531 (2022 - $127,492 in the same prior year period) from the sales of 5,406 tonnes of V^2^O^5^equivalent (2022 - 5,523 tonnes in the same prior year period). Of the total, $92,578 is related to the Sales & trading segment, $16,049 is related to the Mine properties segment and $1,904 is related to the Corporate segment (after the elimination of inter- segment transactions).

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
V^2^O^5^revenues per pound of V^2^O^5^sold^1, 2^
-   Produced material $ 9.91 $ 10.48 $ 9.46 $ 9.58
-   Purchased material $ 7.42 $ 12.99 $ 7.75 $ 11.58
-   Total $ 9.63 $ 10.53 $ 9.30 $ 9.61
V^2^O^3^revenues per pound of V^2^O^3^sold^1, 2^
-   Produced material $ 13.32 $ - $ 12.35 $ -
-   Purchased material $ - A$- $ 13.13 $ -
-   Total $ 13.32 $ - $ 12.52 $ -
FeV revenues per kg of FeV sold^1, 2^
-   Produced material $ 29.76 $ 41.61 $ 30.22 $ 35.46
-   Purchased material $ 27.00 $ 46.69 $ 29.82 $ 45.55
-   Total $ 29.75 $ 43.47 $ 30.21 $ 37.80
Revenues per pound sold^1, 2^ $ 9.42 $ 11.69 $ 9.27 $ 10.47

1. V2O**5 revenues per pound of V2O**5 sold, V2O**3 revenues per pound of V2O**3 sold, FeV revenues per kg of FeV sold and revenues per pound sold are non-GAAP ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non- GAAP Measures" section of this MD&A.

2. Calculated based on the quantity sold during the stated period.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   4

Costs

• Operating costs of $43,029 in Q2 2023 (Q2 2022 - $50,704) include direct mine and production costs of $24,976 (Q2 2022 - $23,905), conversion costs of $2,220 (Q2 2022 - $2,337), product acquisition costs of $3,753 (Q2 2022 - $9,568), royalties of $2,450 (Q2 2022 - $3,742), distribution costs of $2,525 (Q2 2022 - $2,851), inventory write-down of $683 (Q2 2022 - $2,572), depreciation and amortization of $6,202 (Q2 2022

  • $5,507) and iron ore costs of $220 (Q2 2022 - $222).

• The increase in direct mine and production costs is attributable to an increase in total ore mined and the move to a new mining contractor in Q3 2022. Higher mining costs, the change in production levels across the period and the ramp up following the challenges experienced in the prior quarter all impacted costs. In addition, as compared with Q2 2022, the Company continues to experience elevated costs in critical consumables. The Company is actively working to manage its usage of these consumables and is also starting to see a softening in consumable prices. Of the total operating costs, $33,469 is related to the Sales & trading segment, $8,841 is related to the Mine properties segment and $719 is related to the Corporate segment (after the elimination of inter-segment transactions).

• Operating costs of $88,960 for the six months ended June 30, 2023 (2022 - $79,662 in the same prior year period) include direct mine and production costs of $53,395 (2022 - $41,465 in the same prior year period), conversion costs of $4,138 (2022 - $4,184 in the same prior year period), product acquisition costs of $7,931 (2022 - $11,118 in the same prior year period), royalties of $4,895 (2022 - $5,768 in the same prior year period), distribution costs of $3,972 (2022 - $4,306 in the same prior year period), inventory write-down of $683 (2022 - $2,572 in the same prior year period), depreciation and amortization of $13,453 (2022 - $9,812 in the same prior year period) and iron ore costs of $493 (2022 - $437 in the same prior year period). The increase in direct mine and production costs is primarily attributable to the cost impacts of low ore availability experienced in Q1 2023 as a consequence of the elevated levels of rainfall in Q4 2022, plant shutdowns for corrective maintenance during the six months ended June 30, 2023 and cost increases for critical consumables, as compared with the same prior year period. Of the total, $65,663 is related to the Sales & trading segment, $16,660 is related to the Mine properties segment and $6,637 is related to the Corporate segment (after the elimination of inter-segment transactions).

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Cash operating costs per pound^1^ $ 5.67 $ 4.84 $ 5.62 $ 4.65
Cash operating costs excluding royalties per pound^1^ $ 5.18 $ 4.23 $ 5.17 $ 4.12

1. Cash operating costs per pound and cash operating costs excluding royalties per pound are non-GAAP ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this MD&A.

• Cash operating costs excluding royalties per pound, which is calculated on pounds of produced V^2^O^5^sold, were $5.18 per lb in Q2 2023, compared with $4.23 for Q2 2022. The increase seen in Q2 2023 compared with Q2 2022 is largely due to the reasons noted above for operating costs, including the impact of higher costs for critical consumables as compared with Q2 2022. The Company is actively working to manage its usage of these consumables and is also starting to see a softening in consumable prices. Increased quantities of ore mined and lower grades impacted the financial performance. Produced V^2^O^5^equivalent sold decreased as compared with Q2 2022, with 5,000 (000s lb) sold in Q2 2023, as compared with 6,135 (000s lb) sold in Q2 2022.

• For the six months ended June 30, 2023, cash operating costs excluding royalties per pound were $5.17 per lb.

• Professional, consulting and management fees in Q2 2023 decreased from Q2 2022 by 9%. Of the total professional, consulting and management fee expense in Q2 2023, $456 related to the Sales & trading segment (Q2 2022 - $568), $624 related to the Mine properties segment (Q2 2022 - $1,567), $1,997 related to Corporate (Q2 2022 - $1,584), $2,444 related to Largo Clean Energy (Q2 2022 - $2,337) and $303 related to Largo Physical Vanadium (Q2 2022 - $324). The decrease seen in the Mine properties segment is primarily attributable to additional compensation costs incurred in Q2 2022 as a result of management turnover. For the six months ended June 30, 2023, total professional, consulting and management fees decreased from the same prior year period by 8%. Of the total, $902 related to the Sales & trading segment ($1,061 in the same prior year period), $1,468 related to the Mine properties segment ($2,603 in the same prior year period), $3,684 related to Corporate ($3,474 in the same prior year period), $4,846 related to Largo Clean Energy ($4,650 in the same prior year period) and $463 related to Largo Physical Vanadium ($508 in the same prior year period).

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   5

• Other general and administrative expenses in Q2 2023 decreased from Q2 2022 by 35% (or $1,769), which is primarily attributable to the increase in legal provisions recognized in Q2 2022 in the Mine properties segment of $2,842 (increase of $230 in Q2 2023). Of the total other general and administrative expenses in Q2 2023, $452 related to the Sales & trading segment (Q2 2022 - $137), $545 related to the Mine properties segment (Q2 2022 - $3,051), $880 related to Corporate (Q2 2022 - $390), $1,253 related to Largo Clean Energy (Q2 2022 - $1,354) and $29 related to Largo Physical Vanadium (Q2 2022 - $41). For the six months ended June 30, 2023, total other general and administrative expenses decreased from the same prior year period by 2%. Of the total, $625 related to the Sales & trading segment ($248 in the same prior year period), $973 related to the Mine properties segment ($3,318 in the same prior year period), $2,096 related to Corporate ($808 in the same prior year period), $2,685 related to Largo Clean Energy ($2,197 in the same prior year period) and $51 related to Largo Physical Vanadium ($56 in the same prior year period). In addition, $174 related to activities for the titanium project.

• Finance costs in Q2 2023 increased from Q2 2022 by 531% (or $1,667), which is primarily attributable to interest on the increased debt level in Q2 2023 as compared with Q2 2022, as well as a write-down of vanadium assets of $225.

• Exploration and evaluation costs in Q2 2023 increased from Q2 2022 by 623%. This was driven by infill drilling and geological model work at the Maracás Menchen Mine and diamond drilling at Campo Alegre de Lourdes to support the maintenance of the Company's mineral rights. Exploration and evaluation costs increased by 440% in the six months ended June 30, 2023.

• Technology start-up costs primarily relates to activities at LCE focused on the deployment of its initial VCHARGE VRFB system in Spain. Q2 2023 saw increased activity by the field service team, with higher transportation and installation costs.

• Comprehensive income for Q2 2023 increased from Q2 2022 by 414% primarily due a decrease in the unrealized loss on foreign currency translation of 153% (to a gain of $10,223). For the six months ended June 30, 2023, comprehensive income decreased from the same prior year period by 66% primarily due to the decrease in net income, partially offset by an increase in the unrealized gain on foreign currency translation of 107%. The unrealized gain on foreign currency translation in the six months ended June 30, 2023 is primarily due to a strengthening of the Brazilian Real against the U.S. Dollar by approximately 8% since December 31, 2022.

Cash Flows

• Cash provided by operating activities of $18,057 in Q2 2023 is an increase from cash provided by operating activities of $2,902 in Q2 2022. This is primarily due to a net increase in working capital items of $36,714, partially offset by a decrease in cash provided before working capital items of $21,559. The change in working capital items is primarily attributable to movements in amounts receivable. For the six months ended June 30, 2023, cash provided by operating activities was $23,010, compared with cash used in operating activities of $1,148 in the same prior year period. This movement is primarily attributable to a net change in working capital items of $43,318, which is largely driven by movements in amounts receivable and inventory, partially offset by a decrease in cash provided before working capital items of $19,160.

• Cash provided by operating activities continues to be impacted by expenditures at LCE, with a net loss of $5,267 recognized in Q2 2023 (Q2 2022 - $5,441) and a net loss of $11,892 recognized in the six months ended June 30, 2023 ($11,454 in the same prior year period).

• Cash used in financing activities in Q2 2023 decreased from cash used in financing activities in Q2 2022 by $13,923. This movement was primarily due to the change in restricted cash in Q2 2022 of $15,524. For the six months ended June 30, 2023, cash provided by financing activities increased from cash used in financing activities in the same prior year period by $38,843. The movement is primarily attributable to the receipt of debt of $25,000 and the movement in the change in restricted cash of $15,260.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   6

• Cash used in investing activities in Q2 2023 of $14,283 is an increase of $2,900 from the $11,383 seen in Q2 2022. This movement was primarily driven by the purchase of vanadium assets by LPV of $1,525 and continued work on the ilmenite project. For the six months ended June 30, 2023, the increase from the same prior year period was $22,038. This is primarily driven by the purchase of vanadium assets by LPV of $10,115 and capital expenditures for the ilmenite project.

• The net change in cash in Q2 2023 was an increase of $2,405, compared with a decrease of $25,516 for Q2 2022. For the six months ended June 30, 2023, the net change in cash was an increase of $9,509 (a decrease of $30,912 in the same prior year period).

Net income reconciliation

Q2 2023
Total V^2^O^5^equivalent sold 000s lbs 5,637 A
tonnes^1^ 2,557
Produced V^2^O^5^equivalent sold 000s lbs 5,000 B
tonnes^1^ 2,268
Revenues per pound sold $/lb $ 9.42 C
Cash operating costs per pound $/lb $ 5.67 D

1. Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.

