Vanadium news, page-41

In Morgans Stanley's 38 page Largo research report (dated 24 Oct 2018), which includes a detailed section on the global supply/demand fundamentals for vanadium (naturally), their Base Case valuation assumes an average vanadium price for 2019 of $23/lb. They expected the 2018 price to peak out at $30 (it actually got a little higher - $33 I think). This assumes slow adoption of rebar standards in China. 5 years out they forecast vanadium to settle down at the long term price of $12/lb (too low I reckon).

Their Bull Case assumes a V2O5 prices rally to over $50/lb and average $47 for calendar 2019. Their long term forecast beyond 2023 is $15/lb. This scenario assumes that demand destruction is minimal and the adoption of Chinese rebar standards is swift (unlikely?).

I think an amalgam of these two scenarios is likely with a lower near term high (lower than their Bull Case price) and a higher longer term price (higher than their Base Case price).

Whatever, with the metrics we are sure to see in the DFS next year, there is very little doubt that TMT has the potential to be a very profitable company. The risk/reward from here on in is outstanding.