This post first appeared on Micro Cap Daily

Largo Resources Ltd. (OTCQX: LGORF) stock has been dropping ever since mid-November 2018, and while the price did see a few attempts at correction — mostly when reaching strong support levels — the decline remained constant. That is, until a few days ago, when the price started seeing the first real growth after dropping down to $1.

The price, which was struggling to overcome a resistance at $1.5 at the time, started seeing major growth in August 2018. The growth was relatively sharp, and it led it to the resistance level at $3.5. It reached these heights in mid-November of last year, but the resistance was strong enough to reject the price, and cause a half-a-year-long decline. The decline seemingly ended after the price dropped to its strongest resistance yet, at $1. The growth that took place a few days ago led the price up to $1.5 when another small decline took place. In days to come, it is likely that the price will try breaching the resistance once more, and potentially enter another strong surge, not unlike the one in August 2018.

Who is Largo Resources Ltd.?

Largo Resources is a mid-tier mining development company, with a strong focus on the production of vanadium. The company owns Maracas Menchen Mine in Brazil and acts as one of the lowest cost producers of V2O5. Its production rates are consistent and robust, while the company’s common shares are listed on the Toronto Stock Exchange.

The firm has a goal of becoming a leading, world-class mining firm, with a focus on responsible development and strategic growth. In addition, it aims to maintain the respect of investors, customers, partners, and of course, its own employees.

Largo Resources focuses on the production of several products, such as vanadium flake, high-purity vanadium powder, as well as high-purity vanadium flake. It also aims to be the preferred choice by providing exceptional operational performance, superior quality, and responsible development.

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Largo Resources’ recent progress

Despite the company’s high-quality products, as well as all the moves towards securing long-term gains for its partners and shareholders, the firm’s stock price has been on a decline ever since November 2018. Unusually enough, the decline started after the firm secured a Maracas Expansion permit in Brazil.

Following the stock price decline, the company even managed to reduce its debt with a repurchase of $26 million of its 9.25% senior secured notes. In 2019, the company announced the resignation of its Nominee Director, but the firm’s top performance also allowed it to become one of the best-performing OTCQX firms. It also reported a net income of $316 million in 2018, and it appointed a new Nominee Director, Jonathan Lee.

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The company is clearly performing well, despite the behavior of its stock price, which appears to be heavily undervalued. As such, it represents a great investment, as the price of its stock is currently cheap. However, while this may be the case now, the company has demonstrated its stock’s ability to surge, and another growth may be coming once the current major resistance has been breached. 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

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