Q2 2023
A x C
Revenues $ 53,110 2,557 tonnes of V^2^O^5^equivalent sold (Q2 2022 -<br>3,291 tonnes), with revenues per pound sold of<br>$9.42 (Q2 2022 - $11.69)
B x D
Cash operating costs (28,365 ) Global recovery of 81.0% (Q2 2022 - 81.8%),<br>impact of increased mining costs and cost<br>increases for critical consumables
Other operating costs
Conversion costs<br>(costs incurred in converting V^2^O^5^<br>to FeV that are recognized on the<br>sale of FeV) (2,220 ) Note 19<br>579 tonnes of produced FeV sold
Product acquisition costs<br>(costs incurred in purchasing<br>products from 3rd parties that<br>are recognized on the sale of<br>those products) (3,753 ) Note 19<br>289 tonnes of V^2^O^5^equivalent of purchased<br>products sold, compared with 508 tonnes in Q2<br>2022 with a cost of $9,568
Distribution costs (2,525 ) Note 19
Depreciation (6,202 ) Note 19
Inventory write-down (683 ) Note 19<br>Attributable to purchased FeV and V^2^O^5^<br>inventory
Increase in legal provisions (230 ) See "other general and administrative<br>expenses" section on page 5
Iron ore costs (220 ) Note 19
(15,833 )
Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   7
---
Q2 2023
--- --- --- --- --- --- ---
Commercial & Corporate costs
Professional, consulting and<br>management fees (2,453 ) Note 15 (Sales & trading plus Corporate)
Other general and<br>administrative expenses (1,332 )
Share-based payments (413 )
(4,198 )
Largo Clean Energy (5,236 ) Note 15 (excluding finance costs and foreign exchange)<br>2023 guidance between $13,500 and $14,500
Largo Physical Vanadium (332 ) Note 15 (excluding finance costs and foreign exchange)
Titanium project (174 ) Note 15 - "other"
Foreign exchange loss (817 )
Finance costs (1,981 )
Interest income 480
Exploration and evaluation<br>costs (1,301 )
Net income (loss) before tax (4,647 )
Income tax expense 295
Deferred income tax expense (1,614 )
Net income (loss) $ (5,966 )

Note references in the table above refer to the note disclosures contained in the Q2 2023 unaudited condensed interim consolidated financial statements.

Operations

• V2O5 production in Q2 2023 was a significant improvement over Q1 2023. Production in April 2023 was 676 tonnes, with 945 tonnes produced in May and 1,018 tonnes produced in June, for a total of 2,639 tonnes of V2O5 produced. In addition to mining performance and crushing process improvements implemented during Q2 2023, the Company completed its 2023 infill drilling campaign, which resulted in a further refinement of the Company's short-term mining model.

• Production quantities and non-GAAP unit cost measures are summarized in the following table:

Production Average Quarterly Cash operating costs
Production Pounds V2O5 price2 excluding royalties
Period Tonnes Equivalent^1^ /lb per pound^3^$/lb
Q2 2023 2,639 5,817,992 $ 8.46 5.18
Q1 2023 2,111 4,653,953 $ 10.39 5.15
Q4 2022 2,004 4,418,058 $ 8.25 5.15
Q3 2022 2,906 6,406,626 $ 8.23 4.86
Q2 2022 3,084 6,799,048 $ 11.08 4.23
Q1 2022 2,442 5,383,682 $ 10.72 3.97
Q4 2021 2,003 4,415,854 $ 8.30 3.68
Q3 2021 3,260 7,187,061 $ 9.40 3.53

All values are in US Dollars.

1. Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.

2. Average benchmark price per lb of V^2^O^5^in Europe for the stated period.

3. Cash operating costs excluding royalties per pound is a non-GAAP ratio with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this MD&A.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   8

• The Company achieved a normalized production level in June following the completion of upgrades to the crushing circuit and an improvement in mining performance as compared with Q1 2023.

• The global recovery achieved in Q2 2023 was 81.0%, a decrease of 1.0% from the 81.8% achieved in Q2 2022 and 2.4% lower than the 83.0% achieved in Q1 2023. The global recovery in April 2023 was 81.3%, with 80.4% achieved in May and 81.3% achieved in June.

• In Q2 2023, the Company produced 983 V2O5 equivalent tonnes of high purity products, including 706 tonnes of high purity V2O5 and 277 tonnes of high purity V2O3. This represented 37% of the total quarterly production.

• The total material moved in the mine in June was a record 1,349,405 tonnes of waste and 108,104 tonnes of ore (dry basis).

• The Company completed all planned upgrades to its crushing process during Q2 2023, including the installation of a new dry magnetic separator and updates to the crushing circuit. This is expected to reduce operational maintenance costs and provide more flexibility in the blending of ores to stabilize V2O5 production.

• Construction of the ilmenite concentration plant was completed in Q2 2023. Commissioning of this new facility has now begun and is expected to be completed in Q3 2023. A gradual ramp-up of ilmenite concentrate production will occur throughout the second half of 2023.

• Subsequent to Q2 2023, production in July 2023 was 644 tonnes of V2O5 equivalent. As a result of process restrictions following the accident in July, the Company was unable to reach its production target. However, intermediate stocks have been established and are expected to be processed in August.

Selected Quarterly Information

Summary financial information for the eight quarters ended June 30, 2023, prepared in accordance with IFRS (in thousands of U.S. dollars, except for basic earnings (loss) per share and diluted earnings (loss) per share):

Basic (Loss) Diluted (Loss)
Net (Loss) Earnings per Earnings per Non-current
Period Revenue Income Share^1^ Share^1^ Total Assets Liabilities
Q2 2023 $ 53,110 $ (5,966 ) $ (0.09 ) $ (0.09 ) $ 393,319 $ 54,582
Q1 2023 57,421 (1,207 ) (0.02 ) (0.02 ) 382,444 62,168
Q4 2022 47,501 (15,636 ) (0.24 ) (0.24 ) 355,750 42,223
Q3 2022 54,258 (2,601 ) (0.04 ) (0.04 ) 347,569 6,187
Q2 2022 84,804 17,965 0.28 0.28 358,739 6,700
Q1 2022 42,688 (1,954 ) (0.03 ) (0.03 ) 348,755 8,883
Q4 2021 50,326 789 0.01 0.01 313,909 6,544
Q3 2021 53,861 9,193 0.14 0.14 315,577 6,911

1. Basic earnings (loss) per share and diluted earnings (loss) per share have been adjusted in order to reflect the effect of the share consolidation that was completed on March 4, 2021 (refer to note 10).

For Q2 2023, the Company recorded a net loss of $5,966, compared with a net income of $17,965 for Q2 2022. This movement was primarily attributable to a 37% decrease in revenues. The decrease in non-current liabilities in Q2 2023 is due to movement in the classification of debt to current liabilities.

The net income seen in Q2 2022 was primarily attributable to revenues of $84,804 from the sale of 3,291 tonnes of V2O5 equivalent.

2023 Guidance

The Company has committed a significant proportion of its monthly production in 2023 to sales of its VPURE+^TM^and VPURE^TM^products, as well as FeV produced from VPURE^TM^.

The Company's Maracás Menchen Mine continued operations during the six months ended June 30, 2023. Although there have been some challenges with production instability and ore availability, as well as the impact of required processes following the fatality on July 13, 2023, there continues to be no significant impact on the  Company's production or on the shipment of products out of Maracás. To date, there continues to be no significant disruption to the Company's supply chain for its operations and the level of critical consumables continues to be at normal levels.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   9

The Company's 2023 guidance is presented on a "business as usual" basis. The Company continues to monitor ongoing geopolitical uncertainties the impact that these may have on the Company's operations, sales and guidance for 2023. Ongoing developments may significantly change the guidance and forecasts presented and will, if and when necessary, update its guidance accordingly. Refer to the Company's Annual Information Form for the year ended December 31, 2022 for the full discussion of the Company's Risks and Uncertainties.

Following the completion of the infill drilling in the Campbell Pit and the geological model update, the Company has revised its guidance for capitalized waste stripping costs. Expenditures of $11,731 were capitalized during the six months ended June 30, 2023 and the Company now expects to incur approximately $15,000 in the remainder of 2023.

The Company's updated guidance for 2023 is presented below.

2023 Guidance
Annual V2O5 equivalent production tonnes 9,000 - 11,000
Annual V2O5 equivalent sales^1^ tonnes 8,700 - 10,700
Cash operating costs excluding royalties per pound^2^ $/lb 4.85 - 5.65
Distribution costs $ 9,000 - 10,000
Corporate and Sales & trading administrative costs^3^ $ 9,000 - 10,000
Largo Clean Energy administrative costs^4^ $ 13,500 - 14,500
Capital expenditures - components $ 13,000 - 14,000
Sustaining capital expenditures (excluding capitalized stripping costs)
Capitalized stripping costs $ 26,000 - 28,000
Ilmenite concentration plant capital expenditure $ 17,500 - 18,500
Dry magnetic separator capital expenditure $ 2,000 - 3,000
Carry-over capital expenditures $ 3,500 - 4,500
Tonnes V2O5 Q3 Q4 2023
--- --- --- --- --- --- ---
Low High Low High Low High
Production 2,400 3,300 2,400 3,300 9,000 11,000
Sales^1^ 2,000 2,600 2,200 3,000 8,700 10,700

1. Annual sales guidance does not include purchased products.

2. Cash operating costs excluding royalties per pound is a non-GAAP ratio with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this MD&A.

3. Consists of the total of professional, consulting and management fees and other general and administrative expenses for the Corporate and Sales & Trading segments.

4. Consists of the total of professional, consulting and management fees, other general and administrative expenses and technology start-up costs for the Largo Clean Energy segment.

Operations

Largo Clean Energy

Recent Developments

During Q2 2023, LCE continued to make progress on the delivery of the Enel Green Power España ("EGPE") contract, which remains a priority focus. LCE finalized the pumping of electrolyte for EGPE's VCHARGE VRFB deployment and completed cold commissioning of the system in June. The battery system was also successfully interconnected with the grid and the system inverter was successfully utilized to form the chemistry. The battery is currently performing charge-discharge cycles as part of the ongoing hot commissioning phase, which is anticipated to be completed in Q3 2023, along with provisional acceptance of the system by EGPE.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   10

During Q2 2023, Mr. Francesco D'Alessio was appointed as President of LCE. The Company continues to evaluate all strategic options for LCE in order to fully maximize its unique value proposition in the energy storage sector. This includes but is not limited to the potential strengthening and formalization of existing industry and commercial relationships, developing additional collaborative partnerships, evaluating alternative deployment strategies, and performing a comprehensive review of cost reduction measures.

In accordance with this strategic evaluation, LCE has implemented a cost reduction plan and expects to realize savings of approximately 50% in its expenditures going forward.

Maracás Menchen Mine

Recent Developments

Expenditures of $25,292 were capitalized to mine properties, plant and equipment during the six months ended June 30, 2023 (year ended December 31, 2022 - $44,101), including $11,731 of capitalized waste stripping costs (2022 - $7,730).

The production of 2,639 tonnes of V2O5 in Q2 2023 was 14% lower than the 3,084 tonnes of V2O5 produced in Q2 2022, despite the higher mine output. In Q2 2023, 489,892 tonnes of ore were mined with an effective grade of 0.86% of V2O5. The ore mined in Q2 2023 was 30% higher than in Q2 2022. The Company produced 99,083 tonnes of concentrate with an effective grade of 3.34%.

The following table is a summary of production statistics at the Maracás Menchen Mine.

