Largo Inc.

Good day and thank you for standing by. Welcome to the Largo Resources second quarter 2021 earnings webcast and conference call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. I would like to hand the conference over to your speaker today, Alex Guthrie, Senior Manager of External Relations. Please go ahead.

Good morning, everyone, and thanks for joining our second quarter 2021 earnings conference call. On the call today is Ian Robertson, our co-chair of the board, Paulo Misk, our president and chief executive officer, Ernest Cleave, our CFO, and Paul Valland, our VP of commercial. To accompany the call today, we have uploaded a supplemental webcast presentation, which is available on our website at LargoResources.com. Our Q2 2021 financial statements and MD&A are also available on the website, as well as on CDAR and on EDGAR. Before continuing the call today, I would like to remind you that some of the information you will hear during today's discussion will consist of forward-looking statements, including without limitation those regarding future business outlook. In addition, non-IFRS financial measures such as cash operating costs and cash operating costs excluding royalties and revenues per pound sold will also be discussed during today's call. Actual results discussed during today's call could differ material from those anticipated and risk factors that could affect Those results are detailed in our annual information form and other public filings, which are available on CDAR and on the company's website. Additionally, market and industry data contained and incorporated by reference during today's call concerning economic and industry trends is based upon good faith estimates of our management or derived from information provided by industry sources. We believe that such market and industry data is accurate and the sources from which it has been obtained are reliable. However, we cannot guarantee the accuracy of such information, and we have not independently verified these assumptions upon which the projections of future trends are based. On our call this morning, Ian will provide an update to the company's corporate mission, give further highlights to our overall strategic plan, and then close out with an update on our progress at Largo Clean Energy. Paula will provide an update on the company's operational sales results, and Ernest will follow with the financial results accompanied by Paul Volant, who will then provide an update on our sales and trading division, as well as an update on the Venetian market. Paul will then conclude with final comments. We will then open the lines for questions, and we kindly ask that you restrict your questions to two, and then re-queue if you have any additional questions to allow others the opportunity to participate. And with that, I'll turn it over to Ian.

