Largo wins $125M U.S. defense contract for vanadium pentoxide supply

Largo Inc. (TSX: LGO) (NASDAQ: LGO) announced that its subsidiary, Largo Resources USA Inc., has been awarded a five-year Indefinite Delivery, Indefinite Quantity contract by the U.S. Defense Logistics Agency Strategic Materials to supply up to 2,876 metric tonnes of high-purity vanadium pentoxide in support of the U.S. National Defense Stockpile, with a maximum value of $125 million.

The contract uses firm-fixed-price delivery orders, with pricing set at a premium above current benchmark vanadium pentoxide price indexes in 2026, escalating 10% annually thereafter. Delivery orders will be issued over the five-year ordering period, with volumes calibrated to strategic reserve requirements. The IDIQ structure does not guarantee a minimum quantity of orders.

Largo will supply the vanadium pentoxide from its Maracás Menchen Mine and chemical complex in the state of Bahia, Brazil. The company produced 9,150 tonnes of vanadium pentoxide equivalent in 2025 and has guided for production of 10,500 to 12,000 tonnes in 2026.

"This award represents a major milestone for Largo and validates the strategic importance of our vanadium supply platform after a lengthy review process of vetting and discussions with the U.S. Department of Defense," said Alberto Arias, Executive Chairman and Co-CEO of Largo.

Co-CEO Daniel Tellechea noted that China and Russia currently produce approximately 80% to 85% of world vanadium supply, and said the contract "should help improve Largo's vanadium price realizations and help offset the headwinds of depressed vanadium prices outside the U.S."

Largo USA will serve as the contracting entity responsible for customer engagement, logistics coordination, quality assurance, compliance, and delivery execution under the contract.

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