Q2 2023 Q2 2022 YTD 2023 YTD 2022
Total Ore Mined (tonnes) 489,892 378,273 831,859 681,925
Ore Grade Mined - Effective Grade^1^(%) 0.86 1.18 0.84 1.22
Effective Grade of Ore Milled (%) 1.09 1.40 1.09 1.33
Concentrate Produced (tonnes) 99,083 124,317 177,778 216,641
Grade of Concentrate (%) 3.34 3.28 3.18 3.25
Contained V2O5^^(tonnes) 3,309 4,072 5,658 7,033
Crushing Recovery (%) 98.1 98.3 98.1 97.9
Milling Recovery (%) 97.6 97.9 97.9 97.0
Kiln Recovery (%) 90.9 89.2 91.2 88.9
Leaching Recovery (%) 99.9 99.5 99.7 98.7
Chemical Plant Recovery (%) 93.1 95.7 93.7 95.8
Global Recovery^2^(%) 81.0 81.8 81.9 79.9
V2O5 Equivalent Produced (Flake + Powder) (tonnes) 2,639 3,084 4,750 5,526
High Purity V2O5^^Equivalent Produced (tonnes) 983 587 2,024 970

1. Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O**5 in the magnetic concentrate.

2. Global recovery is the product of crushing recovery, milling recovery, kiln recovery, leaching recovery and chemical plant recovery.

Exploration Developments

During Q2 2023, the Company completed approximately 5,000 metres of reverse circulation infill drilling in the Campbell Pit and 3,500 metres of diamond drilling in the near mine deep drilling program. In the six months ended June 30, 2023, approximately 7,100 metres of reverse circulation drilling and approximately 7,000 metres of diamond drillholes have been completed.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   11

The Campbell Pit geological model was updated in Q2 2023 and delivered to the mine planning team. This model will continue to be updated quarterly and will assist with mine planning activities.

Positive final reports in support of the Company's mineral rights were prepared and submitted to the National Mining Agency ("ANM") in April 2023.

A re-assay program began in Q2 2023 to perform chemical analysis on previously interpreted results. The focus of this program is to increase measured and indicated resources. Approximately 2,350 samples were prepared and sent to the external laboratory for analysis in Q2 2023.

Exploration Outlook

For 2023, the Company has planned 8,090 metres of infill drilling using reverse circulation drill rigs in order to reduce gaps in the 2023 and 2024 ore zones in the Campbell Pit and provide further detail to the mine planning team.

The Company is planning for approximately 18,400 metres of exploration drilling in 2023. Efforts will focus on areas in the South Block with known magnetic and geochemical anomalies and on concessions that require work to maintain them in good standing in accordance with the applicable rules and regulations in Brazil. This drilling campaign started at the end of March 2023.

Campo Alegre de Lourdes

Recent Developments

Field work was completed at Campo Alegre de Lourdes in Q2 2023. Approximately 2,110 soil samples were collected and approximately 2,820 metres of diamond drilling were completed. The goal of this program is to support the maintenance of the Company's mineral rights in these areas. A report to the ANM is being prepared and is expected to be completed and submitted in Q3 2023.

Financial Instruments

Financial assets and financial liabilities at June 30, 2023 and December 31, 2022 were as follows:

June 30, December 31,
2023 2022
Cash $ 63,980 $ 54,471
Restricted cash 734 470
Trade and other receivables 20,348 18,313
Accounts payable and accrued liabilities (including non-current) 28,789 26,960
Debt 65,000 40,000

The Company's risk exposures and the impact on the Company's financial instruments are summarized in note 17. There have been no changes in the risks, objectives, policies and procedures from the previous year.

Liquidity And Capital Resources

The Company's continuance as a going concern is dependent on its ability to maintain profitable levels of operations.

At December 31, 2022, the benchmark price per lb of V2O5^^was between $9.27 and $9.60. This decreased to a range of between $7.50 and $8.45 at June 30, 2023, with an average of approximately $8.46 for Q2 2023, compared with approximately $10.39 for Q1 2023 and $11.08 for Q2 2022.

The average European benchmark price per lb of V2O5^^was approximately $8.11 and the average European benchmark price per kg of FeV was approximately $32.31 for July 2023. At the date of the MD&A, the market price of V2O5^^was in a range of $7.70 to $8.75 per lb and the market price of FeV was in a range of $31.10 to $32.70 per kg.

The adequacy of the Company's capital structure is assessed on an ongoing basis and adjusted as necessary after taking into consideration the Company's strategy, vanadium prices, economic conditions and associated risks. To maintain or adjust its capital structure, the Company may adjust capital expenditures, issue new common shares or take on new debt. At June 30, 2023, the Company's debt balance was $65,000.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   12

Credit facilities

In April 2022, the Company repaid in full its $15,000 working capital facility. At the same time, the Company secured a new working capital facility with a bank in Brazil. This facility was fully drawn down and proceeds of $15,000 were received. This facility was originally due to be repaid as a lump sum payment in April 2023, together with accrued interest at a rate of 3.65% per annum. The facility was repaid in full in December 2022.

In October 2022, the Company secured an additional debt facility of $20,000 with a bank in Brazil. Following an amendment finalized in June 2023, the facility is for three years, with the principal due for repayment at maturity. In addition to a fee of 0.8%, accrued interest at a rate of 8.51% p.a. is to be paid every six months.

In December 2022, the Company secured an additional debt facility of $20,000 with a bank in Brazil. The facility is for three years, with equal principal repayments due semi-annually after a grace period of 360 days. In addition to a fee of 0.70%, accrued interest at a rate of 8.20% p.a. is to be paid every six months.

In January 2023, the Company secured a two-year debt facility of $15,000, bearing interest at 6.85% per annum. Payments are due quarterly with principal repayments starting after a grace period of 180 days. Also in January 2023, and amended in June 2023, the Company secured a three-year debt facility of $10,000, bearing interest at 8.51% per annum and an initial fee of 0.80%. The principal is due for repayment at maturity, with interest payments due semi-annually.

Capital resources

At June 30, 2023, the Company had an accumulated deficit of $54,671 since inception (December 31, 2022 - $48,227) and had a net working capital surplus of $103,147 (December 31, 2022 - $115,171) (defined as current assets less current liabilities). At June 30, 2023, the total amount due within 12 months on the Company's debt was $18,000 (December 31, 2022 - $4,000).

The following table details the Company's expected remaining contractual cash flow requirements at June 30, 2023 for its liabilities and commitments with agreed repayment periods. The amounts presented are based on the undiscounted cash flows and therefore, may not equate to the carrying amounts on the consolidated statement of financial position.

Less than 6 months
6 months to 1 year 1 to 3 years Over 3 years
Accounts payable and accrued liabilities $ 28,504 $ - $ 285 $ -
Debt - 18,000 47,000 -
Operating and purchase commitments 10,312 997 80 33
$ 38,816 $ 18,997 $ 47,365 $ 33

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company's principal sources of liquidity are its cash flow from operating activities and cash of $63,980 (December 31, 2022 - $54,471). Refer to note 16 for other commitments and contingencies. As a consequence of vanadium price fluctuations in recent years, a risk may exist that the Company will not have sufficient liquidity to meet its obligations as they come due.

Outstanding Share Data

(Exercise prices presented in this section are in Canadian dollars and also not thousands).

At June 30, 2023, there were 64,050 common shares of the Company outstanding. At the date of this MD&A, there were 64,050 common shares of the Company outstanding.

At June 30, 2023, under the share compensation plan of the Company, 283 RSUs were outstanding and 1,025 stock options were outstanding with exercise prices ranging from C$5.71 to C$30.40 and expiry dates ranging between August 16, 2023 and May 18, 2028. If exercised, the Company would receive proceeds of C$10,485. The weighted average exercise price of the stock options outstanding is C$10.23.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   13

As of the date of this MD&A, 283 RSUs and 1,025 stock options were outstanding with stock option exercise prices ranging from C$5.71 to C$30.40 and expiry dates ranging between August 16, 2023 and May 18, 2028.

At June 30, 2023, 328 common share purchase warrants were outstanding with an exercise price of C$13.00 and expiring on December 8, 2025. If these warrants were exercised, the Company would receive proceeds of C$4,264.

As of the date of this MD&A, 328 common share purchase warrants were outstanding with an exercise price of C$13.00 and expiring on December 8, 2025.

Transactions With Related Parties

The Q2 2023 unaudited condensed interim consolidated financial statements include the financial statements of the Company and its subsidiaries. There have been no changes in the Company's ownership interests in its subsidiaries since December 31, 2022. The Company had transactions with related parties during Q2 2023. Refer to note 14.

Additional information regarding the compensation of officers and directors of the Company is disclosed in the Company's management information circular, which is available under the Company's profile at www.sedar.com and www.sec.gov.

Commitments and Contingencies

At June 30, 2023, the Company was party to certain management and consulting contracts. Minimum commitments under the agreements are approximately $1,808 and all payable within one year. These contracts also require that additional payments of up to approximately $2,712 be made upon the occurrence of certain events such as change of control. As the triggering event has not occurred, the contingent payments have not been reflected in these consolidated financial statements.

In 2021, the Company signed a 10-year exclusive off-take agreement with a third party for the purchase of all standard and high purity grade vanadium products they produce. The annual quantity to be delivered to the Company in 2023 is 220 tonnes of V^2^O^5^, with the Company having a right of first refusal over additional amounts.

The Company is committed to the purchase of 60 tonnes per month of V^2^O^5^from third parties for the remainder of 2023.

LCE is required to pay a royalty of $120 per kilowatt capacity of a licensed product until such time as the licensed patents expire or are abandoned, and $60 per kilowatt thereafter. Refer to note 7 for details of the royalties payable at the Maracás Menchen Mine.

The Company is committed to a minimum amount of rental payments under five leases of office space which expire between December 31, 2023 and May 1, 2027. Minimum rental commitments remaining under the leases are approximately $299, including $185 due within one year.

At the Company's Maracás Menchen Mine and at Largo Clean Energy, the Company has entered into purchase order contracts with remaining amounts due related to goods not received or services not rendered as of June 30, 2023 of $9,315.

The Company, through its subsidiaries, is party to legal proceedings in the ordinary course of its operations related to legally binding agreements with various third parties under supply contracts and consulting agreements. During the year ended December 31, 2022, the Company received a ruling regarding one such proceeding in Brazil. This relates to a supply agreement for the Maracás Menchen Mine which was filed with the courts in October 2014. The ruling requires the Company to pay amounts due, plus interest and legal fees. At June 30, 2023, the Company recognized a provision of R$28,244 ($5,861) in the current portion of provisions (December 31, 2022 - $5,076). The Company is awaiting a further ruling from a higher court in Brazil.

The Company and its subsidiaries are party to legal proceedings regarding labour matters. A provision was recorded at December 31, 2022 for such proceedings in Brazil in an amount of R$1,223 ($234). At June 30, 2023, the provision recognized was R$1,223 ($254).

The outcome of these proceedings remains dependent on the final judgment. Management does not expect the outcome of any of the remaining proceedings to have a materially adverse effect on the results of the Company's financial position or results of operations.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   14

Disclosure Controls And Procedures And Internal Controls Over Financial Reporting

Disclosure Controls and Procedures

The Company's disclosure controls and procedures ("DC&P") are designed to provide reasonable assurance that all relevant information is communicated to management to allow timely decisions regarding required disclosure. An evaluation of the effectiveness of the Company's DC&P, as defined under the rules of the Canadian Securities Administration, was conducted as at December 31, 2022 under the supervision of the Chief Executive Officer ("CEO") and the Chief Financial Officer ("CFO") and with the participation of management. Based on the results of that evaluation, the CEO and CFO concluded that the Company's DC&P were effective as at December 31, 2022 providing reasonable assurance that the information required to be disclosed in the Company's annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported in accordance with securities legislation.

