Largo Inc.

In January 2023, the Company secured a two-year debt facility of $15,000, bearing interest at 6.85% p.a. Payments are due quarterly with principal repayments starting after a grace period of 180 days. Also in January 2023, and amended in June 2023, the Company secured a three-year debt facility of $10,000, bearing interest at 8.51% p.a. and an initial fee of 0.80%. The principal is due for repayment at maturity, with interest payments due semi-annually.

In September 2023, the Company secured a new $15,000 debt facility with a bank in Brazil and repaid in full its existing $15,000 facility secured in January 2023. This new facility is for three years, with four equal principal repayments due semi-annually after a grace period of 540 days. Accrued interest at a rate of 8.75% p.a. is to be paid every six months.

In October 2023, the Company secured a three-year debt facility of $20,000, bearing interest at 8.95% p.a. Interest payments are due quarterly with 50% of the principal to be repaid in October 2025 and 50% to be repaid in October 2026. This new facility was used to repay in full the Company's $20,000 facility that had been secured in December 2022.

In December 2023, the Company secured a two-year debt facility of $10,000, with the principal due for repayment at maturity. In addition to a fee of 0.85%, accrued interest at a rate of 10.45% p.a. is to be paid at maturity.

Capital resources

At December 31, 2023, the Company had an accumulated deficit of $77,643 since inception (December 31, 2022 - $48,227) and had a net working capital surplus of $94,668 (December 31, 2022 - $115,171) (defined as current assets less current liabilities). At December 31, 2023, the total amount due within 12 months on the Company's debt was $nil (December 31, 2022 - $4,000).

The following table details the Company's expected remaining contractual cash flow requirements at December 31, 2023 for its liabilities and commitments with agreed repayment periods. The amounts presented are based on the undiscounted cash flows and therefore, may not equate to the carrying amounts on the consolidated statement of financial position.

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. The Company's principal sources of liquidity are its cash flow from operating activities and cash of $42,714 (December 31, 2022 - $54,471). Refer to note 19 for other commitments and contingencies. As a consequence of vanadium price fluctuations in recent years, a risk may exist that the Company will not have sufficient liquidity to meet its obligations as they come due.

Outstanding Share Data

(Exercise prices presented in this section are in Canadian dollars and not in thousands).

At December 31, 2023, there were 64,051 common shares of the Company outstanding. At the date of this MD&A, there were 64,051 common shares of the Company outstanding.