Largo Inc, a prominent global supplier of vanadium and ilmenite products, announced today that its wholly owned subsidiary, Largo Resources USA (LUSA) has successfully entered into a non-recourse factoring facility worth up to $10 million. This strategic financial move aims to accelerate the monetary gains from vanadium product sales.
The Facility, signed on June 10, 2025, with a well-established third-party factoring company, allows LUSA to sell eligible accounts receivable and receive immediate liquidity. Under the terms, the Factor will advance 85% of the invoice value, with commission rates ranging from a favorable 0.51% for invoices paid within 30 days, to 1.37% for those extending up to 90 days. A key benefit of this arrangement is its non-recourse nature, meaning the Factor assumes the credit risk for the receivables, providing Largo with enhanced financial security.
The initial facility size is set at $10 million, with a promising potential for expansion up to $30 million. This expansion is contingent upon the inclusion of additional customers and further credit approvals, indicating Largo's ambition to leverage factoring as a core component of its financial strategy.
The Facility has an initial term of two years. It can be terminated by the Factor with 90 days' prior written notice or immediately in the event of default, highlighting the standard protective clauses in such agreements. CIRQUE Capital, Inc. played a crucial role in this transaction, acting as Largo’s financial advisor and arranger, and will receive certain custodial fees as per the terms of the Facility.
Daniel Tellechea, Interim CEO of Largo, emphasized the importance of this new facility, stating, "This Facility allows us to access liquidity more quickly by monetizing receivables tied to vanadium shipments, which can take between 30 and 90 days to convert to cash. Improving working capital efficiency is a necessary step as we work through our operational turnaround plan." He further elaborated on the anticipated positive impact, adding, "This Facility is expected to better align cash inflows with expenditures and ensures we have additional flexibility to support day-to-day operations while continuing our efforts to stabilize production and improve sales."
This factoring arrangement is particularly beneficial for Largo, a globally recognized supplier of high-quality vanadium and ilmenite products from its Maracás Menchen Mine in Brazil. As one of the world’s largest primary vanadium producers, Largo supplies critical materials to diverse industries including steel, aerospace, defense, chemical, and energy storage. The nature of its business often involves extended payment terms, making the acceleration of receivables a vital step in optimizing its financial flow.
