Maracás Menchen / Vanadium

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The mine is located in the eastern Bahia State of Brazil, 250km south-west of Salvador, the capital of Bahia, and 800km north-east of Brasilia, the capital of Brazil.






Largo Resources



Royalty rate and type
2% NSR

Balance sheet classification
Royalty intangible

The Group has a 2% NSR royalty on all mineral products sold from the area of the Maracás Menchen mine to which the royalty interest relates. The project is located 250km south-west of the city of Salvador, the capital of Bahia State, Brazil, and covers an area in excess of the current mining permits which offers potential for exploration upside. Maracás Menchen is 99.97% owned and operated by TSX-listed Largo Resources Limited (‘Largo’).

The Maracás Menchen mine is a high grade vanadium mine located in the state of Bahia, Brazil. Operated by Largo, a Canadian producer of vanadium, it is the only vanadium mine in Latin America and boasts one of the highest-grade vanadium resources in the world. The mine was commissioned in 2013, with initial mining operations commenced on the Gulçari A Deposit, which is now known as the Campbell Pit. The first vanadium pentoxide (V2O5) from the mine was produced in August 2014.

In December 2021, Largo filed a technical report which highlighted an extension of the mine life to 20 years with operations expected to commence in 2022 and last until 2041.

Royalties from the Maracás Menchen mine totalled $3.3m for the year ended 31 December 2021, compared to $0.7m in 2020. The $2.7m increase is in part due to the one-off price adjustment of $1.3m in 2020 which arose on the termination of the offtake agreement between Largo and Glencore in 2020.

In addition, the Group’s 2021 royalties benefited from the underlying vanadium price increasing from $5.58/lbs in 2020 to $9.15/lbs in 2021. Excluding the effect of the one-off price adjustment in 2020, royalty income increased by 56% in the year.
The increase in the underlying vanadium price achieved in 2021 is reflective of both the general increase experienced by the market and of the performance of Largo’s sales and marketing function in targeting a greater portion of sales to high purity vanadium markets as well as the battery market. The latter has the potential to add premiums to the benchmark V2O5 price.

Following the termination of the offtake agreement, the majority of Largo’s product is now sold on a CFR basis rather than mine gate terms. Accordingly, applicable freight and transport charges are permitted deductions to the revenue subject to the Group’s royalty. There are also additional costs incurred in refining the final product bound for the battery market although these appear to be compensated by higher margins. Overall allowable deductions increased from 12% in 2020 to 15% in 2021.

While production for 2021 was 13% lower than 2020 at 10.3Kt due to planned capacity upgrade works and unexpected heavy rainfall in Q4 2021, sales of V2O5 equivalent increased by 11% to meet the low end of Largo’s revised guidance.

Construction of the ilmenite concentration plant continues as planned with completion of production targeted for Q2 2023. Commissioning of the TiO2 plant, however, has been delayed until the first half of 2025 due to delays associated with the project’s land acquisition.

Key facts


Largo has announced production and sales guidance of 12-13Kt for 2022, which represents an increase of 20% to 30% compared to 2021


The Group expects to see increased vanadium volumes sold into high purity, premium quality end user markets, with newly developed vanadium product brands such as VPURE and VPURE+


Largo expects to deliver its first VCHARGE vanadium redox flow battery in H2 2022, which will be a significant milestone in aligning Largo’s products with the energy storage market