Internal Control over Financial Reporting

Internal control over financial reporting ("ICFR") is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. ICFR should include those policies and procedures that establish the following:

• maintenance of records in reasonable detail, that accurately and fairly reflect the transactions and dispositions of assets;

• reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with applicable IFRS;

• receipts and expenditures are only being made in accordance with authorizations of management or the Board of Directors; and

• reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial instruments.

The Company's management, under supervision of the CEO and CFO, assessed the effectiveness of the Company's ICFR based on the criteria established in Internal Control - Integrated Framework (2013) issued by The Committee of Sponsoring Organizations of the Treadway Commission and concluded that as at December 31, 2022, the Company's ICFR was effective.

During the six months ended June 30, 2023, the Company completed the implementation of an ERP software. The process of implementing the ERP software represented a material change in the Company's ICFR. Pre- implementation testing and post-implementation reviews were conducted by management to ensure that internal controls surrounding the system implementation process, the applications and the closing process were properly designed and implemented to ensure continuity in the Company's system of internal controls. There were no other changes in the Company's ICFR that would have materially affected, or reasonably likely to materially affect, its ICFR.

Limitations of Disclosure Controls and Procedures and Internal Control over Financial Reporting

The Company's management, including the CEO and CFO, believe that due to inherent limitations, any DC&P or ICFR, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that any design will not succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected. Additionally, management is required to use judgment in evaluating DC&P and ICFR.

Significant Accounting Judgments, Estimates And Assumptions

The preparation of the unaudited condensed interim consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These unaudited condensed interim consolidated financial statements include estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the unaudited condensed interim consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and the revision affects both current and future periods.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   15

Significant areas requiring the use of estimates and assumptions relate to the determination of mineral reserve estimates and the impact on stripping costs, useful lives of mine properties, plant and equipment, impairment analysis of non-financial assets, estimates of the timing of outlays for asset retirement obligations and the determination of functional currencies. Other significant areas include the valuation of mine properties, plant and equipment and development properties, estimates of provisions for environmental rehabilitation, current and deferred taxes and contingencies. Refer to note 3(d) of the annual consolidated financial statements for the year ended December 31, 2022 for a detailed description of these areas of significant judgment, estimates and assumptions. Actual results could differ from those estimates.

Changes In Accounting Policies

The basis of presentation, and accounting policies and methods of their application in the Q2 2023 unaudited condensed interim consolidated financial statements are consistent with those used in the Company's annual consolidated financial statements for the year ended December 31, 2022, except for any changes as disclosed in note 3.

Non-GAAP^1^^****^Measures

The Company uses certain non-GAAP measures in its MD&A, which are described in the following section. Non- GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company's GAAP, and might not be comparable to similar financial measures disclosed by other issuers. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

Revenues Per Pound

The Company's MD&A refers to revenues per pound sold, V2O5^^revenues per pound of V2O5^^sold, V2O3 revenues per pound of V2O3 sold and FeV revenues per kg of FeV sold, which are non-GAAP financial measures that are used to provide investors with information about a key measure used by management to monitor performance of the Company.

These measures, along with cash operating costs, are considered to be key indicators of the Company's ability to generate operating earnings and cash flow from its Maracás Menchen Mine and sales activities. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of revenues per pound sold, V2O5^^revenues per pound of V2O5^^sold, V2O3 revenues per pound of V2O3 sold and FeV revenues per kg of FeV sold to revenues and the revenue information presented in note 18 as per the Q2 2023 unaudited condensed interim consolidated financial statements.

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Revenues - V^2^O5 produced^1^ $ 30,558 $ 45,976 $ 65,084 $ 67,790
V2O5 sold - produced (000s lb) 3,083 4,385 6,881 7,079
V2O5 revenues per pound of V2O5 sold - produced ($/lb) $ 9.91 $ 10.48 $ 9.46 $ 9.58

____________________ 1 GAAP - Generally Accepted Accounting Principles.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   16
Three months ended Six months ended
--- --- --- --- --- --- --- --- ---
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Revenues - V2O5 purchased^1^ $ 2,937 $ 1,143 $ 5,465 $ 1,529
V2O5 sold - purchased (000s lb) 396 88 705 132
V2O5 revenues per pound of V2O5 sold - purchased ($/lb) $ 7.42 $ 12.99 $ 7.75 $ 11.58
Revenues - V2O5^1^ $ 33,495 $ 47,119 $ 70,549 $ 69,319
V2O5 sold (000s lb) 3,479 4,473 7,586 7,211
V2O5^^revenues per pound of V2O5^^sold ($/lb) $ 9.63 $ 10.53 $ 9.30 $ 9.61
Revenues - V2O3^^produced^1^ $ 2,358 $ - $ 3,841 $ -
V2O3 sold - produced (000s lb) 177 - 311 -
V2O3^^revenues per pound of V2O3^^sold - produced ($/lb) $ 13.32 $ - $ 12.35 $ -
Revenues - V2O3^^purchased^1^ $ - $ - $ 1,155 $ -
V2O3^^sold - purchased (000s lb) - - 88 -
V2O3^^revenues per pound of V2O3^^sold - purchased ($/lb) $ - $ - $ 13.13 $ -
Revenues - V2O3^1^ $ 2,358 $ - $ 4,996 $ -
V2O3^^sold (000s lb) 177 - 399 -
V2O3^^revenues per pound of V2O3^^sold ($/ lb) $ 13.32 $ - $ 12.52 $ -
Revenues - FeV produced^1^ $ 17,230 $ 22,883 $ 34,658 $ 41,911
FeV sold - produced (000s kg) 579 550 1,147 1,182
FeV revenues per kg of FeV sold - produced ($/kg) $ 29.76 $ 41.61 $ 30.22 $ 35.46
Revenues - FeV purchased^1^ $ 27 $ 14,802 $ 328 $ 16,262
FeV sold - purchased (000s kg) 1 317 11 357
FeV revenues per kg of FeV sold - purchased ($/kg) $ 27.00 $ 46.69 $ 29.82 $ 45.55
Revenues - FeV^1^ $ 17,256 $ 37,685 $ 34,986 $ 58,173
FeV sold (000s kg) 580 867 1,158 1,539
FeV revenues per kg of FeV sold ($/kg) $ 29.75 $ 43.47 $ 30.21 $ 37.80
Revenues^1^ $ 53,110 $ 84,804 $ 110,531 $ 127,492
V2O5^^equivalent sold (000s lb) 5,637 7,255 11,918 12,176
Revenues per pound sold ($/lb) $ 9.42 $ 11.69 $ 9.27 $ 10.47

1. As per note 18.

Cash Operating Costs and Cash Operating Costs Excluding Royalties

The Company's MD&A refers to cash operating costs per pound and cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs and cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to plan and prior periods, and also to assess its overall effectiveness and efficiency.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   17

Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.

Cash operating costs excluding royalties is calculated as cash operating costs less royalties.

Cash operating costs per pound and cash operating costs excluding royalties per pound are obtained by dividing cash operating costs and cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine.

Cash operating costs, cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company's ability to generate operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of cash operating costs and cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound for the Maracás Menchen Mine to operating costs as per the Q2 2023 unaudited condensed interim consolidated financial statements.

Three months ended Six months ended
June 30, June 30, June 30, June 30,
2023 2022 2023 2022
Operating costs^1^ $ 43,029 $ 50,704 $ 88,960 $ 79,662
Professional, consulting and management fees^2^ 624 1,567 1,468 2,603
Other general and administrative expenses^3^ 315 209 624 476
Less: iron ore costs^1^ (220 ) (222 ) (493 ) (437 )
Less: conversion costs^1^ (2,220 ) (2,337 ) (4,138 ) (4,184 )
Less: product acquisition costs^1^ (3,753 ) (9,568 ) (7,931 ) (11,118 )
Less: distribution costs^1^ (2,525 ) (2,851 ) (3,972 ) (4,306 )
Less: inventory write-down^4^ (683 ) (2,285 ) (683 ) (2,285 )
Less: depreciation and amortization expense^1^ (6,202 ) (5,507 ) (13,453 ) (9,812 )
Cash operating costs 28,365 29,710 60,382 50,599
Less: royalties^1^ (2,450 ) (3,742 ) (4,895 ) (5,768 )
Cash operating costs excluding royalties 25,915 25,968 55,487 44,831
Produced V^2^O^5^sold (000s lb) 5,000 6,135 10,741 10,882
Cash operating costs per pound ($/lb) $ 5.67 $ 4.84 $ 5.62 $ 4.65
Cash operating costs excluding royalties per pound ($/lb) $ 5.18 $ 4.23 $ 5.17 $ 4.12

1. As per note 19.

2. As per the Mine properties segment in note 15.

3. As per the Mine properties segment in note 15 less the increase in legal provisions of $230 (Q2 2023) and $349 (for the six months ended June 30, 2023) as noted in the "other general and administrative expenses" section on page 6 of this MD&A.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   18

Risks And Uncertainties

The Company is subject to various business, financial and operational risks that could materially adversely affect the Company's future business, operations and financial condition. These risks could cause such future business, operations and financial condition to differ materially from the forward-looking statements and information contained in this MD&A and as described in the Cautionary Statement Regarding Forward-Looking Information found in this MD&A.

The Company's business activities expose it to significant risks due to the nature of mining, development and exploration activities, as well as due to the nature of its VRFB business. The ability to manage these risks is a key component of the Company's business strategy. Management is forward looking in its assessment of risks. Identification of key risks occurs in the course of business activities, pursuing approved strategies and as part of the execution of risk oversight responsibilities at the management and Board of Directors' level.

For a full discussion of the Company's Risks and Uncertainties, please refer to the Annual Information Form for the year ended December 31, 2022, which is filed on www.sedar.com and www.sec.gov.

Cautionary Statement Regarding Forward-Looking Information

The information presented in this MD&A contains "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities laws concerning the Company's projects, capital, anticipated financial performance, business prospects and strategies and other general matters. Forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All information contained in this MD&A, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company, including, but not limited to, Largo Clean Energy to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the Annual Information Form of the Company and in its public documents filed on www.sedar.com and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not undertake to update any forward- looking statements, except in accordance with applicable securities laws.

Trademarks are owned by Largo Inc. (formerly Largo Resources Ltd).