Perfect. Thanks, Alex. Good morning, everyone, and I appreciate you taking the time to join us on the call and online. I thought it might make sense to start today with a bit of a personal introduction since I haven't spoken to you on the earnings calls in the past. At my core, I'm an unapologetic entrepreneur. For the past two decades, I've had the privilege and honor of serving as, I guess, the first chief executive officer of a company called Algonquin Power and Utilities Corp., a company that was founded by myself and a colleague, Chris Jarrett. We're immensely proud of having grown this company to a $12 billion U.S. dollar organization listed on the TSX and NYSE. It's included in the TSX-60. And perhaps most meaningfully, it's delivered a greater than 20% total annualized shareholder return over the past decade. Leading Algonquin was gratifying. I'm sure it's not surprising to many of you that as an organization gets to the size of Algonquin, it gets harder and harder to, I'll say, fully flex one's entrepreneurial muscles. And consequently, three years ago, we signaled to the capital markets that Chris and I would be seeking someone to fill our shoes at Algonquin. And last year, we were able to successfully complete the exit. We founded the Northern Genesis Investment Platform last year. And over the past 12 months, we're Gratified to be able to secure over a billion dollars in investor capital and proud of our first investment in electric bus and truck manufacturer Lion Electric. And it's been a strong commercial and investment success. If there's one thing that my experience at Algonquin and subsequently with Northern Genesis has taught me, It's that the path to organizational success, in my view, leads through and may actually be paved by a cogently articulated approach to sustainability. And it's not at all surprising to me that employees and customers, investors today, want to actually, quote, believe in the organizations for which they work, from which they buy, and into which they invest. And clear ESG alignment across the organization, I think, is part of this dynamic. When I was approached to join the Board of Largo, the initiative to transform this organization to a company that can make and will make a meaningful contribution to society's renewable energy transition really struck a resonant chord with me. In some respects, it feels like a continuation of my life's work at Algonquin. And I'm really proud to be able to contribute to helping guide this organization through this really exciting time in its life cycle. which maybe is a good segue to a few thoughts on the energy transition landscape. I'll say firstly, and I'm sure this comes as no shock at all to everyone, the global transition to cleaner renewable energy is well underway. I will say it's being led by attractive economics of renewable energy, but really tailwinded by strong societal pressures on corporations and governments worldwide to deliver more sustainable energy solutions. There's probably a couple of important trends to highlight that are evident in these secular shifts. Firstly, as I mentioned, it's really the economics that are driving the integration of low-cost renewable energy sources into the grid. There is no cheaper source of energy than that from a wind or solar farm, but a reliable electric energy grid obviously needs to deal with the inherent intermittency associated with these generation sources. Obviously, solar doesn't work at night. Secondly, there are clear impacts on energy demand and consumption patterns arising from phenomena such as the electrification of mobility, all those Teslas actually matter, climate change. And lastly, to accommodate the flexibility demanded by customer choice, which organizations like Amazon pioneered, there are continued efforts underway for grid modernization and reinforcement. Energy storage systems, which have the capability of storing electrical, in this case, we'll call it renewable energy, when it's abundant, and then deliver it on demand when it's needed, are going to play a key role in addressing each of these trends. And specifically, you're going to hear a continued story about long duration, which we kind of define as greater than four hour storage, that is evolving to be more valuable than that of short duration storage, in facilitating the energy transition to renewables. As we look at Largo's decision to become, I'm going to say more than just a mining company by shifting its focus for its vanadium to the energy storage industry, a number of factors were considered. Firstly, Largo is confident that it has one of the most competitive long-duration energy storage products available. Vanadium flow batteries, based on Largo's technology obtained in the 2020 purchase of the intellectual property of a company called Vionix, is superior to that of other offerings, and we believe it represents one of the lowest cost, most durable, and practical solutions to long-duration storage. While Largo historically competed in the vanadium commodity market, generally on cost and purity, this superior vanadium redox flow battery technology will allow Largo to sell a product which is now differentiated on dimensions other than cost. Secondly, Largo expects that the energy storage market presents a higher value and faster growing use case for Largo's vanadium over the current world market as an alloy and strengthening agent. And unlike the conventional market for vanadium, according to Guidehouse and other large market research firms, the energy storage market is large and growing fast. with the long-duration storage-specific total addressable market forecast to grow at a compounded average annualized growth rate of more than 30% for the coming half decade. And thirdly, Largo has the unique opportunity to create sustainable competitive advantage for itself. I will say that no other producer of vanadium-based batteries enjoys the guaranteed access to high-quality, high-purity vanadium and the financial substance and stability which is provided through the integration of Largo's energy storage business with its highly efficient and profitable vanadium production operations. I think it is important, though, just to note that this opportunity for sustainable competitive advantage really arises as a result of the company's world-class vanadium mining and production capabilities, which were developed from the dedication of Largo's existing mining professionals. And accordingly, this strategic shift toward the energy storage business is really facilitated by the ongoing efforts of the Largo mining team as much as the efforts of the members of the energy storage team. And shortly, you know, quickly before I hand things over to Paolo, I'd like to offer up a couple of comments regarding our organizational why. There's a guy named Simon Sinek, and he's an author, and he claims that organizational stakeholder loyalty is actually created not by the what and how of one's products, but rather than the why of one's existence. And he wrote a book called Why Start With Why, which details his thoughts here. And I guess my thought is that integrating Largo's vanadium production expertise with its energy storage technology provides an opportunity for our investors, our customers, and maybe as importantly, our employees to reimagine this organization, to reimagine it laying claim to being a force for good in the world, to reimagine it. with a bigger, more inspiring why. Specifically, our vision, articulated with excitement, is that Largo can now play a meaningful role in enabling the planet's transition to 100% renewable energy. Our vision states the why for our business. The what and how of our business is obviously to lever Largo's experience as a successful vanadium mining company to become the leading vanadium-focused energy storage company. Our mission's success will come from being the supplier of choice, delivering 10% of the global demand for long duration energy storage, which in the next three years is forecast by GuideHouse to exceed 30 gigawatt hours a year. We're going to accomplish our mission through our unique vertical integration, our responsible business practices, and perhaps most importantly, from the commitment of our talented team. And we're confident this strategy represents the foundation for significant long-term shareholder value creation at Largo. If it sounds like a transformational shift is underway within Largo, you'd be right. We are committed to our plan outlined recently at our Battery Day back in June. In recognition of this shift to become more than just a mining company, a corporate branding change is underway. We believe that dropping the word resources from our name will help reinforce alignment between the perception of our what and how and the statement of our why. And you can see on the slide here, a sneak peek at our new name, Just Largo. With that, I'll turn things over to Paolo for an update on the company's operations sales progress in Q2. Paolo?