This post first appeared on Micro Cap Daily
Largo Resources Ltd. (OTCQX: LGORF) stock price did not perform particularly well in the past six months. In the last year, the LGORF value managed to reach its peak, but also to come crashing back down. Its price was below $1.5 in the mid-2018, and then it started seeing rapid growth in July of last year. The growth led the price to $3.5 over the span of several months, although it often ran into resistance levels which slowed it down significantly.
Then, after peaking in November at $3.5, the price saw a massive decline which took it down to $2. What followed was a strong recovery to $3, only to be replaced by yet another drop which took it back down to $2 in the final days of December. The price started seeing a small growth in January 2019, and while many believed that this is a new surge, it only went up to the resistance at $2.5 before turning back down.
In months to come, the price kept declining steadily, until it almost reached $1. However, in the last several days ago, the price had shifted once more, and the company’s stock is currently experiencing gains once more, So much so, in fact, that it appears to be close to breaching the resistance level at $1.5 again.
About Largo Resources
Largo Resources is a mid-tier mining development firm that focuses on the production of vanadium, extracted from its Maracas Menchen Mine, located in Brazil. The company is proud to be one of the lowest-cost producers of vanadium, and its products include vanadium flake, high-purity vanadium flake, as well as high-purity vanadium powder.
The firm itself is based in Toronto. During its lifetime, the firm strived to become a world-class, leading mining company with a strong focus on responsible development and strategic growth. The goal is to become the preferred choice for communities, workforce, as well as shareholders.
Largo Resources plans to achieve this by creating sustainable shareholder value through exceptional operational performance, responsible development, top-quality products, and strategic capital investments. The company is also well-known for valuing openness, safety, passion for excellence, commitment, and respect.
Vanadium itself is a strategic metal, that is primarily used as a strengthening alloy for titanium and steel. By adding small amounts of it, steel becomes much tougher and stronger, but also lighter.
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Largo Resources’ performance in 2018 and 2019
As mentioned, the firm’s stock price surged in July of last year, right after the company announced the prices of a secondary offering. After the offering was closed, the company was able to repay its Brazilian debt in full, which is what caused its stock to surge further up. The revenue had gone up, and the firm even managed to repay its long-term Brazilian debt in full by late September.
Things were going well for the company, and in early November, it even secured Maracas Expansion permit in Brazil. However, in mid-November, the firm’s stock price started going down, and apart from a single attempt at recovery, spiraling down was all it did for months to come. The company, naturally, made numerous advances despite the situation, such as completing the drill program at Novo Amparo Norte in Maracas.
It also announced filling of preliminary short form base shelf prospectus in early January 2019. Then, around January 10, the company’s director, Alberto Beeck, had resigned from the board of directors. Interestingly enough, Largo Resources still got named one of the top performing companies on OTCQX’s 2019 Best 50 List. In February, its Nominee Director resigned as well. However, despite the resignations and the dropping stock price, the company reported a record full-year production, followed by a net income of $316 million in 2018.
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In April, the company appointed a new Nominee Director, and its production continues as scheduled. The company’s stock, meanwhile, recently started to shift, seemingly with no big catalyst, simply acting naturally, and perhaps displaying the amount of interest in the firm. Largo Resources certainly seems to be effective and productive, with no scandals of any kind that would damage its reputation. With that in mind, it is likely that the stock price has reached its bottom, and is now ready to surge back up. If so, this is the perfect moment for a new investment, as the price is now likely as low as it can get, and the only remaining way for it to move is up. We will be updating on Largo when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with Largo.
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Disclosure: we hold no position in Largo either long or short and we have not been compensated for this article.
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This post first appeared on Micro Cap Daily