Forward-looking information in this MD&A includes, but is not limited to, statements with respect to the timing and amount of estimated future production and sales; costs of future activities and operations; the extent of capital and operating expenditures; the timing and cost related to the commissioning and ramp-up of the ilmenite plant, eventual production from the ilmenite plant, the ability to sell ilmenite, V2O5^^or other vanadium commodities on a profitable basis; the ability to produce V2O5 or V2O3 according to customer specifications, the continuing and increasing demand in particular sectors and markets for vanadium products, the impact of plant upgrades on operating costs and production stability, the ability of drilling campaigns to improve mine planning, the results of the re-assay program on measured and indicated resource estimates. Forward-looking information in this MD&A also includes, but is not limited to, statements with respect to the Company's ability to build, finance and operate a profitable VRFB business, the projected timing and cost of the completion of the EGPE project, the Company's ability to protect and develop its technology, the Company's ability to maintain its IP, the Company's ability to market, sell and fulfill orders for its VCHARGE battery system on specification and at a competitive price, the Company's ability to secure the required resources to build its VCHARGE battery, the adoption of VFRB technology generally in the market and the success of LPV's strategic initiatives.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   19

The following are some of the assumptions upon which forward-looking information is based: that general business and economic conditions will not change in a material adverse manner; demand for, and stable or improving price of V2O5, other vanadium commodities, ilmenite and titanium dioxide pigment; receipt of regulatory and governmental approvals, permits and renewals in a timely manner; that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company's operations at the Maracás Menchen Mine or relating to Largo Clean Energy, specifically in respect of the installation of the EGPE project; the availability of financing for operations and development; the ability of the Company to meet repayment obligations of existing debt facilities on the current schedule; the ability to mitigate the impact of heavy rainfall; the reliability of production, including, without limitation, access to massive ore, the ability to mitigate the impact of heavy rainfall and the accuracy of the Company's short to mid-term mine plan; the Company's ability to procure equipment and operating supplies in sufficient quantities and on a timely basis; that the estimates of the resources and reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based); the competitiveness of the Company's VRFB technology; the ability to obtain funding through government grants and awards for the green energy sector, the accuracy of cost estimates and assumptions for future variations of the VCHARGE battery system design; that the Company's current plans for ilmenite, titanium dioxide pigment and VRFBs can be achieved; the Company's "two-pillar" business strategy will be successful; the Company's sales and trading arrangements will not be affected by the evolving sanctions against Russia; and the Company's ability to attract and retain skilled personnel and directors; the ability of management to execute strategic goals.

Actual results could differ materially from those anticipated in this forward-looking information as a result of the risks and uncertainties including, without limitation: volatility in prices of, and demand for, V2O5, ilmenite, titanium dioxide and other vanadium commodities; risks inherent in mineral exploration and development; uncertainties associated with estimating mineral resources; uncertainties related to title to the Company's mineral projects; the risks inherent with the introduction and reliance on recently developed VRFB technology; revocation of government approvals; tightening of the credit markets, global economic uncertainty and counterparty risk; failure of plant, equipment or processes to operate as anticipated; unexpected operational events and delays; competition for, among other things, capital and skilled personnel; geological, technical and drilling problems; fluctuations in foreign exchange or interest rates and stock market volatility; rising costs of labour and equipment; risks associated with political and/or economic instability in Brazil, including, without limitation, negative views of the mining industry; compliance with applicable sanctions regimes; inherent uncertainties involved in the legal dispute resolution process, including in foreign jurisdictions; changes in income tax and other laws of foreign jurisdictions; and other factors discussed under "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2022 which is filed on www.sedar.com and www.sec.gov, and any additional risks as included in "Risks and Uncertainties" above. Assumptions relating to the potential mineralization of the Maracás Menchen Mine are discussed in the Technical Report. Statements relating to mineral resources are also forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral resources described can be profitably produced in the future. There is no certainty that it will be commercially viable to produce any portion of the mineral resources.

The forward-looking information is presented in this MD&A for the purpose of assisting investors in understanding the Company's plans, objectives and expectations in making an investment decision and may not be appropriate for other purposes. This forward-looking information is expressly qualified in its entirety by this cautionary statement. Forward-looking information contained in this MD&A or documents incorporated herein by reference are made as of the date hereof or the document incorporated herein by reference, as applicable, and are accordingly subject to change after such date. The Company disclaims any obligation to update any such forward-looking information to reflect events or circumstances after the date of such information, or to reflect the occurrence of anticipated or unanticipated events, except as required by law.

Certain terms appearing in the following table are defined previously in this MD&A. This table contains the material forward-looking statements made by the Company in this MD&A, the assumptions made by the Company in making those statements and the risk factors associated with those assumptions.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   20
Forward-looking Assumptions Risk Factors
--- --- ---
Statements
The Q2 2023 unaudited condensed interim consolidated financial statements were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The Company has assumed that it will be able to continue in operation for the foreseeable future and will be able to discharge its liabilities and commitments in the normal course of business, as it anticipates that it will address working capital and other shortfalls through positive cash flow from operations. The Company's continuance as a going concern is dependent on its ability to maintain profitable levels of operations.<br><br> <br>The adequacy of the Company's capital structure is assessed on an ongoing basis and adjusted as necessary after taking into consideration the Company's strategy, vanadium prices, economic conditions and associated risks. To maintain or adjust its capital structure, the Company may adjust capital expenditures, issue new common shares or take on new debt. At the date of this MD&A, the Company's debt balance was $65,000. Refer to note 9.
Production volumes are expected to achieve the expanded nameplate capacity of 1,100 tonnes per month during 2023.<br><br> <br>2023 Production Guidance:<br><br> <br>9,000 - 11,000 tonnes The Company assumes that consistent production levels will achieve a level of or in excess of 1,000 tonnes per month in 2023 during normal operation. The Company prepares future production estimates with respect to existing operations.<br><br> <br>Actual production and costs may vary from the estimates for a variety of reasons such as estimates of grade, tonnage, dilution and metallurgical and other characteristics of the ore varying from the actual ore mined, revisions to mine plans, risks and hazards associated with mining, adverse weather conditions, unexpected labour shortages or strikes, equipment or design failures and other interruptions in production.<br><br> <br>Production costs may also be affected by increased mining costs, variations in predicted grades of the deposits, increases in level of ore impurities, labour costs, raw material costs, inflation and fluctuations in currency exchange rates. Failure to achieve production targets or cost estimates could have a material adverse impact on the Company's sales, profitability, cash flow and overall financial performance.<br><br> <br>In the event that the Company obtains debt financing, repayment terms associated with such financing will likely be based, among other things, on production schedule estimates. Any failure to meet such timelines or to produce amounts forecast may constitute defaults under such debt financing, which could result in the Company having to repay loans.
Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   21
---
Forward-looking Assumptions Risk Factors
--- --- ---
Statements
2023 Costs Guidance:<br><br>Cash operating costs excluding royalties per pound <br>$4.85 - $5.65 The Company assumes that its current estimation of future operating costs is accurate, as it is largely based on the current cost profile of operations at the Maracás Menchen Mine. Capital and operating cost estimates made by management with respect to future projects, or current operations in the early stages of production are estimates which are in turn based, among other things, on interpretation of geological data, feasibility studies, anticipated climactic conditions and other information.<br><br> <br>Any or all of the above could affect the accuracy of the estimates including unanticipated changes in grade and tonnage to be mined and processed; incorrect data on which engineering assumptions are made; unanticipated transportation costs; accuracy of equipment and construction cost estimates; difficulty or failure to meet scheduled construction completion dates, facility or equipment commissioning dates, or metal production dates; poor or unsatisfactory construction quality resulting in failure to meet completion, commissioning or production dates; increased expenditures required as a failure to meet completion, commissioning or production dates; capital overrun related to the completion of any construction phase including capital overrun associated with demobilization of construction workers and contractors; labour negotiations; unanticipated costs relating to the commencement of operations, ramp up and production sustainment; changes in government regulation (including regulations regarding prices, cost of consumables, royalties, duties, taxes, permitting and restrictions on production quotas or exportation of the Company's products; and change in commodity input costs and quantities).
Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   22
---
Forward-looking Assumptions Risk Factors
--- --- ---
Statements
Sustaining capital expenditures of approximately $13,000 to $14,000 are expected to be required in 2023 to sustain the operational capacity to achieve the stated production guidance (excluding capitalized waste stripping costs). Management assumes that its current estimation of capital expenditures is accurate, as based on operational estimates produced and current experience with operations. Capital and operating costs estimates made by management with respect to future projects, or current operations in production, or not yet in the production phase are estimates which are in turn based, among other things, on interpretation of geological data, feasibility studies, anticipated climactic conditions and other information.<br><br> <br>Any or all of these can affect the accuracy of the estimates including unanticipated changes in grade and tonnage to be mined and processed; incorrect data on which engineering assumptions are made; unanticipated transportation costs; accuracy of equipment and construction cost estimates; difficulty or failure to meet scheduled construction completion dates, facility or equipment commissioning dates, or metal production dates; poor or unsatisfactory construction quality resulting in failure to meet completion, commissioning or production dates; increased expenditures required as a failure to meet completion, commissioning or production dates; capital overrun related to the completion of any construction phase including capital overrun associated with demobilization of construction workers and contractors; labour negotiations; unanticipated costs relating to the commencement of operations, ramp up and production sustainment; changes in government regulation (including regulations regarding prices, cost of consumables, royalties, duties, taxes, permitting and restrictions on production quotas or exportation of the Company's products; and change in commodity input costs and quantities).

Forward-looking statements and forward looking information are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking statements or forward looking information, including, but not limited to, unexpected events during operations; variations in ore grade; risks inherent in the mining industry; delay or failure to receive board approvals; timing and availability of external financing on acceptable terms; risks relating to international operations; actual results of exploration activities; conclusions of economic valuations; changes in project parameters as plans continue to be refined; and fluctuating metal prices and currency exchange rates.

Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements and forward-looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except in accordance with applicable securities laws.

Investors are advised that National Instrument 43-101 of the Canadian Securities Administrators ("NI 43-101") requires that each category of mineral reserves and mineral resources be reported separately. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   23

A Note for US Investors Regarding Estimates of Measured, Indicated and Inferred Mineral Resources and Proven and Probable Mineral Reserves

This MD&A uses the terms "Mineral Reserve", "Proven Mineral Reserve", "Probable Mineral Reserve", "Mineral Resource", "Measured Mineral Resource", "Indicated Mineral Resource" and "Inferred Mineral Resource", which are Canadian mining terms as defined in and required to be disclosed in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), which references the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the "CIM") - CIM Definition Standards on Mineral Resources and Mineral Reserves ("CIM Standards"), adopted by the CIM Council, as amended. Until recently, the CIM Standards differed significantly from standards in the United States. The U.S. Securities and Exchange Commission (the "SEC" or the "Commission") adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the Exchange Act. These amendments became effective February 25, 2019 (the "SEC Modernization Rules") with compliance required for the first fiscal year beginning on or after January 1, 2021. The SEC Modernization Rules replace the historical disclosure requirements for mining registrants that were included in SEC Industry Guide 7. As a result of the adoption of the SEC Modernization Rules, the SEC now recognizes estimates of "Measured Mineral Resources", "Indicated Mineral Resources" and "Inferred Mineral Resources". In addition, the SEC has amended its definitions of "Proven Mineral Reserves" and "Probable Mineral Reserves" to be "substantially similar" to the corresponding definitions under the CIM Standards, as required under NI 43-101.

United States investors are cautioned that while the above terms are "substantially similar" to the corresponding CIM Definition Standards, there are differences in the definitions under the SEC Modernization Rules and the CIM Standards. Accordingly, there is no assurance any Mineral Reserves or Mineral Resources that the Company may report as "Proven Mineral Reserves", "Probable Mineral Reserves", "Measured Mineral Resources", "Indicated Mineral Resources" and "Inferred Mineral Resources" under NI 43-101 would be the same had the Company prepared the reserve or resource estimates under the standards adopted under the SEC Modernization Rules.

United States investors are also cautioned that while the SEC now recognizes "Indicated Mineral Resources" and "Inferred Mineral Resources", investors should not assume that any part or all of the mineralization in these categories will ever be converted into a higher category of Mineral Resources or into Mineral Reserves. Mineralization described using these terms has a greater amount of uncertainty as to their existence and feasibility than mineralization that has been characterized as reserves. Accordingly, investors are cautioned not to assume that any "Indicated Mineral Resources" or "Inferred Mineral Resources" that the Company reports are or will be economically or legally mineable. Further, "Inferred Mineral Resources" have a greater amount of uncertainty as to their existence and as to whether they can be mined legally or economically. Therefore, United States investors are also cautioned not to assume that all or any part of the "Inferred Mineral Resources" exist. In accordance with Canadian securities laws, estimates of "Inferred Mineral Resources" cannot form the basis of feasibility or other economic studies, except in limited circumstances where permitted under NI 43-101.

Accordingly, information contained in this MD&A and the documents incorporated by reference herein containing descriptions of the Company's mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

Management's Discussion and Analysis for the Three and Six Months Ended June 30, 2023   24 
Largo Inc.: Exhibit 99.3 - Filed by newsfilecorp.com

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Daniel Tellechea, Chief Executive Office of LARGO INC., certify the following:

  1. Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of LARGO INC. (the "issuer") for the interim period ended June 30, 2023.

  2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

  3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

  4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.

  5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is the Internal Control - Integrated Framework (2013 COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission.

5.2 ICFR - material weakness relating to design: N/A

5.3 Limitation on scope of design: N/A

  1. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on April 1, 2023 and ended on June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: August 9, 2023

"Signed"
Daniel Tellechea
Chief Executive Officer 
Largo Inc.: Exhibit 99.4 - Filed by newsfilecorp.com

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

FULL CERTIFICATE

I, Ernest Cleave, Chief Financial Officer of LARGO INC., certify the following:

  1. Review: I have reviewed the interim financial report and interim MD&A (together, the "interim filings") of LARGO INC. (the "issuer") for the interim period ended June 30, 2023.

  2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

  3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

  4. Responsibility: The issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings, for the issuer.

  5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer's other certifying officer(s) and I have, as at the end of the period covered by the interim filings

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer's GAAP.

5.1 Control framework: The control framework the issuer's other certifying officer(s) and I used to design the issuer's ICFR is the Internal Control - Integrated Framework (2013 COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission.

5.2 ICFR - material weakness relating to design: N/A

5.3 Limitation on scope of design: N/A

  1. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer's ICFR that occurred during the period beginning on April 1, 2023 and ended on June 30, 2023 that has materially affected, or is reasonably likely to materially affect, the issuer's ICFR.

Date: August 9, 2023

"Signed"
Ernest Cleave
Chief Financial Officer 
Largo Inc.: Exhibit 99.5 - Filed by newsfilecorp.com
PRESS RELEASE AUGUST 9, 2023

Largo Reports Second Quarter 2023 Financial Results, Including Further Progress on its Cost Reduction Initiatives and Commissioning of its Ilmenite Production as a By-Product of its Vanadium Operations All dollar amounts expressed are in thousands of U.S. dollars unless otherwise indicated.

Q2 2023 and Other Highlights

  • Revenues of $53.1 million vs. revenues of $84.8 million Q2 2022; Revenues per pound of V2O****5 sold^1^ of $9.42 vs. $11.69 per pound sold in Q2 2022, mainly driven by a sharp decrease in V2O****5 prices during the quarter, which was partially offset by an increase in the Company's high purity vanadium sales
  • Operating costs of $43.0 million vs. $50.7 million in Q2 2022; Cash operating costs excluding royalties per pound^1^ of V2O****5 equivalent sold of $5.18 vs. $4.23 in Q2 2022
  • Net loss of $6.0 million vs. net income of $18.0 million in Q2 2022; Basic loss per share of $0.09
  • Cash provided before working capital items of $3.8 million vs. $25.4 million in Q2 2022; Cash provided by operating activities of $18.1 million vs. $2.9 million in Q2 2022
  • Cash balance of $64.0 million, net working capital^2^ surplus of $103.1 million and debt of $65.0 million exiting Q2 2023
  • V2O****5 production 2,639 tonnes (5.8 million lbs^3^) vs. 3,084 tonnes in Q2 2022 and 2,111 tonnes in Q1 2023; V2O****5 equivalent sales of 2,557 tonnes vs. 3,291 tonnes in Q2 2022
  • Commissioning of the Company's ilmenite concentration plant has commenced and is expected to be completed in Q3 2023, at which point a gradual ramp-up of ilmenite production in Q4 2023; Ilmenite concentrate will become a by-product of the Company's vanadium operations in Brazil
  • Hot commissioning of Largo Clean Energy's ("LCE") 6.1 megawatt-hour ("MWh") Enel Green Power España ("EGPE") vanadium redox flow battery ("VRFB") deployment remains ongoing, with provisional acceptance by EGPE expected in Q3 2023
  • The Company published its 2022 Sustainability Report entitled: "Building a low-carbon future together" highlighting the development and improvement of its ongoing sustainability programs
  • Q2 2023 results conference call: Thursday, August 10th at 1:00 p.m. ET

Vanadium Market Update^4^

  • The average benchmark price per lb of V2O****5 in Europe was $8.46 in Q2 2023, a 19% decrease from the average of $10.39 seen in Q1 2023 and a 24% decrease from the average of $11.08 seen in Q2 2022; The average benchmark price per kg of ferrovanadium in Europe was $33.47 in Q2 2023, a 15% decrease from the average of $39.46 seen in Q1 2023 and a 24% decrease from the average of $43.83 seen in Q2 2022

Page 1 of 14

  • Lower vanadium prices can be attributed to weaker demand in the Chinese construction market; however, these prices been partially offset by higher VRFB deployments in China and increased aerospace demand
  • The average European benchmark V2O****5 price at June 30, 2023 was approximately $7.98 per lb, compared with approximately $10.13 per lb at March 31, 2023 and $9.15 per lb at June 30, 2022
  • According to Vanitec, demand in energy storage applications has increased by 141% from Q1 2022 to Q1 2023

TORONTO - Largo Inc. ("Largo" or the "Company") (TSX: LGO) (NASDAQ: LGO) today released financial and operating results for the three and six months ended June 30, 2023. The Company reported revenues of $53.1 million from vanadium pentoxide ("V2O5") equivalent sales of 2,557 tonnes.

Daniel Tellechea, Interim CEO and Director of Largo, stated: "A sharp decrease in V2O**5 prices combined with lower sales in Q2 2023 impacted the Company's financial performance for the quarter. Higher production at the end of the second quarter is positively impacting in-transit inventory and should support higher availability and sales in the coming months. Our primary focus continues to be on delivering production and sales targets safely, optimizing our mine plan, as well as implementing additional cost reduction measures at both the mine site and at LCE to support profit margins going forward. The Company is beginning to see a reduction in key consumable costs at its mine site and has implemented a cost reduction plan at LCE."

He continued: "Chinese and European steel sector spot demand for vanadium was weaker in Q2 2023, however, strong demand from the aerospace industry offset this during the quarter. Importantly, recent estimates indicate that energy storage demand is expected to increase significantly in the future, driven primarily by new VRFB deployments to 2030, with a CAGR of 14%^8^."

Financial Results

(thousands of U.S. dollars, except for basic earnings(loss) per share and diluted earnings (loss) per share) Three months ended Six months ended
June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Revenues 53,110 84,804 110,531 127,492
Operating costs (43,029) (50,704) (88,960) (79,662)
Direct mine and production costs (24,976) (23,905) (53,395) (41,465)
Net income (loss) before tax (4,647) 22,409 (3,932) 23,223
Income tax recovery (expense) 295 (7,115) (38) (7,717)
Deferred income tax (expense) recovery (1,614) 2,671 (3,203) 505
Net income (loss) (5,966) 17,965 (7,173) 16,011
Basic earnings (loss) per share (0.09) 0.28 (0.11) 0.25
Diluted earnings (loss) per share (0.09) 0.28 (0.11) 0.25
Cash provided before non-cash working capital items 3,841 25,400 11,991 31,151
Net cash provided by (used in) operating activities 18,057 2,902 23,010 (1,148)
Net cash (used in) provided by financing activities (1,756) (15,679) 23,549 (15,294)
Net cash used in investing activities (14,283) (11,383) (37,689) (15,651)
Net change in cash 2,405 (25,516) 9,509 (30,912)

Page 2 of 14

As at
June 30, 2023 December 31, 2022
Cash 63,980 54,471
Debt 65,000 40,000
Working capital^2^ 103,147 115,171

Maracás Menchen Mine Operational and Sales Results

**** Q2 2023 Q2 2022
Total Ore Mined (tonnes) 489,892 378,273
Ore Grade Mined - Effective Grade^[5]^ (%) 0.86 1.18
Total Mined - Dry Basis (tonnes) 3,671,842 2,503,696
Concentrate Produced (tonnes) 99,083 124,317
Grade of Concentrate (%) 3.34 3.28
Global Recovery^[6]^ (%) 81.0 81.8
V2O****5 Produced (Flake + Powder) (tonnes) 2,639 3,084
High purity V2O**5 equivalent produced (tonnes) 983 587
V2O**5 produced (equivalent pounds^3^) 5,817,992 6,799,048
V2O****5 Equivalent Sold (tonnes) 2,557 3,291
Produced V2O**5 equivalent sold (tonnes) 2,268 2,783
Purchased V2O**5 equivalent sold (tonnes) 289 508
Cash Operating Costs Excluding Royalties per pound ($/lb)^1^ 5.18 4.23
Revenues per pound sold ($/lb)^1^ 9.42 11.69

Page 3 of 14

Q2 2023 Financial Highlights

  • The Company recognized revenues of $53.1 million from sales of 2,557 tonnes of V2O5 equivalent (Q2 2022 - 2,849 tonnes) in Q2 2023. This represents a 37% decrease in revenues over Q2 2022 ($84.8 million) mainly due to lower sales and vanadium prices for the quarter. Reconciliation of the Company's revenues per pound sold^1^ and total quantities sold of each product are provided in the "Non-GAAP^[7]^ Measures" section of this press release.
  • Operating costs of $43.0 million (Q2 2022 - $50.7 million) include direct mine and production costs of $25.0 million (Q2 2022 - $23.9 million), conversion costs of $2.2 million (Q2 2022 - $2.3 million), product acquisition costs of $3.8 million (Q2 2022 - $9.6 million), royalties of $2.5 million (Q2 2022 - $3.7 million), distribution costs of $2.5 million (Q2 2022 - $2.9 million), inventory write-down of $0.7 million (Q2 2022 - $2.3 million), depreciation and amortization of $6.2 million (Q2 2022 - $5.5 million) and iron ore costs of $0.2 million (Q2 2022 - $0.2 million). The increase in direct mine and production costs is attributable to an increase in total ore mined and the move to a new mining contractor in Q3 2022. Higher mining costs, the change in production levels across the period and the ramp up following the challenges experienced in the prior quarter negatively impacted costs. In addition, as compared with Q2 2022, the Company continued to experience elevated costs in critical consumables. The Company is actively working to manage its usage of these consumables and is also starting to see a softening in consumable prices.
  • Cash operating costs excluding royalties^1^ per pound sold were $5.18 per lb, compared with $4.23 for Q2 2022. The increase seen in Q2 2023 compared with Q2 2022 is largely due to the reasons noted above.
  • Professional, consulting and management fees of $5.8 million decreased from Q2 2022 by 9%. The decrease was mainly due to lower expenses incurred in the mine properties segment in Q2 2023 over Q2 2022, which is primarily attributable to additional compensation costs incurred in Q2 2022.
  • Other general and administrative expenses of $3.3 million decreased from Q2 2022 by 35% (or $1.8 million), which is primarily attributable to the increase in legal provisions recognized in Q2 2022 in the mine properties segment.
  • Finance costs of $2.0 million in Q2 2023 increased by $1.7 million from Q2 2022, which is primarily attributable to interest on the increased debt level in Q2 2023 as compared with Q2 2022, as well as a write-down of vanadium assets of $0.2 million.
  • Exploration and evaluation costs of $1.3 million in Q2 2023 increased by $1.1 million from Q2 2022. This was driven by infill drilling and geological model work at the Maracás Menchen Mine and diamond drilling at Campo Alegre de Lourdes.
  • Following the completion of its short-term infill drilling program in the Campbell Pit, the resulting geological model update and the decision to prioritize operating flexibility in the near-term mine planning, the Company has decided to accelerate its pre-stripping mining rates. Accordingly, it has revised its guidance for capitalized waste stripping costs for 2023. Expenditures of $11.7 million were capitalized during the six months ended June 30, 2023, and the Company now plans to incur approximately $15.0 million in the remainder of 2023. The Company believes that increased operating flexibility at its open pit mine will, amongst other things, assist in preventing weather related disruptions at the mine.
  • Cash provided by operating activities continues to be impacted by expenditures at LCE, with a net loss of $5.3 million recognized in Q2 2023 (Q2 2022 - $5.4 million).

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Additional Corporate Updates

• Production: V2O5 production in April, May and June 2023 was 676 tonnes, 945 tonnes and 1,018 tonnes, respectively, for a total of 2,639 tonnes of V2O5 produced in Q2 2023.

• The Company completed its 2023 infill drilling campaign, which resulted in a further refinement of the Company's short-term mining model. The Company achieved a normalized production level in June following the completion of upgrades to the crushing circuit and an improvement in mining performance as compared with Q1 2023. These upgrades are expected to reduce operational maintenance costs and provide more flexibility in the blending of ores to stabilize V2O5 production.

• In Q2 2023, the Company produced 983 V2O5 equivalent tonnes of high purity products, including 706 tonnes of high purity V2O5 and 277 tonnes of high purity vanadium trioxide ("V2O3"). This represented 37% of the Company's total quarterly production.

• The global recovery^6^ achieved in Q2 2023 was 81.0%, a decrease of 1.0% from the 81.8% achieved in Q2 2022 and 2.4% lower than the 83.0% achieved in Q1 2023. The global recovery^6^ in April, May and June 2023 was 81.3%, 80.4%, 81.3%, respectively.

• The total material moved in the mine in June was a record 1,349,405 tonnes of waste and 108,104 tonnes of ore (dry basis). In Q2 2023, 489,892 tonnes of ore were mined with an effective grade^5^ of 0.86% of V2O5. The ore mined in Q2 2023 was 30% higher than in Q2 2022. The Company produced 99,083 tonnes of concentrate with an effective grade^5^ of 3.34%.

• Subsequent to Q2 2023, production in July 2023 was 644 tonnes of V2O5 equivalent as a result of process restrictions following the accident in July at its chemical plant. However, the Company accumulated intermediate stocks of vanadium material that is expected to be processed in August, offsetting a portion of weaker July V2O5 output.

• Sales: In Q2 2023, the Company sold 2,557 tonnes of V2O5 equivalent (Q2 2022 - 3,291 tonnes), including 289 tonnes of purchased products (Q2 2022 - 508 tonnes). Produced V2O5 equivalent sold decreased, with 2,268 tonnes sold in Q2 2023, as compared with 2,783 tonnes in Q2 2022. The Company delivered both standard grade and high purity V2O5, as well as vanadium trioxide ("V2O3") and ferrovanadium ("FeV") to customers globally. Subsequent to Q2 2023, sales in July 2023 were 860 tonnes of V2O5 equivalent.

• Largo Clean Energy: During Q2 2023, LCE continued to make progress on the delivery of the EGPE contract, which remains a priority focus. LCE finalized the pumping of electrolyte for EGPE's VCHARGE VRFB deployment and completed cold commissioning of the system in June. The battery system was also successfully interconnected with the grid and the system inverter was successfully utilized to form the chemistry. The battery is currently performing charge-discharge cycles as part of the ongoing hot commissioning phase, which is anticipated to be completed in Q3 2023, along with provisional acceptance of the system by EGPE.

• During Q2 2023, Mr. Francesco D'Alessio was appointed as President of LCE. The Company continues to evaluate all strategic options for LCE in order to fully maximize its unique value proposition in the energy storage sector. This includes but is not limited to the potential strengthening and formalization of existing industry and commercial relationships, developing additional collaborative partnerships, evaluating alternative deployment strategies, and performing a comprehensive review of cost reduction measures.

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• In accordance with this strategic evaluation, LCE has implemented a cost reduction plan and expects to realize savings of approximately 50% in its expenditures at LCE going forward.

• Ilmenite Plant: Construction of the ilmenite concentration plant was completed in Q2 2023. Commissioning of this new facility has commenced and is expected to be completed in Q3 2023. A gradual ramp-up of ilmenite concentrate production will occur in Q4 2023.

• Exploration: During Q2 2023, the Company completed approximately 5,000 metres of reverse circulation ("RC") infill drilling in the Campbell Pit and 3,500 metres of diamond drilling in the near mine deep drilling program. The Campbell Pit geological model was updated in Q2 2023 and delivered to the mine planning team. This model will continue to be updated quarterly and will assist with mine planning activities going forward.

• Largo Physical Vanadium Corp. ("LPV"): LPV continued its acquisition of vanadium assets, with $1.5 million spent during Q2 2023. LPV has deployed over 90% of its capital and is focussed on marketing and strategic initiatives to establish its business model.

Q2 2023 Webcast and Conference Call Information

The Company will host a webcast and conference call on Thursday, August 10th at 1:00 p.m. ET, to discuss its second quarter 2023 results and progress.

Webcast and Conference Call Details:

Details of the webcast and conference call are listed below:

Conference Call Details
Date: Thursday, August 10, 2023
Time: 1:00 p.m. ET
Dial-in Number: Local: +1 (416) 764-8650
North American Toll Free: +1 (888) 664-6383
Conference ID: 72903885
Webcast Registration Link: https://app.webinar.net/YkB4eW6Ey1v
RapidConnect Link https://emportal.ink/3rk2Eqz

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Replay Number: Local / International: + 1 (416) 764-8677
North American Toll Free: +1 (888) 390-0541
Replay Passcode: 903885#
Website: To view press releases or any additional financial information, please visit the Investor Resources section of the Company's website at: www.largoinc.com/English/investor-resources

A playback recording will be available on the Company's website for a period of 60-days following the conference call.

The information provided within this release should be read in conjunction with Largo's unaudited condensed interim consolidated financial statements for the three and six months ended June 30, 2023 and 2022, and its management's discussion and analysis for the three and six months ended June 30, 2023, which are available on our website at www.largoinc.com or on the Company's respective profiles at www.sedar.com and www.sec.gov.

About Largo

Largo has a long and successful history as one of the world's preferred vanadium companies through the supply of its VPURE^TM^ and VPURE+^TM^ products, which are sourced from one of the world's highest-grade vanadium deposits at the Company's Maracás Menchen Mine in Brazil. Aiming to enhance value creation at Largo, the Company is in the process of implementing a titanium dioxide pigment plant using feedstock sourced from its existing operations in addition to advancing its U.S.-based clean energy division with its VCHARGE vanadium batteries. Largo's VCHARGE vanadium batteries contain a variety of innovations, enabling an efficient, safe and ESG-aligned long duration solution that is fully recyclable at the end of its 25+ year lifespan. Producing some of the world's highest quality vanadium, Largo's strategic business plan is based on two pillars: 1.) vanadium production from its operations in Brazil and 2.) energy storage business in the U.S. to support a low carbon future through its clean energy division.

Largo's common shares trade on the Nasdaq Stock Market and on the Toronto Stock Exchange under the symbol "LGO". For more information, please visit www.largoinc.com.

For further information, please contact:

Investor Relations Alex Guthrie Senior Manager, External Relations +1.416.861.9778 aguthrie@largoinc.com

Cautionary Statement Regarding Forward-looking Information:

This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable Canadian and United States securities legislation. Forward‐looking information in this press release includes, but is not limited to, statements with respect to the timing and amount of estimated future production and sales; the future price of commodities; costs of future activities and operations, including, without limitation, the effect of inflation and exchange rates; the effect of unforeseen equipment maintenance or repairs on production; timing and cost related to the commissioning and ramp-up of the ilmenite plan, ilmenite production; the ability to sell ilmenite, V2O5 or other vanadium commodities on a profitable basis, the ability to produce high purity V2O5 and V2O3 according to customer specifications; the extent of capital and operating expenditures; the improvements to mine planning based on the results of drilling campaigns; the affect of the re-assay program results on measured and indicated resource estimates. Forward‐looking information in this press release also includes, but is not limited to, statements with respect to our ability to build, finance and successfully operate a VRFB business, the projected timing and cost of the completion of the EGPE project; our ability to protect and develop our technology, our ability to maintain our IP, the competitiveness of our product in an evolving market, our ability to market, sell and deliver our VCHARGE batteries on specification and at a competitive price, our ability to successfully deploy our VCHARGE batteries in foreign jurisdictions, the affect of the workforce reduction on operating costs, our ability to secure the required resources to build and deploy our VCHARGE batteries, and the adoption of VRFB technology generally in the market.

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The following are some of the assumptions upon which forward-looking information is based: that general business and economic conditions will not change in a material adverse manner; demand for, and stable or improving price of V2O5, other vanadium products, ilmenite and titanium dioxide pigment; receipt of regulatory and governmental approvals, permits and renewals in a timely manner; that the Company will not experience any material accident, labour dispute or failure of plant or equipment or other material disruption in the Company's operations at the Maracás Menchen Mine or relating to Largo Clean Energy, specially in respect of the installation and commissioning of the EGPE project; the availability of financing for operations and development; the availability of funding for future capital expenditures; the ability to replace current funding on terms satisfactory to the Company; the ability to mitigate the impact of heavy rainfall; the reliability of production, including, without limitation, access to massive ore, the Company's ability to procure equipment, services and operating supplies in sufficient quantities and on a timely basis; that the estimates of the resources and reserves at the Maracás Menchen Mine are within reasonable bounds of accuracy (including with respect to size, grade and recovery and the operational and price assumptions on which such estimates are based); the accuracy of the Company's mine plan at the Maracás Menchen Mine, the competitiveness of the Company's VRFB technology; the ability to obtain funding through government grants and awards for the Green Energy sector, the accuracy of cost estimates and assumptions on future variations of VCHARGE battery system design, that the Company's current plans for ilmenite and VRFBs can be achieved; the Company's "two-pillar" business strategy will be successful; the Company's sales and trading arrangements will not be affected by the evolving sanctions against Russia; and the Company's ability to attract and retain skilled personnel and directors; the ability of management to execute strategic goals.

Forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or statements that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". All information contained in this news release, other than statements of current and historical fact, is forward looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Largo or Largo Clean Energy to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in the annual information form of Largo and in its public documents filed on www.sedar.com and available on www.sec.gov from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Largo has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Largo does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Readers should also review the risks and uncertainties sections of Largo's annual and interim MD&As which also apply.

Trademarks are owned by Largo Inc.

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Q2 2023 Net Income Reconciliation

Q2 2023
Total V2O5 equivalent sold 000s lbs 5,637 A
Tonnes^i^ 2,557
Produced V2O5 equivalent sold 000s lbs 5,000 B
Tonnes^i^ 2,268
Revenues per pound sold $/lb $ 9.42 C
Cash operating costs per pound $/lb $ 5.67 D

i. Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.

Q2 2023
Revenues $ 53,110 A x C<br>2,557 tonnes of V2O5equivalent sold (Q2 2022 - 3,291 tonnes), with revenues per pound sold of $9.42 (Q2 2022 - $11.69)
Cash operating costs (28,365 ) B x D<br>Global recovery of 81.0% (Q2 2022 - 81.8%), impact of increased mining costs and cost increases for critical consumables
Other operating costs
Conversion costs<br>(costs incurred in converting V2O**5 to FeV that are recognized on the sale of FeV) (2,220 ) Note 19<br>579 tonnes of FeV sold
Product acquisition costs<br>(costs incurred in purchasing products from 3rd parties that are recognized on the sale of those products) (3,753 ) Note 19<br>289 tonnes of V2O5 equivalent of purchased products sold, compared with 508 tonnes in Q2 2022 with a cost of $9,568
Distribution costs (2,525 ) **** Note 19
Depreciation (6,202 ) **** Note 19
Inventory write-down (683 ) **** Note 19<br>Attributable to purchased FeV and V2O5 inventory

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Increase in legal provisions (230 ) **** See "other general and administrative expenses" section on<br>page 5
Iron ore costs (220 ) **** Note 19
(15,833 )
Commercial & Corporate costs
Professional, consulting and management fees (2,453 ) Note 15 (Sales & trading plus Corporate)
Other general and administrative expenses (1,332 )
Share-based payments (413 )
(4,198 )
Largo Clean Energy (5,236 ) Note 15 (excluding finance costs and foreign exchange)<br>2023 guidance between $13,500 and $14,500
Largo Physical Vanadium (332 ) Note 15 (excluding finance costs and foreign exchange)
Titanium project (174 ) Note 15 - "other"
Foreign exchange loss (817 )
Finance costs (1,981 )
Interest income 480
Exploration and evaluation costs (1,301 )
Net income before tax (4,647 )
Income tax expense 295
Deferred income tax expense (1,614 )
Net income (loss) $ (5,966 )

Note references in the table above refer to the note disclosures contained in the Q2 2023 unaudited condensed interim consolidated financial statements.

Non-GAAP Measures

The Company uses certain non-GAAP measures in its press release, which are described in the following section. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under IFRS, the Company's GAAP, and might not be comparable to similar financial measures disclosed by other issuers. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

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Revenues Per Pound

The Company's press release refers to revenues per pound sold, V2O**5 revenues per pound of V2O**5 sold and FeV revenues per kg of FeV sold, which are non-GAAP financial measures that are used to provide investors with information about a key measure used by management to monitor performance of the Company.

These measures, along with cash operating costs, are considered to be key indicators of the Company's ability to generate operating earnings and cash flow from its Maracás Menchen Mine and sales activities. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

The following table provides a reconciliation of revenues per pound sold, V2O5 revenues per pound of V2O5 sold and FeV revenues per kg of FeV sold to revenues and the revenue information presented in note 18 as per the Q2 2022 unaudited condensed interim consolidated financial statements.

Three months ended Six months ended
June 30, <br>2023 June 30, <br>2022 June 30, <br>2023 June 30, <br>2022
Revenues - V2O5 produced^i^ $ 30,558 $ 45,976 $ 65,084 $ 67,790
V2O5 sold - produced (000s lb) 3,083 4,385 6,881 7,079
V2O5 revenues per pound of V2O5 sold - produced ($/lb) $ 9.91 $ 10.48 $ 9.46 $ 9.58
Revenues - V2O5 purchased^i^ $ 2,937 $ 1,143 $ 5,465 $ 1,529
V2O5 sold - purchased (000s lb) 396 88 705 132
V2O5 revenues per pound of V2O5 sold - purchased ($/lb) $ 7.42 $ 12.99 $ 7.75 $ 11.58
Revenues - V2O5^i^ $ 33,495 $ 47,119 $ 70,549 $ 69,319
V2O5 sold (000s lb) 3,479 4,473 7,586 7,211
V2O5 revenues per pound of V2O5 sold ($/lb) $ 9.63 $ 10.53 $ 9.30 $ 9.61
Revenues - V2O3^i^ $ 2,358 $ - $ 3,841 $ -
V2O3 sold (000s lb) 177 - 311 -
V2O3 revenues per pound of V2O3 sold ($/lb) $ 13.32 $ - $ 12.35 $ -
Revenues - FeV produced^i^ $ 17,230 $ 22,883 $ 34,658 $ 41,911
FeV sold - produced (000s kg) 579 550 1,147 1,182

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Three months ended Six months ended
June 30, <br>2023 June 30, <br>2022 June 30, <br>2023 June 30, <br>2022
FeV revenues per kg of FeV sold - produced ($/kg) $ 29.76 $ 41.61 $ 30.22 $ 35.46
Revenues - FeV purchased^i^ $ 27 $ 14,802 $ 328 $ 16,262
FeV sold - purchased (000s kg) 1 317 11 357
FeV revenues per kg of FeV sold - purchased ($/kg) $ 27.00 $ 46.69 $ 29.82 $ 45.55
Revenues - FeV^i^ $ 17,256 $ 37,685 $ 34,986 $ 58,173
FeV sold (000s kg) 580 867 1,158 1,539
FeV revenues per kg of FeV sold ($/kg) $ 29.75 $ 43.47 $ 30.21 $ 37.80
Revenues^i^ $ 53,110 $ 84,804 $ 110,531 $ 127,492
V2O5 equivalent sold (000s lb) 5,637 7,255 11,918 12,176
Revenues per pound sold ($/lb) $ 9.42 $ 11.69 $ 9.27 $ 10.47

i. As per note 18 in the Company's Q2 2023 unaudited condensed interim consolidated financial statements.

Cash Operating Costs and Cash Operating Costs Excluding Royalties

The Company's press release refers to cash operating costs per pound and cash operating costs excluding royalties per pound, which are non-GAAP ratios based on cash operating costs and cash operating costs excluding royalties, which are non-GAAP financial measures, in order to provide investors with information about a key measure used by management to monitor performance. This information is used to assess how well the Maracás Menchen Mine is performing compared to plan and prior periods, and also to assess its overall effectiveness and efficiency.

Cash operating costs includes mine site operating costs such as mining costs, plant and maintenance costs, sustainability costs, mine and plant administration costs, royalties and sales, general and administrative costs (all for the Mine properties segment), but excludes depreciation and amortization, share-based payments, foreign exchange gains or losses, commissions, reclamation, capital expenditures and exploration and evaluation costs. Operating costs not attributable to the Mine properties segment are also excluded, including conversion costs, product acquisition costs, distribution costs and inventory write-downs.

Cash operating costs excluding royalties is calculated as cash operating costs less royalties.

Cash operating costs per pound and cash operating costs excluding royalties per pound are obtained by dividing cash operating costs and cash operating costs excluding royalties, respectively, by the pounds of vanadium equivalent sold that were produced by the Maracás Menchen Mine.

Cash operating costs, cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound, along with revenues, are considered to be key indicators of the Company's ability to generate operating earnings and cash flow from its Maracás Menchen Mine. These measures differ from measures determined in accordance with IFRS, and are not necessarily indicative of net earnings or cash flow from operating activities as determined under IFRS.

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The following table provides a reconciliation of cash operating costs and cash operating costs excluding royalties, cash operating costs per pound and cash operating costs excluding royalties per pound for the Maracás Menchen Mine to operating costs as per the Q2 2022 unaudited condensed interim consolidated financial statements.

Three months ended Six months ended
June 30, 2023 June 30, 2022 June 30, 2023 June 30, 2022
Operating costs^i^ $ 43,029 $ 50,704 $ 88,960 $ 79,662
Professional, consulting and management fees^ii^ 624 1,567 1,468 2,603
Other general and administrative expenses^ii^^i^ 315 209 624 476
Less: iron ore costs^i^ (220 ) (222 ) (493 ) (437 )
Less: conversion costs^i^ (2,220 ) (2,337 ) (4,138 ) (4,184 )
Less: product acquisition costs^i^ (3,753 ) (9,568 ) (7,931 ) (11,118 )
Less: distribution costs^i^ (2,525 ) (2,851 ) (3,972 ) (4,306 )
Less: inventory write-down (683 ) (2,285 ) (683 ) (2,285 )
Less: depreciation and amortization expense^1^ (6,202 ) (5,507 ) (13,453 ) (9,812 )
Cash operating costs 28,365 29,710 60,382 50,599
Less: royalties^i^ (2,450 ) (3,742 ) (4,895 ) (5,768 )
Cash operating costs excluding royalties 25,915 25,968 55,487 44,831
Produced V2O5 sold (000s lb) 5,000 6,135 10,741 10,882
Cash operating costs per pound ($/lb) $ 5.67 $ 4.84 $ 5.62 $ 4.65
Cash operating costs excluding royalties per pound ($/lb) $ 5.18 $ 4.23 $ 5.17 $ 4.12

i. As per note 19 in the Company's Q2 2023 unaudited condensed interim consolidated financial statements.

ii. As per the Mine properties segment in note 15 in the Company's Q2 2023 unaudited condensed interim consolidated financial statements.

iii. As per the Mine properties segment in note 15, less the increase in legal provisions of $0.2 million (Q2 2023) and $0.3 million (for the six months ended June 30, 2023) as noted in the "other general and administrative expenses" section on page 6 of the Company's Q2 2023 Management Discussion and Analysis.

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^____________________________________________________1^Revenues per pound sold and cash operating costs are non-GAAP financial measures, and cash operating costs per pound and cash operating costs excluding royalties per pound are non-GAAP ratios with no standard meaning under IFRS, and may not be comparable to similar financial measures disclosed by other issuers. Refer to the "Non-GAAP Measures" section of this press release.

^2^Defined as current assets less current liabilities per the consolidated statements of financial position.

^3^Conversion of tonnes to pounds, 1 tonne = 2,204.62 pounds or lbs.

^4^Fastmarkets Metal Bulletin.

^5^Effective grade represents the percentage of magnetic material mined multiplied by the percentage of V2O**5 in the magnetic concentrate.

^6^Global recovery is the product of crushing recovery, milling recovery, kiln recovery, leaching recovery and chemical plant recovery.

^7^GAAP - Generally Accepted Accounting Principles ^8^ RBC Capital Markets Vanadium Outlook (2023)

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